Managing Without Managers
Managing Without
Managers
by Ricardo Semler
Harvard Business Review
Reprint 89509
HBR
SEPTEMBER–OCTOBER 1989
Managing Without Managers by Ricardo Semler
I
n Brazil, where paternalism and the family business fiefdom still flourish, I am president of a manufacturing company that treats its 800 employees like responsible adults. Most of them—including factory workers—set their own working hours.
All have access to the company books. The vast majority vote on many important corporate decisions. Everyone gets paid by the month, regardless of job description, and more than 150 of our management people set their own salaries and bonuses.
This may sound like an unconventional way to run a business, but it seems to work. Close to financial disaster in 1980, Semco is now one of Brazil’s fastestgrowing companies, with a profit margin in 1988 of
10% on sales of $37 million. Our five factories produce a range of sophisticated products, including marine pumps, digital scanners, commercial dishwashers, truck filters, and mixing equipment for everything from bubble gum to rocket fuel. Our customers include
Alcoa, Saab, and General Motors. We’ve built a number of cookie factories for Nabisco, Nestlé, and United
Biscuits. Our multinational competitors include AMF,
Worthington Industries, Mitsubishi Heavy Industries, and Carrier.
Management associations, labor unions, and the press have repeatedly named us the best company in
Brazil to work for. In fact, we no longer advertise jobs.
Word of mouth generates up to 300 applications for every available position. The top five managers—we call them counselors—include a former human resources director of Ford Brazil, a 15-year veteran
Chrysler executive, and a man who left his job as president of a larger company to come to Semco.
When I joined the company in 1980, 27 years after my father founded it, Semco had about 100 employees, manufactured hydraulic pumps for ships, generated about $4
Managers
by Ricardo Semler
Harvard Business Review
Reprint 89509
HBR
SEPTEMBER–OCTOBER 1989
Managing Without Managers by Ricardo Semler
I
n Brazil, where paternalism and the family business fiefdom still flourish, I am president of a manufacturing company that treats its 800 employees like responsible adults. Most of them—including factory workers—set their own working hours.
All have access to the company books. The vast majority vote on many important corporate decisions. Everyone gets paid by the month, regardless of job description, and more than 150 of our management people set their own salaries and bonuses.
This may sound like an unconventional way to run a business, but it seems to work. Close to financial disaster in 1980, Semco is now one of Brazil’s fastestgrowing companies, with a profit margin in 1988 of
10% on sales of $37 million. Our five factories produce a range of sophisticated products, including marine pumps, digital scanners, commercial dishwashers, truck filters, and mixing equipment for everything from bubble gum to rocket fuel. Our customers include
Alcoa, Saab, and General Motors. We’ve built a number of cookie factories for Nabisco, Nestlé, and United
Biscuits. Our multinational competitors include AMF,
Worthington Industries, Mitsubishi Heavy Industries, and Carrier.
Management associations, labor unions, and the press have repeatedly named us the best company in
Brazil to work for. In fact, we no longer advertise jobs.
Word of mouth generates up to 300 applications for every available position. The top five managers—we call them counselors—include a former human resources director of Ford Brazil, a 15-year veteran
Chrysler executive, and a man who left his job as president of a larger company to come to Semco.
When I joined the company in 1980, 27 years after my father founded it, Semco had about 100 employees, manufactured hydraulic pumps for ships, generated about $4