How to Run a Company With Almost No Rules

3 min read
Feb 17, 2017

How to Run a Company With Almost No Rules

A key finding of our 2017 Employee Engagement Report is that organizational culture is a major influencer of employee engagement. If you’ve ever been at a company that has a lot of rules and enforces them strictly, you know how discouraging (and distracting) it can be. It’s 100 degrees outside, but employees arent allowed to wear shorts because of the dress code. Someones train is 15 minutes late today meaning they’ll be late too  but when they arrive in the office, they won’t be able to start doing work until they’ve been scolded by their boss for tardiness. A team members child has a soccer game this afternoon, but they have to sit at their desk because your company isn’t flexible — even though they’re caught up with work. You get the gist.

When teams are forced to work in such a situation, it’s impossible for them to become thoroughly engaged.

Understanding this intuitively, Ricardo Semler has transformed Semco Partners into a company that takes it to the other extreme. For all intents and purposes, the company doesn’t have any rules.

In a recent TED Talk, Semler explained his management style and talked about the importance of allowing employees the freedom to live life — a great deal of which occurs outside the office. (If you don’t have time to watch the video, here’s the transcript which is definitely worth a read.)

Over the course of his talk, Semler touched upon a number of interesting management ideas that should help you begin to understand how it’s possible to run a company with no rules:

  • Work-life balance: Semler understands that there’s no sense in expecting your employees to work like machines. If you want them to reach their full potential, you need to give them time off. To this end, Semco sets reasonable expectations for its workers and doesn’t pressure them to continue producing once they’ve met their goals. “We’d say things like, let’s agree that you’re going to sell 57 widgets per week. If you sell them by Wednesday, please go to the beach,” Semler said. “Don’t create a problem for us, for manufacturing, for application. Then we have to buy new companies, we have to buy our competitors, we have to do all kinds of things because you sold too many widgets. So go to the beach and start again on Monday.”
  • Commuting: You can make your employees come to the office every day. But whoever lives the furthest away will have the least amount of time to spend with their family and loved ones. “We don’t want to know where you work. We had, at one point, 14 different offices around town, and we’d say, go to the one that’s closest to your house, to the customer that you’re going to visit today. Don’t tell us where you are.”
  • Scheduling: So long as your employees are doing their jobs well, does it really matter when they work? Semler doesn’t think so. “We started saying things like, why do we want to know what time you came to work, what time you left, etc.?”
  • Ownership: All employees put in a ton of time in the office. Why shouldn’t they feel ownership of the company too? “We wanted people to know everything, and we wanted to be truly democratic about the way we ran things. So our board had two seats open with the same voting rights, for the first two people who showed up. And so we had cleaning ladies voting in a board meeting, which had a lot of other very important people in suits and ties. And the fact is that they kept us honest.”

Semler — whose management style is studied around the world — has helped build Semco into a wildly successful company. That success stems from thinking about what it means to be a manager in a completely different manner. Start thinking like Semler, and your employees will almost certainly view you in a more favorable light — and enjoy their jobs that much more.

Here’s one last quote to point you in the right direction:

“We’ve all learned how to go on Sunday night to email and work from home. But very few of us have learned how to go to the movies on Monday afternoon.”



2017 Employee Engagement Report


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