How to turn a traditional company around.
EYES ON BRAZIL. THINK WORK DIFFERENT.
“The most difficult thing was HOW to put changes into practice. So we started to discuss it. We found out that there were few people in the organization who had interest in what they did. They were those who held some power… .. the directors, managers etc.”, Clovis Bojikian recalls. He began to work at Semco in the 70s, responsible for human resources. Clovis tells us about the beginning: about risks and responsibility, growing participation and rainbow-coloured uniforms.
Clovis: Ricardos father was a normal, successful businessman, who learned that in order to manage a company, you needed to be autocratic. Because that was the rule. The rule is: “Do as I order” and who has any sense will obey. Everything came from top to bottom. and the company went well. But soon I’ll talk more about the risks the company was facing.
Aside from what we’ll talk here about the cultural changes that took place in the company, Ricardo had incredible foresight from a business point of view, at that young age and that baby face! He realised that although the company was going rather well, there were serious risks ahead. Why? 90 % of what was being manufactured went to a single industrial segment: the naval industry, which was going very well in Brazil at the time.
Ricardo understood this was a risk, that if that segment ceased to go well, Semco could very well sink together with it. So Ricardo took it upon himself, to travel around the world: he went to Sweden, Norway, England, Germany, the USA to search for new manufacturing licenses of other products here in Brazil.
In a short period of time, Semco was already building other equipment: mixers, emulsifiers, stirrers of several sizes to serve the food industry, mining, the chemical and pharmaceutical industry etc. So in a short period of time, Semco stopped being a sole provider for the naval industry and widened its range – the naval industry was just one of many- it had a whole other set of segments.
Two years later the Brazilian naval industry started to decline. From second biggest naval industry in the world, at that time, it got to the penultimate position. In other words, if changes hadn’t been made, Semco would no longer exist.
So, when I arrived, there were all these new products, Ricardo started a new cycle… this represented a new cycle of considerable growth, this diversification. But right from the beginning there was a second cycle of growth which consisted of buying up companies that were practically broke, that had good products but were failing. Usually multi-nationals. In this way, they could be purchased for very little. As we recuperated these companies, we paid them along the way. So he bought some American companies, so we had four, five factories: our factory, then four more that all stood in different places, with different cultures.
The hypothesis was: the realization that those who were most interested, most engaged and motivated within the company, were those who held some sort of power. Well, if this is true, I can establish a highly positive correlation between power, participation, and motivation. If this is true, I don’t need to know how to motivate people, but I do know how to offer conditions of participation. And instead of starting at a given hierarchical level, we decided to involve everyone at once. Everyone. All the factories, at all levels.
Examples of growing participation
It had to be a process, a process of growing participation, but it had to start at the base. Instead of creating courses and seminars, we had to act within reality, within actual day-to-day situations. We decided to take every opportunity that day-to-day situations offer us to exercise participation.
One of the greatest dissatifactions: Food in the cafeteria!
We searched in the factories where the main dissatisfactions lay and how they were being dealt with. All the factories have cafeterias, and cafeterias in factories and all other sort of large collectives are always great sources of dissatisfaction. In fact, that dissatisfaction is sometimes justified, but many times it’s just a transference, a dissatisfaction with the boss, with the company, that manifests itself in dissatisfaction with the restaurant. So we picked the restaurant to exercise participation.
So how does it normally happen? People complain, the HR person normally says “I’ll see what i can do…” If another complaint comes up, the same thing happens. Opinion polls we did on the restaurants showed showed how difficult it was to please all.
So let’s do this: Gather four, five colleagues, make a group, and try to come up with a proposal. There were 2 objectives: 1) their participation by bringing a proposal, 2) start practicing group work, instead of just individual work. They came up with a proposal, then we said “Great, now do you think this is feasible? Do you think the people in the kitchen can make that happen?”
– “I don’t know”
– “So how about you from another group, a kitchen group? Then you get together with that other group and come up with a final solution, already approved by the kitchen group?”.
– “Oh, ok…”
– “Ok, so go, make it happen, and bring something back”.
So when they brought it, -“all OK, approved? – Approved. – Very well.”
So from now on, the cafeteria will be managed by this commission. The first cafeteria commission of Semco has just been created, that will be valid for one year. Then it will be replaced by another.
Wouldn’t a lot of managers say that all this talking takes too much time and it’s not effective and people are not working anymore?
No, these things were much faster than you can imagine. At first, they had a hard time to act as a group; it didn’t start as a group, it was rather a bunch of people. As they practiced though, they solved this in the lunch break, at the end of the day, in the corridors because they learned to work as a group. So they got better at it. It was a time well spent. The benefits were much larger than the time lost trying to solve the issues.
So what was the proposal about: to initiate a process of practicing participation. People felt they could collaborate, they could act, they could not only obey but contribute to issues that concerned them directly.
Bridge day or day off?
The company always decided more or less over the last minute how it was going to deal with bridge holidays. And it informed the workers that Saturday would be a workday to compensate for the bridge day. So everyone was caught by surprise… First, many people couldn’t in fact work on Saturday because of some cousin’s wedding, or some church event or a test at university… many things came up. Nobody asked them if they could in fact compensate by working on Saturday. Nor did anybody warn in advance that it would be possible to take advantage of the bridge holiday to make a short trip etc. but why does it always have to come from top to bottom? Let’s ask them what they’d like to do. They formed a group – a group was always formed – they came two weeks later with a 6-year calendar.
The following six years were already mapped: which would be the bridges and which days would be used to compensate. Everything was established in the calendar. This was great because it attended perfectly to our needs, the company’s, and their own since it was created by themselves.
Another example, another opportunity: low stock of uniforms. This is an opportunity for what?
Normally you send out a purchase order to the purchasing department to buy uniforms. No, it’s an opportunity; let’s first ask if they want uniforms or if they prefer to work without uniform. Secondly, do they want this uniform or another one? This colour or another?
So let’s make a opinion poll in all factories. We prepared a ballot; we hung on the wall a series of models, colours, and the first question was whether they wanted to work with uniform. The great majority answered with a resounding yes, because to them that meant sparing them clothes etc. Then they were to choose models, colours etc. Oh, some people came to talk to us to tell us that it was the first time in their lives that they were answering a question that concerned directly. “The company is asking me something that concerns me; it’s the first time that they ask me something”. OK. Then came the result: it was a rainbow.
Because everyone picked a different colour, a different model, so no uniform!
“What do we do with this?” Then they got together and came up with the following: “Let’s pick the first two most voted and then let’s do a second round.” We made a new round with campaigns etc. (Clovis laughs) and one model got 79%, the other one got 20 something%, and thus was voted the new uniform, which was a different one from the one before. All good.
Now, what happened, in practical terms, in the company? There was a change of uniform. But what did in fact happen in this company’s culture? For the first time, this was introduced by adecision they had taken. And something else. This happened in 1985 or 86 and the Brazilian Constitution is from 1988. And it was in this Constitution that the practice of the ‘second round’ (nota bene: In Brazil today, they have a second round of election if none of the candidates gets over 50% of the vote) was established. So the concept of the ‘second round’ didn’t exist then in Brazil, the workers came up themselves with this novel solution. This wasn’t a model they could copy.
Today, everyone knows about the second round. Before, nobody didn’t even know that it was called ‘second round’. Second Voting. So it was a moment of great participation because all factories were involved, all took part.
So these were simpler situations that affected the base of the whole pyramid. From then on, we could already notice a change of attitude in these people, who before were quiet, and suddenly started to speak out. To propose, to make suggestions.
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