Ricardo Semler
Encyclopedia
Ricardo Semler is the CEO and majority owner of Semco SA, a Brazil
ian company best known for its radical form of industrial democracy
and corporate re-engineering. Under his ownership, revenue has grown from US$4 million in 1982 to US$212 million in 2003 and his innovative business management
policies have attracted widespread interest around the world. Time
featured him among its Global 100 young leaders profile series published in 1994 while the World Economic Forum
also nominated him. The Wall Street Journal America Economia, The Wall Street Journal
's Latin America
n magazine, named him Latin American businessman of the year in 1990 and he was named Brazilian businessman of the year in 1990 and 1992. Virando a Própria Mesa ("Turning Your Own Table"), his first book, became the bestselling non-fiction
book in the history of Brazil
. He has since written two books in English on the transformation of Semco and workplace re-engineering: Maverick
, an English version of "Turning Your Own Table" published in 1993 and an international bestseller, and The Seven Day Weekend in 2003. He was 21 years old when he received his MBA from Harvard Business School.
. Semler clashed with his father, Antonio Semler, who supported a traditional autocratic style of management while the younger Semler favoured a decentralised, participatory style. Further, Ricardo favoured diversification away from the struggling shipbuilding industry, which his father opposed.
After heated clashes, the son threatened to leave the company. Rather than see this happen, Antonio Semler resigned as CEO and vested majority ownership in his son in 1980 when Ricardo was 21 years old. On his first day as CEO, Ricardo Semler fired sixty percent of all top managers. He began work on a diversification program to rescue the company. A fainting spell when he was 25 inspired him to want a greater work-life balance
for himself and his employees.
Attempts to introduce a matrix organisational structure
in 1986 failed to achieve desired improvements.
In the late 1980s, three engineers at Semco proposed setting up a Nucleus of Technological Innovation to develop new businesses and product lines which Semler endorsed. At the end of the first six months, NTI had identified 18 such opportunities. Following the success of this initiative, satellite units were encouraged throughout Semco. By the late 1980s, these satellite units accounted for two-thirds of its new products and two-thirds of its employees.
instituted by Brazilian president Fernando Collor de Mello
to combat hyperinflation
in 1990, the Brazilian economy
went into a severe downturn, forcing many companies to declare bankruptcy
. Workers at Semco agreed to wage cuts, providing their share of profits was increased to 39%, management salaries were cut by 40% and employees were given the right to approve every item of expenditure.
Performing multiple roles during the crisis gave workers greater knowledge of the operations and more suggestions on how to improve the business. Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco's revenues and profitability improved dramatically.
, Semco had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employed 3,000 workers in 2003, as opposed to 90 in 1982. The company's units include:
As Semco grew, Ricardo Semler received a great deal of recognition. He was named Brazilian businessman of the year in 1990 and 1992, and the World Economic Forum
named him as one of the Global Leaders of Tomorrow. A high profile committee appointed by CIO Magazine featuring Tom Peters
, Jim Champy and Michael Hammer
selected Semco as one of the most successfully re-engineered companies in the world. The BBC
included Semco in its series on Re-Engineering the Business for creating one of the most successful management structures in business.
on his experience at Semco which became a worldwide bestseller in 1993. A second book, The Seven Day Weekend: Changing the Way Work Works, followed in 2003.
He has appeared in the media around the world and speaks regularly to business schools, businesses and groups to promote his philosophy of industrial democracy. He has also been a visiting scholar at Harvard Business School
.
Semler has been Vice President of the Federation of Industries of Brazil and a member of SOS Atlantic Forest, the leading environmental defence organisation in Brazil. He founded The Ralston-Semler Foundation and the Lumiar School, a democratic school
where children aged 0–14 are engaged in projects of their interest. There are three such schools — one in the city of São Paulo and two in the vicinity of Campos do Jordão, in the state of São Paulo.
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian company best known for its radical form of industrial democracy
Industrial democracy
Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decision-making process, in organizations employing industrial...
and corporate re-engineering. Under his ownership, revenue has grown from US$4 million in 1982 to US$212 million in 2003 and his innovative business management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
policies have attracted widespread interest around the world. Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...
featured him among its Global 100 young leaders profile series published in 1994 while the World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
also nominated him. The Wall Street Journal America Economia, The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
's Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
n magazine, named him Latin American businessman of the year in 1990 and he was named Brazilian businessman of the year in 1990 and 1992. Virando a Própria Mesa ("Turning Your Own Table"), his first book, became the bestselling non-fiction
Non-fiction
Non-fiction is the form of any narrative, account, or other communicative work whose assertions and descriptions are understood to be fact...
book in the history of Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
. He has since written two books in English on the transformation of Semco and workplace re-engineering: Maverick
Maverick (book)
Maverick : The Success Story Behind the World's Most Unusual Workplace by Ricardo Semler Maverick is essentially the autobiography of a business as well as a businessman, Ricardo Semler, Chairman of Semco, one of Brazil’s largest conglomerates...
, an English version of "Turning Your Own Table" published in 1993 and an international bestseller, and The Seven Day Weekend in 2003. He was 21 years old when he received his MBA from Harvard Business School.
Semco 1982—90
Semler went to work for his father's company, originally called Semler & Company, then a Mixer & Agitator supplier in São PauloSão Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...
. Semler clashed with his father, Antonio Semler, who supported a traditional autocratic style of management while the younger Semler favoured a decentralised, participatory style. Further, Ricardo favoured diversification away from the struggling shipbuilding industry, which his father opposed.
After heated clashes, the son threatened to leave the company. Rather than see this happen, Antonio Semler resigned as CEO and vested majority ownership in his son in 1980 when Ricardo was 21 years old. On his first day as CEO, Ricardo Semler fired sixty percent of all top managers. He began work on a diversification program to rescue the company. A fainting spell when he was 25 inspired him to want a greater work-life balance
Work-life balance
Work–life balance is a broad concept including proper prioritizing between "work" on the one hand and "life" on the other. Related, though broader, terms include "lifestyle balance" and "life balance".-History:The work-leisure dichotomy was invented in the mid 1800s...
for himself and his employees.
Attempts to introduce a matrix organisational structure
Matrix management
Matrix management is a type of organizational management in which people with similar skills are pooled for work assignments. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and...
in 1986 failed to achieve desired improvements.
In the late 1980s, three engineers at Semco proposed setting up a Nucleus of Technological Innovation to develop new businesses and product lines which Semler endorsed. At the end of the first six months, NTI had identified 18 such opportunities. Following the success of this initiative, satellite units were encouraged throughout Semco. By the late 1980s, these satellite units accounted for two-thirds of its new products and two-thirds of its employees.
Semco 1990–2004
After dramatic restrictions on liquidityMarket liquidity
In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value...
instituted by Brazilian president Fernando Collor de Mello
Fernando Collor de Mello
Fernando Affonso Collor de Mello was the 32nd president of Brazil from 1990 to 1992, when he resigned in a failed attempt to stop his trial of impeachment by the Brazilian Senate...
to combat hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
in 1990, the Brazilian economy
Economy of Brazil
The economy of Brazil is the world's seventh largest by nominal GDP and eighth largest by purchasing power parity. Brazil has moderately free markets and an inward-oriented economy...
went into a severe downturn, forcing many companies to declare bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
. Workers at Semco agreed to wage cuts, providing their share of profits was increased to 39%, management salaries were cut by 40% and employees were given the right to approve every item of expenditure.
Performing multiple roles during the crisis gave workers greater knowledge of the operations and more suggestions on how to improve the business. Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco's revenues and profitability improved dramatically.
, Semco had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employed 3,000 workers in 2003, as opposed to 90 in 1982. The company's units include:
- the industrial machinery unit, which now manufactures mixing equipment as opposed to pumps
- Sembobac, a partnership with Baltimore Air Cooler making cooling towers
- Cushman and Wakefield Semco, a partnership with Rockefeller property company Cushman and Wakefield managing properties in BrazilBrazilBrazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
and Latin AmericaLatin AmericaLatin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area... - Semco Johnson Controls, a partnership with Johnson ControlsJohnson ControlsJohnson Controls, Inc. is a company, based in Milwaukee, Wisconsin, USA. It was founded in 1885 by professor Warren S. Johnson, inventor of the first electric room thermostat....
, managing large scale facilities such as airports and hospitals - ERM, a partnership with Environmental Resources Management, one of the world's leading environmental consultants
- Semco Ventures, offering high technology and Internet services
- SemcoHR, a human resources management firm
- Semco-RGIS, an inventory control firm
As Semco grew, Ricardo Semler received a great deal of recognition. He was named Brazilian businessman of the year in 1990 and 1992, and the World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
named him as one of the Global Leaders of Tomorrow. A high profile committee appointed by CIO Magazine featuring Tom Peters
Tom Peters
Thomas J. "Tom" Peters is an American writer on business management practices, best-known for In Search of Excellence .-Life and career:Peters was born in Baltimore, Maryland...
, Jim Champy and Michael Hammer
Michael Hammer
Michael Martin Hammer was an American engineer, management author, and a former professor of computer science at the Massachusetts Institute of Technology , known as one of the founders of the management theory of Business process reengineering .- Biography:Hammer, the child of Holocaust...
selected Semco as one of the most successfully re-engineered companies in the world. The BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
included Semco in its series on Re-Engineering the Business for creating one of the most successful management structures in business.
Other activities
Semler has reduced his involvement in Semco in the past decade to pursue other activities. He wrote a book MaverickMaverick (book)
Maverick : The Success Story Behind the World's Most Unusual Workplace by Ricardo Semler Maverick is essentially the autobiography of a business as well as a businessman, Ricardo Semler, Chairman of Semco, one of Brazil’s largest conglomerates...
on his experience at Semco which became a worldwide bestseller in 1993. A second book, The Seven Day Weekend: Changing the Way Work Works, followed in 2003.
He has appeared in the media around the world and speaks regularly to business schools, businesses and groups to promote his philosophy of industrial democracy. He has also been a visiting scholar at Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
.
Semler has been Vice President of the Federation of Industries of Brazil and a member of SOS Atlantic Forest, the leading environmental defence organisation in Brazil. He founded The Ralston-Semler Foundation and the Lumiar School, a democratic school
Democratic school
This is a comprehensive list of current and former democratic schools. Most of these were modeled on the Summerhill School, the oldest existing democratic school founded in 1921...
where children aged 0–14 are engaged in projects of their interest. There are three such schools — one in the city of São Paulo and two in the vicinity of Campos do Jordão, in the state of São Paulo.