Ming the Mechanic:
Capitalism or Socialism?

The NewsLog of Flemming Funch
 Capitalism or Socialism?2004-01-28 18:53
12 comments
by Flemming Funch

From Alka Dwivedi, an excerpt from a book "Maverick" by Ricardo Semler, about a Brazilian company that is organized and run in a somewhat unusual manner.
When I took over Semco from my father 12 years ago, it was a traditional company in every respect, with a pyramidal structure and a rule for every contingency. But today our factory workers sometimes set their own production quotas and even come in their time to meet them, without prodding from management or overtime pay. They help redesign the products they make and formulate the marketing plans. Their bosses, for their part, can run our business units with extraordinary freedom, determining business strategy without interference from the top brass. They even set their own salaries, with no strings. Then again, everyone will know what they are, since all financial - information at Semco is openly discussed.

Indeed our workers have unlimited access to our books ( and we keep one set). To show we are serious about this, Semco, with the labor unions that represent our workers, developed a course to teach everyone, even messengers and cleaning people, to read balance sheets and cash flow statements.

For truly big decisions, such as buying another company, everyone at Semco gets a vote. A few years ago, when we wanted to relocate a factory, we closed down for a day and everyone piled into buses to inspect three possible new sites. Then the workers decided. Their choice hardly thrilled us, since it was next to a company that was frequently on strike. But while no one in management wanted front row seats to labor-management strife, we moved in anyway. In the lobby of our headquarters, a standard-issue office building with four floors of steel and glass, there is a reception desk but [no] receptionist. That's the first clue that we are different.

We don't have receptionists. We don't think they are necessary, despite all our visitors. We don't have secretaries either, or personal assistants. We don't believe in cluttering the payroll with ungratifying, dead-end jobs. Everyone at Semco, even top managers, fetches guests, stands over photocopiers, send faxes, type letters, and dials the phone. We don't have executive dining rooms and parking is strictly first-come, first-served. It's all part of running a natural business.

At Semco we have stripped away the unnecessary perks and privileges that feed the ego but hurt the balance sheet and distract everyone from the crucial corporate tasks of making, selling, billing and collecting. Our offices don't even have the usual number of walls. Instead, a forest of plans separates the desks, computers and drawing boards in our work areas. The mood is informal: some people wear suits and ties or dresses, others jeans and sneakers. It does not matter. If people want to emulate Thomas Watson and don white button-downs, that's fine. But turtleneck and T-shirts are okay, too. And I want our people to feel free to put their feet on their desks, just like me.

I am pleased to report that more than once a group of Semco executes has been interrupted by people who wanted to use their conference room to hold a birthday party. They use my room in office to hold conferences. Sometimes when I enter in my room, someone was sitting in my chair, using my phone. I have to wait on visitors' sofa for the meeting to get over.

We have a sales manager named Rubin Agater who sits there reading the newspaper hour after hour, not even making a pretence of looking busy. I am sure this mystifies some of our visitors. Most modern managers would not tolerate it. But when a Semco pump on an oil tanker on the other side of the world fails and millions of gallons of oil are about to spill into the sea, Rubin springs into action. He knows everything there is to know about our pumps and how to fix them. That's when he earns his salary. No one cares if he doesn't look busy the rest of the time.
Sounds like a fun place to work. And it seems to translate into a productive and profitable company. But it also sounds like a socialist commune. Contradiction? Not necessarily. People are more productive when their opinions and their work makes a difference and they aren't hindered by meaningless bureaucracy. This is an inspiring story, and from I can understand, entirely non-fictional, and one can go and visit the company and find out for oneself.


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12 comments

29 Jan 2004 @ 07:44 by ming : Engaging
It seems so simple, really. But somehow very hard to agreed widely on.  


29 Jan 2004 @ 13:41 by istvan : Since labels that kill
Social oriented movements all needed is just to change names to titles than no one can hung up on. These would be systems and their names that are new enough, not to elicit any connections to older sticky ideas.
The above described business idea is souch as i can understand. Open ended enough not to be able to smear.  



29 Jan 2004 @ 17:28 by Bruce I. Kodish @24.205.69.22 : A Third Way?
This sounds like a company working on the order of the "justice-based management" of the the {Link:http://cesj.org/index.html|Center for Economic and Social Justice.} That group has morphed a new approach/model of free market organization that brings more people into the game. I'm for that.  


30 Jan 2004 @ 02:34 by lugon @195.53.174.19 : name numbers
Perhaps models should be labeled with numbers, not with names.

"I'd like us to try model 291."

Of course numbers quickly become names in our old "cut me that concept with a knife" brains.

But at least having numbers it's obvious that we can have _more_ models. Variations are worded with decimals ("model 291.3").

"Democracy 2.0" sends a message.  



31 Jan 2004 @ 05:42 by Birgit Funch @81.50.157.20 : Tell me more!!!!
How absolutely exciting!
There is a longer excerpt on Alka Dwivedi's site, and I better track down that book. I am not sure that it can be duplicated or transferred what they're doing at Semco but it is SO refreshing to hear about.
Thank you!  



4 Feb 2004 @ 12:19 by george dafermos @195.97.43.36 : oops..
....in the concluding line, i meant to say that *most* of the micro-businesses were not employing more than 2-3 people.

and it's also interesting to note that the device of control and management that semler employed was linked to the the *machines* needed in the production process. He first trained workers to use the machines (he deemed proper? i can't say), even the workers that would soon flee, and even more so he actually bought plenty and gave them away for free in many cases (he wrote that in this way he was helping those would-be enterpreneurs to set up shop - how they would repay him evades me)  



6 Apr 2013 @ 01:34 by P Buddery @58.106.169.249 : Semco Management Style
The place I work at is a bit like that, and I tend towards a notable informality in the way I work. I arrive and leave when I want, and my lunch breaks are as long as I want. I get paid by the hour, so this is fair. Someone mentioned a year or two back that perhaps my lunch breaks should be shorter, but it didn't happen. Most of us avoid meetings. We are frivolous and light-hearted. Jokes are made in working hours, and laughed at by top management.

I personally like to do the best and most perfect job that I can. This suits my employer, who make very long-lasting products for which they charge our beloved customers large amounts of money.

To conclude, do productivity and quality have much to do with seriousness and over-management? We can have the first without having to suffer the second.  



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