The Semco Style 5 Principles to transform the way we work

CEO Rotation

Promotes agility, diversity and greater bonding between leaders

People have a reservoir of talent worth discovering. They just have to be given the opportunity to discover it in themselves– Ricardo Semler


In a Nutshell

Many of the successful companies today have been around for decades or, sometimes, even centuries. That’s a long period of time during which they inevitably faced multiple challenges, the need to innovate and to stay nimble in a volatile market. But, if you take a look at the number of people who spearheaded these large companies, it’s usually just a handful of men who wielded enormous levels of power over the entire organization. They were demigods, who were believed to be capable of single-handedly leading the company through any crisis.

However, that much of power concentrated within the hands of a single person, for years together, isn’t such a great idea. These powerful men often lose touch with the ground realities because they’re too removed from those who do the actual work. Also, their egos become super inflated, leaving no room for dissent. In short, they become superheroes who care for nobody’s opinions but their own.

It might be an old cliche that too many cooks spoil the broth. But, in reality, companies that want to be agile and nimble should make decisions after considering diverse points of view brought to the table by people from various backgrounds. A single person calling the shots will no longer work in the changing world of business.


What

Rotate who occupies the CEO position every six months among the company’s executive team of leaders.


Why

It’s a great way to inform top-level decisions with a diverse set of points of view, provided by leaders from various backgrounds. When leaders, who have a long-term understanding of the company’s business and organizational model, add their expertise to the equation, the decisions made are always better than those made by a single person. The fact that it’s a short stint at the top job makes it necessary for leaders to cooperate with each other. Apart from enhancing the bonds between the top level executives, the practice also breaks down stereotypes on the kind of qualification and experience required to be a company’s CEO.


How

 

Change the CEO every six months: If you have a top-level executive team that has a wide variety of experience and expertise, then allow them to take turns at performing the top role in your organization. This enables the current CEO to utilize the expertise of the previous CEOs, while allowing the previous CEOs to offer solutions with the broader vision needed to make decisions that affect the entire company.

Peers, not subordinates: Since every executive gets only six months to make decisions as the company’s CEO, it’s crucial that they treat other members on the executive team as their peers and not subordinates. The current CEO should know that he’s dealing with people who were in his shoes just a while ago or, those who will soon be in his shoes. This enhances the bonds between the company’s top leadership and makes for sound decisions.

Keep the market in the loop: When a company decides to rotate its CEO every six months, it can be very confusing and frustrating for your stakeholders and the market as a whole. So it’s important to inform them about why your company has chosen to implement this practice. Although there was some initial friction with the market when Semco introduced this system, things got smoother as and when the company started acquiring more clients and suppliers. Once everybody understood that it was an initiative to strengthen the already-unique culture at Semco, there was lesser confusion and frustration.

Break out of stereotypes: Use this practice to prove to everyone that anybody with any kind of qualification or experience can do the top job – as long as they have a supportive peer group to seek help and guidance from. For instance, it’s quite common to see people from sales, operations or marketing backgrounds becoming company CEOs but never someone from a HR background. This practice at Semco proved that even a person with HR background could perform the role of a CEO without any glitch.

Be flexible about reverting to old model: Although such a practice might revolutionize the way your top leaders work with each other, it might not be ideal as a permanent organizational model. So, once your executives feel enriched by the whole experience and there isn’t much left to learn from each other, the company should be flexible enough to revert to the old organizational model.


Level to implement

  Hard


DO’S

Get all executive members onboard

Be transparent and constructive

Promote genuine support from executive members to the current CEO

Explain to the market why you’re doing this

Be flexible enough to revert to the old organizational model if needed

DON’TS

Make it a top-down decision where someone feels obligated to do this. They need to see the benefits and want to do this.

Start this program if your executive members don’t share a constructive relationship and there’s a lot of hatred and distrust between them

Pros

Helps current CEO to make decisions after considering diverse points of view and needs for the whole organization.

Promotes decision-making based on collective expertise and experience.

The bonds between the executive team are strengthened

Cons

The market might react with confusion and might not see the point of such a program

Long-term initiatives become difficult to put in place

Becomes difficult to maintain long-term relationships with CEOs of client companies, supplier companies and other stakeholders

It could be expensive because the pay of the leader becoming the CEO might need to be increased for the six-month period


CASE STUDY

Jose Violi, who is one of the main shareholders in the Semco Partners Holding, had the opportunity to be the CEO of Semco for six months. At the time, he didn’t have much experience in leading from the top, but was able to assume the role with confidence because he had the support of all the other leaders. He didn’t feel like he was alone or thrown in at the deep end without much training. He says he was ready to tackle the job of a CEO because he felt like was on the same boat as all the former and future CEOs of the company. Whenever he had to make the final call, he says he felt more confident deciding with the support of others, than doing it all by himself.

When the practice of CEO rotation came to a natural conclusion, Jose Violi ended up continuing as the CEO for much longer because he came from the corporate area that worked with several other business units. The other leaders went on to head the new joint ventures that Semco was getting into at that time.


Changemaker

Expert avatar

Borges, Ian

Co-founder at LeadWise | Partner at Semco Style Institute | Entrepreneur | Lifestyle Strategist | Digital Nomad

Rio de Janeiro, Brazil

Portuguese, English, French, Spanish

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Leadership Innovation: Huawei’s rotating CEO system

TED Talk: How diversity makes teams more innovative

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