SEMCO: A case study in distributing organizational power, Part Three

(Continued from Part 2)


Synopsis: Ricardo Semler, inherited his father’s company in 1982. He was 24 years old. After his singular focus on work created a serious health crisis, he decided something had to change. Over several years, he dismantled the hierarchy of his traditional organization to create an adult culture of empowered workers.  Today Semco employees decide when it makes the most sense for them to work and where. They choose their own leaders, define their own schedules, and set their own salaries.

The purpose of work at Semco, Ricardo insists, “is to make workers, whether the working stiff or a senior executive, feel good about life.”


Sounds crazy? Here are a few facts about Semco so you can judge for yourself:

  • The company that employed 100 employees in 1982 as of 2007 has 3,000 workers

  • Semco now represents diverse ventures including manufacturing, mixing equipment, making cooling towers, technology, managing Latin American properties, and environmental consulting.

  • It experienced a 900 percent growth in 10 years.

  • In Brazil, Semco increased its ranking from 56th to 4th in machinery operations.

  • It ranks No. 1 in the service industries in which it is active.

  • Turnover has been less than 2 percent over 25 years.

  • Operating this way has generated a 27 percent growth rate for 25 years, without public investment and in spite of Brazil’s erratic economy.

  • The $4 million company Ricardo inherited is now worth more than $220 million


Semco is an unparalleled example of how abandoning traditional management strategies and widely distributing organizational power can lead to phenomenal business results — and create meaning and purpose at work.


Says Ricardo: “People want to work when work is not the enemy of personal freedom and legitimate self-interest. Our [organizational] ‘architecture’ is really the sum of all the conventional business practices we avoid. The purpose of work is to make workers, whether the working stiff or a senior executive, feel good about life.”


Treating his employees like adults, helping them understand the marketplace they live in and trusting them to get results has been a remarkable success formula t Semco.