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Best Business Books 2004: Management

Counterculture CEO
The MBA degree is often a starting point for persons with innate managerial talent, who go on to challenge the conventional management methods they learned about in business school. There is no better example of this than Ricardo Semler, the Harvard MBA from Brazil whose iconoclastic style has made him a folk hero in management lore. His first book, Maverick: The Success Story Behind the World’s Most Unusual Workplace, published in 1993 by Warner Books, sold more than a million copies, and case studies of his firm, Semco, are found in business schools all over the world. Now, in The Seven-Day Weekend: Changing the Way Work Works (Portfolio, 2004), he updates us on the progress made at Semco over the past 10 years.

In a business that he describes as “sustainably out of control,” Semler and his people have innovated continually, in their management techniques as well as in their products and services. Semler sees himself as a catalyst for change — a Chief Enzyme Officer, as he calls himself — dedicated to finding the middle way between the “airy theories of workplace democracy and the nitty-gritty practice of running a profitable business.” His approach has much in common with open-book management practiced in the United States by firms like Johnsonville Sausage and the Springfield ReManufacturing Corporation.

The systems used at all three companies clearly work: People are empowered and the bottom-line results are there for all to see; but those systems run counter to almost everything taught in the business schools — managing by getting rid of managers, increasing corporate profits by giving more people a share in them, and so on. And once one is over that, there are other questions: Is this system indefinitely scalable? Is it suited only to particular kinds of business? Is it too dependent on one charismatic person at the top of the organization? And how would we get there from here?

The jury is out on many of these questions, and to compound the dilemma, Semler is a vocal critic of retired GE CEO Jack Welch and his famously Darwinian approach to performance assessment. But Semler does offer numerous ideas for programs that might be useful without requiring companies to embrace his whole system. There is the “Rush Hour MBA” program, for example, that runs once a week during the evening rush hour: Employees learn about and discuss the latest management ideas while the traffic dissipates. In another initiative (a personal favorite of this reviewer), a Semco factory created a garden, slung with hammocks, to allow workers to take afternoon catnaps. Medical science has long recognized that our bodily rhythms predispose us to nap in the afternoon, and prominent nappers including John F. Kennedy, Winston Churchill, Albert Einstein, Thomas Edison, and Napoleon Bonaparte have endorsed the benefits.

Semler doesn’t claim that his ideas are unique. Indeed, he is an enthusiastic borrower: The “Lost in Space” initiative that allows young recruits to roam through the Semco companies for a year searching for a place to make a contribution is reminiscent of a similar program at W.L. Gore Associates. Semco’s “cardinal strategy,” with its slightly corny name “Whyway” (to contrast it, presumably, with the widespread My-Way-or-the-Highway management style), in which people are encouraged to ask the question “Why?” at least three times, is clearly lifted from the philosophy of the Toyota Production System. But creative borrowing is a hallmark of learners everywhere, and Semco’s ideas, whether original or borrowed, are edifying.

Just as Semler has learned from Toyota, businesspeople will find much useful insight in Jeffrey K. Liker’s The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer (McGraw-Hill, 2004). Toyota pioneered the idea of “lean production,” and Liker, a professor of industrial and operations engineering at the University of Michigan, does an admirable job of analyzing this seemingly simple but in fact complex and difficult-to-achieve lean production concept, which is rooted in a ruthless obsession to clear out waste. Liker clarifies Toyota’s 14 principles (many of which will be familiar to readers) by placing them in a four-level pyramid, with philosophy at the base, followed by process, then people and partners, and, finally, problem solving.

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