Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Monday 16 February 2004

CONTROLLING THE ENDS-NOT THE MEANS OR METHODS!

16 Feb 2004

CONTROLLING THE ENDS-NOT THE MEANS OR METHODS!

Nirmit/Raju/Sriram/Mitchelle/Aparna/Sanjeev/Abhi/Reena

·    Enclosed pages are from the book MAVERICK (by Ricardo Semler)

·    When nearly 10 years (1977-1987), I tried to introduce at L&T (Powai), some of the concepts/ideals mentioned in enclosed pages. Given a strong union / conservative top management / apathetic middle management and a workforce of 7500 + at Powai, it was not easy. But, at the end of a relentless effort for 10 year, many things did change for the better.

·   Cultures cannot be transplanted overnight like a kidney transplant. But, if we keep at it for long enough, people’s attitudes do change. Our advantage at 3P is that, we are a small company and we can change our attitudes fairly quickly. I have no doubt that if we all give this an honest try, we will certainly succeed.

On Feb 14 1990 I deposited Rs. 3000/- from my personal account & starts a 3P account.

INTRODUCTIO

Just the other day, Clovis Bojikian, our Sultan for HR (yes, we still love to mock titles) and I sat around evaluating how close we now were to our dream of 19 years ago. 30 percent, we agreed. Not very good for two decades of huffing and puffing for democracy in the workplace. The worst part, however, is that we had put that percentage at 50 only three years before.

If you ask the serious people, those with blue suits and tie clips, Semco is a roaring success. We are pursued by bankers who enjoy lending money to people who have it, and are stalked to the point of sexual harassment by stock market underwriters.

By the Grand Scoreboard of Numbers, We’re doing fine: since the first edition of Maverick in 1993, we have gone from  US$35 million in sales to US$160 million, and mushroomed from hundreds of employees to 1.500 profits and profit sharing are dandy. Salaries are increasing strongly, we have internet companies making money and a half-dozen new joint ventures underway with Global 500 companies. Wunderbar!
But to us this begs, on its knees, the question: so what?

During our meager years we were deluged with pundits who, personally, behind our backs or in magazine articles, proclaimed our imminent demise. At the Federation of Industries our poor numbers were merrily displayed to other club members as a proof that this democracy nonsense was no way to run a business. Today, a whopping 85 percent of those Board members have lost or sold their companies.

We could now do a little bit of gloating, but for one issue: we were always adamant that making money and creating a sustainable organization where people felt enthused to flock to on Monday mornings – had little in common. Sure, I love making money, and I even enjoy a spot of gloating (Jung backs me on this) And yes, making money is a nice by –product of a business that is on the right track. But it is only one of many indicators.

The same way that an IQ test may tell you about people’s specific abilities in narrowly defined intelligence but tells you nothing about other vital characteristics, so profits are an indicator, but not much else. How many untold companies have gone to the doghouse surrounded by very handsome numbers? How many businesses make a killing for the owner while slowly killing off all the enthusiasm of the underlings?

Sure, we’re happy, and we feel vindicated from the soothsayers that told us to beware the ides of March. But rapid growth has brought about a backslide in our hopes of reaching corporate nirvana. Clovis and I are still a bit airy- Fairy and touchy –feely, I know, but we ain’t givin’ up yet.

Our Board meetings have two open seats for the first employees that sign up, and two more for any person in a leadership capacity that cares to show. And we still debate strategy openly, schedule meetings on a volunteer basis, and have leaders interviewed by their future subordinates. But in a time of growth, and in a pattern where we increasingly join with huge corporate partners, Clovis and I are less quirky than we’d like to be.

So the Semco story continues and, should we do badly in five to ten year’s nothing will alter our faith in freedom  and democracy as guarantors of sustainability. Maverick is a tale of flying in the face accrued business wisdom. But it is also a reminder that age-old truths about human nature, respect and integrity can be powerful allies of success. At least that’s what the numbers say, if people in striped suits can be trusted.

Recently we inaugurated our new offices, which herald the end of the headquarters and the untimely death of control. The new layout harks of a VIP airport lounger. We resisted the temptation of cutesy billiard tables and beanbags, painted nothing in citric colors and left no place for cribs or dogleashes. How undotcomlike.

But we did something else: we told people that they were all welcome to join the new system, which entails a non-territorial concept. Give up your desk and the trappings of personal space, and we give you freedom. Predictably, only half of our people have taken up the offer so far. Not everyone likes freedom, apparently.

It works like this: instead of one headquarter building; we distribute identical offices across town (four so far). To use a desk, a couch seat or a place at the cappuccino outdoor café (modem-wired) you tap into the website and reserve a place for yourself. At any of the locales across town, presumably the closest to your house, your next meeting, or the theatre you’re going to at night. If you need a meeting area, reserve more seats close to you, or a closed meeting room (I find that 70 percent of the people believe that their meeting falls into the 10 percent of the situations of confidentiality, so we have lots of closed rooms, also). Because no one knows whether you’re at Office A,B,D or at home, you discover that, hey presto! You can also stay an extra day at the beach. And no one will know.

As I tell our people constantly: we’ve all learned how to answer email on Sunday, but none of us has learned to go to the movies on Monday afternoon. Until we learn that, we are email slaves harnessed to the wicked ways of the Profit and Loss Master.

In our new system, the ability to control, once taken away, eliminates not only the headquarters, but all of the insecurity that makes bosses glance, glare and gloat (by looking at their watches and around the office). Now, one issue alone remains: whether people are doing what they negotiated to do, be it the sale of 140 widgets per month, or the Business Plan for a new company. Now, control is passé and a badge of incompetence. Now, you are free.

As we shift into this new gear of growth without bondage, all bets are off as to where Semco will be in seven years time. The last time someone asked, seven years ago, the reply was that of Lewis Caroll: if you don’t know where you’re going, any road will take you there.

So we have arrived. And feel the corners of our mouth going from a slight smirk to was not really …a gloat. Now back to the job -70 percents.

Hemen Parekh

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