A Federation

The Seven-Day Weekend: Changing the Way Work Works
by Ricardo Semler

(Page 4 of 4)

I'll bet you still want to know what Semco does. Okay, we have ten companies, give or take. I'm not sure, because they come and go; we've had a minimum of five for twenty years. We also have six Internet companies, so we could claim sixteen units, but we don't know how many of those will survive, or in what form.

At the risk of offering a description, Semco is a federation of businesses with a minimum common denominator. What I mean is we are not monolithic, yet there are common themes and threads uniting us. All our business units are highly engineered, premium providers and market leaders in their niches. We haven't ventured into any of them by chance.

The first, the industrial machinery unit, is what's left of my father's original business. It began with marine pumps and moved into industrial mixers, and now produces only high-tech mixing equipment - the kind of complex, engineered industrial mixers used for pharmaceuticals and at candy factories.

The second unit is SemcoBAC; a partnership with Baltimore Air Coil in the United States. Essentially, we make cooling towers for commercial properties. The third company is Cushman & Wakefield Semco. The fourth business unit is Semco Johnson Controls - a partnership with Johnson Controls, a $16 billion world leader in facility management to handle large properties like hospitals, airports, hotels, and huge factories.

Then there's ERM. We added this unit in 1996 in partnership with Environmental Resources Management, one of the world's premier environmental consulting companies.

Finally, we have Semco Ventures, our nod to the Internet and our high-tech ventures unit; SemcoHR, which manages the outsourcing of HR activities for large companies; and Semco-RGIS, our inventory control firm.

Semco's ten (eleven, twelve ... who's counting?) units are very diverse; in fact, you might wonder how such industries came to be part of the same business. But a closer look will reveal a hidden synergy that satisfies three basic criteria when we consider a new venture. First, we look for complexity, which usually means "highly engineered." Everything has a high entry barrier of complexity. If a new business isn't difficult for us and for others to break into, then we're not interested.

Second, we demand that in each of our markets, we be the premium player. We want to offer a high-end product or service. That means we're always more expensive because we provide the premium that stretches what the customer will pay. And third, we want a unique niche in the market, one that makes us a major player in any given industry. To us, this follows naturally from the first two requirements. We want to be only in businesses where our disappearance would cause our disheartened customers to complain loudly. They'd survive, but they'd have substantial difficulty moving on.

All of our products and services meet these criteria, and we leverage the power of our units. For example, Wal-Mart has gradually become a customer of four of our units - we count their inventory, manage their cooling towers, administer their buildings and warehouses, and conduct environmental site investigation and remediation.

Other clients like GM, BankBoston, and Unilever have become customers of multiple Semco units. This isn't unusual for us. The point of entry may change, but our objective remains the same - synergy.

Whichever unit serves as the point of entry, it soon finds business opportunities for the others. Signing on with a client is usually our biggest hurdle, since we are more expensive than our competitors. Once a customer is on board, however, we rarely have operational problems, we rarely abandon a customer, and they rarely leave us. Repeat customers represent some 80 percent of our annual revenue. I can count on my fingers the number of clients who have dropped us in twenty years of business.

The Whyway

The secret? If we have a cardinal strategy that forms the bedrock for all our practices, it may be this:

Ask why.

Ask it all the time, ask it any day, every day, and always ask it three times in a row.

This doesn't come naturally. People are conditioned to recoil from questioning too much. First, it can be perceived as rude. Second, it can be dangerous, implying that we're ignorant or uninformed. Third, it means everything we think we know may turn out to be incorrect or incomplete. Last, management is usually threatened by the prospect of employees who question continually. But mostly, it means putting aside all the rote or pat answers that have resulted from what I call "calcified" thinking, that state of mind where ideas have become so hardened that they're no longer of any use. Employees must be free to question, to analyze, to investigate; and a company must be flexible enough to listen to the answers. Those habits are the key to longevity, growth, and profit.

Asking why in this manner is also refreshingly childish, therefore of essence. When I tell my four-year-old something and he asks why, I have a good adult, pat answer. Then he asks a second why, and I'm in a bit of trouble. By the third why there is no solution but to buy him an ice cream.

Thus it is at Semco meetings. Sometimes they are like scenes from an overly artsy foreign film - we address the same subject again and again. The angles are quirky and the focus fuzzy. We ask why repeatedly. And nothing gets carved in stone. That's because as a company we hate written plans. People will follow a plan like a Pied Piper - mindlessly, with no thought as to the final destination.

At Semco, we often jot down generic ideas and broad numbers so we can visualize the dimensions of a new product or service. Then we throw those notes away. At the next meeting on the same idea, we'll start over, without the benefit of the original notes. That way we cannot fall into the trap of "fixed assumptions." It forces us to reconsider all the variables.

When an executive is new to Semco, he or she will often stammer: "But we already decided that at the last meeting," or "Why are we going over this again, instead of forging ahead?" I'm sure it's frustrating for them. But when they watch the process unfold, and if they listen to their colleagues asking why, they'll see how it allows no stone to be left unturned. Soon they're roaring down the whyway with the rest of us.

In the 1990s, our philosophies, practices, and high speed merges onto the whyway attracted attention. Six thousand people have written to us, curious about Semco, and hundreds of newspaper and magazine articles have featured our company. BBC television and dozens of other TV programs have profiled us. I've given nearly three hundred speeches to companies, conferences, charitable groups, youth groups, and universities such as Stanford, Harvard, MIT, the London School of Economics, and INSEAD. Semco is a case study at 76 universities, and texts of our organizational practices are required reading at 271 other schools. Sixteen master's and doctoral candidates have made Semco the subject of their theses.

And the first book about Semco, MaverickM, was on best-seller lists in twelve countries and sold more than one million copies even though we had yet to really prove ourselves, let alone demonstrate staying power.

But the point I'm making is that all of this demonstrates a bona fide interest in Semco. Yet when visitors learn that our economic success requires replacing control and structure with democracy in the workplace - well, often those starry-eyed visiting executives go home with second thoughts and never get around to making it happen in their workplaces.

Why is that? Why do these visitors shy away from practices that are hugely successful both in terms of the bottom line and in the pursuit and attainment of personal happiness? And for the third consecutive why, why do organizations and their leaders cling to a rigid form of command and control that is at odds with the values of personal freedom that they cherish?

Don't tell me that the answer is profits. Semco makes plenty of money. But let the whys linger and ripen. The answers - or more whys - will come in due course. We need to first walk through the seven-day weekend that is the metaphor for the Semco way. Oh, did I forget to mention that among those things Semco doesn't do is a Monday to Friday workweek? If rock climbing is more inviting on a Wednesday morning than a budget planning meeting, then break out the rope and pitons. If lighter traffic on a Saturday afternoon makes the commute to the office bearable, go for it. Yet, the seven-day weekend is more than permission to play hooky. It's about creating an atmosphere and culture that grants permission to employees to be men and women in full for seven days a week. Why should the fun, fulfillment, and freedom stop first thing Monday morning and be on hold until Friday night? And that's one why that we will revisit as the book moves forward because I believe no one can afford, can endure, or can stomach leaving half a life in the parking lot when she or he goes to work. It's a lousy way to live and a lousy way to work.

Although I still can't definitely answer the question about what Semco does do, I can say we've changed the way work works and improved the quality of our lives - and so can you.

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

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.