There's no one right way to manage people. Finding the right way for yourself demands trust, trial, error and heresy. A Brazilian engineering company has shown that eccentricity pays with people - but becoming a rich oddball has very orthodox rules.
One advantage of owning your own business is that you can mind it any way you like. However eccentric your ideas may be, nobody can stop you putting them into practice. When the family owner of an engineering company acted on that freedom, it did more than make him successful - it made him famous.
The business, Semco, is actually in Brazil, but Ricardo Semler spends much of his time travelling, partly because of his fame as way-out manager and best-selling author. His book Maverick! (Century) entertainingly expounds the way-out ideas, like twice-yearly evaluation of their managers by subordinates. If the boss is rated low, moreover, he can lose his job in consequence.
The multiple-choice questionnaire refers to the boss as 'the subject'. The first question out of 36 is 'When an employee makes a small mistake, the subject is (a) Irritated and unwilling to discuss the mistake (b) Irritated but willing to discuss it (c) Realizes the mistake and discusses it in a constructive manner (d) Ignores the mistake and only pays attention to more important matters.'
There are no prizes for knowing the right answer, or for seeing that Semler has an ideal of management behaviour. He expects bosses to be relaxed, secure, fair, friendly, participative, innovative, very trustworthy, and highly competent. And so say all of us, no doubt. The issue is whether orthodox organisation helps people to behave in those ideal ways. Or should you emulate Semco and look for unorthodox approaches?
In the film Goodbye Columbus, a college graduate, just starting in his father's building supplies business, staggers the men's lunch hours, to provide continuous cover. The father countermands the reform: 'No fancy deals! We all eat at the same time!' That's the natural reaction. The traditional way is the accepted way. Any change is regarded with deep suspicion - let alone fancy deals.
That's understandable, but indefensible, once you recognise that every process in every business is capable of being improved. That is, better results can always be won at lower cost and in faster time. If somebody comes up with a potentially good idea (even the owner's son), rejecting the notion out-of-hand makes no sense. Ask, rather, what are the benefits? What are the drawbacks? What are the costs?
Would you, for example, shut down twice a year for an afternoon while everyone cleans out the places where they work? Useless files, scrap and old machinery, etc. get ruthlessly thrown away. Would you limit all memos and reports to one piece of A4, always headed by an arresting tabloid headline that sums up the key message? ('New Toaster Will Sell 20,000 Units for $2 Million Profit').
If these seem like good ideas, implementing them involves very little time or trouble. Semco is full of brainwaves of this description. But the issue isn't whether or not others borrow Semler's specific innovations: rather, it's whether they are prepared to embark on a similar exercise of challenge and change - to try to create a company where they are more comfortable managing, and others are more comfortable being managed.
The comfort, of course, will be illusory if the business results are bad. Semco's are good - and apostles of unorthodoxy argue that doing things differently will improve profits bu cutting down on unnecessary activities like enforcing rules and regulations, paying for expensive perks and having unneeded support staff: Semco has shrunk its head office jobs by more than three-quarters, and cut its management layers to only three.
Any competent management consultant, of course, could achieve similar one-off savings by 'reengineering' the business processes. But the savings of unorthodoxy are the by-product of creating a unique company which goes on generating powerful new ideas - like 'self-set pay.' As Semler writes. 'Paying people whatever they want seems a sure route to bankruptcy, but we've been doing this for eight years, and we've never done better.'
Self-set rises of 10%, it seems, are exceptional. Try selling that to British Gas. But that's the nub of the issue. You don't want to emulate bureaucratic corporations in any way. And if it's your own business, you don't have to.
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