Ricardo Semler

1. What are the personal and organisational reasons that led Ricardo Semler to change his leadership style so markedly?

Ans.

Organisational reasons:

Semco was following a tough-minded and statistical approach. People were working long hours and yet deliveries were always late, which led to further employee dissatisfaction. At the annual corporate retreat, one of the employee expressed extreme dissatisfaction by creating a caricature symbolising the extreme controlling and autocratic culture at Semco. People were polarised with two extremes of thought processes- one which felt the controlling nature was necessary and another which felt the culture was suffocating.

Personal Reasons:

Ricardo’s personal health was getting affected due to long working hours and the amount of stress he was taking. This led to him collapsing during a visit to a US factory. He was advised by the doctors to change his lifestyle.

These factors led him to change his leadership style.

1. How would you characterise Semler’s early leadership style? And his later leadership style?

1. To what extent do you think Ricardo would succeed as a leader in other types of organisations?

Ans. Ricardo relied on employees self-managing and created a democratic working style. This led to increase in intrinsic motivation for the employees and they got satisfaction from the work they did and felt a sense of ownership of the organisation. This is evident by the example when during a downturn employees agreed to take a pay cut  and also took over all the activities of external contractors. This led to cost saving and higher profits and within 3 months salaries were restored. All these factors also led to elimination of external and internal equity comparisons as all processes and decisions were transparent.