Ricardo Semler and Semco S.A.
In 1982 at the age of 24, Ricardo Semler took control of Semler & Company, a business founded and, until then, managed by his father. At that time, this Brazilian company’s organizational structure, like many historical Latin American enterprises, was a paternalistic, pyramidal hierarchy led by an autocratic leader with a rule for every contingency. Upon taking office, the younger Semler began dramatic organizational restructuring. Among other things, he immediately renamed the company Semco, eliminated all secretarial positions, and implemented an aggressive product diversification strategy. Most observers predicted that these ...view middle of the document...
Antonio Semler quickly focused the resources of the company on providing these pumps to the government. Semler & Company eventually grew into one of the major suppliers of the National Shipbuilding Plan supported by several Brazilian governments.
Copyright © 1998 Thunderbird, The American Graduate School of International Management. All rights reserved. This case was prepared by Kelly Killian and Francisco Perez under the direction of Dr. Caren Siehl for the purpose of classroom discussion only, and not to indicate either effective or ineffective management.
After graduating from Harvard at the age 20, one of the school’s youngest-ever MBA graduates, Ricardo Semler returned to Sao Paulo to work for his father. From his arrival, it was clear that Ricardo’s organizational philosophy clashed with that held by his father. The elder Semler firmly believed in autocratic, paternalistic control, as well as the inextricable connection between personal and business matters. Ricardo advocated a more participatory management style, as well as a strict separation of work and personal life. During the years that followed, these differences in philosophy were a constant source of conflict. Both father and son began to realize that any eventual transfer of power would not represent a continuation of the status quo. The Brazilian recession of the early 1980s hit Semler & Company particularly hard. At that time, the company derived 90% of its sales from shipbuilding products. The younger Semler was convinced that the future success of the company hinged upon diversification into other product lines, but no one, least of all his father, was willing to listen. Because of Ricardo Semler’s dissatisfaction with both the management of the firm and its strategic direction, he threatened to leave during his third year. Faced with this possibility, Antonio Semler retired as CEO and transferred majority ownership to his son. Ricardo Semler was finally in a position to implement his own managerial and strategic philosophy.
The Semco Era
The key to management is to get rid of the managers. The key to getting work done on time is to stop wearing a watch. The best way to invest corporate profits is to give them to the employees. The purpose of work is not to make money. The purpose of work is to make the workers, whether working stiffs or top executives, feel good about life. Ricardo Semler
On his first day as the new CEO, Ricardo Semler fired two-thirds of the top management of Semler & Company, many close friends of his father, and began plotting a product diversification strategy for the newly renamed Semco. Semler worked long hours to save the faltering business and made some limited progress in his first year toward the eradication of the old Semler & Company organizational legacy. However, it was not until he fainted while touring a factory in the United States and was diagnosed with a severe case of stress that he decided to drastically change his lifestyle...