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

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.

Books: The Starbucks Experience : 5 Principles for Turning Ordinary into Extraordinary

For some reason, if there’s a business book related to Starbucks, I just have to pick it up and usually wind up going through it as quickly as one of my favorite mocha’s.

This week I ran across The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary by Joseph Michelli. This book is the result of an 18 month study of what makes Starbucks work by the author.

Starbucks has been one of those companies that completely fascinates me. From everything written about them, they are run a lot differently than most companies one reads about. Their commitment to their customers, employees, and communities in which they reside is really unparalleled in the business world and I am constantly wondering how they make it work.

This book gives you some insight. In it, Michelli outlines the 5 principles that the Starbucks leadership team instills in its “partners” through tons of training and consistent modeling of behaviors by senior management.

  1. Make It Your Own – Starbucks goes to great lengths to educate their employees on their products. They also allow their employees (or “partners” as their called) to do whatever it takes to ensure a positive experience by the customer of the company. Each employee is encouraged to take action as if the company were his own.
  2. Everything Matters – Starbucks employees are trained to pay attention to the smallest details. Within this principle the author makes a distinction between “above deck” and “below deck” activities. The “below-deck” activities are those which the customer does not see. Great care is taken at Starbucks to pay attention to the “below-deck” activities. Traditional business find it “OK” to cut corners on below-deck activities to cut costs. Starbucks views these activities as just as important as customer facing ones. It is understood at Starbucks that in order to deliver quality, you have to deliver it at all levels of the business. Any compromises can relax “quality awareness” throughout the organization.
  3. Surprise and Delight – Cote actually addressed this principle fairly well in a recent posting where he talks about how companies can “unexpectedly delight him” by doing things he wouldn’t expect but are useful to him, the customer (see the “Making My Life Easier” section). At Starbucks, one of the primary principles the company is built on is cultivating this ability to delight customers and go beyond their expectations. The book gives some really good examples of this type of behavior.
  4. Embrace Resistance – This principle is all about accepting feedback, both positive and negative – and using the negative feedback to feed into the business to find lessons to improve. The company finds all feedback important. A recent example of this is its response to Oxfam America and its efforts to get Starbucks to use its leverage to stand up for the Ethopian Coffee Farmers. Rather than ignore the feedback, Starbucks responded – constructively and calmly, explaining its position on the issue. Accepting and responding to feedback is built into the core principles of the company.
  5. Leave Your Mark – The final Starbucks principle is built around being involved and contributing to the communities in which it resides. Starbucks has a strong commitment to contributing to the community around them. This chapter focuses on the social aspects of the company, including its activities concerning the environment and various social issues.

To me, these seem like some pretty solid principles to build a business on. It almost seems “too ideal to be practically possible”. One thing that comes out fairly strong in most of the books I read about Starbucks (and Toyota as of late) is the acknowledgment of senior managements importance in setting the culture, ideals, and principles of the overall business while giving the “people doing the work” the ability to act within the framework of the principles. It seems that the more I read about these two companies, the more there is in common between them at a high level.

A book that I would be really interested in reading would be a book focused on the IT practices and principles in both companies. It seems to me that it is really easy to push down authority in a company which is distributed across the country, while that same practice in a corporate environment (especially IT, which is traditionally looked at as a “necessary evil” and liability rather than an asset) would be a little harder to foster this type of culture. I would be extremely interested to read an honest, detailed descriptions of how these areas of the company are run within the context of the overarching principles.

But here I go, digressing again. I thought The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary was an excellent book and would recommend it to anyone managing people. It documents an interesting framework for running a business and is full of great examples of each principle to illustrate application of the principle to “real life” in a business.

Flowers For The Spouse of an Over Time Worker

Flowers For Ron?

Jonna started a new job a few months ago as a QA Analyst. She has been working tons of overtime over the past few months due to a new site launch. When we got back from the Bristol Renaissance Fair yesterday evening, we found these on the door step. My first reaction was “I wonder who is sending Jonna flowers?” They were actually for me, from her company – thanking me for my patience during the time she put in and the sacrifices I made for their launch.

I made fun of it at first – mainly because if anyone has sacrificed anything through our marriage, its Jonna. For most of our marriage I’ve been the one working all of the time and she hasn’t really gotten anything out of it. When she took the job, it was kind of just an expectation that there would be overtime on my part, coming from almost 20 years in IT (the last 7 in internet based applications with that 99.9% uptime rule). I also spend a lot of non-work time reading to keep up to speed on new developments and learning different languages just to keep current. To be honest, I didn’t think it was anything out of the ordinary for the role she was in.

I guess this just goes to show you that some companies actually do think about the ramifications that overtime has on employees families. After my initial time making fun of the fact that I actually got flowers, I started thinking about what a cool thing it is for a company to acknowledge an employees spouse in this way.

See? You learn something new every day!

Frank Zappa On Failure

I mentioned earlier that I was reading The Real Frank Zappa Book by Frank Zappa with Peter Occhiogrosso. I have found so much value in this book that I’m not even really sure how to review it. That will come later.

I did think it would be valueable to quote the opening of a chapter called ‘Failure’ (Chapter 18), in which Zappa describes many of the business plans that he had put together and tried to sell to venture capitalists and/or investors that never quite made it off the ground, one of which sounds a lot like iTunes.

I think the best thing about this quote is the philosophy expressed. Many of us are raised to fear failure, rather than viewing it as a way to figure out what doesn’t work. Some work environments reinforce the negative view of failure rather than the positive.

In any event, I like the way the concept is explained here.

Failure is one of those things that ‘serious people’ dread. Invariably, the persons most likely to be crippled by this fear are people who have convinced themselves that they are so bitchen they shouldn’t ever be placed in a situation where they might fail.

Failure is nothing to get upset about. It’s a fairly normal condition; an inevitability in ninety-nine percent of all human undertakings. Success is rare – that’s why people get so cranked up about it.

Its not only these simple statements that have an effect, but the whole book is pretty incredible. As someone who has struggled for quite a long time with learning a musical instrument, it was quite refreshing to hear Franks opinions and philosophy around music as well.

This book is way more than a musicians biography though. Its a pretty damn good philosphy book on the human condition as a whole.

I found so much value in the reading of this book. Not only that, as is typical when I read a biography, I have spent the week completely immersed in his music. Pretty amazing.