Inspiring Ricardo Semler lecture at MIT

In this lecture at MIT’s Sloan Business school, Ricardo Semler, the pioneeering CEO of Semco, says the military-inspired structure of most workplaces is anachronistic. He advises the students to rethink some of the fundamental assumptions they have about organizations, leadership, and life in general.

If you’ve only read about his ideas, it’s cool to hear him speak aloud about these topics. You can really sense the guy’s passion. A few standout points excerpted below.

Most business plans are wishful thinking…

A 5 year plan is just an extrapolation added to wishful thinking. Have you ever seen a business plan that says, “I’m going to go up 5% and then down -14% and then -22% and then I’m going to recuperate a little bit and then it’s going to go to hell?”

‘Cuz that’s what happens. That’s how it looks in practice, but that’s not the way we design it. We’re willing to trick ourselves into thinking we have control as long as we do it with wishful thinking.

Growth is overrated for companies…

The assumption that growth is good for companies is a very difficult one to sustain. There is no evidence whatsoever that companies that grow a lot do better than companies that don’t grow a lot.

Admit what you don’t know…

We don’t know where we’re going, but we’d rather not pretend that we do. Because we think pretending is a lot more dangerous than admitting that we don’t…Talking about specific numbers more than six months out is improbable. Think about the future but don’t write it down. If you write it down, you have to follow it.

Make meetings voluntary…

All our meetings are on a voluntary basis. Because if it’s getting boring, go…If no one’s left, do we really need to do this?

Most hiring is like internet dating…

[On hiring] The [typical] process of recruitment and selection in a company is basically an internet dating process. You say your company is Brad Pitt and she says she’s Angelina Jolie and you go and meet at a bar…You get together for two quick meetings and then you decide to get married and hope it works…

[Instead of that,] we take qualified candidates, the ten that fit the bill, and ask them to come in together. Then we have whoever wants to be involved interview these people. This will go for hours. Then [the interviewers] write down the two people who they want to keep. The two who score highest come back and spend the whole day here and talk to anyone they want…The result is less than 2% year turnover.

Do nothing sometimes…

Sometimes doing absolutely nothing, even about a critical decision, will end up bring through a solution. The idea that we alone can be trained to “know the answer” is a very dangerous rational.

We need more democratic workplaces…

We will send our sons anywhere in the world to die for democracy…But I’ve never seen a democratic workplace. So it’s very important for our lives except where we spend 60% of our time. There must be something wrong with that.

Balance your life…

Every one of us has learned how to send emails on Sunday night. But how many of us know how to go a movie on Monday afternoon. You’ve unbalanced your life without balancing it with something else…The opposite to activity is not leisure. It’s idleness.

And that’s just the few bits I decided to type up. Go check it out. [tx Tyler]

Matt Linderman wrote this on Oct 30 2007 There are 12 comments.

Ken

on 30 Oct 07

I for one DO know how to go to a movie on a weekday afternoon. My employer recently reorgainzed the IT and I found myself with no work assignment and no expections of me by management for a number of months. At first I was scared, of losing my job, then angry, that they did not have meaningful, interesting or challening work. I went to long lunches, matinees, and shopping, until one day a manager asked me what I was doing and what I wanted to do. It really paid off to be patient.

condor

These are some great ideas. Thanks for the post; its good to reinforce thinking like this.

JB

You have to see planning in corporate world as a processo to keep all focused in some targets. And then you have to update those targets. Of course that, if I forecaste a ‘down’ in my growth, I’ll have to get a new business that complements my current and keeps me grwoing…

Not that I very much defend this approach, but just trying to help others to look from another point of view…

Alex

Well, so what’s the answer – why are there only a handful of companies (Semco, Gore, maybe some others) that have tried this kind of radical decentralization, if it’s so helpful to a company’s bottom line and the basic tenets have been known for twenty years or more? I can’t imagine that that the answer is simply upper management’s resistance to change – as Semler himself notes, most companies never change until they’re forced to by competitors. So why hasn’t that more-agile competition shown up all over the place?

Jonathan

Alex,

I think that is very true. It is not that people are resistant to change (they are), it is that old habits are hard to break and people say, “If I have been doing this for 20 years and I still have my job, my kids, my house… then I must be ok” and therefore do not want to change.

It really boils down to the difference between intelligent people and passionately curious people.

Matt Wiebe

I love the internet dating – hiring comparison!

Richard

Most of these seems to come down to… ‘Stop Wasting My Time’ and stop running off of ‘Fear’.

I love the voluntary meeting. If the meeting is needed and meaningful people will stick around otherwise vote with your feet. Additionally, doing nothing sometimes is exactly the answer but most are afraid that if they don’t show progress or commotion they won’t be viewed as productive. This fear coupled with ‘Wasting Time’ has lead to the imbalance in life and thus the weekday movie bit. If you can’t go to a movie on the weekdays it is normally because you are afraid of what other people think and most likely if you are operating this way you are mentally ineffective anyhow. Take a break ( I call it mental space ) and hit it fresh. Even pro athletes need to take a blow (breather) every once in a while.

These are all ways to gauge yourself. Great information! I have it posted on my board next to my office door for all my employees to see. I wonder how many will go to the movie tomorrow.

Brian

on 31 Oct 07

Much of this resonates as wisdom, and other portions of this sound more like radical preferences.

There needs to be balance between productivity and anarchy. And remember; as I’ve stated in my blog, planning isn’t so much about the plans themselves… as much as it is about the “process” of planning. The “process” of planning keeps us sharp, always evaluating, collaborating and pursuant of creative new approaches to our business or organization.

On the other hand, while it’s healthy to plan, stumbling around a bit is just as healthy in balanced proportions. Sergey Brin; Co-Founder of Google, once stated, “The more you stumble around, the more you’re likely to stumble upon something valuable.”

The process of planning is crucial, but allot time for your executive, professional and administrative teams to stumble… to grow, to develop, to invent, to make mistakes, to fail forward. This balance promotes growth, and a happier and more fulfilled team… and ultimately a stronger business/organization.

Anonymous Coward

I’m hoping a lot of these things will start emerging naturally as the boomers retire and the younger gen takes their place. At least in my workplace there is a huge difference in perception of the workplace between the older people and the younger people, and interestingly the younger-skewed departments operate much better than the older-skewed ones despite the fact that we youngsters are seen as screwing around too much.

Dhrumil

on 01 Nov 07

This is great Matt. Thanks so much.

kareem

www.worldblu.com/blog is a blog about democratic workplaces. if you like semler’s fantastic talk here, you’ll probably be interested in the work worldblu is doing.

Lautaro

on 04 Nov 07

It’s a Joke?. No!, It Shit.