IS A MANAGER A LEADER, WHAT IS A LEADER AND HOW CAN SOMEONE BE BOTH A GOOD AND A BAD LEADER?

Introduction

Leadership and management are somewhat synonymous terms within the field of

organisational development. A significant amount of research endeavours to draw

distinctions between the differences of leaders and managers, while other studies focus

on the contextual element of leadership or indeed the leaders themselves, in an attempt

to define leadership. More recently research has focused on the examination of what

subordinates or followers value in a leader, specifically practices such as enabling or

empowering employees, on the premise that the psychosocial health of employees,

improves the interrelationships with management. This recent development in part, has

grown out of the need for organisations that are consistently looking to improve

themselves in highly competitive markets. Organisational effectiveness heavily relies on

employee performance, which is most frequently attributed to effective leadership within

the organisation. Included in this report is an investigation of a case study, which

highlights the dynamic interaction between employees and a leader. This case study

demonstrates the complex issues involved when considering whether a manager is a

leader and whether leadership can be both good and bad.

The Importance of the Follower

Charles Saatchi who built one of the largest advertising agencies in the world, once said

‘the assets of this organisation go up and down in the lifts’, Saatchi clearly recognises

the importance of his employees to the success of his organisation. Industrial leaders

such as Ricardo Semler of Semco (SA Brazil) also recognise the importance of the

employee, “it’s not what Semco makes…it’s the way people of Semco make it” (Semler,

1994, p. 23). Theoretically leadership and/or management of individuals is more likely to

be successful if it is better equipped to comprehend, empathise with and predict the

behaviour of those it seeks to lead. As occupational and organisational psychologists we

look to the theories and current trends in order to aid such organisations, with the

ultimate aim of offering predictive added value. Given this, one might speculate whether

it is possible for a form of leadership theory to be formulated out of current empirical and

experimental research, which would afford such predictive value to organisations with

1

regards to the leadership question? As we will see, the answer to this still remains quite

perplexing. However, the focus on organising and motivating employees to maximise

their investment into the organisations remains. The tools of leadership and

management and their respective utility remain at the forefront of organisational

development, which if managed well, may be the defining feature that ensures a

competitive edge in the marketplace.

What is a Leader?

A literature review on leadership reveals a whole range of different aspects on which

various definitions focus. Theoretical approaches attempt to explain leadership in terms

of personality traits, behavioural patterns (or style), situational (contingency) factors, or

to focus on those that are considered exceptional leaders (charismatic or

transformational). This diversity in perspective is largely due to the different interests of

researchers who examine leadership, which ultimately results in “…as many different

definitions of leadership as there are people who have attempted to define the concept”

(Stogdill, 1974). Indeed, Hoff (1999) has reported that no fewer than 350 definitions of

leadership exist in literature related to organisational behaviour. However, an overview

of the research into leadership highlights the notion that it would be a requirement for an

organisational leader to demonstrate particular qualities namely, insight, initiative,

inspiration, involvement, improvisation, individuality and implementation, (Leigh &

Maynard, 1996).

Defining the ‘context’ of leadership might reduce confusion. As occupational

psychologists the focus here is on leadership in organisations in the context of industry

and business, rather than on the battlefield, or in the field of religion, or politics. On the

premise that every organisation deserves its own theory, Katz & Kahn (1978) provide a

useful working definition of organisational leadership as “the influence increment over

and above mechanical compliance with the routine directives of the organisation” (as

cited in Steers et al., 1996, p. 528). This individuates the definition of leadership as a

process in social influence in any organisation, whereby followers respond to their

leaders in a voluntary fashion. This voluntary aspect in followers’ behaviour is probably

the only common assumption throughout the whole scope of leadership definitions. It

follows therefore, that the question “what is a leader?” will elicit a different answer and

2

related set of meanings from each individual asked and perhaps even different

responses from the same person in different contexts.

Is a Manager a Leader?

The question of whether a manager is a leader obviously calls for a definition of

management as differentiated from leadership. Briefly speaking, management has been

defined as ‘path following’, as the process of ‘doing things right’, unlike leadership which

is concerned with ‘path finding’ or ‘doing the right things’ (Bennis & Nanus, 1985).

Further descriptive aspects of management point to activities that are focused on

consistency and order, whereas leadership appears to be linked with constructive and

adaptive change in the organisation (Kotter, 1990). However, an overall evaluation of

leadership versus management definitions, could lead us to an understanding that

management is more successfully described through behavioural models, whereas

leadership can be more accurately explained through a cognitive affective approach.

Management is akin to the obvious, the observable, the mechanical and the automatic

responsiveness to organisational requirements, whilst leadership draws on the hidden,

the non-observable processes which lie in the leader/follower relationship within the

organisation. Conceptually, if the common assumption with definitions of leadership is

‘the influence increment over and above mechanical compliance’ (Katz & Kahn, 1978),

then it follows that management does not seem to depart from the mechanical aspect in

social influence processes. Therefore one could argue that leadership is just a higher

qualitative version of management, thus a manager can be a leader if they display such

qualities. A brief examination of a case study below, will help us to see how current

findings with regards to behavioural as well as cognitive processes in management, can

elevate the latter to leadership.

How can someone be both a good and a bad Leader?

Leadership is a heterogeneous construct and little can be found in the literature to

address the specific issue of whether an individual can be a good and a bad leader.

Anecdotally one can see that in an organisation the employees may state that their

leader is a good leader but, if you were to compare that leader’s performance in the

market place, they may well be deemed a bad leader. In an effort to address this issue

3

within the available theoretical perspectives, we will now turn to the analysis of a case

study, to examine how one leader’s influence has enabled employee empowerment with

considerable success.

Case Study

Ricardo Semler (see Appendix A for a brief biography) of Semco SA, Brazil took control

of a small traditional manufacturing company, from his father (25 years ago). As

president of Semco, Semler has powered the company to 900% growth in the last 15

years, with a reported turnover of 100 million pounds per year. Ricardo Semler

constitutes a case study, which has attracted considerable interest from the international

business community. Semler’s approach to business management appears to be utterly

unorthodox but nonetheless incredibly successful. His 15-year experimental

restructuring of Semco transformed a traditional, paternalistic company environment into

a very radical workspace, where there is no human resource function and 60% of top

management positions became redundant (Lloyd, 1994). Semler’s most distinctive

change was employee empowerment and participative leadership. Hiring is undertaken

by the workers themselves, who decide on their own salary, bonuses, working hours and

goals. Semler believes that employees should deliver a final result and empowers them

accordingly towards this goal. He unequivocally rejects the pyramidal structure that

bears the notion of company procedures, outlining in every detail how employees should

behave in every contingency. At Semco, labour unions train everybody how to read the

financial statements of the company and workers participate collectively on the

company’s big decisions (e.g. moving premises or buying another firm). Employee

involvement at Semco is also reflected in 360-degree appraisal procedures held every

six months, as well as in rotating job titles and job enrichment procedures, which offer

workers a broader view of the company (Vanderburg, 2004).

Analysis on Semler as a leader, in terms of the theoretical perspectives

Employee Centred Approach

Semler’s outlook on employee empowerment was prompted by two fundamental crises.

Firstly growing unrest within the organisation, Semco had expanded so quickly it was

4

having growing pains, (Bureaucracy Phase/Adolescent Phase), and lacked its own

organisational culture, i.e. the shared attitudes, values and beliefs of its employees.

Secondly Semler (aged 25) collapsed and was diagnosed with having an advanced case

of stress. Semler began in earnest to research the psychosocial health of his employees

in an endeavour to tackle stress management issues. Semler came to the conclusion

that responsibility and control, aid the workers to deal with stress more successfully,

“they set their own production rotas and come in on their own time to meet them”,

(Semler, 1994, p. 23). His emphasis lies on the final output, on the fact that the

relationship between effort and result, quantity and quality are not necessarily

proportional (Vanderburg, 2004). In line with this, research shows that the mainstream

perception in most companies assumes an inverse relationship between job demands

and employee control with this also having direct implications on work health (Karasek &

Theorell, 1990). Drawing on an evaluation based on psychological research, the

Michigan University study (Likert, 1961) on leadership views such an ‘employee centred

approach’ as a key characteristic of effective leaders and the Ohio University leadership

study (Flieshman, 1953; Flieshman et al., 1953) also identifies ‘consideration of others’

to have a positive impact on group morale and employee satisfaction. Both studies

identify task completion and follower satisfaction as the two defining variables in

effective leadership and Semler appears to have attained both.

Democratic leadership

Semler’s style also clearly places itself on the democratic end of the democratic-

autocratic continuum, which is consistently favoured by several studies on leadership.

Democratic leadership is shown to lead to high quality decisions, a stronger team spirit,

and commitment to implementing decisions and satisfaction among followers. In a

climate of freedom, which encourages individualism, Semler transposes the concept of

tribalism, with its connotations on collectivism, to the organisational context (Muehrcke,

1998). He acknowledges individualism in the realm of collectivism and shapes his

organisational vision accordingly. Semco’s restructuring sets the vision of a successful

organisation based on a collective goal with high expectations that greatly challenge its

members. Undoubtedly, this was an extremely hard task in an economic landscape

facing tremendous crisis: “…inflation as high as 1,600 per cent…where the currency was

devalued by three zeros twice...” (Burdett, 1994).

5

Contingency theories

Contingency theories maintain that certain behavioural styles in leadership are effective

in specific settings. Semler changed his own behavioural style of working. “Before I

could reorganise Semco, I had to reorganise myself. Long hours were the first issue I

tackled…next I resolved to delegate furiously, and to summon up the courage to throw

unneeded papers away, so they wouldn’t clutter my desk or thoughts” (Semler, 1993 p.

57). Research on leadership style has shown that leaders’ behavioural patterns can

enhance team effectiveness. However, contingency theories in leadership also identify

the interaction between leadership style and situational variables.

Apart from the ‘crisis’ variable, another variable that should be considered in the

equation is ‘follower maturity’ (Hersey & Blanchard, 1988). Maturity is seen in terms of

both job (experience, knowledge & ability) and psychological maturity (willingness to

learn and work, persistence and independence). According to Hersey and Blanchard,

employee centred leadership (‘delegating style’) can be successful when employee

maturity is high. It could be argued that with regards to Semler’s delegating style, his

leadership effectiveness was due to, or supported by, employee maturity, which

ultimately favoured the effectiveness of his interventions. Had employee maturity been

low, Semler’s leadership effectiveness would have relied on a low employee

relationship/ high task performance approach (‘structuring style’) according to the same

researchers.

Furthermore, Semler’s ultimate absence from the organisational structure could hardly

be attributed to a ‘laissez-faire’ style in leadership. Laissez-faire leaders are considered

to be highly undesirable and their style is seen to lead to organisational ineffectiveness.

Evidently, the opposite seems to hold true for the case in point. In addition, Kerr and

Jermier’s (1978) ‘substitution’ or ‘neutralisation’ of leadership theory also falls short in

accounting for Semco’s structure. Semler progressively disappears from Semco’s

organisational management, which developed an organic independence across its self-

controlled units. Leadership ‘substitution’ theory requires a formal organisational

environment with highly structured, routine tasks in order to explain leader neutralisation

but this is far from being the case at Semco.

6

Charismatic and Transformational theories

Charismatic theories in leadership emphasise, apart from style, the importance of a

vision and House (1977) also identifies stressful or reaching crisis points conditions, as

the necessary factors that will allow charismatic leadership to emerge. In line with this, it

could then be argued that Brazil’s devastated economy combined with the growing pains

of Semco and Semler’s collapse, to have fundamentally constituted the necessary ‘crisis

factor’ towards Semler’s charismatic leadership effectiveness. Transformational

leadership on the other hand, puts emphasis on follower performance at levels, which

are higher than those that would normally be expected (Bass, 1985). Semco workers do

respond to highly demanding tasks more than effectively and in ways that could even be

viewed as highly unexpected. For example, when setting their own salaries, almost none

of them abuse the system and any deviations are soon amended in favour of reinforcing

feelings of equity and work motivation in the collective sphere.

Perhaps a more plausible explanation of transformational leadership at Semco can be

offered by Shamir’s theory based on self-concept motivators (Shamir et al., 1993). This

theory maintains that leader behaviour activates followers’ self-concepts in such a way

that ultimately affects further motivational mechanisms. Leaders do not change the

values of their followers but “rather they change their salience and connect them with

goals and required behaviours” (as cited in Steers et al., 1996, p. 225). In this sense

leaders respond to followers, no less than followers respond to them. In this process, the

vision of the leader plays an important role as it has to respond to the values and social

identities of followers, in order to induce the profound psychological effects of

transformational leadership, such as sacrifice of self-interests for the sake of a larger

collective goal or elevation towards self-actualisation on the Maslow hierarchy (Bass,

1985; Bass & Avolio, 1990).

Semco’s international reputation has been built through an ongoing process, which

fosters creativity, flexibility and entrepreneurial thinking. Its operations and structural

reformulations might even appear as ‘mission impossible’ to some managers. However,

Semler currently spends his time travelling around the world, explaining how his model

truly works. Psychological research on leadership processes allows us to distinguish

certain key features in Semler’s restructuring of Semco. Participative or democratic style

7

in management practices for example, is consistently shown to favour successful

leadership. Also, certain situational factors do seem to allow the emergence of leaders

as well as followers’ emotional responsiveness to them, like crisis point conditions and

employee maturity. However, selective variables can hardly provide us with insight in the

broader organisational picture that rendered Semco such a successful story. One of

Semler’s fundamental innovations was the creation of ‘satellites’, which were made up of

former Semco employees, working competitively as entrepreneurs on a freelance basis,

while receiving high level of support from Semco. The satellites divided their working

hours between Semco and an external organization. This allowed the fragmentation of

the production process towards decentralisation in line with the management principles

of flexible specialisation.

Morgan (1997) promotes the image of a loose, decentralised, partly outsourced

organization as the basis of a creative environment and for innovation to emerge.

Analysts comment on innovation as a process that fails to occur as a result of an

innovation programme; it emerges out of chaos – the same way Semler implemented it.

For innovation and entrepreneurial spirit to emerge, “people have to create a future for

themselves by sharing leadership and community…a network of mutual respect will

sustain people and encourage and innovative programme” (Gifford Pinchot, 1996, as

cited in Anonymous, 1997). Perhaps Semler’s unconventional leadership effectiveness

and outstanding success can be pinpointed to the creation of the right conditions, which

permit the regeneration of leaders in the organisational structure and substructure,

alongside the company’s organic growth. Semco’s uniqueness though, appears to be

underpinned by its extensive participative climate that invites flexibility, creativity and

innovation for successful entrepreneurial practices to emerge.

Evaluation

The case study discussed here partly demonstrates how current psychological research

can account for some of the social influence processes in the realm of leadership

practice, in the organisational setting. We have seen that research does lend some

support to the view that Semler is a good enough business manager to actually be called

a leader. However, whether leadership can be two-faceted, in terms of good or bad

leadership, addresses a question that is hardly—if at all, directly tackled in research

8

papers. The vast bulk of research examines the leadership hypothesis by trying to

identify the key characteristics and dynamics of its effectiveness. An attempt, however,

to identify both good and bad aspects in Semler’s case will follow.

Semler’s case can readily be identified as good leadership due to his international

success as well as Semco’s outstanding business growth. Furthermore, leadership

models do support his leadership style. Nevertheless, in the process of experimentation

Semler decides to depart from the organisational structure and commit himself to duties

that lie outside of Semco’s development. It could be argued that this can potentially

constitute bad leadership, with any possible detriment remaining yet latent or invisible.

Future developments will prove the validity of this argument, but any propositions at this

stage can only remain speculative.

It would be useful to provide here a theoretical accounting of the above analysis that is

based on the ‘leadership’ concept itself as related to post-modernity and attribution

theory in social psychology. Post-modernity can provide a theoretical interpretation

which can further help us to understand Semler’s management approach, as

differentiated from modernist economic practices such as ‘Fordism’ and ‘Taylorism’, with

their applications of scientific management techniques. The post-modern economic

environment is characterised by multi-skilled workers in the production process, market

segmentation and competition and sub-contracting of services (Abercrobie, 1994).

Clearly, all these elements do constitute key factors in Semco’s organisational

restructuring, redevelopment and ultimate success. In the post-modern context,

leadership can be deconstructed and then reconstructed with its meaning and existence

acquiring a new dimension, which does not necessarily lend itself to the modernist view

of a unitary, solid leader —in line with modernism’s universal politics. In Semco’s

entrepreneurial environment of rotating CEOs, leaders are regenerated within a creative

and innovative environment. Semco’s satellite structure allows for innovation across its

self-controlled units that contribute towards the benefit of the organic development of

Semco as a whole. Possibly, a similar kind of self-controlled, non-bureaucratic but

organically coherent organisational structure can be observed in the all-pervasive,

rapidly expanding, corporate model of the franchise, which fosters the

‘MacDonaldisation’ of business operational structures, functions and cultures. But

already mentioned earlier, the question of whether this type of organisational structure

9

will warrant Semco’s continuing future success or potential downfall can only be

speculative.

Partly in line with demystifying and deconstructing the concept of leadership in the

organisational setting, is the attributional approach (Kelly, 1970), which primarily

maintains that people tend to attribute a causal link behind other people’s actions when

interpreting human behaviour, which is rarely taken at face value (Rollinson et al, 1998).

In the organisational context, the attribution process allows managers to interpret

subordinate behaviour (Mitchell & Wood, 1979, 1980; Green & Mitchell, 1979). But most

importantly, the attribution approach can also help us to explain follower perceptions of

leadership, with this having strong implications when it comes to charismatic and

transformational leadership. Such an approach regards leadership as an act, which

greatly relies on impression management techniques and views leadership attribution as

a self-fulfilling prophecy, or a process that mostly lies in the eye of the beholder (Pfeffer,

1977). Although, such an approach might sound quite extreme, its underlying arguments

are extremely powerful and experimental results do seem to support it (Staw 1975;

Reich 1985). The key element in the attributional model for the case in point is its de-

romanticised perspective, which brings to light the potentiality of a myth, in the very

concept of leadership itself. Should this be the case, the validity of the good/bad

leadership argument becomes questionable.

Conclusion

There are many approaches to theories about leadership, most have been discussed

here in regard to a single case study, that of Ricardo Semler. Semler’s success cannot

be qualified in terms of a single theoretical perspective, Semler achieved his success

intuitively, and apparently he quotes a Frenchman who asked: “ it works in practice, how

does it work in theory?” It would appear that Semler does not have a theory. What he

had were a set of wisdoms that he worked to which are age old, for example, ‘if you trust

people they will surprise you positively if their interests coincide with yours” (Handy,

2002). However, in researching the answers to the questions ‘Is a manager a leader,

what is a leader and how can someone be both a good and a bad leader’, one is left

questioning its use, when developing managers or leadership skills? The answer

appears to lay with Katz and Kahn’s definition of leadership, in that it is “the influence

10

increment over and above mechanical compliance with the routine directives of the

organisation” (1978, p. 528), i.e. leadership is a process in social influence in any

organisation, whereby followers respond to their leaders in a voluntary fashion. As

Ricardo Semler puts it “only the respect of the led creates a leader” (Semler, 1993). It is

suggested here that theories of leadership and management are only useful as a tool to

guide development of organisations, if we constantly re-conceptualise them and adapt

them to current events.

[Word count: 3702]

Authors

Wendy Bowler

Orestis Droseltis

Lindi Faku-Juqula

Stevie Firminger

Jack Jacka

Vongai Nyahunzui

11

Appendix A

Biography

In the early 1980s, Ricardo Semler took on the position of Chief Executive of his father’s

company, Semco, a manufacturing company in Brazil. Ricardo Semler was only 19,

having just graduated from Harvard University, and set about running the company with

tight discipline and controls. Unfortunately, his own high standards and incredibly

stressful workload meant that Semler quickly became physically exhausted. It was at

this point that the revolutionary approach to running Semco commenced.

Semler started to remove “corporate oppression” as he called it. Secretaries and

receptionists were removed with everyone having to make their own coffee and greet

their own visitors. In order to keep his own workload manageable, Semler began to

involve his employees in decision-making. “Factory committees” were set up in order for

staff to get more involved in the manufacturing process and Semler guaranteed that no-

one would be dismissed whilst serving on the committees, or for a year afterwards, to

build trust and encourage his staff to speak out. Profit-sharing schemes were introduced

and units were self-regulated, meaning that staff could fire and hire their own managers.

It was found that Semco started to grow almost entirely as a result of the initiatives of the

staff.

Semler today views his role as more of a ‘questioner’ than the lead of the organisation.

He likes to encourage his staff to bring ideas down to simple levels by asking ‘why’ and

states that the organisation is running itself. In an interview with Charles Handy, BBC

World Service, Semler concludes by declaring, “Give people the freedom to do what

they want and over the long haul their successes will far outnumber their failures”

Ricardo Semler is the author of two best selling paperbacks. (1993), Maverick: The

success story behind the world’s most unusual workplace. London: Random House and

(2003), The Seven-Day Weekend. London: Random House.

The following is a recent interview with Ricardo Semler that affords an update on his

activities:

12

Interview with Ricardo SemlerBy Alan Strutt, Management Centre EuropePublication date: April 2004

MCE, in collaboration with El Mundo of Spain, recently interviewed Ricardo Semler, who spoke on ‘The 7-day weekend’ at HR2004.

When you took position within Semco, the company was struggling. How did you manage to diversify the company’s production?

The only solution was to make a radical shift in the direction and capabilities of the company, and that included changing the majority of the leaders and creating a new mentality. This bordered on the irresponsible in terms of scope and

speed, but in the end saved us. There might have been a safer or more mature way of doing this, but I was 21 at the time.

What is your opinion about the crisis that the European shipbuilding industry is suffering due to strong Asian competition?

Countries will remain with certain basic vocations. When the fundamentals are wrong, no amount of subsidy or effort will overcome this. Witness the fact that among the Asians the Japanese have found it impossible to continue leading the world in shipbuilding, as they did in the 80s. Their vocation is for higher labour costs, low structural capacity for raw materials such as steel, and strong government centralisation in industry planning. Whereas shipbuilding of a higher customisation, such as that of cruise liners, is still possible in France and Finland – in these cases, the customer is willing to pay more for specialised finishes through higher labour costs.

In your success, have you taken the model of any other company as a reference? Did you get inspiration from something or someone else? Was this ‘revolution’ in Semco your idea or did you get some help?

Semco was an ongoing living laboratory. All that we learned we did by walking, as says the great Spanish poet Antonio Machado – ‘el camino se hace al caminar’. Companies such as WL Gore (that makes Gore-Tex textiles) and even the first phase of the Mondragón Cooperative were beacons that we paid attention to, but our solutions are highly idiosyncratic – and not easily adopted, because they require two things: giving up control of the company’s future, and a long transition term.

Your company’s management model is a worldwide reference. Why has your idea not spread?

For the two above reasons, which I can explain further. Boards, shareholders and CEO’s need, for reasons that have more to do with Freud and Foucault than management gurus, to feel secure about the absolutely insecure future they face. So they leave important meetings with a plan, and expect the employees to follow, much as a Pied Piper. If the plan or the people are flawed, you end up with Enron, Fiat, or Parmalat – if they are better, you end up like the auto makers in general, the airline industry or banks, who have a perfect plan and precise numbers, and are unable to predict whether they’ll make money or exist in two years time.

13

As for the transition, companies today are expected to run on 90-day mandates. As such, no one wants to risk changes in culture that will take many years to prove themselves.

Could you tell in few words what your company’s management model is?

It is a model that is based on people’s freedom and need for gratification through work as the pivotal levers of a successful company.

How do you measure your employee’s efficiency? If they do that themselves, isn’t it risky?

This would be the same as saying that people are basically lazy, or that they want to come in as late as possible, leave as early as possible, and make more than they deserve. And we don’t believe in that, and have never seen this, even when we left people to set their own work hours, their salaries and choose their bosses. The pundits who pronounced us dead were wrong and, after 25 years of this, we have gone from 100 to 3,000 employees based on our concepts. That is what the book Maverick, published in Spain as Radical, was about. The new book, coming out soon in Spain, is The Seven-Day Weekend, and tries to make the point that companies of the future will have to adapt their architecture to the Gaudis of management, and not only the Goyas – after all, the naked global giants of industry also have to lose weight.

What do you believe is so attractive of Semco for those thousands of young people who want to work for your company?

They see there a degree of respect, freedom and self-propulsion that is hard to find. They know that they can customise their jobs, watch Moya and Kuerten play tennis at Roland Garros all morning, as long as they get their work done. And that is more contemporary, and therefore more seductive. They don’t want to be subject to more of the senseless boarding school mentality that they had to anachronistically endure during their education.

Semco’s management model is unique. How does this corporate philosophy affect the HR department? How does the employee recruitment work in Semco?

HR takes a decidedly backstage role at Semco. We want people decisions to be made by those who are close to the people, and not a department – from a hundred or more, that area is down to a few loners, who think strategy.

Hiring is done in a unique way: by those who really care. When you think about it, job hiring is as flawed as an Internet dating process, and could be the basis of any Almodóvar movie. On the one side, the company lies about what a wonderful place they are to work for, and, on the other, the candidate omits important information about his or her faults. And what is the chance that one or two encounters will result in a happy marriage? In our process, the candidates all participate, together, in a collective first interview and tour of the company, meeting many future co-workers. Then, the finalists are interviewed for 5 or 6 times by a dozen or two dozen people from the company. By the time the decision is made, by majority of our people, there have been innumerous opportunities to see beneath the veneer of both sides, and when the person begins work they have supporters and accomplices in place.

14

Have you fired employees? Do the employees vote if someone has to be let go or is there some kind of committee who decides this?

Semco is not run by committees, but we haven’t done away with the vital aspect of leadership. The difference is only in the more democratic method of choosing leaders. But once they are in place, they have a mandate, and do decide. So a leader can decide to fire people, but normally discusses this openly with the people who work in that area. Semco has grown by some 35% a year for over 10 years, so the effect of the people that have been fired is not easily registered, but some dozen people every year do not survive the system which is, in actual fact, very demanding. After all, showing up on time or playing politics doesn’t work there – you need to produce measurable results.

A big company in an industry such as yours is usually well known by the public, but yours isn’t so much. Are you the company’s best image? Can it be that at the end you are selling more of your experience than your products?

Semco has no products for the public. In most of our big contracts we have a dozen clients, no more. Santander or Telefonica de España know us well because we run things for them, but their customers are not our target. As to selling image, Semco has gone from US$ 4 to $ 212 million since we started this system, so we cannot complain about the success of our products – we are #1 or 2 in 100% of the markets we are in.

Have you changed since you have become considered a ‘guru’? Are you now earning more with all your other activities than working for Semco?

People who believe they are gurus set themselves up for superficial marketing as a way of life, or for a future fall. I’m surely no guru, and it is only a sign of the feeble state of management thinking that there are no more than a dozen people who are constantly sought out for speaking about the future of organisations. I have never earned more than 10% from these side activities of mine (I am now spending a semester working at Harvard University pro bono), and, in any case, all this money is channeled to my Foundation, which has created a school system that mirrors Semco’s beliefs. We have two schools, one of them public, based on the idea that adults arrive at Semco already programmed to accept, submit and conform – as well as throw away their dreams and talents. Our schools transfer the burden of making the class interesting to the educators – children are free to go to class or not, and we are the ones who look for interesting people to bring out the magic that resides in mathematics, sciences and art. We have a proportion of 2-3 Masters per child (they only come a few days a week, and we look for them to be passionate in their areas of expertise).

Also, part of my money goes to a modern botanical garden for children, a new concert hall in the country and an Institute called DNA Brasil which unites Brazil’s 50 most renowned specialists in all sectors (actors, architects, economists, geneticists, sociologists) once a year and in constant workshops to think about the country’s vocation and future. The Seven-Day Weekend is also dedicated to seeing the bigger picture, and its income is also directed to these efforts. Seeing Semco as an isolated case, or imagining that it is largely based on my personality is selling the concepts short. No international audience of journalists and executives (2,700 companies, 200 magazines and almost all the major TV networks have visited us) can be deceived for 25 years – this is not about marketing or an isolated example – it is about an architecture of organisations that can serve as seeds for a more gratifying way of working – that is our raison d’être.

15

REFERENCES

Anonymous, (1997) Innovative, creative. International Journal of Productivity and Performance Management. 46(4), 147.

Anonymous, (2001) Semco succeeds with no rules, regulations or HR department. Human Resource Management International Digest. 9(2), 18-9.

Abercrombie, N., Hill, S. & Turner, B. S. (1984) Dictionary of Sociology (3rd ed.). Middlesex: Penguin.

Bass, B. M. (1985) Leadership and performance beyond expectations. New York: Free Press.

Bass, B. M., & Avolio, B. J. (1990). The implications of transactional and transformational leadership for individual, team, and organizational development. In Steers, R. M., Porter, L. W. and Bigley, G. A. (1996) Motivation and leadership at work (6th ed.). Singapore: McGraw-Hill.

Bennis, W. G. & Nanus, B. (1985) Leaders: The strategies for taking charge. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Burdett, J. O. (1994) The magic of alignment. Management decision. 32(2), 59.

Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Gifford Pinchot (1997). Cited in Anonymous, (1997) Innovative, creative. International Journal of Productivity and Performance Management. 46(4), 147.

Green, S. & Mitchell, T. R. (1979) Attributional processes of leaders in leader-member interactions. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Handy (2002): BBC documentary.

Hersey, P. & Blanchard, K. H. (1988) Management of organizational behaviour (5th ed.). In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

House, R. J. (1977) A 1976 theory of charismatic leadership. In J. G. Hunt & L. L. Larson (Eds.). Leadership: The Cutting edge. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Kerr, S. & Jermier, J. M. (1978) Substitutes for leadership: Their meaning and measurement. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

16

Katz, D. & Kahn, R. L. (1978) The Social Psychology of Organizations (2nd ed.). In Steers, R. M., Porter, L. W. and Bigley, G. A. (1996) Motivation and leadership at work (6th ed.). Singapore: McGraw-Hill.

Kelly, G.A. (1970) A brief introduction to personal construct theory. In Bannister, D. (ed) Perspectives in Personal Construct Theory. London: Academic Press.

Kotter, J. P. (1990) A Force for Change: How leadership differs from management. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Lloyd, B. (1994) A discussion with Ricardo Semler, author of Maverick! Maverick! An alternative approach to leadership, company organization and management. Leadership & Organization Development Journal, 15(2), 8-12.

Mitchell, T. R. & Wood, R. E. (1979) An empirical test of an Attributional model of leaders’ responses to poor performance. In Huseman, R. C. (Ed.) Academy of management proceedings. In Chmiel, N. (2000) Introduction to work and organisational psychology: A European Perspective. Oxford: Blackwell.

Morgan, G. (1997) Images of organisation (2nd ed.). London: Sage.

Muehrcke, J. (1998) Let tribal customs thrive. Nonprofit world, 16(1), 2.

Pfeffer, J. (1977) The ambiguity of leadership. In Rollinson, D., Broadfield, A. & Edwards, D. J. (1998) Organisational Behaviour and Analysis. Essex: Longman.

Reich, R. (1985) The executive’s new clothes. In Rollinson, D, A. Broadfield, and, D. J. Edwards (1998) Organisational behaviour and analysis. Essex: Longman.

Rollinson, D., Broadfield, A. & Edwards, D. J. (1998) Organisational Behaviour and Analysis. Essex: Longman.

Semler, R. (1994). Who needs bosses? Across the Board, 31(2), 23.

Semler, R. (1993) Maverick: The success story behind the world’s most unusual workplace. In D. Vanderburg. (2004) The Story of Semco: The Company that Humanised Work. Bulletin of Science, Technology & Society, 24(5), 430.

Semler, R. (1993) Maverick: The success story behind the world’s most unusual workplace. London: Random House.

Semler, R. (2003). The Seven-Day Weekend. London: Random House

Shamir, B., House, R. J. & Arthur, M. B. (1993). The motivational effects of charismatic leadership: A self-concept based theory. In Steers, R. M., Porter, L. W. and Bigley, G. A. (1996) Motivation and leadership at work (6th ed., p.166). Singapore: McGraw-Hill.

Staw, B. M. (1975) Attribution of the causes of performance: A new alternative interpretation of cross-sectional research on organisations. In Rollinson, D., Broadfield, A. & Edwards, D. J. (1998) Organisational Behaviour and Analysis. Essex: Longman.

17

Steers, R. M., Porter, L. W. and Bigley, G. A. (1996) Motivation and leadership at work (6th ed.). Singapore: McGraw-Hill.

Stogdill, R. M. (1974) Handbook of leadership. In Steers, R. M., Porter, L. W. and Bigley, G. A. (1996) Motivation and leadership at work (6th ed.). Singapore: McGraw-Hill.

Turner, F. (2000) As market changes, good leaders must be good learners. Business Journal, 15, 18-20.

Vanderburg, D. (2004) The Story of Semco: the Company that humanised work. Bulletin of Science, Technology, 24(5), 430.

18