Imagine a company where managers set their own salaries! Middle management utopia, who would not like to be here? But this is also a company where if you put your salary too high, and people don’t put you on the list as someone they need for the next six months, you’re in more trouble than you would be at General Motors.

Ricardo Semler is my idea of a great leader. In the context of modern entrepreneurship, the task of a CEO is to get customers, cut costs and convey value to shareholders. A leader CEO however is one who does not get so obsessed with these ends that he glances over what still remain the fundamentals of any business – trust and relationships. Semler built an organisation on trust. Or did he?

I think what he did by initiating policies based on trust, and I will not go into them here, was to create more leaders. In fact, if every SEMCO employee is welcome to a board meeting (of course, she has to be one of the first two to arrive at the door!), Semler created an organization where everybody potentially can influence the direction the organization takes. That is what leadership is all about – creating more leaders.

In the late 1980s, three engineers at SEMCO proposed setting up a Nucleus of Technological Innovation (NTI) to develop new businesses and product lines which Semler endorsed. At the end of the first six months, NTI had identified 18 such opportunities. Following the success of this initiative, satellite units were encouraged throughout SEMCO. By the late 1980’s, these satellite units accounted for two thirds of its new products and two thirds of its employees.

A leader who fosters entrepreneurship within his organization turns motivation on its head.

What is motivation really? Is it any better than a KITA! Semler created volition in his organization. A place where you forget socialism, capitalism, just-in-time deliveries, salary surveys, and the rest of it, and concentrate on building organizations that accomplish that most difficult of challenges: to make people look forward to coming to work in the morning. That is leadership.

If you really look at various utopian goals in mankind’s history, from the pursuit of alchemy to communism and beyond, SEMCO is perhaps the only successful story: creating the ideal workers organization – it is almost a fable.

Have you come across more? How do you lead in your startups?

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