In “Maverick: The Success Behind the World’s Most Unusual Workplace” (Amazon link), Ricardo Semler tells the story of how he converted a traditionally structured business into one without walls and rules. The way he challenges assumptions and rethinks how a business can be run is inspirational. (It’s probably the business book that’s been read by more members of 37signals than any other.) Below are some excerpts…
A modern company must accept change as its basic premise:
To survive in modern times, a company must have an organizational structure that accepts change as its basic premise, lets tribal customs thrive, and fosters a power that is derived from respect, not rules. In other words, the successful companies will be the ones that put quality of life first. Do this and the rest – quality of product, productivity of workers, profits for all – will follow. At Semco we did away with strictures that dictate the “hows” and created fertile soil for differences. We gave people an opportunity to test, question, and disagree. We let them determine their own futures. We let them come and go as they wanted, work at home if they wished, set their own salaries, choose their own bosses. We let them change their minds and ours, prove us wrong when we are wrong, make us humbler. Such a system relishes change, which is the only antidote to the corporate brainwashing that has consigned giant businesses with brilliant pasts to uncertain futures.
Growth is often just about greed:
A few years ago, I struggled with an opportunity to acquire a company with five plants and 2,000 employees. “Why do we want to grow more?” I asked myself. Are we going to be better for it?”...
It’s all about persistence, isn’t it? But where does persistence end and obsession begin? How high is too high? How big is too big? Of course, some growth is necessary for any business to keep up with competitors and provide new opportunities for its people. But so often it is power and greed and plain stubbornness that make bigger automatically seem better…
Semco has learned that to want to grow big just to be big is a catch…Much about growth is really about ego and greed, not business strategy.
How rules snowball:
In their quest for law, order, stability, and predictability, corporations make rules for every conceivable contingency. Policy manuals are created with the idea that, if a company puts everything in writing, management will be more rational and objective. Standardizing methods and conduct will guide new employees and insure that the entire company has a single, cohesive image. And so it became accepted that large organizations could not function without hundreds or thousands or tens of thousands of rules.
Sounds sensible, right? And it works fine for an army or a prison system. But not, I believe, for a business. And certainly not for a business that wants people to think, innovate, and act as human beings whenever possible. All those rules cause employees to forget that a company needs to be creative and adaptive to survive. Rules slow it down…
With few exceptions, rules and regulations only serve to:
1. Divert attention from the company’s objective.
2. Provide a false sense of security for the executives.
3. Create work for bean counters.
4. Teach men to stone dinosaurs and start fire with sticks.
The desire for rules and the need for innovation are, I believe, incompatible…Rules freeze companies inside a glacier; innovation lets them ride sleighs over it…A turtle may live for hundreds of years because it is well protected by its shell, but it only moves forward when it sticks out its head.
What’s wrong with bosses:
That’s what’s wrong with bosses. So many of them are better prepared to find error and to criticize than to add to the effort. To be the boss is what counts to most bosses. They confuse authority with authoritarianism. They don’t trust their subordinates.
Why bureaucracies get built:
Bureaucracies are built by and for people who busy themselves proving they are necessary, especially when they suspect they aren’t. All these bosses have to keep themselves occupied, and so they constantly complicate everything…I wanted our people to have more contact with one another. I wanted less clutter. I wanted fewer levels. I wanted more flexibility. I wanted a new shape for our organization.
Coming soon: More excerpts from Maverick.