The Economics of Good Team Work – The Easy Way to Improve Business Profits for the Long Term

I wrote this article for the Al Jarida newspaper and it was published on Saturday 21 February 2015.

Jeremiah Josey

This article took a full page to discuss the economics of good team work for a business.

It is published here:

Al Jarida Article 21 Feb 2015 (Go to page 12)

Al Jardia Page 12 - 21 Feb 2015

The Economics of Good Team Work – The Easy Way to Improve Business Profits for the Long Term

How do you improve human group dynamics and allow people be more productive, your business to be more profitable, groups to be self reliant, whilst at the same time have it be more satisfying, more rewarding and straight out more enjoyable for the individuals involved?

The solution: Develop a self organising, collaborative workplace (also known as in the industry as “Sociocracy“.

Many big companies have worked out how to do it, for exBMW at the Globalistample GE, BMW & Semco (a Brazilian manufacturing company). Many more practising the process have registered themselves at WorldBlu.com. While Worldblu calls it “democratic workplace”, it’s really more likely to be collaborative one, since when you have a flexible organisation, it is more likely that 100% consent is necessary to achieve anything, and not merely majority rules – what a democracy is. The key word here is “consent”.worldbluHow to achieve great success, with great results, rewards and satisfaction in a manner which is harmonious to the group, to other participants, and to the world in general? It is not through competition. It is through collaboration.

Much of the presently accepted models in many organisations are military style and competition based. Competition is a poor use of human potential. The autocratic leadership methods necessary lead to almost total staff disconnection. Poor performance, and whip-like management mentality becomes necessary to maintain performance. Such a culture is easy to start, and success may be evident and easy to measure, but it soon grows into a dismal forgotten failure as any long term success measures are applied – staff retention rates fall, production efficiency, product quality, and eventual profits follow soon after. It’s simply a dismal failure at humanity, at being human even. Even for those directly measured to have “succeeded” they experience high stress, poor health and eventual a short, and ultimately an unsatisfying life.

One of the most successful examples of collaboration has been documented by Ricardo Semler with his company Semco, today a billion dollar operation. He wrote two books about it: “Maverick” and “7 Day Weekend” where he explains everything in succinct terms. He took his small family run company and grew it into an international corporation whilst he progressively ceased his day to day operational involvement.

maverick

Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or

Ricardo Semler

practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed. Most important, success is not measured only in profit and growth.” Ricardo Semler, Founder of Semco

I personally have applied Semler’s processes to great success in my own endeavors. For example I’ve taken totally disconnected and non-performing employees, and turned them into stars, “fought” over within the office for new assignments. One of the very useful Semler tools I like to use often is the upward feedback tool. This provided management with very directly, and some times very revealing feedback on their own performance from their staff and employees.

I’ve been searching for a methodical system to describe Semler’s approach, and for a long time I called it “democratic” as he and many others have done. But I’ve never liked that, that word “democracy”. It is essentially a competitive system.

Dubbed “the worst form of government” by Winston Churchill, democratic environments automatically and immediately lead to the oppression of the minority and any group that contains oppression of any kind is never a good thing in the long term.

“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one Winston Churchillpretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.” Sir Winston Churchill, Hansard, November 11, 1947

Democracy, by it’s very design, is an oppression regime: the oppression of a few by the many. “This is fair. It’s only natural”, I hear you say, but do you really think so? Is any oppression fair? Of anyone? It is quite plain to see that any minority oppression in a social group no matter how large or small, has an ultimately negative consequence. Suppressed negative thoughts, feelings, and emotions harbored by the minority can only grow and manifest in other forms. The costs – both social and financial, short term and long term – to control, pacify, down-right-openly-oppress increases for the majority. Then something curious happens: the majority find themselves the minority, the minority becomes the majority and the cycle is repeated. Back and forth, back and forth. Those once-were-majority of course hang onto their once-granted-power with great enthusiasm and vigor, as long as they are able. The majority learnt what to do while in power. They learnt the rules of the game. The Occupy Wall Street or “99% protests” were examples that highlighted how a majority can be controlled by a minority. The minority has a much better understanding of the rules.

An another example was the 2008 US election with Obama and McCain running against each other: it was 53% versus 46%. Is that a “democracy” when almost half of the people have to yield their desires for the other half? This is more like a society close to reorganization as the majority may soon become the minority. Such a shifting of power will occur either violently (like has been seen in many Arabic countries with the so called Arab Springs) or passively, as with not-even-newsworthy Iceland. In Iceland the people rejected the debt burden of the banks their brethren in government attempted to impose upon them from the financial meltdown of 2008. They arrested a number of bankers and changed their laws so it cannot happen again!

So, what is it? What is the magic that means a group of people will be inspired to performance, all by themselves, with little external influence, other than maybe “Go!”.

Studies have shown that for complex, creative projects, monetary incentives actually inhibits performance! It’s not carrot and stick that works best where creative thinking is required.

Much has been done on the subject and reading Semler’s “Maverick” and “7 Day Weekend” you’ll understand that it is an evolutionary process, and it occurs by consent of the individuals of the group.

“Consent” a better option.

This is the important word: consent.

Work that recent came to me by the Dutch thinker Gerard Endenburg offers very substantial physical elements to this evolutionary process. A good short summary of this thinking is in “Sociocracy: The Creative Forces of Self-Organization”, by Gerard Endenburg and John A Buck.

gerard Endenburg

These two resources: Semler’s books and Edenburg’s work combined results in a very harmonious outcome: the flexibility of the benefits, and the basic parameters on how to get there.

Endenburg defines four basic concepts for a self-organising group:

Four Principles of Sociocracy

  1. Consent: The principle of consent governs decision-making. Consent means no argued and paramount objection. In other words, a policy decision can only be made if nobody has a reasoned and paramount objection to it. Day-to-day decisions don’t require consent, but there must be consent about the use of other forms of decision-making, for example, for day-to-day operations.
  2. Election of Persons: Election of persons for functions and/or tasks takes place in accordance with the principle of consent and after open argumentation.
  3. Circle: The organisation maintains a structure for decision making, consisting of semi-autonomous circles (i.e. groups of individuals). Each circle has it’s own aim and organises the three functions of leading, doing, and measuring/feedback. A circle makes its own policy decisions by consent, maintains it’s own memory system, and develops itself through integral research, teaching and learning. A circle makes consent decisions only in special circle meetings (also called round table meetings).
  4. Double-linking: A circle is connection to the next higher circle in the organisation with a double link. This means that at least two persons, one being the functional leader of the circle and at least one delegate from the circle, are full members of the next higher circle.

With these four principles in place, more specific actions can occur. Here’s an example of a Sociocratic Circle Meeting, a meeting of consent:

Sociocratic Circle Meeting

  1. Opening round: a time to tune into the members. Like an orchestra just before a concert.
  2. Administrative concerns: such as announcements, time available for the meeting, consent to minutes of last meeting, date of next meeting, acceptance of the agenda.
  3. Content: First agenda item, second agenda item, etc
  4. Closing Round: a time to measure the meeting process. E.g. use of time, did the facilitator maintain equivalence, how could the decision-making have been more efficient, did everyone arrive prepared. Also this is a time to mention agenda items that should be on the agenda for the next meeting.

During the Circle Meeting there will be times to appoint a leader or a task or role or job to an individual. Here’s how it’s done:

Template for Sociocratic Elections

  1. Task: establish the job description and the period of time the person will perform the job.
  2. Ballots: Fill our ballots and hand to the election leader
  3. “Public Gossip”: each person says why they made their nomination
  4. Changes: Election leader asks each person if they want to change their votes based on the arguments they heard.
  5. Discussion: Election leader usually proposes a name after step 4. However they may ask for discussion if the arguments are very unclear – i.e. informal consent has not been reached.
  6. Consent round: Election leader asks each person if he of she consents to the proposed person, asking the person proposed last. If there is an objection, the election leader takes everyone back to step five before trying another consent round.

For making decisions by consent, a sociocratic organisation will operate in the following manner:

Template for making policy decisions by consent

  1. Consent to the issue(s) to be decided. “What’s the concern, problem or challenge?”
  2. Generate a proposal. “What’s our opinion?” Often a person or persons may be asked to prepare a proposal and bring it to the next meeting.
  3. Consent to the proposal. “What is our decision?”
    1. Present proposal – questions and discussion is for clarification only
    2. Quick reactions round – quick feedback about the proposal (intended to illicit the “feeling response”, and not the “thinking response”)
    3. Amendments – proposer amends proposal, if needed, based on the questions, discussions and quick reactions
    4. Consent round – collect and record any objections on a flip chart. No discussion at this time
    5. Discussion – improve proposal to deal with the objections if any
    6. Consent round – Each person indicates their consent to the proposal, with the proposer speaking last. If there are remaining objections, they are recorded (no discussion), everyone goes back to “Discussion”, before trying another consent round.

Implementing a self-organising group requires consent from the people who exert power over the group. Simply stated this means that senior management and/or organisation owners must support Sociocracy. Full stop. No “ifs”, “buts” or “maybes” or even “veto rights”. Otherwise internal fractures will be created when the a circle’s “assumed power” confronts the more senior “declared power”. If that happens, growth is stymied and a slide back to pseudo-autocratic or totalitarianism, or even democratic systems will follow.

The great thing about this Sociocratic process as described by Endenburg, is that it’s an excellent way to get self-organisation into an existing organisation without changing or upsetting the existing power structure. The magic then begins to happen and once the system is running well, initiatives and improvements emerge organically and naturally. There is no revolution, only evolution.

All companies and groups that utilise such or similar systems experience better performance, better products, innovation, higher moral, lower turnover, lower loss, lower costs.

Semler advocates this because, after all, he created the 7 day weekend!

7dayweekend

It is simply the human way to operate.

What could be better?

About the author

Mr. Jeremiah Emanuel Josey is an Australian who has been living in the Middle East for 7 years. Expert in the finance and energy markets, he is the Chairman of Swiss based Meci Group, a business and investment consultancy that operates across the Middle East, Central Asia and Russia.

See www.JeremiahJosey.com and www.Meci-Group.com for more.

meci group

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Advice from Richard Branson: give your employees freedom

By Jack Preston of Virgin

Richard Branson

You won’t come across many people who have never had a boss. The thought of not having someone to answer to at work is a peculiar one for most people, however for Richard Branson it’s a natural state of affairs.”Having always worked for myself, I’ve never had to play by anyone else’s rules, and I wouldn’t want to. This attitude has shaped my approach to management since Virgin’s early days, when I decided to grant our employees many of the same freedoms that I enjoy,” wrote the Virgin Group Founder in a recent entrepreneur.com blog.

Without a rule book to adhere to or a rigid company policy to bear in mind, Branson and his Virgin staff have managed to shake up countless industries over the years. A company defined by a ‘Screw it, let’s do it’ attitude towards tough decisions, Virgin has seen its refreshing outlook pay dividends and win the faith of consumers.

“Today the Virgin Group is made up of dozens of companies headed by CEOs and managers who have the freedom to run their businesses as they see fit. This philosophy goes against the usual rules of business and may seem unmanageable, but it has turned out to be one of the keys to our success,” explained Branson. Who went on to highlight how this played out for one of the Virgin Group’s newest companies in 2012.

“Our newest business, the global touring company Virgin Live, had a great launch for this reason. Although the Virgin brand is well respected within the music industry given our roots we had no history of promoting global tours. However, our small, enthusiastic team at Virgin Live beat competition from giants within the industry and won the right to promote The Rolling Stones’ 50 & Counting series of shows. This was a very proud moment for us: If you are going to enter this business, there really isn’t a bigger or better way to show your intentions.

“Before their show at London’s O2 Arena, I caught up with Mick Jagger to have a word and take a few photos with him and my family. After we were chatting he jokingly asked me if I was going to disappear, because ‘That’s what all the other promoters do.’ I had no intention of doing so. ‘I’ll be seeing you down the front,’ I told him.

“My family and I watched the show standing in front of our seats near the stage. It was a fantastic night – they put on a marvelous show. Why anyone would have passed up the opportunity to see it is beyond me. I thought later that Mick’s question showed why we had won the contract: Our employees love what they do and throw themselves into the work, so they achieve much more than anyone would expect.”

Men want freedom, women want security. Give it to them, and life is easy.

Jeremiah Josey

Social Engineering: Self-Organising, Collaborating Groups, or Sociocracy for short

How do you improve human group dynamics, and allow people be more productive, business to be more profitable, groups to be more self reliant, whilst at the same time have it be more satisfying, more rewarding and straight out more enjoyable for the individuals involved?

The solution: Develop a self organising, collaborative workplace (also known as  “Sociocracy“).

Many big companies have worked out how to do it: parts of GE, most of BMW, all of Semco (a Brazilian manufacturing company). Many more practicing it can be found here at Worldblu.  While Worldblu calls it “democratic workplace”, it’s really more likely to be collaborative one, since when you have a flexible organisation, it is more likely that 100% consent is necessary to achieve anything, and not merely majority rules – what a democracy is. The key word here is consent.

How to achieve great success, with great results, rewards and satisfaction in a manner which is harmonious to the group, to other participants, and to the world in general? It is not through competition. It is through collaboration.

Much of the presently accepted models in many organisations are competition based, and competition is a poor use of human potential.  Autocratic leadership methods necessary lead to almost total staff disconnection. Poor performance, and whip-like management mentality becomes the norm. Such a culture is easy to start, and success may be evident and easy to measure, but it soon grows into a dismal forgotten failure as any long term success measures are applied – staff turnover rates soar, production efficiency, product quality, and eventual profits plummet. It’s simply a dismal failure at humanity, at being human even. Even for those directly measured to have “succeeded” they experience high stress, poor health and eventual a short, and ultimately an unsatisfying life.

One of the most successful examples of collaboration has been documented by Ricardo Semler with his company Semco.  His two books “Maverick” and “7 Day Weekend” explain everything in succinct terms.  How a small family run company grew to an international corporation with its principal, Ricardo ceasing his involvement a long time ago.

“Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed… Most important, success is not measured only in profit and growth.” – Ricardo Semler

Here’s another great summary of Semler’s work here at Christian Sarkars blog

Personally I have applied Semler’s processes (actually they evolved naturally from Semco employees) to great success in my own endeavors.  For example I’ve taken totally disconnected and non-performing employees, and turned them into stars, “fought” over within the office for new assignments. One of the very useful Semler tools I used was upward feedback.

However amongst all of this, I’ve been searching for a methodical system to describe Semlers approach, and for a long time I called it “democratic” as he and many others have done. But I’ve never liked that, that word “democracy”. It is essentially a competitive system. Here’s why:

Demo-ns!

Dubbed “the worst form of government” by Winston Churchill, democratic environments automatically and immediately lead to the oppression of the minority. And oppression of any kind is never a good thing.

“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.” Sir Winston Churchill, Hansard, November 11, 1947

Democracy, by it’s very design, is an oppression regime: the oppression of a few by the many. “This is fair. It’s only natural”, I hear you say, but do you really think so? Is any oppression fair? Of anyone?  It is quite plain to see that any minority oppression in a social group no matter how large or small, has an ultimately negative consequence. Suppressed negative thoughts, feelings, and emotions harboured by the minority can only grow and manifest in other forms. The costs – both social and financial, short term and long term – to control, pacify, down-right-openly-oppress increases for the majority. Then something curious happens: the majority find themselves the minority, the minority becomes the majority and the cycle is repeated. Back and forth, back and forth. Those once-were-majority of course hang onto their once-granted-power with great enthusiasm and vigor, as long as they are able. The majority learnt what to do while in power. They learnt the rules of the game. The still-ongoing Occupy Wall Street  or “99% protests” (yes, still ongoing since 17 September 2011) are a good example of a majority now being controlled by a minority that has a much better understanding of the rules. Still resilience and perseverance can be a good thing.

“Consent” a better thing.

An another example is a recent US election with Obama and McCain running against each other: it was 53%/46%. Is that a “democracy” when almost half of the people have to yield their desires for the other half? This is more like a society close to reorganisation as the majority may soon become the minority.  Such a shifting of power will occur either violently (like has been seen in many Arabic countries recently) or passively, as with not-even-newsworthy Iceland recently.  In Iceland the people rejected the debt burden of the banks their brethren in government attempted to impose upon them. They arrested a number of bankers and changed their laws so it cannot happen again!

Good posts about Iceland:

Iceland Bankers Arrested

More on Iceland

And more on Iceland…

Nice YouTube accounts on Iceland:

  1. Iceland Account 1
  2. Iceland Account 2

So, what is it? What is the magic that means a group of people will be inspired to performance, all by themselves, with little external influence, other than maybe “Go!”

This video clearly shows it is not the money.  In fact the study shows that for complex, creative projects, monetary incentives actually STOPS performance! It’s not carrot and stick that works best where creative thinking is required.

Much has been done on the subject and reading Semler’s “Maverick” and “7 Day Weekend” you’ll understand that it is an evolutionary process, and it occurs by consent of the individuals of the group.

This is the important word: consent.

Work that recent came to me by the Dutch thinker Gerard Endenburg offers very substantial physical elements to this evolutionary process. A good short summary of this thinking is in “Sociocracy: The Creative Forces of Self-Organization”, by Gerard Endenburg and John A Buck. You can find this on the web in pdf.

These two resources: Semler’s dual mini-tomes and Edenburg’s principles combined results in a very harmonious outcome: the flexibility of the benefits, and the basic parameters on how to get there.

Endenburg defines four basic concepts for a self-organising group:

Four Principles of Sociocracy

1. Consent: The principle of consent governs decision-making. Consent means no argued and paramount objection. In other words, a policy decision can only be made if nobody has a reasoned and paramount objection to it. Day-to-day decisions don’t require consent, but there must be consent about the use of other forms of decision-making, for example, for day-to-day operations.

2. Election of Persons: Election of persons for functions and/or tasks takes place in accordance with the principle of consent and after open argumentation.

3. Circle: The organisation maintains a structure for decision making, consisting of semi-autonomous circles (i.e. groups of individuals). Each circle has it’s own aim and organises the three functions of leading, doing, and measuring/feedback. A circle makes its own policy decisions by consent, maintains it’s own memory system, and develops itself through integral research, teaching and learning. A circle makes consent decisions only in special circle meetings (also called round table meetings).

4. Double-linking: A circle is connection to the next higher circle in the organisation with a double link. This means that at least two persons, one being the functional leader of the circle and at least one delegate from the circle, are full members of the next higher circle.

With these four principles in place, more specific actions can occur. Here’s an example of a Sociocratic Circle Meeting:

Sociocratic Circle Meeting

1. Opening round: a time to tune into the members. Like an orchestra just before a concert.
2. Administrative concerns: such as announcements, time available for the meeting, consent to minutes of last meeting, date of next meeting, acceptance of the agenda.
3. Content: Agenda item, second agenda item, etc
4. Closing Round: a time to measure the meeting process. E.g. use of time, did the facilitator maintain equivalence, how could the decision-making have been more efficient, did everyone arrive prepared. Also this is a time to mention agenda items that should be on the agenda for the next meeting.

During the Circle Meeting there will be times to appoint a leader or a task or role or job to an individual. Here’s how it’s done:

Template for Sociocratic Elections

1. Task: establish the job description and the period of time the person will perform the job.
2. Ballots: Fill our ballots and hand to the election leader
3. “Public Gossip”: each person says why they made their nomination
4. Changes: Election leader asks each person if they want to change their votes based on the arguments they heard.
5. Discussion: Election leader usually proposes a name after step 4. However they may ask for discussion if the arguments are very unclear – i.e. informal consent has not been reached.
6. Consent round: Election leader asks each person if he of she consents to the proposed person, asking the person proposed last. If there is an objection, the election leader takes everyone back to step five before trying another consent round.

For making decisions by consent, a sociocratic organisation will operate in the following manner:

Template for making policy decisions by consent

1. Consent to the issue(s) to be decided. “What’s the concern, problem or challenge?”
2. Generate a proposal. “What’s our opinion?” Often a person or persons may be asked to prepare a proposal and bring it to the next meeting.
3. Consent to the proposal. “What is our decision?”
a. Present proposal – questions and discussion is for clarification only
b. Quick reactions round – quick feedback about the proposal (intended to illicit the “feeling response”, and not the “thinking response”)
c. Amendments – proposer amends proposal, if needed, based on the questions, discussions and quick reactions
d. Consent round – collect and record any objections on a flip chart. No discussion at this time
e. Discussion – improve proposal to deal with the objections if any
f. Consent round – Each person indicates their consent to the proposal, with the proposer speaking last. If there are remaining objections, they are recorded (no discussion), everyone goes back to e. Discussion, before trying another consent round.

Implementing a self-organising group requires consent from the people who exert power over the group. Simply stated this means that senior management and/or organisation owners must support Sociocracy. Full stop. No “ifs” or “buts” or even “veto rights”. Otherwise internal fractures will be created when the a circle’s “assumed power” confronts the more senior “declared power”. If that happens, growth is stymied and a slide back to pseudo-autocratic or totalitarianism will follow.

The great thing about this Sociocratic process as described by Endenburg, is that it’s an excellent way to get self-organisation into an existing organisation without changing or upsetting the existing power structure. The magic then begins to happen and once the system is running well, initiatives and improvements emerge organically and naturally. There is no revolution, only evolution.

All companies and groups that utilise such or similar systems experience better performance, better products, innovation, higher moral, lower turnover, lower loss, lower costs.

Semler advocates this because, after all, he invented the 7 day weekend!

It is simply the human way to operate.

What could be better?

Jeremiah Josey

Ricardo Semler on Salaries

We set salaries like this:

A lot of our people belong to unions, and they negotiate their salaries collectively. Everyone else’s salary involves an element of self-determination.

Ricardo Semler

Once or twice a year, we order salary market survey’s and pass them out. We say to people, “Figure out where you stand on this thing. You know what you do, you know what everyone else in the company makes, you know what your friends in other companies make, you know what you need, you know what’s fair.  Come back on Monday and tell us what to pay you.”

When people ask for too little, we give it to them. By and by, they figure it out and ask for more. When they ask for too much, we give that to them too – at least for the first year. Then, if we don’t feel they’re worth the money, we sit down with them and say, “Look, you make x amount of money, and we don’t think you’re making x amount of contribution. So either we find something else for you to do, or we don’t have a job for you any more. But with half a dozen exceptions, our people have always named salaries we could live with.

We do a similar thing with titles. Counsellors are counsellors, and partners are partners; these titles are always the same. But with coordinators, it’s not quite so easy. Job titles still mean too much to many people. So we tell coordinators to make up their own titles. They know what signals they need to send inside and outside the company. If they want “Procurement Manager,” that’s fine. And if they want “Grand Panjandrum of Imperial Supplies,” that’s fine too.

Jeremiah Josey

Ricardo Semler on Compensation

Employers began hiring workers by the hour during the Industrial Revolution. Their reasons were simple and rapacious. Say you ran out of cotton thread at 11:30 in the morning. If you paid people by the hour, you could stop the looms, send everyone home, and pay only for the hours actually worked.

You couldn’t do such a thing today? The law probably wouldn’t let you. The unions certainly wouldn’t let you. Your own self-interest would argue strongly against it. Yet the system lives on. The distinction between wage-earning workers and salaried employees is alive but not well, nearly universal but perfectly silly. The new clerk who lives at home and doesn’t know hot to boil an egg starts on a monthly salary, but the chief lathe operator who’s been with the company 38 years and is a master sergeant in the army reserve still gets paid by the hour.

At Semco, we eliminated Frederick Winslow Taylor’s segmentation and specialization of work. We ended the wage analyst’s hundred years of solitude. We did away with hourly pay and now give everyone a monthly salary.

Jeremiah Josey

Managing without Managers – Ricardo Semler

Managing without Managers

by Ricardo Semler, Harvard Business Review (Sep-Oct 1989)

In Brazil, where paternalism and the family business fiefdom still flourish, I am president of a manufacturing company that treats its 800 employees like responsible adults. Most of them –including factory workers – set their own working hours. All have access to the company books. The vast majority vote on many important corporate decisions. Everyone gets paid by the month, regardless of job description, and more than 150 of our management people set their own salaries and bonuses.

This may sound like an unconventional way to run a business, but it seems to work. Close to financial disaster in 1980, Semco is now one of Brazil’s fastest growing companies, with a profit margin in 1988 of 10% on sales of $37 million. Our five factories produce a range of sophisticated products, including marine pumps, digital scanners, commercial dishwashers, truck filters, and mixing equipment for everything from bubble gum to rocket fuel. Our customers include Alcoa, Saab, and General Motors. We’ve built a number of cookie factories for Nabisco, Nestle, and United Biscuits. Our multinational competitors include AMF, Worthington Industries, Mitsubishi Heavy Industries, and Carrier.

Management associations, labor unions, and the press have repeatedly named us the best company in Brazil to work for. In fact, we no longer advertise jobs.  Word of mouth generates up to 300 applications for every available position. The top five managers – we call them counselors – include a former human resources director of Ford Brazil, a 15 year veteran Chrysler executive, and a man who left his job as president of a larger company to come to Semco.

When I joined the company in 1980, 27 years after my father founded it, Semco had about 100 employees, manufactured hydraulic pumps for ships, generated about $4 million in revenues, and teetered on the brink of catastrophe. All through 1981 and 1982, we ran from bank to bank looking for loans, and we fought persistent, well-founded rumours that the company was in danger of going under. We often stayed through the night reading files and searching the desk drawers of venerable executives for clues about contracts long since privately made and privately forgotten.

Most managers and outside board members agreed on two immediate needs: to professionalize and to diversify. In fact, both of these measures had been discussed for years but had never progressed beyond wishful thinking.

For two years, holding on by our fingertips, we sought licenses to manufacture other companies’ products in Brazil. We travelled constantly. I remember one day being in Oslo for breakfast, New York for lunch, Cincinnati for dinner, and San Francisco for the night. The obstacles were great. Our company lacked an international reputation – and so did our country. Brazil’s political eccentricities and draconian business regulations scared many companies away.

Still, good luck and a relentless program of beating the corporate bushes on four continents finally paid off. By 1982, we had signed seven license agreements. Our marine division –once the entire company – was now down to 60% of total sales. Moreover, the managers and directors were all professionals with no connection to the family.

With Semco back on its feet, we entered an acquisitions phase that cost millions of dollars in expenditures and millions more in losses over the next two or three years. All this growth was financed by banks at interest rates that were generally 30% above the rate of inflation, which ranged from 40% to 900% annually; There was no long-term money in Brazil at that time, so all those loans had maximum terms of 90 days. We didn’t get one cent in government financing or from incentive agencies either, and we never paid out a dime in graft or bribes.

How did we do it and survive? Hard work, of course. And good luck – fundamental to all business success. But most important, I think, were the drastic changes we made in our concept of management. Without those changes, not even hard work and good luck could have pulled us through.

Semco has three fundamental values on which we base some 30 management programs. These values – democracy, profit sharing, and information – work in a complicated circle, each dependent on the other two. If we eliminated one, the others would be meaningless. Our corporate structure, employee freedoms, union relations, factory size limitations – all are products of our commitment to these principles.

It’s never easy to transplant management programs from one company to another. In South America, it’s axiomatic that our structure and style cannot be duplicated. Semco is either too small, too big, too far away, too young, too old, or too obnoxious.

We may also be too specialized. We do cellular manufacturing of technologically sophisticated products, and we work at the high end on quality and price. So our critics maybe right. Perhaps nothing we’ve done can be a blueprint for anyone else. Still, in an industrial world whose methods show obvious signs of exhaustion, the merit of sharing experience is to encourage experiment and to plant the seeds of conceptual change. So what the hell.

Participatory Hot Air

The first of Semco’s three values is democracy, or employee involvement. Clearly, workers who control their working conditions are going to be happier than workers who don’t. Just as clearly, there is no contest between the company that buys the grudging compliance of its work force and the company that enjoys the enterprising participation of its employees.

But about 90% of the time, participatory management is just hot air. Not that intentions aren’t good. It’s just that implementing employee involvement is so complex, so difficult, and not uncommonly, so frustrating that it is easier to talk about than to do.

We found four big obstacles to effective participatory management: size, hierarchy, lack of motivation, and ignorance. In an immense production unit, people feel tiny, nameless, and in capable of exerting influence on the way work is done or on the final profit made. This sense of helplessness is underlined by managers who, jealous of their power and prerogatives, refuse to let subordinates make any decisions for themselves – sometimes even about going to the bathroom. But even if size and hierarchy can be overcome, why should workers care about productivity and company profits? Moreover, even if you can get them to care, how can they tell when they’re doing the right thing?

As Antony Jay pointed out back in the 1950s in Corporation Man, human beings weren’t designed to work in big groups. Until recently, our ancestors were hunters and gatherers. For more than five million years, they refined their ability to work in groups of no more than about a dozen people. Then along comes the industrial revolution, and suddenly workers are trying to function efficiently in factories that employ hundreds and even thousands. Organizing those hundreds into teams of about ten members each may help some but there is still a limit to how many small teams can work well together. At Semco, we’ve found the most effective production unit to consist of about 150 people. The exact number is open to argument, but it’s clear that several thousand people in one facility makes individual involvement an illusion.

When we made the decision to keep our units small, we immediately focused on one facility that had more than 300 people. The unit manufactured commercial food-service equipment – slicers, scales, meat grinders, mixers – and used an MRP II system hooked up to an IBM mainframe with dozens of terminals all over the plant. Paperwork often took two days to make its way from one end of the factory to the other. Excess inventories, late delivery, and quality problems were common. We had tried various worker participation programs, quality circles, kanban systems, and motivation schemes, all of which got off to great starts but lost their momentum within months. The whole thing was just too damn big and complex; there were too many managers in too many layers holding too many meetings. So we decided to break up the facility into three separate plants.

To begin with, we kept all three in the same building but separated everything we could –entrances, receiving docks, inventories, telephones, as well as certain auxiliary functions like personnel, management information systems, and internal controls. We also scrapped the mainframe in favor of three independent, PC-based systems.

The first effect of the break-up was a rise in costs due to duplication of effort and a loss in economies of scale. UnfortunateIy, balance sheets chalk up items like these as liabilities, all with dollar figures attached, and there’s nothing at first to list on the asset side but airy stuff like “heightened involvement” and “a sense of belonging.” Yet the longer term results exceed our expectations.

Within a year, sales doubled, inventories fell from 136 days to 46, we unveiled eight new products that had been stalled in R&D for two years, and overall quality improved to the point that a one-third rejection rate on federally inspected scales dropped to less than 1%. Increased productivity let us reduce the workforce by 32% through attrition and retirement incentives.

I don’t claim that size reduction alone accomplished all this, just that size reduction is essential for putting employees in touch with one another so they can co-ordinate their work. The kind of distance we want to eliminate comes from having too many people in one place, but it also comes from having a pyramidal hierarchy.

Pyramids and Circles

The organizational pyramid is the cause of much corporate evil, because the tip is too far from the base. Pyramids emphasize power, promote insecurity; distort communications, hobble interaction, and make it very difficult for the people who plan and the people who execute to move in the same direction. So Semco designed an organizational circle. Its greatest advantage is to reduce management levels to three – one corporate level and two operating levels at the manufacturing units.

It consists of three concentric circles. One tiny, central circle contains the five people who integrate the company’s movements. These are the counselors I mentioned before. I’m one of them, and except for a couple of legal documents that call me president, counselor is the only title I use. A second, larger circle contains the heads of the eight divisions – we call them partners. Finally, a third, huge circle holds all the other employees. Most of them are the people we call associates; they do the research, design, sales, and manufacturing work and have no one reporting to them on a regular basis. But some of them are the permanent and temporary team and task leaders we call co-ordinators. Counselors, partners, co-ordinators, and associates. Four titles. Three management layers.

The linchpins of the system are the co-ordinators, a group that includes everyone formerly called foreman, supervisor, manager, head, or chief. The only people who report to co-ordinators are associates. No co-ordinator reports to another co-ordinator – that feature of the system is what ensures the reduction in management layers.

Like anyone else, we value leadership, but it’s not .the only thing we value. In marine pumps for example, we have an applications engineer who can look at the layout of a ship and then focus on one particular pump and say, “That pump will fail if you take this thing north of the Arctic Circle.” He makes a lot more money than the person who manages his unit. We can change the manager, but this guy knows what kind of pump will work in the Arctic, and that’s worth more. Associates often make higher salaries than co-ordinators and partners, and they can increase their status and compensation without entering the “management” line.

Managers and the status and money they enjoy – in a word, hierarchy – are the single biggest obstacle to participatory management. We had to get the managers out of the way of democratic decision making, and our circular system does that pretty well.

But we go further. We don’t hire or promote people until they’ve been interviewed and accepted by all their future subordinates. Twice a year, subordinates evaluate managers. Also twice a year, everyone in the company anonymously fills out a questionnaire about company credibility and top management competence. Among other things, we ask our employees what it would take to make them quit or go on strike.

We insist on making important decision’s collegially, and certain decisions are made by a company-wide vote. Several years ago, for example, we needed a bigger plant for our marine division, which makes pumps, compressors, and ship propellers. Real estate agents looked for months and found nothing, So we asked the employees themselves to help, and over the first weekend they found three factories for sale, all of them nearby. We closed up shop for a day, piled everyone into buses, and drove out to inspect the three buildings. Then the workers voted – and they chose a plant the counselors didn’t really want. It was an interesting situation – one that tested our commitment to participatory management.

The building stands across the street from a Caterpillar plant that’s one of the most frequently struck factories in Brazil. With two tough unions of our own, we weren’t looking forward to front-row seats for every labor dispute that crime along. But we accepted the employee decision, because we believe that in the long run, letting people participate in the decisions that affect their lives will have a positive effect on employee motivation and morale.

We bough the building and moved in. The workers designed the layout for a flexible manufacturing system, and they hired one of Brazil’s foremost artists to paint the whole thing, inside and out, including the machinery. That plant really belongs to its employees. I feel like a guest every time I walk in.

I don’t mind, The division’s productivity, in dollars per year per employee, has jumped from $14,200 in 1984 – the year we moved – to $37,500 in 1988 and for 1989 the goal is $50,000. Over the same period, market share went from 54% to 62%.

Employees also outvoted me on the acquisition of a company that I’m still sure we should have bought. But they felt we weren’t ready to digest it, and I lost the vote. In a case like that, the credibility of our management system is at stake. Employee involvement must be real, even when it makes management uneasy. Anyway, what is the future of an acquisition if the people who have to operate it don’t believe it’s workable?

Hiring Adults

We have other ways of combating hierarchy too. Most of our programs are based on the notion of giving employees control over their own lives. In a word, we hire adults, and then we treat them like adults.

Think about that. Outside the factory, workers are men and women who elect governments, serve in the army, lead community projects, raise and educate families, and make decisions every day about the future. Friends solicit their advice. Salespeople court them. Children and grandchildren look up to them for their wisdom and experience. But the moment they walk into the factory, the company transforms them into adolescents. They have to wear badges and name tags, arrive at a certain time, stand in line to punch the clock or eat their lunch, get permission to go to the bathroom, give lengthy explanations every time they’re five minutes late, and follow instructions without asking a lot of questions.

One of my first moves when I took control of Semco was to abolish norms, manuals, rules, and regulations. Everyone knows you can’t run a large organization without regulations, but everyone also knows that most regulations are poppycock. They rarely solve problems. On the contrary; there is usually some obscure comer of the rule book that justifies the worst silliness people can think up. Common sense is a riskier tactic because it requires personal responsibility.

It’s also true that common sense requires just a touch of civil disobedience every time someone calls attention to something that’s not working. We had to free the Thoreaus and the Tom Paines in the factory and come to terms with that fact that civil disobedience was not an early sign of revolution but a clear indication of common sense at work.

So we replaced all the nitpicking regulations with the rule of common sense and put our employees in the demanding position of using their own judgement.

We have no dress code, for example. The idea that personal appearance is important in a job – any job – is baloney. We’ve all heard that salespeople, receptionists, and service reps are the company’s calling cards, but in fact how utterly silly is that. A company that needs business suits to prove its seriousness probably lacks more meaningful proof. And what customer has ever canceled an order because the receptionist was wearing jeans instead of a dress? Women and men look best when they feel good. IBM is not a great company because its salespeople dress to the special standard that Thomas Watson set. It’s a great company that also happens to have this quirk.

We also scrapped the complex company rules about travel expenses – what sorts of accommodations people were entitled to, whether we’d pay for a theater ticket, whether a free call home meant five minutes or ten. We used to spend a lot of time discussing stuff like that. Now we base everything on common sense. Some people stay in four-star hotels and some live like spartans. Some people spend $200 a day while others get by on $125. Or so I suppose. No one checks expenses, so there is no way of knowing. The point is, we don’t care. If we can’t trust people with our money and their judgement, we sure as hell shouldn’t be sending them overseas to do business in our name.

We have done away with security searches, storeroom padlocks, and audits of the petty cash accounts of veteran employees. Not that we wouldn’t prosecute a genuinely criminal violation of our trust. We just refuse to humiliate 97% of the work force to get our hands on the occasional thief or two-bit embezzler.

We encourage – we practically insist on – job rotation every two to five years to prevent boredom. We try hard to provide job security, and for people over 50 or who’ve been with the company for more than three years, dismissal procedures are extra complicated.

On the more experimental side, we have a program for entry-level management trainees called “Lost in Space” whereby we hire a couple of people every year who have no job description at all. A “godfather” looks after them and for one year they can do anything they like as long as they try at least 12 different areas or units.

By the same logic that governs our other employee programs, we have also eliminated time clocks. People come and go according to their own schedules – even on the factory floor. I admit this idea is hard to swallow, most manufacturers are not ready for factory-floor flextime. But our reasoning was simple.

First, we use cellular manufacturing systems. At our food-processing equipment plant, for example, one cell makes only slicers, another makes scales, another makes mixers, and so forth. Each cell is self-contained, so products – and their problems – are segregated from each other.

Second, we assumed that all our employees were trustworthy adults. We couldn’t believe they would come to work day after day and sit on their hands because no one else was there. Pretty soon, we figured, they would start co-ordinating their work hours with their co-workers.

And that’s exactly what happened, only more so. For example, one man wanted to start at 7am, but because the forklift operator didn’t come until 8, he couldn’t get his parts. So a general discussion arose, and the upshot was that now everyone knows how to operate a forklift. In fact, most people can now do several jobs. The union has never objected because the initiative came from the workers themselves. It was their idea.

Moreover, the people on the factory floor set the schedule, and if they say that this month they will build 48 commercial dishwashers, then we can go play tennis, because 48 is what they’ll build.

In one case, one group decided to make 220 meat slicers. By the end of the month, it had finished the slicers as scheduled – except that even after repeated phone calls, the supplier still hadn’t produced the motors. So two employees drove over and talked to the supplier and managed to get delivery at the end of that day, the 31st. Then they stayed all night, the whole work force, and finished the lot at 4:45 the next morning.

When we introduced flexible hours, we decided to hold regular follow-up meetings to track problems and decide how to deal with abuses and production interruptions. That was years ago, and we haven’t yet held the first meeting.

Hunting the Woolly Mammoth

What makes our people behave this way? As Antony Jay points out, corporate man is a very recent animal. At Semco, we try to respect the hunter that dominated the first 99.9% of the history of our species. If you had to kill a mammoth or do without supper, there was no time to draw up an organization chart, assign tasks, or delegate authority. Basically, the person who saw the mammoth from farthest away was the Official Sighter, the one who ran fastest was the Head Runner, whoever threw the most accurate spear was the Grand Marksman, and the person all others respected most and listened to was the Chief. That’s all there was to it. Distributing little charts to produce an appearance of order would have been a waste of time. It still is.

What I’m saying is, put ten people together, don’t appoint a leader, and you can be sure that one will emerge. So will a sighter, a runner, and whatever else the group needs. We form the groups, but they find their own leaders. That’s not a lack of structure that’s just a lack of structure imposed from above.

But getting back to that mammoth, why was it that all the members of the group were so eager to do their share of the work – sighting, running, spearing, chiefing – and to stand aside when someone else could do it better? Because they all got to eat the thing once it was killed and cooked. What mattered was results, not status.

Corporate profit is today’s mammoth meat. And though there is a widespread view that profit sharing is some kind of socialist infection, it seems to me that few motivational tools are more capitalist. Everyone agrees that profits should belong to those who risk their capital, that entrepreneurial behavior deserves reward, that the creation of wealth should enrich the creator. Well, depending on how you define capital and risk, all these truisms can apply as much to workers as to shareholders.

Still, many profit-sharing programs are failures, and we think we know why. Profit sharing won’t motivate employees if they see it as just another management gimmick, if the company makes it difficult for them to see how their own work is related to profits and to understand how those profits are divided.

In Semco’s case, each division has a separate profit-sharing program. Twice a year, we calculate 23% of after-tax profit on each division income statement and give a check to three employees who’ve been elected by the workers in their division. These three invest the money until the unit can meet and decide – by simple majority vote – what they want to do with it. In most units, that’s turned out to be an equal distribution. If a unit has 150 workers, the total is divided by 150 and handed out. It’s that simple. The guy who sweeps the floor gets just as much as the division partner.

One division chose to use the money as a fund to lend out for housing construction. It was a pretty close vote, and the workers may change their minds next year. In the meantime, some of them have already received loans and have begun to build themselves houses. In any case, the employees do what they want with the money. The counselors stay out of it.

Semco’s experience has convinced me that profit-sharing has an excellent chance of working when it crowns a broad program of employee participation. When the profit-sharing criteria are so clear and simple that the least gifted employee can understand them, and perhaps most important, when employees have monthly access to the company’s vital statistics – costs, overhead, sales, payroll, taxes, profits.

Transparency

Lots of things contribute to a successful profit-sharing program: low employee tumover, competitive pay, absence of paternalism, refusal to give consolation prizes when profits are down, frequent (quarterly or semi-annual) profit distribution, and plenty of opportunity for employees to question the management decisions that affect future profits. But nothing matters more than those vital statistics – short, frank, frequent reports on how the company is doing. Complete transparency. No hocus-pocus, no hanky-panky, no simplifications.

On the contrary, all Semco employees attend classes to learn how to read and understand the numbers, and it’s one of their unions that teach the course. Every month, each employee gets a  balance sheet, a profit-and-loss analysis, and a cash-flow statement for his or her division. The reports contain about 70 line items (more, incidentally than we use to run the company, but we don’t want anyone to think we’re withholding information).

Many of our executives were alarmed by the decision to share monthly financial results with all employees. They were afraid workers would want to know everything like how much we pay executives. When we held the first large meeting to discuss these financial reports with the factory committees and the leaders of the metalworkers’ union, the first question we got was, “How much do division managers make?” We told them. They gasped. Ever since, the factory workers have called them “maharaja.”

But so what? If executives are embarrassed by their salaries, that probably means they aren’t earning them. Confidential payrolls are for those who cannot look themselves in the mirror and say with conviction, “I live in a capitalist system that remunerates on a geometric scale. I spent years in school, I have years of experience, I am capable and dedicated and intelligent. I deserve what I get.”

I believe that the courage to show the real numbers will always have positive consequences over the long term. On the other hand, we can show only the numbers we bother to put together, and there aren’t as many as there used to be. In my view, only the big numbers matter. But Semco’s accounting people keep telling me that since the only way to get big numbers is to add up the small ones, producing a budget or report that includes every tiny detail would require no extra effort. This is an expensive fallacy, and a difficult one to eradicate.

A few years ago, the U.S. president of Allis-Chalmers paid Semco a visit. At the end of his factory tour, he leafed through our monthly reports and budgets. At the time, we had our numbers ready on the fifth working day of every month in super-organized folders, and were those numbers comprehensive! On page 67, chart 112.6, for example, you could see how much coffee the workers in Light Manufacturing III had consumed the month before. The man said he was surprised to find such efficiency in a Brazilian company. In fact, he was so impressed that he asked his Brazilian subsidiary, an organization many times our size, to install a similar system there.

For months, we strolled around like peacocks, telling anyone who cared to listen that our budget system was state-of-the-art and that the president of a Big American Company had ordered his people to copy it. But soon we began to realize two things. First, our expenses were always too high, and they never came down because the accounting department was full of overpaid clerks who did nothing but compile them. Second, there were so damn many numbers insidethe folder that almost none of our managers read them. In fact, we knew less about the company then, with all that information, than we do now without it.

Today we have a simple accounting system providing limited but relevant information that we can grasp and act on quickly. We pared 400 cost centers down to 50. We beheaded hundreds of classifications and dozens of accounting lines. Finally, we can see the company through the haze.

As for Allis-Chalmers, I don’t know whether it ever adopted our old system in all its terrible completeness, but l hope not. A few years later, it began to suffer severe financial difficulties and eventually lost so much market share and money that it was broken up and sold. I’d hate to think it was our fault.

In preparing budgets, we believe that the flexibility to change the budget continually is much more important than the detailed consistency of the initial numbers. We also believe in the importance of comparing expectations with results. Naturally, we compare monthly reports with the budget. But we go one step further. At month’s end, the co-ordinators in each area make guesses about unit receipts, profit margins, and expenses. When the official numbers come out a few days later, top managers compare them with the guesses to judge how well the co-ordinators understand their areas.

What matters in budgets as well as in reports is that the numbers be few and important and that people treat them with something approaching passion. The three monthly reports, with their 70 line items, tell us how to run the company; tell our managers how well they know their units, and tell our employees if there’s going to be a profit. Everyone works on the basis of the same information, and everyone looks forward to its appearance with what I’d call fervent curiosity.

And that’s all there is to it. Participation gives people control of their work, profit sharing gives them a reason to do it better, information tells them what’s working and what isn’t.

Letting Them Do Whatever the HeIl They Want

So we don’t have systems or staff functions or analysts or anything like that. What we have are people who either sell or make, and there’s nothing in between. Is there a marketing department? Not on your life. Marketing is everybody’s problem. Everybody knows the price of the product. Everybody knows the cost. Everybody has the monthly balance sheet that says exactly what each of them makes, how much bronze is costing us, how much overtime we paid, all of it. And the employees know that 23% of the after-tax profit is theirs.

We are very, very rigorous about the numbers. We want them in on the fourth day of the month so we can get them back out on the fifth. And because we’re so strict with the financial controls, we can be extremely lax about everything else. Employees can paint the walls any color they like. They can come to work whenever they decide. They can wear whatever clothing makes them comfortable. They can do whatever the hell they want. It’s up to them to see the connection between productivity and profit and to act on it.

Jeremiah Josey

Productivity – How to Get the Most from Your Team: Have a Collaborative Work Culture

Do you operate a fear based work culture or a collaborative work culture?

It’s easy to tell: just take a break, have a holiday. Come back to your work place and if it based on fear you will find work has slowed to a standstill.

A collaborative work culture and you’ll wonder why came back – performance may have actually improved!

Now we humans are a learning animal – we learn from each other – for good or for bad. Having the experience I have in the engineering business (the consultancy or working for hours business – see my presentation on how to measure business performance here) I have seen the effect of focus on maximising revenue alone: training falls by the way side.  Or if it does occur, it is focused on technical, task related skills. That leaves us in the least desirable learning environment: informally from each other!! In an environment like this leadership and managerial skills are taken for granted and left to “brew” in the culture of the company. Managers modeled their styles on the only thing they have – their own managers. And if their own managers were promoted engineers – technically orientated, not people oriented – well that “brew” will be interesting indeed.

What’s new? Most companies actually run like this: focusing on short term immediate results, deferring training and improvement to a another day, “when things get quiet”. I suppose the confusing element with selling hours for a business is that you are actually trying to buy and sell the same “thing” you need to manage: people.

Confused… How is this related to the culture?

Well consider where fear usually comes from? It’s a fear of something? In business, as an employee, it is a fear of what?  Loosing that job of course, and that comes if the boss perceives you as not performing (whether you are or not is a different matter). And there will be fear of being found out that you really don’t know what you are doing.  Because for a technically trained person to have the wrong answer, is to be a failure.  It’s black or white, pass or fail.

From what I have just described – a work team where there’s no formal training in how to lead, how to manage, even how to communicate, the fall back position is to manipulate people like inanimate objects – you can expect that fear will be a natural outcome. Getting promoted into a position you’ve never been trained you will naturally be fearful. And worse, being fearful of anyone finding out that you don’t know.

By the way, don’t bother hiding – it’s always obvious to your team and your managers if you are struggling. It’s how you deal with that struggle that your managers are interested in.   With your team, lie to them and you loose their respect. Loose their respect and you loose your team.

That’s why I enjoy collaborative cultures the most: continual feedback, formal, informal, positive, negative, eliminates the fear.

A culture where the leader recognises that a shortfall in team member is a shortfall in their ability to lead.  A culture where the leader knows that to improve their team they must first improve themselves.

But it does take courage.

Courage is not having no fear – that is fool hardy.  Courage is acting despite your fear.

This is the basis behind the collaborative work culture instilled by Ricardo Semler.

Here’s a great lecture by Ricardo at MIT.  He says something very fundamental about the predominant way of working in the 21st century: collaboration.

A meritocracy is another word for it.

by Jeremiah Josey, August 2009