Disorganization at Semco: Human Resource Practices as a Strategic Advantage

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Organizational Strategy At Semco, there was no vision/mission statement or regulations manual. It also had no official organizational chart. When it was critical to portray the architecture of the organization, it was only drawn with pencil and was disposed of immediately. The company's course was almost completely reliant on the zeal and creativity of its employees. Every business division of Semco had complete autonomy to expend its allocated finance as it deemed fit. Each of these business divisions had only a few hundred employees. Within each of these divisions, the practice was to form self-run teams, comprising 10 to 12 individuals, which manufactured a complete product and not merely an individual part...

Semler's efforts to change Semco's DNA partly included his tinkering with its organizational structure. Semco's initial structure was a functional one. This was a traditional pyramidal structure where the power was concentrated at the top, and where it was difficult for employees to move up the ladder. Employees of each functional area such as manufacturing, sales, and accounts reported to the respective functional heads at the head office. Semler found that Semco's expansion was being slowed down by the bureaucracies and inter-departmental frictions inherent in a functional system. Semco briefly experimented with the matrix structure but found it ineffective...

Autonomy
All Semco employees were free to do what they desired. They individually determined their respective salaries/ wages, their respective work timings, and their respective attires. Employees were not evaluated on the basis of the number of work hours that they clocked but on the basis of their meeting the set output targets. Clovis Bojikian, Semco's Director of Human Resources as of 2003, explained, "We don't know how many hours any of our employees work weekly. Not even if they work at all. As long as you’re getting the job done for yourself and the company, you're free to manage your own time."...

Doing Only What Was Needed
There was no compulsion for the employees to attend any of the meetings - if no one attended a meeting, it was an indication that its agenda for the meeting was worthless. Two positions at the board meeting were kept vacant for all the employees, to be filled up on a first come-first serve basis. Also at meetings, employees were vigorously prodded to raise queries, to leave a meeting if they lost interest, and to attend any meeting whose agenda they were keen on...

Bottom-Up Approach
The employees themselves nominated the corporate executives and triggered many of Semco's entries into new business arenas and its exit from existing ones. They could veto even the CEO's decisions. Though Semler was the major shareholder at Semco, he had a single vote just like other company employees...

At Semco, the worker committees administered the factories. These committees regularly held parleys with the executives of each plant. The committees had a say in expense reductions, in making significant alterations to product lines, and during difficult times, in choosing the employees who would face the axe. Workers, of their own volition, performed multiple tasks. On a typical day, depending upon the output goals, a lathe operator might opt to concurrently handle a grinder or steer a forklift...

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