Radical leadership
Ricardo Semler, CEO of Semco Group of São Paulo, Brazil, is considered by many people to be a radical. He has never been the type of leader that most people might expect to be in charge of a multimillion-dollar business. Why? Semler breaks all the traditional ‘rules’ of leading and managing. He is the ultimate hands-off leader who does not even have an office at the company’s headquarters. As the ‘leading proponent and most tireless evangelist’ of participative management, Semler says his philosophy is simple: Treat people like adults and they will respond like adults. Underlying the participative management approach is the belief that ‘organisations thrive best by entrusting employees to apply their creativity and ingenuity in service of the whole enterprise, and to make important decisions close to the flow of work, conceivably including the selection and election of their bosses’. And according to Semler, his approach works … and works well. But how does it work in reality?
At Semco, you will not find most of the trappings of organisations and management. There are no organisation charts, no long-term plans, no corporate values statements, no dress codes, and no written rules or policy manuals. The company’s 3000 employees decide their work hours and their pay levels. Subordinates decide who their bosses will be and they also review their boss’s performance. The employees also elect the corporate leadership and decide most of the company’s new strategic initiatives. Each person – including Ricardo Semler – has one vote.
At one of the company’s plants outside São Paulo, there are no supervisors telling employees what to do. On any given day, an employee may decide to ‘run a grinder or drive a forklift, depending on what needs to be done’. João Vendramin Neto, the person in charge of Semco’s manufacturing, says that ‘the workers know the organisation’s objectives and they use common sense to decide for themselves what they should do to hit those goals’.
Why did Semler decide that his form of radical leadership was necessary, and does it work? Semler did not pursue such radical self-governance out of some altruistic ulterior motive. Instead, he felt it was the only way to build an organisation that was flexible and resilient enough to flourish in chaotic and turbulent times. He maintains that this approach has enabled Semco to survive the roller-coaster nature of Brazil’s politics and economy. Although the country’s political leadership and economy have gone from one extreme to another and countless Brazilian banks and companies have failed, Semco has survived. And not just survived; it has prospered. Semler says, ‘If you look at Semco’s numbers, we have grown 27.5 per cent a year for 14 years.’ And Semler attributes that fact to flexibility … of his company and, most importantly, of his employees.
1) Describe Ricardo Semler’s leadership style. What do you think the advantages and drawbacks of his style might be? What two leadership models could be used to best explain Ricardo Semler’s leadership style?
2)What challenges might a radically ‘hands-off’ leader face? How could those challenges be addressed?
3)How could future leaders be identified in this organisation? Would leadership training be important to this organisation? Discuss.
