The Semco Style 5 Principles to transform the way we work
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Co-Creating Your Social Contract

– People Not Employees

The era of using people as production tools is coming to an end. Participation is infinitely more complex to practice than conventional corporate unilateralism, just as democracy is much more cumbersome than dictatorship. But there will be few companies that can afford to ignore either of them. – Ricardo Semler

In a Nutshell

The social contract isn’t a business negotiation and neither is it a legal document. Instead, it is a tacit agreement between members of a group to behave in a certain way with certain privileges and duties. It’s an integral part of the concept of democracy – whether it’s a nation or a company, and by nature it’s idealistic. When people in an organization agree to work together, it’s an ideal that each of them agrees to strive towards.

If every person on the team is to perform to the best of their abilities, then the team needs to follow certain behavioral principles and guidelines. So, it’s highly important to explicitly discuss the terms of the social contract and have them condensed into an easily understandable format that everybody agrees with. There can be no room for hidden thoughts or doubts when it comes to the social contract and the only way to make sure it’s effective is to co-create the document with the entire team.  

Most importantly, it cannot be a contract that’s set in stone. Instead, it needs to be a live document that members of the team can come back to, and even challenge, whenever there’s a lack of alignment. The social contract is a great tool that enables teams to deeply understand their motivations as individuals as well as groups. And that can happen only when they feel it’s safe enough to be transparent.



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