Semco - Presentation

Semco - Presentation

Semco is a Brazilian company founded 1953 by the Austrian-born engineer Antonio Curt Semler. At that time Semco used to be a small family business with laying focus on the making of industrial machinery. When the firm got hit very hard by the recession in the early 80s and Semler’s son Ricardo became the CEO it underwent a tremendous change. Before Ricardo, Semco was stuck in a very traditional, hierarchical and patriarchal structure with many rules and policies. Therefore Ricardo’s aim was to break out of the old, crusty structure and develop a new corporate structure with a flat hierarchy as well as to design and implement a diversification strategy.

Ricardo took matters in his own hands and one of his first acts was to fire two-thirds of the top management. Due to a radical democratisation of the corporate processes Semco is now famous for its revolutionary leadership model. Semco now has 3000 employees that set their own budgets, production goals and schedules. There is a democratically elected committee responsible for the allocation of profit-sharing funds. The basic idea of the new system is about people managing themselves instead of being managed by a superior. Hence there isn’t a traditional management hierarchy but the company is effectively made up of autonomous, democratically run units. Semco’s model of organization can be described as concentric circles. At the centre there are the Counselors including Ricardo Semler, the second circle is made up of the Partners, which are the leaders from each Semco division and everyone else is an Associate. The success of the change is shown by the figures of Semco. Under Ricardo’s ownership revenue has grown from 4 million dollars in 1982 to 212 million dollars in 2003, with an annual growth rate of up to 40 percent a year. Moreover the labour turnover rate is below 1 %. Semco nowadays doesn’t operate in a clear defined business area. It still produces machines but is also active in facility management, environmental consulting, outsourcing of HR and many more.