Semco workers make money for the company and take a good chunk of it for themselves in a profit-sharing plan. Most important, they make it the kind of organization that people clamor to work for, a place where turnover is negligible.
Semco's experience befits more than just business. It's germane to any organization where flesh-and-blood realities of the workplace guide how people interact. The type and size of the organization is irrelevant--that's why Semco practices have been adopted at schools, hospitals, police departments, and large and small companies around the world.
Along the way, I've lost sight of what defines Semco. That's not because it's too big to manage or because I've stepped back too far from day-to-day operations. I don't want to know where Semco is headed. It doesn't unnerve me to see nothing on the company's horizon. I want Semco and its employees to ramble through their days, to use instinct, opportunity, and ingenuity to choose projects and ventures.
Fortunately, my convictions have borne results that business people value, and more important, can understand: sustainability, productivity, profit, growth, and new ventures. These are all by-products of running a company where employees are encouraged to establish their own sense of balance.
And the increasingly popular concept of work/life balance is not all that we seek. Balance also ensues when people are given room to explore so they can find out where their talents and interests lie and merge their personal aspirations with the goals of the company. Once employees feel challenged, invigorated, and productive, their efforts will naturally translate into profit and growth for the organization. That's what the Semco way is all about.
A FEDERATION
I'll bet you still want to know what Semco does. Okay, we have ten companies, give or take. I'm not sure, because they come and go; we've had a minimum of five for twenty years. We also have six Internet companies, so we could claim sixteen units, but we don't know how many of those will survive, or in what form.
At the risk of offering a description, Semco is a federation of businesses with a minimum common denominator. What I mean is we are not monolithic, yet there are common themes and threads uniting us. All our business units are highly engineered, premium providers and market leaders in their niches. We haven't ventured into any of them by chance.
The first, the industrial machinery unit, is what's left of my father's original business. It began with marine pumps and moved into industrial mixers, and now produces only high-tech mixing equipment--the kind of complex, engineered industrial mixers used for pharmaceuticals and at candy factories.
The second unit is SemcoBAC; a partnership with Baltimore Air Coil in the United States. Essentially, we make cooling towers for commercial properties. The third company is Cushman & Wakefield Semco. The fourth business unit is Semco Johnson Controls--a partnership with Johnson Controls, a $16 billion world leader in facility management to handle large properties like hospitals, airports, hotels, and huge factories.
Then there's ERM. We added this unit in 1996 in partnership with Environmental Resources Management, one of the world's premier environmental consulting companies.
Finally, we have Semco Ventures, our nod to the Internet and our high-tech ventures unit; SemcoHR, which manages the outsourcing of HR activities for large companies; and Semco-RGIS, our inventory control firm.
Semco's ten (eleven, twelve...who's counting?) units are very diverse; in fact, you might wonder how such industries came to be part of the same business. But a closer look will reveal a hidden synergy that satisfies three basic criteria when we consider a new venture. First, we look for complexity, which usually means "highly engineered." Everything has a high entry barrier of complexity. If a new business isn't difficult for us and for others to break into, then we're not interested.
Second, we demand that in each of our markets, we be the premium player. We want to offer a high-end product or service. That means we're always more expensive because we provide the premium that stretches what the customer will pay. And third, we want a unique niche in the market, one that makes us a major player in any given industry. To us, this follows naturally from the first two requirements. We want to be only in businesses where our disappearance would cause our disheartened customers to complain loudly. They'd survive, but they'd have substantial difficulty moving on.
Employees must be free to question, to analyze, to investigate; and a company must be flexible enough to listen to the answers.
All of our products and services meet these criteria, and we leverage the power of our units. For example, Wal- Mart has gradually become a customer of four of our units--we count their inventory, manage their cooling towers, administer their buildings and warehouses, and conduct environmental site investigation and remediation.
Other clients like GM, BankBoston, and Unilever have become customers of multiple Semco units. This isn't unusual for us. The point of entry may change, but our objective remains the same--synergy.
Whichever unit serves as the point of entry, it soon finds business opportunities for the others. Signing on with a client is usually our biggest hurdle, since we are more expensive than our competitors. Once a customer is on board, however, we rarely have operational problems, we rarely abandon a customer, and they rarely leave us. Repeat customers represent some 80 percent of our annual revenue. I can count on my fingers the number of clients who have dropped us in twenty years of business.
