Take A Book. Contemplate It.

In a social media world where content is hailed as king, very few ever take a book, read it, contemplate it, and summarize it. Do it! The lessons learnt will stay with you forever. In this 36th issue we offer some ideas for compiling your own summaries and an example of a book summary compiled some 40 years ago, that still has meaning today, if not more so.

Way back in the 1970s. '80s, & '90s, as I was devouring any business book or success-oriented entrepreneurial autobiography to enhance my own learning-curve in business, I found myself actually summarizing the books and audio-tapes that got my juices flowing, so that I could share them with colleagues and clients. Those summaries are still stored in digital format and make for interesting reading some +-50 years later.

The intriguing lesson/s learnt, from reviewing those summaries, is that the basics of good business philosophy and strategy are timeless (and often they can have exponentially heightened impact when applied utilizing the innovative new technologies of the new times).. and that the practice of physically writing down the lessons learnt on paper (or typing them into a word document) commits them into the subconscious to be called upon as a source of collective experience when confronted with similar situations in business.

Without looking to re-invent the wheel, everything you need to know about compiling your own summaries is adequately covered in this link: The Ultimate Guide to Summarizing Books: How to Distill Ideas to Accelerate Your Learning. This comment by article writer Tiago Forte hits at the nub of the problem for most:

Extract: 'In 2016, I read 57 books. I read like I was running out of time. It felt like an achievement, yet by the end of the year, I could scarcely recall even one useful idea from each book. I realized if I wanted to benefit from my reading, I needed to engage with the books I read on a much deeper level. I decided I would rather deeply absorb the wisdom of a small handful of books than speed-read my way through dozens. The 14 book summaries I’ve created since then have changed the trajectory of my business and my work. They have attracted more than 125,000 page-views over the last year.'

The key idea, and point, being that YOU too can be presenting your summaries of the books you read as personal content to generate followers and page-views on your social-media platforms.. all while YOU are subconsciously storing the key ideas that you have noted.

Here is an original sample of a summary produced by self (from a selection of many 100s of book summaries produced).. about a Brazilian businessman who broke all the rules of business to reengineer his company into a magnificent business success story.

As I review this summary, I am struck by the stark 2022 post-Covid reality for corporates facing a rush of integral employees seeking to disengage (The Great Resignation) from their unfulfilling corporate lives. Here is an old story (40 years old) that has positive clues for solving today's corporate challenges. Some of Ricardo Semler's maverick solutions are still forward-thinking for many corporates today. See if you can spot them.

Semler's closing lines are the foundation upon which his maverick style is based and a great lead into the summary: 'I hope our story will cause other companies to reconsider themselves and their employees. To forget socialism, capitalism, just-in-time deliveries, salary surveys, and the rest of it, and to concentrate on building organizations that accomplish that most difficult of all challenges: to make people look forward to coming to work in the morning.'

This Business Maverick Fired Himself.. To Grow His Own Company

The story of how Ricardo Semler turned his Brazilian company into one of the greatest business success stories of all time - by working from home!

Antonio Curt Semler first visited Brazil in 1952 - aged 40 - when he identified the prospects offered by a vast undeveloped country. Armed with a patent for a centrifuge to separate lubricating oil from vegetables, Curt formed his company - Semco - which soon became a market leader in it’s field.

In the late 1950’s, and through the 1960’s, Semco grew from a backyard machine shop to an established manufacturer employing about 110 people and generating revenues of $2 million a year.

During the late 1960’s Brazil’s military dictators called for a five-year National Shipbuilding Plan. Curt took the opportunity to partner with two British pump manufacturers to become a leading supplier of marine pumps in Brazil.

Enter our hero, Ricardo Semler - Curt’s eldest son - who first saw Semco’s inside operation when he took a summer job in the purchasing department at age 16.

Aspiring to to be a famous guitarist, the young Ricardo couldn’t fight his lack of musical talent and his father's desire for a family member as a successor.

By age 18, Ricardo was working at Semco while being enrolled at the Sao Paulo Law School, a fact that he blames for causing his below-average grades.

By age 20, Ricardo had the illustrious privileged title of 'Assistant to the Board of Directors', but he was discovering that his authoritarian father and he were on differing wavelengths.

‘The gap between us was almost 50 years wide, and no matter how hard we tried to blend them, our styles and our ideas would become increasingly incompatible. I knew the transition from father to son wasn’t going to be smooth.' Slowly, he came to realize it as well.

Father - Curt - was a traditionalist form the old school, prim and proper in a dashing suit with a strict daily routine. He treated his employees with paternal fervor, never forgetting that he had started the business on a dining room table.. ’..giving these people the opportunities of good jobs for which they should be grateful. He considered strikes and labour strife to be personal affronts.’

Says Ricardo, ‘He demanded respect and inspired fear. A stern look was his registered trademark. Clerks would flip coins to decide who would deliver his papers and possibly become the target of his wrath, for he would often take out his frustration on whoever happened to be closest to him.’

Ricardo, by contrast, couldn’t stand to wear a suit, loved to put his feet up on his desk, and insisted on everyone calling him ‘Dickie’ - all of which infuriated his father. Tensions were further compounded by a rapidly declining economy with a crash in the ship-building industry causing Semco’s profits to diminish rapidly.

Semco had been run for a decade by Old Guard executives who were skilled in the maritime industry, and they were telling Curt to hang in through the slump for a new Ship-Building Plan to be announced by government. Ricardo’s view was that Semco should diversify before it lost everything. ‘It was time for something completely different.’ To Ricardo it was a case of ‘Diversify or Die!’

Taking the bull by the horns Ricardo confronted his father: ‘There’s no use me staying here. We’re just going to fight. We don’t agree on how to run the company, and you’ve got all these people here you still trust. There was a time when I thought you were going to give me more power, but I know you’re not about to do that.’

With that ultimatum the 70-year old Curt gave Ricardo a majority of Semco shares and management control, with the parting words; ‘Better make your mistakes while I’m still alive. I’m going on a trip for three weeks. Whatever changes you want to make in the organisation, do them now.’

Says Ricardo, ‘As it happened, I made all sorts of mistakes right under his nose. That’s the trouble with mistakes. You don’t recognise them at the time.’

Ricardo immediately set about ripping the company apart. He drew up a list of 15 top executives who had resisted any plan to diversify. It was a Friday, and he had set up individual appointments with each of them.

‘By 6 p.m. I had fired 60 per cent of Semco’s top management. I was 22 years old. I’d never hired anybody, much less laid waste to so many people in a single, godfather-like purge. But they had ignored my suggestions to diversify. Semco did not have time for slow, herbal medicine. It needed emergency surgery.’

Ricardo spent the rest of 1980 running from bank to bank trying to raise cash to acquire companies and broaden their product lines.

‘I did make mistakes - but Semco grew and grew. In my first two years, sales manager Harro Heyde and I travelled to 16 countries and contacted more than 60 companies to drum up business. On one unforgettable trip, we had dinner in Oslo, took the next flight to New York for lunch, then went on to dinner in Cincinnati - before spending the night in San Francisco.’

‘Today, 12 years later, Semco is diversified. We manufacture pumps that can empty an oil tanker in a night, dishwashers that scrub 4,100 plates an hour, cooling units that can keep huge office towers habitable during heatwaves, and entire biscuit factories containing 6,000 separate components and 16 miles of wiring. Our sales have swelled from $2 million to $35 million, and instead of one factory employing 100 people, we have six factories employing 830. We’ve moved from 56th place in our industry to number four.’

But, what really amazes Ricardo Semler is the annual pilgrimage of corporate executives who come ‘from IBM, General Motors, Ford, Kodak, Bayer, Nestle, Goodyear, Firestone, Chase Manhattan, Siemens, and other well-known companies. They wait for months for a chance to tour our plant and offices.’

Semco experienced an amazing turnaround in its fortunes, to the point where workers felt that it had become a workers paradise. In a Brazilian magazine’s census poll of college graduates fully 25% of the men and 13% of the women said: ‘Semco was where they most wanted to work!’

So what did Ricardo Semler do to engineer this amazing turnaround.

Simple. He fired the autocratic position at the top - his own position.. and dismembered the classic organizational pyramid hierarchy, that is ‘..the basic organising principle of the modern corporation.’

Semler recognised that most big companies have 7 to 14 levels of ambitious managers with differing responsibilities and authority. He identified that ‘much of management’s time is spent dealing with conflicts, jealousies, and confusion.’ He found that managers who were five rungs and more away from the factory floor had no idea of what was going on, so they took up everyone’s time with ‘memos, calls, and meetings, trying to find out.’

Ricardo set about removing the pyramidal layers of management, doing away with artificial titles and doing away with all dead-end jobs. he introduced the concept of Management By Walking Around (MBWA).

And amazingly, as mentioned, he set about eliminating his own management level. He set up a committee of five counsellors, each owning 1% of Semco, to run the company. He became one of the counsellors and instituted a rotating Acting Chief Executive position to be held by a different counsellor every 6 months. This meant that no one individual could stamp his image above that of the company’s image.

Ricardo today works from home, three to five mornings a week and spends only 30% of his time on Semco. ‘I hardly do anything I don’t enjoy. I have no more than two or three business lunches a year, never leave the office (at the plant or at home) after 6 p.m., and return fewer than five of the 20 to 30 phone calls I get each day. I respond to the rest and most of my mail with hand-written notes that I fax from my home machine.’

‘Unless I’m the only one who can handle a problem, I’ll steer clear. I hate it when I make myself needed and then can’t pull away. I’m proud to say I no longer know what a Semco cheque looks like. I haven’t signed one for almost eight years.’

‘The truth is, the company hardly needs me now now in its day-to-day operations. And the ideas Semco is built on aren’t mine either. They flow from the company’s culture, and that belongs to everyone at Semco. I don’t have anything against capitalism, despite what my critics say. I value my shares in Semco. But it’s really not my company any more. I am not Semco. Semco is Semco.’

Ricardo Semler’s laid back attitude stemmed from his realization that excessive stress in business is a killer. By age 25 he was diagnosed with an advanced case of stress. He recalls how his father never enjoyed the money that he made.

‘He was always worrying. Late in life, after his cancer had been diagnosed, he would walk in the park after radiation therapy and tell my mother that he had never really noticed the flowers and the ducks before. It took 73 years and terminal illness to make him see the small but fascinating details of life.’

Ricardo identified four chief causes for his early stress which he shares with other corporate executives all around the world:

Cause 1. ‘The belief that effort and result are directly proportional.’ This is the belief that a business executive has to ‘sweat blood’ for the business.

Cause 2. ‘The gospel that the quantity of your work is more important than the quality.’ Executives tend to feel guilty if they are not bogged down under piles of paperwork and problems.

Cause 3. ‘The idea that you’re going through a phase.’ These executives say things like, “Things are uncertain at the office right now. I’ll work a little longer to straighten them out.”

Cause 4. ‘Fear of delegation. This is the faulty belief that no one is as competent as you are.’

So how does Ricardo spend the other 70% of his working time? He no longer wears a wristwatch, he writes a weekly newspaper column, watches at least 3 movies a week, takes piano, golf, Chinese and cooking lessons, reads at least 50 books a year, four newspapers a day, and travels incessantly.

‘Now Sofia (the wife) and I set out for Xi’An to see 6000 terracotta soldiers buried hundreds of years ago, take balloon safaris in Kenya, camp in Tanzania, scuba dive in the Seychelles, cross the Sahara, comb beaches in Thailand, and float down the Nile.’

Getting back to Semco, Ricardo quickly learnt that sophisticated computer management systems that were being adopted to simplify procedures were, in fact, slower than their old effective manual systems. He ditched any structure that slowed the flow of income into the company.

 He employed an in-house economist to travel the world and visit innovative companies ‘that were breaking the rules or eliminating them.’ The economist returned with a critical observation that became the underlying principle of Semco’s structure.

He reported: ‘There is no way to treat employees as responsible and honest adults unless you let them know and influence what is going on. And there is no way to involve them in decisions if the plant they work in has too many people.’

‘Yes, there are schemes and mechanisms to convince people that they matter. But at some point workers notice that they are never consulted about important decisions. The only way to change is to make each business unit so small that people can understand what is going on and contribute.’

They decided to take all their organization's written rules and dump them for simple common sense decisions by their people on the ground. Says Ricardo, ‘Rules cause employees to forget that a company needs to be creative in order to survive.’

Employees were encouraged to rearrange their working areas as they wanted - to increase performance. Within a month the neatly aligned rows of machines were collected together in haphazard clusters to simplify the assembling of a complete product. ‘That makes them happier and our products better.’

Next, all Semco employees were offered the opportunity to set their own salaries and bonuses based on their own performance goals. ‘Except for a half dozen people, everyone set salaries that were in line with our expectations. Of the six exceptions, five set salaries lower than we projected.’

In a strategy planning session with 40 top managers, Ricardo asked for a projection of how they would like to see the business grow in the future. He was blown away: ‘They did not want a bigger company, they wanted a better company.'

Ricardo has enlightening views on those who aggressively pursue growth as a business strategy:

‘Some growth is necessary for nearly every business. It allows for diversification of products and markets, which is a good way to guarantee survival. it creates additional opportunities for employees and improves motivation, since it creates changes all over a company.’

‘But beware, much about growth is about ego and greed, not business strategy. We have outgrown the allure of growth, after paying the price in money, time, and gastritis.’

‘At Semco, we initially pursued the acquisition of companies. We studied more than 100 firms, negotiated with 15, and bought 4. I can summarise in three sentences the hundreds of hours and millions of dollars we invested:

1. Growing through acquisition is exciting, glamorous, and ulcer inducing.

2. The company you buy is not very similar to the one you thought you were buying, and never like what they told you.

3. Buying small, family firms is a certain way to skip the ulcers and go straight to bypass surgery. I have seen countless companies grow tremendously and then flame out like a meteor.’

Ricardo discovered that ‘no company can be successful in the long run, if profits are its principal goal.’

He learnt that money isn’t everything, not for himself, not for his employees - people want responsibility, autonomy and personal satisfaction to enjoy themselves at their work.

His universal claim to fame is the manner in which he deals with trade union leaders and his attitude to strikes. His view is that trade unions are a vital form of workers protection. He sees strikes as representing the true feelings of workers and their grievances. Strikes are ‘normal, part and parcel of democracy.’

In his early days at Semco the unions were very obstructive, until they came to realize that he had no intention of dismantling their power, that their members would get a greater share of improved profits, and that the workers would be given a real say in the business.

His thoughts on participative management are clear. ‘Almost all businessmen think their employees are involved in the firm and are its greatest asset.’ Conversely.. ‘Almost all employees think they are given too little attention and respect, and cannot say what they really think.’

‘How is it possible to resolve these two positions.’

‘The sad truth is that employees of modern corporations have little reason to feel satisfied, much less fulfilled. Companies do not have the time or the interest to listen to them, and lack the resources or the inclination to train them for advancement. These companies make a series of demands, for which they compensate employees with salaries that are often considered inadequate. Moreover companies tend to be implacable in dismissing workers when they start to age or go through a temporary drop in performance, and send people into early retirement earlier than they want, leaving them with the feeling that they could have contributed much more had someone just asked.’

‘The era of using people as production tools is coming to an end. Participation is infinitely more complex to practice than conventional corporate uni-lateralism, just as democracy is much more cumbersome than dictatorship. But there will be few companies that can afford to ignore either of them.’

Ricardo’s book - ‘Maverick, The Success Story Behind The World’s Most Unusual Workplace’ - includes some excerpts from their employees handbooks, called ‘The Survival Manual.’ This amusing publication constitutes Semco’s only written set of rules. Some of their innovative and often humorous explanations are as follows:

• Organisation Chart: Semco doesn’t use a formal organisation chart!
• Hiring: Everyone in that unit has the opportunity to interview and evaluate the candidate.
• Working Hours: Semco has flexible working hours, and the responsibility for setting them and keeping them rests with the employees.
• Clothing and Appearance: Neither has any importance at Semco. Wear just your common sense.
• Authority: Unacceptable use of authority will not be tolerated.
• Strikes: Absence from work because of a strike is considered as normal absenteeism, without further consequences or punishment.
• Change: Semco is a place where there are big changes from time to time. Don’t worry about them. We consider them healthy and positive. Watch the changes without fear. They are characteristic of our company.
• Participation: Your opinion is always interesting, even if no one asked you for it.
• Evaluation by Subordinates: Twice a year you will receive a questionnaire to fill in that enables you to say what you think of your boss.
• Job Security: Anyone who has been with us for three years, or has reached the age of 50, has special protection and can only be dismissed after a long series of approvals.
• Private Lives: Everyone owns his or her life, and a person’s private affairs are considered sacred by the company. Semco never interferes with what people do when they are away from work, as long as it doesn’t interfere with their work.
• Vacations: Semco is not one of those companies that believes anyone is irreplaceable. You should take all your 30 days of vacation every year. It’s vital for your health and the company’s welfare. No excuse is good enough for accumulating vacation days for later.

No wonder that Semco was regarded at the time of writing the book as one of Latin America’s fastest growing companies. Whether you are an employee or an employer, this book is an essential read for anyone in business.

The closing lines of the book: 'I hope our story will cause other companies to reconsider themselves and their employees. To forget socialism, capitalism, just-in-time deliveries, salary surveys, and the rest of it, and to concentrate on building organizations that accomplish that most difficult of all challenges: to make people look forward to coming to work in the morning.'

Bibliography:

Semler, Ricardo. ‘MAVERICK, The Success Story behind The World’s Most Unusual Workplace’

Semler, Ricardo. Article - MAVERICK - SUCCESS Magazine December 1993

Points To Ponder

1. Diversify or Die!

2. Excessive stress is a killer.

3. How small is my business unit.

4. Am I consulted about important decisions at work.

5. Do I enjoy responsibility, autonomy and personal satisfaction at work.

6. I take my vacation every year.

Action Program

If you are working within an organization that has yet to discover Ricardo Semler’s innovative, maverick thoughts on participative management, then get this copy into your superior's hands and ask for their opinion.

Additional reading:

Case study on Ricardo Semler’s Leadership at Semco Partners

Direct extract book notes here: Maverick by Ricardo Semler: An incredible read; some learnings - 'I have a habit of writing down notes in parallel, whenever I read books - here's a peek into some learnings I found most relevant.' - Dhruv Goel

Chapter by Chapter notes & opinions - Maverick - Ricardo Semler - the opinion / essay writer notes: 'I’m writing this for myself. For my past, present and future self. Much of what I write is my opinion.'

If you're new to us it is recommended that you read issue 1: One Idea is All it Takes

About: Trevor Nel is an 'ideas-generating machine' and co-founder of WISDOMS™. You can connect with WISDOMS™ and become: 1. a PATRON and/or; 2. a PLAYER , and/or; 3. a PARTNER - follow each link for more info.

Next week: issue 37 - We look into some ideas for discovering, locating, identifying, and claiming, your 'happy place'.. for life!

Trevor Nel is author of One Idea Is All It Takes and numerous publications & articles, including :

1. Another GREAT Day in Africa!
2. Confessions of a SERIAL Entrepreneur
3. Here's How To Be Well-Prepared For YOUR Cycles Of Success
4. Here's How YOU Can Make A Meaningful Difference In Other People's Lives
5. COMRADES Marathon: Metaphor For The Marathon Of Life
6. Riding the wild, wild River Of Life
7. Life Lessons Learnt as a Dusi Rat