Imagine it: 80% of your organization’s problems, gone

“How many people on their death beds say ‘boy, I wish I’d spent more time at the office?’, 30 years ago we started thinking about that as a company.” Today Ricardo Semler, founder of Brazilian manufacturing giant Semco, has created a culture of open management where employees choose their own schedules and take one day a week off to, well – live their lives. Globally, more and more organizations are recognizing the human and business benefits of building openness – and the courage and commitment it requires.


Walk through the doors of one of the many Semco offices in Sao Paolo and the first thing you’ll see is a reception desk – but no receptionist: “We don’t believe in cluttering the payroll with ungratifying, dead-end jobs,” says Semco leader Ricardo Semler (and no, he isn’t CEO. The CEO position revolves every six months between the company’s six ‘Counselors’.)

The results of such initiatives are impressive: Semco delivers average annual revenue growth of 40 percent – whilst achieving cultural openness across a complex, global business. Semco employs thousands of people (the waiting lists for vacancies are very long apparently!) It runs a multi-million dollar rocket fuel propellant systems business and 4,000 ATMs in Brazil – amongst other operations.

“Everyone at Semco fetches their own guests, stands over photocopiers and makes their own phone calls,” says Semler. “It’s all part of running a natural business. We have stripped away the unnecessary perks and privileges that feed the ego, hurt the balance sheet and distract everyone from the crucial corporate tasks of making, selling, billing and collecting.”’

Once you pass through Reception the surprises keep coming. The company has (literally as well as metaphorically) torn down the walls between employees. Work stations are non-designated, staff pre-book them, and separated by plants, flowers and vines. Hammocks hang between stations for employees to rest in, and workers dress as they want.

The company tore up traditional work schedules too, with people taking one day off every week. It was one of the things I first heard about Semco, when my colleague Sören Holm told me about them. I was intrigued.

Create change now – tomorrow may be too late
“When you look at the way that we distribute our lives,” says Semler “You realize that when we have a lot of money, we have very little time. And then when we finally have time, we have neither the money nor the health. How many people on their death beds say ‘boy, I wish I’d spent more time at the office?’ So there’s the thing of having the courage now — not in a week, not in two months. So instead of going mountain climbing when you’re 82, why don’t you do it next week? So we tried it like this: We’ll sell you back your Wednesdays for 10 percent of your salary. So now, if you were going to be a violinist, which you probably weren’t, you go and do this on Wednesday. The purpose of work is not to make money. The purpose of work is to make the workers, whether working stiffs or top executives, feel good about life.” ‘

Democracy in action
Beneath the hammocks and open plan offices is an ambitious, courageous adventure in workplace democracy. A robust culture of openness drives the entire company:

• Workers, including factory workers, set their own schedules and their own salaries
• They choose their own form of compensation based on 11 different options
• All the company’s financial information is open and public, everyone knows what everyone else makes
• People who pay themselves too much are required to work with colleagues who might be resentful
• Every six months leaders get elected or reelected by the whole staff. They anonymously evaluate leaders’ performance. When leaders get less than 70 – 80 percent, a new leader is elected
• At every board meeting, two seats are kept open for employees on a first-come, first-served basis
Challenge conventions, don’t conform to them
None of these measures have been imposed from above. In following open management techniques, they have evolved, and tried and tested over time. Semler encourages all Semco workers to fearlessly ask ‘why’ and become actively involved in driving the business. Why do we have job titles? Why do we need a HQ? Why shouldn’t employees have access to detailed financial information? When you think of the courage it takes as a leader to hand over these kinds of decisions, the trust, confidence and self-belief involved is inspiring. For me it asks provocative questions: Could you imagine initiating or driving through any of these kinds of measures as a leader in your organization, for example? If yes, which ones? If no, why not? What would be stopping you?

Lack of openness is typically 80% of a company’s problem
According to one of my great mentors, the late Will Schutz (in his book The Human Element: Productivity, Self-Esteem and the Bottom Line) 80 percent of the problems most organizations face are not real problems. They’re actually the result of people not being open enough with each other – of people concealing, misrepresenting and miscommunicating information.

Think about that for a moment! 80%. Imagine your present organization minus 80% of its current problems. Imagine not having to meet deadlines in the face of misunderstandings, misinformation, conflicting messages or a lack of face-to-face contact.

When I start working with an organization I often find decision makers from every level struggling with a lack of openness. Yet often, within the same organization, I’ll hear talk of how important it is to be ‘diplomatic’ and to ‘not reveal too much.’ How much of this is people being fearful of revealing their own weaknesses? Or trying to protect themselves from situations they’re afraid they won’t be able to handle?


Think about your own organization:

• In your management team do you talk about the things that really need talking about?
• What are the issues you don’t talk about? How do these issues, and not talking about them, affect your business?
• What do you choose not to talk to your customers about, and how does that affect your business?
• Do other teams in your business do things the same way your team does?
• When big decisions are made, how transparent and open is the process?
• How many people are included in making that decision? Or are decisions typically ‘handed down’? How does that affect your overall business?

The story of Semco is the kind of story — inspiring, driven by courage, business-relevant — that we will be offering on our new Facebook page. The Kull Leadership Facebook page will hopefully open doors to new ideas and new collaborators. We want to inspire action and create debate, sharing new perspectives on courage, and how it can grow your business, and ours.

So how can we start to build a culture of openness and transparency within our own organizations?

Communicating without fear
In our own small way, with our new Facebook page we’re aspiring to something like Semco’s own commitment to open communication: “We always try to speak the truth,” says Semler. “On those rare occasions when the truth, for some special reason, can’t be told, we say nothing. We believe it is essential that all company communications, especially those intended for the workers or the public, are absolutely honest. Our people are free to speak their minds, without fear.”

We want the Facebook page to reach out to a wider audience of people we wouldn’t otherwise meet. We are a small team at Kull Leadership AB, but a united and energetic one. We run off ideas. We thrive on debate. We love making each other think. Sounds good? With Facebook you’ll get access to ideas which drive us and make us grow, ideas that inspire us to act. It’s often easier to put words into action and courage into practice, when we have new stories and arguments to hand. So come and share new ideas, and leave energized, emboldened and ready to get courageous.

Join us there at: _________link________.

On ______date___________.

Be yourself
When you see Ricardo Semler, one thing that might strike you is that he is funny, relaxed, and, well – slightly eccentric for the head of a major multinational. (He makes people laugh, and he clearly enjoys making people laugh!) Maybe you’ve noticed this about other courageous leaders – they don’t seem too worried about what other people think of them. They might dress informally, crack jokes, ask searching questions unexpectedly. But you think immediately I like that person. I trust them. As Will Schutz said: “You are open, or true to yourself, when you allow yourself to acknowledge your own experiences, and can talk to other people about them.” All openness starts with this internal transparency. We start the journey towards outer openness by reflecting and being honest with ourselves about who we really are inside.

If you want to lead others start by reflecting on yourself
Give yourself time to reflect. Ask yourself difficult questions: Who am I really? How often am I really truthful with myself and others? How well and how much do I really listen? How do I arrive at the conclusions I come to? What prejudices and preconceptions do I have? Who do I really want to be as a leader? What obstacles do I put in my own way? What do I really need? Try not to hide information from yourself. Try not to fool yourself. Be calm. Don’t accept quick, easy, reflexive answers from yourself. Be curious. Probe. True leaders are not just curious about other people. They’re curious about themselves.

Does openness mean revealing everything?
Absolutely not. Different situations require different levels of openness. Look at the Semler quote above – even a company with a strong commitment to openness admits there are “rare occasions” when “the truth can’t be told.” Sometimes it’s important to share your views frankly. Sometimes it’s important to listen. But overall my experience is that we often mislead ourselves, telling ourselves that we don’t really need to tell everybody everything, and that the situation requires less transparency than it actually does. Often we are doing this to avoid having to manage a situation that frightens us, and to retain control in a situation we perceive as threatening. Consciously identifying why you stop sharing views and information openly when you do, and examining you reasons for this, is vital for success. Imagine you discover, for example, that you have a strong need to feel important, and are sensitive to being ignored – this could directly affect how much you delegate. Consciously reflecting allows you to move valuable information about yourself from your subconscious to your conscious – leaving you free to choose ways of developing your leadership in the direction you really want to take it in. Letting you move, courageously and confidently, towards openness.