“Agile / Lean or Common Sense and Permission To Change?” is an interesting article that examines agile ideas in comparison to Ricardo Semler’s principles.
I have most recently been reading a couple of books by Ricardo Semler, who runs his company in a completely democratic way – doing away with all top down authoritarian management principles and allowing the employees to make decisions on dress, salaries, where they work, when they work, and most importantly, how they work…
It struck me how most of the things that are characterized by “lean” are just common sense principles explained in such a way that they sound like a “process” that manager types can “buy into”. But really, they work because they make sense – and people have the permission to standardize and then change their work rather than having things written down and subsequently treating these processes like they are set in stone. You can’t change them unless you go through an agonizing approval process up the management chain…
In most of the process agile / lean related books that I’ve read there seem to be a few common themes:
- Trust people to do the right thing for the company
- Give them freedom and authority to work the way they want to
- Push decisions down the chain as far as possible
- Work in small batches and change things that aren’t working
- Allow those who are capable of leading to lead, no matter what their title or position is
- Put quality checks in place – whether it be test-driven development, or quality checks at each step in an assembly
- Fix problems at the core and stop the line as quickly as possible – in development this would be TDD and automated builds. Once a problem is found, find the root cause and put a test or quality check in place to ensure it doesn’t happen again
- and finally, Trust people to do the right thing for the company
One more principle that I would add would be “tolerate mistakes”. Many of the issues that I’ve come across with other groups is that if they make a mistake they feel they will be punished. I’ve had great success with my team in articulating that I know mistakes will be made, but I want them to be made once, a lesson learned, and things put in place (usually automated) to ensure they won’t happen again. I’ve found that if people know it is expected that mistakes will be made, and everything doesn’t have to be perfect, they are more receptive to trying something new.
But I digress.
What Semler’s story shows me is that if people are given the freedom to work the way that is most effective, they will. More than that, if you invest in them with trust, they will want to do these things as their commitment to the company will obviously go up based on how they feel they are treated.
Semler uses a key phrase throughout his books that is repeated over and over. “Treat people like adults”. Semco, Toyota, Amazon and Google seem to do a really good job at this, as I’m sure most high functioning companies do. Read this article called The Google Way: Give Engineers Room and you will see the same concepts outlined in the excerpts on Semco that I have just written about. It seems to be a common theme.
Here’s a quick interview with Ricardo Semler:
And here’s another video, a 13min video look at Semco, his company.
Doug
on 13 Mar 08Microsoft operates much like this.
Their developers lead the company, identify new products – and upper management is viewed as simply people who do the non-fun admin work that companies simply need done for legal reasons.
A different Doug
on 13 Mar 08After reading one of Ricardo’s books, I found this site: http://www.worldblu.com/
She is trying to get other companies to change to democratic work places, and find the best practices. Some good references for those interested in more depth.
I am constantly amazed that his company is successful in Brazil. They have corruption, government fiddling and other outside problems. The fact they can deal with all that speaks to the power of his approach.
Fanboi
on 13 Mar 08I love Semler, and I love you guys. Thanks for keeping me inspired.
Frank Gilroy
on 13 Mar 08You might also be interested in meeting a guy by the name of Brian Robertson of Ternary Software. He has developed a system for governing his software company known as Holocracy. Pretty neat stuff.
Juanma
on 13 Mar 08This is so true. I’m forwarding this to my partners right away. It’s funny cause just yesterday I had this similar issue with eXpansis, a website dedicated to sell Smartphone accesories. After placing an order for my father in law birthday present, I got this email from them:
Dear Customer,
Thank you for placing your order with eXpansys.
We need to verify your alternate shipping address with your credit card company because it is different than your billing address.
If shipping to your work address, please email company name, main telephone number and website address if available.
If shipping to a residential address, please call the Customer Service phone number on the back of your credit card and ask to list your shipping address on file. They will make a note on your account so we can verify the approved alternate shipping address.
When you are done please reply to this email or call us at 1-800-675-2638 or 309-820-7913 and we will verify your shipping address with your credit card company and process your order.
Call to my bank and ask them to add a shipping address that I’m sure I will only use ONCE?
These cats need to learn how to remove the friction from the user. They need to treat their clients like adults and specially, remember that if they make it this hard to buy things from their website, people will choose going to a Radio Shack instead of using their website.
Counterpoint from Brazil
on 13 Mar 08Allow me to present a counterpoint as someone than knows the inside of both Toyota and Semco: you have to discern what is book-material and what is actual fact. How many of you have been inside one of his companies? How many of you have worked with people from those companies? Reading a book or seeing a keynote is one thing. The reality, as I’ve seen it, is different.
There is democratic approach to what Semler does, and I give him credit for that. But there is hierarchy, and there is as much political stress inside his companies as I’ve ever seen. He’s an empirical man, and he puts his money where his mouth is, but most of the experiments he puts on paper don’t actually work at his company.
And don’t get me started on Toyota. They are as authoritarian as can be, as are most Japanese companies. And they treat women like crap. Ask anyone who’s ever worked there and they’ll tell you.
There is one thing to know in business: hiring and motivating excellent people is what makes companies good, and it’s what makes them innovative. Google, Amazon, Toyota, Semco, IBM, Microsoft, Yahoo: they all manage to do that. Being democratic during that process seems to me highly irrelevant, other than defining the profile of people that want to work with you (and sometimes it doesn’t do very well, because people – and I see this at Semco – confuse freedom with an excuse to work less). Bottom line is: those companies succeed because they have competent people, not because of labor theories that are good book-sellers.
It's about scale
on 13 Mar 08Adding to the opinion from Brazil: Most of the argument is linked to the scale of a company.
While many of the things discussed here will work for small to medium businesses, some of those principles simply break once your business grows beyond a certain scale.
There’s little to be democratic about the decision, which system to choose for your order processing, invoicing or financial controlling. And sometimes the scale of your system changes simply don’t allow for those fast development and testing cycles you’d like, once you’ve entered the first stages of broader integration testing (especially when there are industry robots and automated assembly gear involved).
So I generally like the discussion and inspiration here – and I try to keep in mind, that some of those things simply will not scale well to some businesses.
Which is OK, since this site is about the smaller and more agile businesses.
Doug
on 13 Mar 08Some would argue that the success of Linux, and at a much smaller scale, Rails – is because of their dictator leadership.
Evan
on 13 Mar 08@ Doug:
Works quite well for Lua, too, as long as we’re talking about Brazil. Their “benevolent dictatorship” has kept the language small, neat, and orderly from version to version. All the benevolent dictators are quite civil guys, as well.
Fanboi
on 13 Mar 08@It’s about scale: Tell that to W.L. Gore & Associates. It’s not about scale. It’s about building the right company culture, and that is very, very, very, very hard. If you haven’t lived it you’ll probably have a lot of trouble visualizing it.
Andrew Skegg
on 13 Mar 08One of my favourite books is “Maverick” by Richardo Semler. It’s an inspirational read about a the kind of company we all wish we worked for. Worker’s a respected, trusted, and given real power. A lot of the concepts translate nicely to how to treat your customers and set up a successful online business. Highly recommended.
Cali Ressler and Jody Thompson
on 13 Mar 08We love Ricardo Semler and his practices. Glad to see that others do, too! We sincerely hope that companies start to see the benefits of trusting their employees and treating them like adults – these practices are good for the bottom line AND good for people’s lives.
Cali Ressler and Jody Thompson Creators of the Results-Only Work Environment (ROWE) Authors of the forthcoming book “Why Work Sucks and How to Fix It”
matt
on 13 Mar 08great article.
Steve R.
on 14 Mar 08A long time ago in a galaxy far, far away, I worked summers in a 120 degree kitchen on the South shore of Long Island, New York in a restaurant called the ‘Cull House’. The owner was on-site every day and had built his restaurant up from a fried clam shack to a nice sit-down place. I was a dishwasher. I wanted to work the kitchen and I worked my butt off to get promoted to fry cook. The owner saw this and offered me the chance to make extra money by helping prep. Due to my inexperience, I made a mistake that killed an entire weeks worth of live lobsters – the most expensive item on the menu on a cost- and price- basis. He took the head chef into the walk in freezer to ask her what I did wrong. When they came out, he did not fire me – it was an honest mistake. He made sure I knew where I had gone wrong. To this day, he is the best boss I ever had, and that job is the best job I ever had. You can bet that for the rest of the time I worked there, I gave 150% to try and make up for what I had done. I even made it into the kitchen. Now, 20+ years later, I go there whenever I am back east – too rarely. The owner doesn’t even remember me any more (he is still in-house most days), but I will never forget him – and I promise myself I will follow his example if I ever have an employee in the same place I was. Tolerating mistakes teaches lessons you can’t get anywhere else to both the ‘tolerator’ and the ‘tolerated’.
Ron
on 14 Mar 08I remember a boss like Steve R had. I was working for a data warehousing group as a DBA and dropped the fact table in what I thought was the development environment. It was production. It took 3 days to rebuild the database.
My boss pulled me in his office and asked me, “you will never do that again will you?”. That was it. He never mentioned it again.
To this day, I double check EVERYTHING I do to make sure I’m in the right place when I do it. Just because this boss tolerated a really large mistake.
tom carroll
on 14 Mar 08Ron (over at bieber labs) makes a great point about tolerating mistakes. I would add that delivering clear, constructive, timely and direct feedback about the mistake is required. A team full of gun shy developers is less productive and creative than a team that is given the freedom to act even of that means the occasional mistake.
Traci Fenton
on 14 Mar 08Hey all,
Thanks “A different Doug” for the mention about my company, WorldBlu, http://www.worldblu.com. Ricardo Semler has had a huge influence on me and my desire to help teach other companies how to implement a democratic system.
Frank Gilroy also mentioned Brian Robertson and his company, Ternary Software. Brian is a friend and has a great idea with “Holocracy.”
Last March we published our first annual WorldBlu List of Most Democratic Workplaces and Ternary was on it. We’re publishing this year’s list - which includes a Fortune 500 company with 30,000 employees - on April 24th, so head on over our way if you want to check it out and learn more.
Thanks for the great blog post Matt—Semler is always an inspiration.
Ian Kershaw
on 14 Mar 08I love this guy. He’s a real inspiration.
You can see a hour lecture he gave at MIT too http://mitworld.mit.edu/video/308/
Eric Willis
on 14 Mar 08I’ve also read “Maverick” by Richardo Semler and it was one of the most inspirational business books I had read in a while. Great read and excellent concepts..
Jozzua
on 15 Mar 08I just saw that first few pages of the Maverick book on Amazon.
My reaction?
Wow that was an awesome first few pages. I’m amazed that a company like Semco exists. It’s completely contradictory to standard company/business practices.
Really. I’d love to stay a few months in this company to just find out how they solve common business and human resource problems.
I’d love to personally meet Ricardo Semler.
Chris
on 20 Mar 08Definitely an inspiring video, though I take it with a healthy dose of skepticism (especially given the insider comments above). I think it boils down to getting the company out of the way of the employees. I just started a new job, and I’m left alone to get my work done. No one is spoon feeding me decisions – it’s up to me to find the info I need. Refreshing, though a little disconcerting at first.
Trust is probably the biggest component of getting the company out of the way. Treat people like adults (as a boss, or a politician, or anyone really) and they tend to rise to the occasion. It’s funny, trusting people actually saves everyone a ton of time and improves productivity, yet the natural inclination of bosses seems to be the opposite. Semler has learned to trust, with great results.
This discussion is closed.