Maverick: Ricardo Semler

Taking the discussion on Theory X, Y and Z a little further, today’s Gyan is about a company and its CEO who are a living example of Theory Z.

Can you imagine a company where the employees decide their own salaries, the timings they would come and leave the workplace, how the surroundings around them should look like!!? Well, if whatever Ricardo Semler claims in his book “Maverick” is true, “SEMCO” in Brazil would be the only company in the world where the things said above do happen!

Ricardo Semler took over the reigns of “SEMCO” from his father. Till then, SEMCO was just another old fashioned manufacturing company with strict shift times, cribbing workers, etc. Handing over the papers to Ricardo, Semler Sr. said, “Do whatever you want as long as I’m alive to correct your mistakes” But Ricardo had his own ways of doing things that made sure that his father won’t have anything to complain about in the first place and even if there was, he (father) won’t be able to do much!

After stabilizing the company through the turbulent periods of change of management, Ricardo started acquiring companies to enhance business. I won’t go into the details of how he went on to acquire companies or the timelines but I would surely like to share the philosophy behind this world’s most unusual workplace.

The premise that Ricardo runs his company on is that “All the people working are adults and they know what needs to be done. It’s no use policing them and having strict rules about what to do and what not to. If the employees are satisfied with work they are doing, a lot of problems won’t arise in the first place.” Ricardo proclaims that the policy of his company is not to have policy at all!

Some of the interesting initiatives that were implemented at SEMCO are:

When recruiting a new team member, he / she would be interviewed by the team with whom he / she is going to work. That way, the team members would find out if they would be happy working with the new member.

For some days, the company had started an initiative where everybody had to put a tag on the peg named after the employee. If someone is in a really bad mood at the start of the day, he/she would put a red tag at the entrance, “Stay away from me!” If someone is in OKish mood, he/she would put a yellow tag, “It’s just another day for me...” and if someone is in really good mood, he/she would put a green tag, “What a wonderful day this is!” This initiative gave a clear indication to the management whether the employees are happy coming to work. But I believe it served another bigger purpose: to identify emotions to a certain extent. To control an emotion one needs to identify it first! I think, most of the employees would have certainly spared a few moments wondering why they feel what they feel.

Headline Memo: Earlier, shelves after shelves were filled with documents and memos. It was tedious to maintain and find the required document from the piles. Ricardo used a simple criterion to get rid of the excess documents, “What worst can happen if I throw this piece of paper?” and he could manage to reduce his 6 cupboards full inventory of documents to just 3 shelves! Similarly, employees used to write pages for a simple memo. Ricardo suggested an effective way. He asked the employees to write the memo just like reporters write the news. They manage to catch the attraction of the reader and deliver important information through the Headline. The headline memo concept was used throughout the company. It reduced the documentation drastically and still, managed to convey the important information effectively.

As stated earlier, Semler believed in employees being mature. He asked the employees to decide how much salary they’d need. It’s hard to believe but employees did really rate themselves appropriately and asked for the salaries they really deserved. Some even asked for a less salary that they were getting!... And believe me, the company is still running.

In spite of the fact that SEMCO is a manufacturing company and has to work in Shifts, the workers decided themselves when they would come to the plant. They were keen to adjust the timings of other shifts and schedule according to the business requirement.

Workers coloured the walls of the surroundings the way they wanted. Some grew plants between adjacent cubicles.

And last but not the least, Semler scrapped the age – old hierarchy of CEO – Middle Managers – workers. Instead, he proposed a new systems of 3 concentric Circles wherein the innermost circle is that of Partners, the middle one being Coordinators and the outermost being the Associates. Any associate could move into the inner circles of respective departments. This way every employee has an opportunity to move around in the company.
Ricardo has also pondered upon the growth of the company and “How big is big enough?”


These are just some of the astonishing things. The whole book is filled up with such out – of – the – world initiatives. It’s really hard to believe that a company can survive with such processes (in fact, no processes!) and with adverse government policies, let alone prospering. But today the company is making exceptional progress!

One important thing: SEMCO has a total count of 3000 – 4000. So I think, it is manageable to implement the initiatives effectively in a small company and difficult to implement in big companies like ours. Also, it needs maturity and commitment of the employees to appreciate such initiatives. But then, as the clichéd saying goes, “Where there is a will…There is a way!”

Why Do We Work?

I always wanted to catch the rain…

I always wanted to go for a year long trip… around the world…

I always wanted to quit on Monday Mornings….

One by one, stretched and tired faces express themselves... And Vroooom!! comes the Tata Safari Dicor with the punch line “Reclaim Your Life” and a strong and energizing score playing in the background. Apart from a great way to advertise, what strike me most are the persons shown. They, somewhere, resemble to the faces we get to see around us… Faces tired of working for long hours, frustrated by the kind of work they are doing…

Well, I know, the thought above in Bold, does come to our minds on the Monday Mornings. Most of us, at times me included, drag ourselves to workplaces on Mondays… Call it the effect of Monday morning blues, today’s Gyan is about:

For ages, there has been a hierarchy – a pyramid rather. The one sitting on the top commands the thousands below him and they work. Be it construction of Egyptian Pyramids or the wars or today’s corporations, the hierarchy is strictly maintained. The people at the top have to MAKE people at the bottom work, by hook or crook. Motivating people has always been a headache for the management.

It was Fredrick Taylor who first proposed Management as Science. He pioneered the “Scientific Management.” People like Frank Gailbreth contributed to the scientific management by using “Work Motion Study” to measure and optimize the time and efforts spent in any activity. (There is a beautiful book named “Cheaper by the Dozen” penned by Frank Gailbreth’s children. A movie with the same title was also made starring Dean Martin)

Now that, we have called Management as Science, there are bound to be theories about Management…

It was Elton Mayo who first pondered upon the Management – Workers relationship and why people work. Then Abraham Maslow proposed “Maslow’s Hierarchy” which described the pyramid of Human needs that drive him to work.


Till then, Ford had implemented the “Assembly Line” that asked a worker to do the same work repeatedly. The work was, thus, becoming more and more mechanical – monotonous. Ford was even accused of putting thugs to supervise the workers. Workers working in shifts in factories all across the globe had the same tragic story to share.

In late 60’s, Douglas McGregor proposed two theories – Theory X and Theory Y that stated in depth 2 approaches to why people work. I know, somewhere in engineering we have come across these theories.

The Theory X says:
Work is inherently distasteful to most people, and they will attempt to avoid work whenever possible.
Most people are not ambitious, have little desire for responsibility, and prefer to be directed.
Most people have little aptitude for creativity in solving organizational problems.
Motivation occurs only at the physiological and security levels of Maslow's Needs Hierarchy
Most people are self-centered. As a result, they must be closely controlled and often coerced to achieve organizational objectives
Most people resist change.
Most people are gullible and unintelligent.
In a nutshell, this theory assumes that the primary source of most employee motivation is monetary, with security as a strong second.

The theory Y says:
Work can be as natural as play if the conditions are favorable.
People will be self-directed and creative to meet their work and organizational objectives if they are committed to them.
People will be committed to their quality and productivity objectives if rewards are in place that addresses higher needs such as self-fulfillment.
The capacity for creativity spreads throughout organizations.
Most people can handle responsibility because creativity and ingenuity are common in the population.
Under these conditions, people will seek responsibility

Somewhere in 80’s, William Ouchi picked up the good points from both these theories and proposed his own Theory Z.

Just to compare these theories:

Theory X orders the employee - Do this job by X days and Have it done or you are fired. We are watching your every move!

Theory Y says - You're a senior person, go, think about it and tell me when you can get this done. Management permits them to work at their own pace and awaits feedback to accommodate schedules.

Theory Z states - you're a senior person, go, figure it out but our schedules require a solution by X date.

With all these theories implemented in business (that’s what they say!), it’s surprising to see why so many people grumble about the job they devote their most time to! The question still remains why most of us drag ourselves to work which, in fact, should have been fun/interesting to spend time at… Why is it that we still can’t balance our work lives with the personal ones? How can we not be happy with our job for which we had aspired and worked hard all through our young age…? Why do we get to see most sarcastic, nasty jokes on Work!? If all had been well, there wouldn’t have been problems like depression due to work and attrition and things like that.

Well, all I can say is “Theoretically, there is no difference between theory and practice. In practice, there is.”

Apple: The Story of two Steves

Well, it’s hard to talk about computers without referring to these 4 companies: Microsoft, Apple, Intel and last but not the least – The Big Blue “IBM”. I’m not sure how well I would be able to cover the great contributions these companies have made to the computing world with such small space and time that I have. But, again, just giving a try to write about “Apple” today.

A college drop out and a techie guy working for HP, joined hands (and brains) and together, they shook the world… IBM included. The story of the two Steves – Steve Jobs and Steve Wozniak (a.k.a. Woz) has all the ingredients to make a Bollywood hit. A phenomenal rise to fame by becoming one of the fastest entrant to Fortune 500 league, then a catastrophic downfall with losing market share and then, again, a steady growth is the story in brief about Apple.

In the late 70’s, a company MITS came up with a device called “Altair” which can be fairly called as the first “Personal Computer”. Till then, Mainframes and Mini computers were ruling the market, only to be used by big corporations and Labs. The Altair attracted a lot of hobbyists who wanted to make their own computers.

Jobs and Woz were also one of these enthusiasts. Earlier, they tried to make money by selling a device called “Blue Box.” At $150, Blue Box can be connected to the telephone and you could make calls to almost anywhere in the world absolutely free of cost. The telecom companies, obviously, didn’t quite appreciate this and the Steves had to stop this after getting beaten up by some thugs.

After “Altair” came into market, Jobs and Woz studied it and managed to build their own personal computer in Jobs’ garage. Woz was still working with HP. Jobs made him leave that job and together, they founded Apple. Woz pitched in $1500 by selling his car to build the initial capital. They started manufacturing and selling these computers. The story goes that for months, they were looking for a good name for their company. Finally, Jobs threatened that if his people don’t come up with any other good name by 5 PM that day, he would name the company as “Apple”. And, eventually, nobody could suggest any other name and Jobs continued with “Apple”.

Over a period of time, Apple became immensely popular, first in the hobbyists and then in the general market. The popularity reached so high that IBM had to take up a project immediately to build their own PC named “Project Chase”. IBM being a behemoth, things moved very slowly within the organization. The delay in actions used to infuriate the then IBM chairman Frank Carrey. In every meeting of Project Chase, he used to bark, “WHERE IS MY APPLE?”

Apple was growing. Both Jobs and Voz were inexperienced to handle this growth. So they brought in Mike Markkula who had taken an early retirement (well, much too early – at the age of 33) from Intel. Markkula had become a becoming millionaire by selling his Intel stocks. Mike introduced better management in Apple and was instrumental in making it more organized.

Apple always strived for perfection and user friendliness. As described in earlier Gyans, it was Jobs who used the GUI, Mouse, Icons concepts developed by PARC, effectively in making PC more user friendly and hence, popular. In late 70’s, Apple II hit the market and became a major success. It was followed by even more advanced “Lisa” but Lisa was too ahead of its time and hence failed to grab the market. In 1983, Jobs invited John Sculley to become CEO of Apple. Sculley was then President of PepsiCo. During his persuasion, Jobs had asked Sculley, “Would you like to continue selling Sugarated Water or do you want to change the world?” Finally, Sculley gave in and joined Apple. Jobs and Sculley shared such a good rapport that Sculley once boasted, “Apple has one leader: Steve and I…” But things soon started falling apart. Macintosh – Job’s baby - couldn’t pick up well in the market. IBM retaliated hard in the PC market and Apple started losing their market.

Additionally, there were internal fights between Apple II team and Macintosh team headed by Jobs because of his constant interference in product development. Meanwhile, Woz had, also, left the company. Finally, Sculley had to forcefully remove Jobs from the company he founded. This was a major setback for both Apple and Jobs. Under the leadership of Sculley – who was a marketing wizard, the company struggled to get back on track. Soon, IBM compatibles also started to eat up Apple’s market.

After being thrown out of the company, Jobs started two companies “NeXt” and “Pixar” (Pixar is one of the best Animation movie makers. It has produced movies like Toy Story, Bug’s Life etc.)

In the late 80’s, Apple also got involved in dispute over GUI with Microsoft. It was, finally, won by Microsoft. So Apple was losing in Software market as well. The apple was, thus, losing its juice.

Eventually, and as fate would have it, even John Sculley was fired from his post of CEO. Apple bought NeXt and reinstated Jobs as CEO. Since then, Apple has come up with great products like iMac, iPod that has clearly shown their passion for perfection, excellent “Look and Feel” and user friendliness as visioned by Steve Jobs.

Recently, Jobs was diagnosed with a very rare type of Cancer but it was cured in time.

There is a beautiful book written by John Sculley named “Odyssey – From Pepsi to Apple” It depicts various stages that Apple and Sculley’s friendship with Jobs went through. Even, books about Microsoft have a lot of references of their interactions with the Apple people.

Apple showed the world how agile a small company can be and how innovation and perfection can produce products that ushers the world into the future era. It was a dream place to work for all the maverick youth who wanted to change the world. And who other better leader could they find but Steve Jobs!?