Ricardo Semler the man who takes over his family business called Semco. The Semco is a manufacturing business resides in Brazil, the core manufacturing includes products like pumps, oil tankers, dishwashers, mixers and cooling units for air conditioners. Ricardo Semler changes the conventional hierarchal business model adopted by his father in to participative structure. Semler broke all the conventional methods in the business, he set up small autonomous business units and team allowed to work independently.
What are your thoughts on Semler’s book Maverick?
I thought what Semler did is the partially success attempt. Because he initially sacked most of the senior managers and reduce the management team size significantly then he move ahead and setting up small teams with some junior level manager and every team allowed to set up their own business targets and schedules depends on their convenience, later on this method was hailed by most of executives from other top Corporatist like IBM, Ford, by using this method he dramatically improve the productivity of his workers, for example in the very next year with the same HR strength Semler improve the overall product production by the average of 85%, this means with the same number of workers he improve the production capability of a oil tanker from 200 to 370 within a year. But the worst thing was we can’t run the longstanding business without the senior level managers for example when he removed senior level managers and trying to run the company with his new methodology Semler lost three of the major multi million dollar contracts which he trying to get from the European conuntries, latter on Semler himself acknowledge that he lost the contracts because of poor planning and worst business execution, this mess was happen because he could not have experienced senior managers with him.
As a success attempt Semler able to improve his production rate in retail market significantly and Semler gained significant growth in gross production rate by the average of 85%, he allowed his workers to frame their own wages and bonus money too, in this way he keep the workers very happy and improve their productivity, this means with the same number of workers he improve the production capability of a oil tanker from 200 to 370 within a year. The business methodology what Semler introduced was largely helped him to improve his production rate and allow him to reduce the unwanted cash flow, Semler not able to conduct any new business adventures like large scale acquisition apparently Semler’s business was witnessed in lack of business tactics and planning. The economical atmosphere of mid 80’s in Brazil was not favour for business men, in mid 80’s Brazil stuck with huge inflation rate, as of mid 80’s Semler’s business was successful because Semler targets only local markets which was already dominated by Semler’s father. In international arena Semler not able to succeed due to set backs he faced on planning and business tactics.