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Nearly twenty years ago a prominent Brazilian politician invited me to the far north of Brazil for a conference. Senator Jose Macedo, a wonderful self-made man, had begun his working life as a soap salesman. By the time I met him, he was a billionaire in the flour, biscuit, beer, and car dealership businesses.

I spoke at the conference for an hour about Semco and its unusual practices, and then Senator Macedo opened the question-and-answer session. Sitting in the first row, he looked back over his shoulder at the hundreds of people who filled the hot, humid auditorium and asked, "Mr. Semler, before answering other questions, can you please tell us what planet you're from?" It took several minutes for the room to quiet down, and I can still hear the good- natured laughter.

In case you're tempted to ask the same question after reading a few more pages of this book, I suggest that we first pursue another line of inquiry that might prove more helpful and less inflammatory. The question that I have in mind is, what is Semco?

The only problem is that now I have to come up with an answer. If you ask me to describe it in conventional business terms, I'd have to admit I have no idea what business Semco is in. For years, I have resisted defining Semco for a simple reason: Once you say what business you're in, you create boundaries for your employees, you restrict their thinking and give them a reason to ignore new opportunities. "We're not in that business," they'll say.

Instead of dictating Semco's identity, I let our employees shape it with their individual efforts, interests, and initiatives.

You probably don't like my answer, and I don't blame you. I'll try again from another angle. Instead of explaining what Semco does, I'll take a run at what it doesn't do.

Semco has no official structure. It has no organizational chart. There's no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There's no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed.

Most important, success is not measured only in profit and growth.

Strange, eh? My summary may make Semco sound like a company with an offbeat management style that wouldn't succeed anywhere else. Nevertheless, hundreds of corporate leaders from around the world have visited Sao Paulo to find out what makes us tick. The visitors are curious about Semco because they want what we have - huge growth in spite of a fluctuating economy, unique market niches, rising profits, highly motivated employees, low turnover, diverse products, and service areas.

Our visitors want to understand how Semco has increased its annual revenue between 1994 and 2003 from $35 million a year to $212 million when I - the company's largest shareholder - rarely attend meetings and almost never make decisions. They want to know how my employees, with a show of hands, can veto new product ideas or scrap whole business ventures.

This book will explain the straightforward philosophies and practices that make Semco one of the world's most unusual workplaces. Be warned - many of our basic tenets fly in the face of even the most progressive business owners or managers. Our "architecture" is really the sum of all the conventional business practices we avoid.

It's our lack of formal structure, our willingness to let workers follow their interests and their instincts when choosing jobs or projects.

It's our insistence that workers seek personal challenges and satisfaction before trying to meet the company's goals.

It's our commitment to encouraging employees to ramble through their day or week so that they will meander into new ideas and new business opportunities.

It's our philosophy of embracing democracy and open communication, and inciting questions and dissent in the workplace.

On-the-job democracy isn't just a lofty concept but a better, more profitable way to do things. We all demand democracy in every other aspect of our lives and culture. People are considered adults in their private lives, at the bank, at their children's schools, with family and among friends - so why are they suddenly treated like adolescents at work? Why can't workers be involved in choosing their own leaders? Why shouldn't they manage themselves? Why can't they speak up - challenge, question, share information openly?

Copyright © 2004 Ricardo Semler. All rights reserved. This excerpt, or any parts thereof, may not be reproduced without permission.

Tags: Management & Leadership

About the Author

Ricardo Semler has been CEO of Brazil-based Semco for the last two decades. He is known around the globe for championing his employee-friendly management style. His first book, Maverick, was an international bestseller.