The Telegraph
Since 1st March, 1999
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Pick your boss & fix your pay
- Semler with razor-sharp wit slices up convention-bound firms

Jaipur, Nov. 11: Ricardo Semler is a gag bag. And you would love to work for him — if not for the gags that pour out of his mouth, then for a gag he’s played in his company.

Do you choose your boss' Probably not. In Semco, a Brazilian marine and food processing manufacturer Semler established, subordinates hire their bosses, and almost 30 per cent of the employees fix their own salaries.

“Recently, when we wanted to hire a chief financial officer, 37 employees turned up to grill the potential candidates. All new recruits go through at least six or seven such interactions before they land the job. It gives the subordinates some idea of the boss just as it gives the boss some idea of the people he will be dealing with,” Semler says.

He was speaking at Ad Asia 2003, the once-in-two-years gathering of the cream of the advertising profession that began today. Semler is best known for the book Maverick: The Success Story behind the World’s Most Unusual Workplace.

Salary fixing is based on basically three parameters for the corporation: what the competition pays, what the company pays for the same job, and the level of anticipated profits in the year ahead, he said.

For the employee, his salary depends on his perceptions about how much he should be paid and the demands made on him by his wife and kids, and how much his friends get. Semler says once you sit down with the employee and explain the constraints, it isn’t hard to find a workable pay package.

Tell that to Indian employers, Mr Semler.

“Let’s face it. There is no democratic workplace.” Most corporations have autocratic structures, thanks to mankind’s military legacy.

Corporations that are innovative in their early years run themselves into the ground by doing the same things over and over again by force of habit and sticking to hidebound conventions.

Semler takes wonderful sideswipes at these “crystallised corporations”.

Let’s start with Gillette, the world-famous blade-maker. In the 1880s, Gillette came up with the safety razor and stropped virtually everyone else out of the market. About 40 years later followed the next innovation — the famous G2 razor that had twin blades.

“Then what do they do' After spending $608 million, six years of research by a team headed by two Nasa scientists, they come up with the next Big Innovation — they put a third blade between the other two!”

Or, take the car industry. “Cars came off the assembly line in 1908 — about a 100 years ago. The first cars had a steel chassis, four wheels, a piston engine, carburettor and a steering wheel. And they were driven at a top speed of 18 km an hour. In 2003, the cars still have a steel chassis, four wheels, a piston engine, carburettor and a steering wheel. And last year, the average speed of cars in London was 17.5 km an hour.” The audience cracks up.

So, what sort of innovation do we need in cars'

Says Semler: “I find it hard to park a car. I’m always sawing away backwards and forwards and manage to park only after a few bumps. Maybe, we should take time off from Ad Asia deliberations and brainstorm to find a solution to a problem that everyone faces everyday. Perhaps, we need to have a car that sort of shuffles sideways,” says Semler.

What Semler is saying is that car designers are conditioned by their education and the practices within the industry to think that a car must only move forwards or backwards, not sideways.

“Is it easier to go to the moon than to find a solution to the parking problem'” A slight pause for effect and then: “I think it is easier to go to the moon.” The audience cracks up again.

Corporations lay great store by research and number crunching — and Semler shows just how absurd this can all get.

Take the case of Shell. “I met the guy who headed a department with 120 people whose job was to predict the future price of oil. ‘So what did your research show five years ago'’ asked Semler. ‘That the oil price would be $31 a barrel’. At that point it was around $19.

“So I asked him if he ever relied on intuition or hunch. ‘Oh yes. I always keep another book where I jot down what I feel the number will be’. ‘What was your figure'’ ‘$21 a barrel.’ ‘So why didn’t you tell the board about your figure'’ ‘The board has guys who are over 70 years old. You are nuts if you think I’m going to tell them that I picked out a figure after sitting by the pool and talking to my wife’.

“But why didn’t you lose your job because your department got the figure totally wrong'’ ‘Well I can keep my job as long as I pore over all the research to get the figure precisely wrong!’”

Apocryphal or not, it’s a great yarn — and anyone who has worked in a corporation will know that it is entirely believable. He also takes a huge crack at big brands.

He starts with a story about Lufthansa — absolutely apocryphal. Back in the sixties, Lufthansa was a top-drawer airline — very efficient.

“This was a flight from Rio to Frankfurt. Half-way through when the plane was right over the ocean, the right turbine started making a noise. The passengers were worried, but the pilot said, ‘Don’t worry, Lufthansa has the problem under control.’ Then the left turbine started rumbling. Again the pilot said, ‘Don’t worry, Lufthansa has the problem under control.’

“A little later, the pilot said, ‘It’s worse than we feared. We will have to force land over the ocean’. Soon after, the crew huddles the people who can swim to the right side of the aircraft and those who can’t to the left side. Then the pilot asks the people on the right to exit through the emergency hatches. And then he says, ‘Those on the left, thank you for flying Lufthansa’.”

Conventions are his bugbear: take the case of school holidays. Two months in a year — and they drive every parent up the wall.

“Well, I researched this a bit. I found that this dated back to the time when all hands were needed for harvest season. What do they harvest now' Crack'”

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