How to Run a Company with (Almost) No Rules

Ricardo Semler is the Brazilian CEO who takes ‘Terminal Days’ to give him time before retirement to empty his bucket list – like climbing Himalayan mountains and visiting the magnetic north pole on a dogsled. Refreshingly, he encourages his people to do the same. He is also the guy who turned around Brazilian firm Semco Partners, modernising and growing the firm from turnovers of $4M to $160M in his 20 year tenure. He also introduced a radical form of industrial democracy into Semco, allowing employees to choose their managers, work where they wish and vote at board meetings. He also controversially setup a computer in the company cafeteria giving employees access to revenues and profits, company salaries and benchmark salaries from similar positions. He then allowed employees to set their own salary. What he found was that pay levels stayed the same – he trusted employees to do what was best for the company and their peers, challenging the assumption that our natural tendency toward greed would take over, especially in a large company.

Semler has a very particular view of how to radically run his organisations – by transferring control, being inquisitive and showing his vulnerabilities. He also has some fairly controversial views on HR and its usefulness, commenting that he had two people in the HR department but “luckily one of them retired”.

Although I don’t agree with his views on HR’s place in the world, I am inspired by Semler’s radical thinking about people management. Does this radical democracy have a place in the modern business and a place on the HR agenda? With a seat at the board table and the attention of the CEO, can great HR leaders introduce a trusting, no-rules environment within which employees can flourish and organisations succeed?

Watch the video and judge for yourself.