Current Reading – Maverick by Ricardo Semler

While I still have a few books in the queue mainly focused around TPS, I started reading Maverick: The Success Story Behind the World’s Most Unusual Workplace, the prequel to The Seven-Day Weekend: Changing the Way Work Works.

Not too far into it yet, but riveted again. Pretty amazing story. Highly recommend both books.

I’m really curious about a lot of the ideas in these books, and how they would work in a traditional company. I know I’ve made little adjustments in this direction even before reading the books, but now I’m really curious as to how extreme you can go. Ricardo seems to have had great success going more extreme than most. I admire his idealism and his trust in people.

The Seven Day Weekend by Ricardo Semler

It’s been a long time since I’ve read a book on business that has kept me captivated through the whole thing, but Ricardo Semler’s The Seven-Day Weekend: Changing the Way Work Works certainly did.

Semler is the CEO of SemCo SA, a company in Brazil with a pretty crazy management model by conventional standards. A complete democracy. People choose where and when they will work. There are no permanent desks, no dress codes, and employees select their own salaries and bonus structures. Most ideas for new business for the company comes directly from its employees. The bottom line, the company is run on the base assumption that their people can be trusted to (and actually are motivated to) do what is needed to keep the business running and growing.

This is, oddly, the complete opposite of the normal viewpoint seen in corporations today that employees are not trustworthy, must be monitored, must be in the office during a certain timeframe and dress a certain way to ensure that they are “behaving professionally” and “productive”.

Semlers philosophy may seem weird to some, but it also seems to work, as according to Semler the company has grown from $4M a year when he took over the company from his father in 1982 to, as of 2003, an annual revenue of $212M. Reading the book, its hard to figure out what SemCo actually does, but the model in which it is run is so intriguing that by the end of the book you don’t really care.

Some of the most interesting assumptions, behaviors, and programs that I found while reading this book that SemCo pioneers:

  • People are inherently good and trustworthy – Sure, there will be bad apples, but if you create a culture in which the social norm is trust, the “bad people” will be pushed out by their peers and/or subordinates if they violate the social norms. An interesting idea.
  • Management positions are not guaranteed – All managers are evaluated openly by their teams. Think of it as a Digg.com for managers. Repeated low scoring usually results in the manager either leaving or being dismissed. I found this to be a very intriguing example of giving the teams the power rather than the management structure.
  • Employees set their own salaries – SemCo’s books are completely open to their employees so that they can see the impacts of their salaries on the companies bottom line. Each knows what the other makes, and requests for salaries that are out of the whack are run the risk of being rejected by colleagues. Its an interesting concept to allow social norms to keep behavior in check, rather than the traditional approach of hiding information from employees. Given all of the information, employees are able to make decisions based on the impact to the company.
  • Retire A Little Program – The company did a study on work productivity and found that the peak of physical capability is in ones twenties and thirties. Financial independence, on the other hand, usually occurs between age fifty and sixty, while “idle-time” peaks after seventy. The conclusion was reached that when you are most fit to realize your dreams, you do not have the money or leisure time for them, and when you have the time, and money on hand, you no longer have the physical energy to realize them. Semco allows their employees to buy early retirement time, from the company, allowing you to do the things you are passionate about while you can still do them. Another twist on the program is that for all of this time you take off, you receive a voucher for time to work, so that when you are older, you can come back and work at a proportional pay level. Brilliant.

Its extremely hard to characterize the thoughts contained in this book in a review. They are so different, and so people oriented, that the best thing you can say is once you read this book you will more than likely begin thinking about how to relocate to Brazil to be a part of it. The book is really well written and Semler has a great conversational style to his writing. It isn’t your typical business book, which would be expected being written from someone who is not the typical CEO.

Do yourself a favor and pick this book up. It will completely change the way you look at your employees and your company.

Related Links:

  • The Semco Way – section of their web site detailing their management and company philosophy

37Signals: Secrets To Amazons Success

37Signals has an article on the Signal vs. Noise blog about the Secrets To Amazons Success. Its a good read.

My favorites:

People’s side projects, the one’s they follow because they are interested, are often ones where you get the most value and innovation. Never underestimate the power of wandering where you are most interested.

Innovation can only come from the bottom. Those closest to the problem are in the best position to solve it. any organization that depends on innovation must embrace chaos. Loyalty and obedience are not your tools.

and finally

Everyone must be able to experiment, learn, and iterate. Position, obedience, and tradition should hold no power. For innovation to flourish, measurement must rule.

Check out the full article. There’s a lot there, most of which sounds like it comes straight out of lean books I have read. These three, however, are key for me. People are the greatest asset, and the things that they are passionate enough to “play” with are the key things that foster innovation. You just have to learn to trust them enough to let them play, and release some of the structure that “mature” companies think they require.

Another example of how Amazon gets it.

Organizational Features of a Lean Plant

I’m reading The Machine That Changed the World : The Story of Lean Production by James P. Womack, Daniel T. Jones, and Daniel Roos. It is an extremely interesting book.

I ran into this small paragraph yesterday that for some reason stuck in my head as something important:

The truly lean plant has two key organizational features: It transfers the maximum number of tasks and responsibilities to those workers actually adding value to the car on the line, and it has in place a system for detecting defects that quickly traces every problem, once discovered, to its ultimate cause.

I’m telling you, the Poppendeick books are great, but there is nothing like going right to the source for an explanation of lean. I’m about 100 pages into the current book and I am absolutely fascinated at how much of todays current corporate structure (multi-level, many people with very specific task sets or responsibilities) is based on things that Ford and Sloan did with their companies.

In IT, this management style is manifested through all the different groups one hears about all the time from people in the field: Development, Infrastructure, Business Analysts, Quality Assurance. Each its own little silo, with its own responsibilities – and never should one group know how to do, or be privy to, the information in one of the other groups. Handoffs occur between the groups via very large documents.

Sometimes it goes further than that. I was talking to a friend once (who worked at another company, BTW) who told me about how their DBA’s were responsible for uptime and performance of the database and had decided that developers were not allowed to use ORDER BY clauses in their SQL because it effected the performance of the database. These developers were actually forced to sort their results within the application, rather than use the capabilities of the database, adding additional complexity to an already complex application. Worse, management seemed to buy into the decision, as I don’t think I would have been hearing about the situation if it was overruled. Ridiculous.

Another quote from the book, same page:

In old fashioned mass production plants, managers jealously guard information about conditions in the plant, thinking this knowledge is the key to their power.

Again, shocking how much of this mentality you read about in corporations not even connected to automobiles. This sounds like just about every company I’ve talked to people about (or worked at) over the years.

I’ve come to the decision over the years that ultimate transparency is the key to breaking down silos. It only breaks down your silo, but hey – thats a start, and at least you are setting an example.

Its definitely very beneficial, I’m finding, to read about things that are completely outside your profession to give you some distance from what is being taught. The lessons flow in easily this way, because you don’t have the predisposition that you “already know how things work”.

I recommend to anyone in IT to pick this book up. Its absolutely fascinating.

Calacanis Interviews Evan Williams, Co Founder of Twitter

I really enjoyed Jason’s interview with Evan Williams (co-founder of Twitter, Odeo, and Blogger) especially Evan’s “lessons learned” about entrepreneurism:

1. Focus
2. Small things can become big.
3. Don’t go too wide.
4. Trust your gut.
5. Don’t do anything you aren’t absolutely passionate about.

The Shoemakers Son Always Goes Barefoot

The other night the ignition switch on the furnace went out in the house. I watched as Jonna spent a ton of time searching for the contact information for the guy who came out the last time we had a problem. It took quite a while to find the information, but finally she found it. When she got a hold of him, he started asking questions about a blinking light on the furnace. We had no idea what he was talking about, but I did remember he gave us information last time he was here – I just couldn’t remember what it was.

Yesterday as I was driving to work, I was reflecting on the activities of the night before. Why did we not have this information available when we needed it? Where could we put it so that if something happened again, we could have it readily available? How can we take these kinds of notes effortlessly and ensure that we know where we put them?

Then a stark realization hit me. We’ve already solved this problem – at work.

In early 2004, at the urging of one of my direct reports, we installed wiki software at the office to solve just this problem. All of our information was scattered around network drives, none of it really searchable. Doug was very into Python at the time so we chose ZWiki, a wiki package that runs on the Zope application server. We used that for about 1 1/2 years until we finally bit the bullet and moved to MediaWiki, where our information repository lives today.

We actually have quite a knowledge base going there now, everything from detailed process information, to configuration information, to even some projects that are being managed on the platform, with detailed information about all of the issues encountered, configuration information, and the like. It has become a one stop shop for all information related to our environment.

And I’ve been the primary champion since it was installed.

This was when, as I was sitting in the car pondering this, that the title of this post came to me. The old adage is true. There are so many problems that we solve in our daily business lives that never get resolved in our personal lives, and vice versa. Its amazing to me that while we’ve done so much at work to centralize the information in our department (while decentralizing the authoring so that if something is found to be wrong it can be corrected) that I never thought to apply this at home to keep all of our information straight here. Instead, Jonna spends countless amounts of time searching through kitchen drawers for information on service providers and I sit trying to remember that one valuable piece of information that the furnace guy absolutely needs so that he can arrive and fix the part, rather than wasting trips to and from our house to first diagnose the problem, then go get the parts to fix it.

So, I’ve spent this morning getting MediaWiki running here at the Labs. Hopefully, I can motivate the family to use it as we have motivated our employees to use it at work to keep all of our important information centralized and updated. Its a simple thing to set up, but can be rather difficult to socialize. Luckily, we only have 5 people here, so the socialization might be a tad bit easier to do.

How many things do you struggle with at home that have been solved for years at work? Maybe you even had a hand in solving them, but the solution never seeped into your life outside of work?

This was a major “AHA” moment for me this week and I’d love to hear about other people who might have similar stories.

Now I’ve Heard It All: Management Lessons from RoadHouse!

One of my favorite “bad” movies that I just cannot switch past when its on is the movie “Road House“. As a matter of fact, we went out and bought the DVD so that when it is on TV, I can pop in the DVD and watch the “unedited” TV version of the movie – thats how addictive the movie is to me for some reason. I just cannot “not” watch it when its on.

So imagine my surprise when the latest episode of Manager Tools used Roadhouse as one of their examples when discussing Handling Peer Conflict When Your Directs Are Involved. The example was around one of their steps in handling conflict, which was “Turn the other cheek”. In the movie, there is a scene in which Patrick Swayze is laying down the rules for working in the bar now that he has been hired as a cooler. Oddly, the scene really does illustrate the point Mark was making quite well:

DALTON:

1. Never underestimate your opponent. Expect the unexpected.
2. Take it outside. Never start anything in the bar unless its absolutely necessary.
and

3. Be nice.

EMPLOYEE:
C’mon

DALTON:
If someone gets in your face and calls you a <bleep>, I want you to be nice.

EMPLOYEE: OK …

DALTON: Ask him to walk, but be nice. If he won’t walk – walk him – but be nice. If you can’t walk him, one of the others will help you – and you’ll both be nice. I want you to remember that its a job. Its nothing personal.

EMPLOYEE 2: Uh, huh. Being called a <bleep> isn’t personal?

DALTON: No. Its two nouns combined to elicit a prescribed response.

EMPLOYEE 2: [laughs] Well what if someone calls my mama a whore?

DALTON: Is she? [pause with employee laughter] I want you to be nice until its time to not be nice.

EMPLOYEE 3: Well, uh, how are we supposed to know when that is?

DALTON: You won’t. I’ll let you know. You are the bouncers, I am the cooler. All you have to do is watch my back – and each others … and take out the trash.

See video below.

I guess it just goes to show you that there are leadership lessons everywhere, you just have to be looking for them. Road House, honestly, would have been the last place I would have looked, but damned if they aren’t there as well.

As an aside, I’ve just started reading a book called Leadership Sopranos Style: How to Become a More Effective Boss. Again, another place I would not necessarily look for leadership lessons. The book is pretty good so far. I’ll probably write something up on it when I finish it.

I like books and lectures that use pop culture to make the concepts more accessible. We need more of this in the world, rather than the dry theory of most leadership related material.