Running a company with almost no rules

Today I want to share a dream with you. The dream of a business environment where everyone is empowered and contributes to building a great company, driven by their own genuine motivation.

An environment where factory workers define their production quantities, working hours, and vacation days by themselves. A company where office staff and their managers have the freedom to determine business strategy without command and control from the senior executive level. A world where employees set their own salaries and where these salaries are transparent to everybody in the company.

Hands together

An organization where all financial information is open and discussed by everyone, and where everyone has access to gain the skills necessary to understand the numbers. Where big decisions are made by voting of all employees and where profit-sharing is a fully democratic exercise. A world where all unnecessary signs of power that feed the ego but hurt the balance sheet are removed. Actually, a system of democracy and full empowerment across the whole company.

Does this sound realistic to you? Probably not, but this company actually exists applying this incredible culture for over two decades. It is called Semco, led by Ricardo Semler who transformed a struggling equipment supplier in Brazil into a #radicallyHuman and democratic company.

If we are afraid to let people decide in which section of the plane to sit, or how many stars their hotel should have, we shouldn’t be sending them abroad to do business in our name, shouldn’t we?
Ricardo Semler, CEO of Semco

What might look like a small island in the sea isn’t an isolated case. A couple of months ago, I met Frank van Massenhove, Chairman of the Social Security Department of Belgium, that is composed of roughly 3,000 employees. When he took over the Department in 2002 he quickly realized that he would have to do some substantial changes to turn it into an attractive place to work.

Over a period of several years, he introduced a flatter hierarchy, and a fully transparent salary and bonus system where employees set the results they want to achieve. Interestingly, the goals they set themselves are generally more ambitious than what Frank would have imagined they should do.

Most impressively, he fully empowered employees to manage their working hours. With one non-negotiable condition: They have to achieve the results they set themselves.

Employees freely choose if they come to the office or if they work from home, at which time of the day they work and even ON which day they work, weekends included. As a result, people are able to spend more time with family and friends as they can easily arrange having lunch together or accompany their children to the swimming class at 3 pm. Part-time work becomes obsolete as employees can arrange their work flexibly.

A method that can be introduced anywhere?

This triggered my interest and I spoke to other people who started or are trying to implement similar systems in their working environment. What looks like a dream in the first place turns out to be a realistic exercise that requires patience, emotional intelligence and above all the courage to give away control.

An implementation phase of 10-15+ years is realistic or even optimistic. You must be up for several circles of trial and error and you have to understand that the fundamental element that makes it work is trust. There is a steep learning curve for the leadership teams and for all employees. People have to learn step by step how to manage growing empowerment and need to acknowledge their own part of accountability. Power goes with responsibility and the mutual trust necessary to delegate this power needs time to emerge.

But the complex and lengthy implementation is worth the effort as the reward is high and leads to sustainable success. Once implemented, people truly care about their jobs and they truly care about the company.

The results of the two examples mentioned above speak by themselves

Semco has grown its productivity sevenfold and its profit fivefold just in the first 8 years of implementation of their revolutionary culture. The Social Security department of Belgium can proudly look back at yearly productivity growth rates between 10% and 24% over the past years.

We should seriously rethink our idea of having a handful of people in the decision-maker seat in favor of leveraging the collective wisdom and knowledge of all employees.

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© 2019 Ulrike Seminati, Zurich, Switzerland