Wednesday, July 8, 2009

Democracy is More Cumbersome than Dictatorship

Semco went through a radical, democratic transformation beginning in 1980. In 1980, Semco employees "each produced an average of $10,800 worth of goods a year." When Ricardo Semler wrote Maverick in 1993, his employees each produced an average of "$92,000 worth of goods a year (adjusted for inflation)--four times the national average; by the value-added standard, productivity rose six and a half times."

If democratic businesses are more profitable and motivating, then why do people insist on creating oligarchical/command-control organizations? Because...
(1) "so often it is power and greed and plain stubbornness that make bigger automatically seem better."
(2) "secrecy is a strong incentive to be conspicuously greedy."
(3) "bureaucracies are built by and for people who busy themselves proving they are necessary, especially when they are not."

"The era of using people as production tools is coming to an end. Participation is infinitely more complex to practice than conventional corporate unilateralsm, just as democracy is much more cumbersome than dictatorship."

(Quotes taken from Maverick by Ricardo Semler)

No comments:

Post a Comment

How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.