Customer Retention Strategies: Do Not Run From Your Customers

Here’s a novel Customer Retention Strategy: Do Not Run From Your Customers.

I’ve spoken extensively about the unheralded — but, arguably, the most important — Pillar of The Toyota Production System: Respect for People. Today, I want to highlight an interesting company that appears to have done an amazing job at Participative Management and in eliminating fear and mediocrity in the workplace: Semco Group.

I was first made aware of Semco Group after watching this amazing video on the MIT website. I sought to learn more about Semco and found some pretty amazing case studies such as the following:

• Harvard Business Review: Managing without Managers
• Harvard Business Review: Why my former employees still work for me
• Maverick: The Success Story behind the World’s Most Unusual Workplace
• The Seven-Day Weekend: Changing the Way Work Works
• Semco on Strategy+Business

Semco appears to have operationalized a very humane workplace and has also produced some impressive results, proving that fear and intimidation and mediocrity are not necessary ingredients to do well in the corporate world:

Reforms implemented during that time led to 65% reduction in inventories, a marked reduction in product delivery times and a product defects rate that fell to less than 1%. As the business climate improved, Semco’s revenues and profitability improved dramatically. As of 2003, SEMCO had annual revenue of $212 million, from $4 million in 1982 and $35 million in 1994, with an annual growth rate of up to 40 per cent a year. It employs 3,000 workers in 2003, as opposed to 90 in 1982.

Semco publishes and collectively live by the “Semco Survival Guide”, opting for something much simpler and thinner than a big, thick manual. Here are two points that I personally appreciate:

Our People: We avoid using terms like “employees”, “staff”, collaborator and similar terms. We are a team and we only have people. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Customer Services: This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions – never promise something you cannot deliver.

I find “never run away from your customer” an interesting thing to say — I think this point requires some reflection:

Do we — as an act of omission — run away from our customers — either in action or mentally or emotionally?

Below is their survival guide, taken directly from their website:

Leadership
We believe that organizational structure is required to ensure good business processes. However, only people who have respect for their followers can be leaders. Situational leadership will always be stimulated and respected.

Position
At the Semco Group, it makes no difference whether someone has a high ranking or a humble position. The most important thing is to always try to learn and teach new things.

Job Rotation
Whenever possible we rotate people: Some people change area and other people change business unit. This is another development opportunity offered by the company.

Freedom
There is no space at the Semco Group for formalities. The doors are always open and people should say what they really think, without worries or inhibitions.

Honesty
Everything at the Semco Group is based on trust. Whenever there is dishonesty, and there is always the possibility that there will be somebody dishonest, the company takes hard action.

Accusations
The company does not encourage people to accuse others – this should only occur when you believe you have access to concrete facts that somebody is benefiting while harming everybody else. Anonymous letters are not considered.

Gambling
No gambling of any type is permitted within the company.

Weapons and Violence
It is completely unacceptable to carry weapons inside the company. Any type of violence employed by one person against another is seen as an extremely serious event.

Unions
Unions are an important method of protecting workers. Unionization is free within the company. The Semco Group believes that constant relationships with unions are healthy for the company and the employees. The presence of union members at the company is always welcome.

You… and the Others
Based on the fact that everyone can say what they think, rumors and gossip should not be stimulated. Any attempt to harm another person is looked on very seriously. Take part and speak openly of what you are thinking in order to improve things.

Sales at the Company
The entry of salespersons to deal with personal issues is only permitted when scheduled by the interested party.

Loan Sharking
Any employee lending money to another while charging interest is considered abusive and this is dealt with by the company as a serious matter.

Discrimination
The Semco Group does not permit discrimination based on sex, colour, religion, politics etc. Everybody must have identical opportunities at the company – help to make this a reality.

Use of Authority
Many positions of the company involve the use of authority. Pressure, tactics that involve people working while afraid or any type of disrespect are considered incapable leadership and improper use of authority.

Working Hours
The Semco Group has flexible working hours where possible. This is a method of meeting the needs of each person, without harming the company.

Employee Timesheet Control
At the Semco Group, each person controls their own working hours. This is a method of transferring responsibility to each person.

Commissions
People at the Semco Group usually create commissions to deal with issues of collective interest. Take part to ensure that the commissions are active channels which effectively defend your interests, which may often not coincide with the interests of the company. Here, this conflict is seen as healthy and necessary.

Internal Promotions
At the Semco Group, people already working for the company are given preference when a new position or a promotion appears, as long as they fill the requirements for the job.

Vacations
The Semco Group does not believe that anyone cannot be replaced. Everybody must take their annual vacations, always. This is fundamental for the health of the people and the company as a whole – no excuse is good enough to justify accumulating vacations.

Recruitment
Where there is recruitment or a promotion, people in the department have the chance to interview, analyze and take part in the decision to choose the candidate.

Evaluation by Subordinates
Every six months you will fill in a questionnaire and say what you really think about your immediate superior. Be open and honest, when filling in the form and during the discussion that should take place afterwards.

Retirees
We have no restrictions on active or part-time work for retirees or people of an advanced age. Nobody is too old for us – on the contrary, we believe that experience comes with age.

Everyday Participation
The Semco Group philosophy is based on active involvement and participation. Do not sit back. Have an opinion, put yourself forward as a candidate, always say what you think – do not be just another cog in the wheel. State your opinion about everything that interests you, even if you weren’t asked for it. Be active about your feelings.

Suggestions
We want everybody to participate; opinions will always be welcome and should be spontaneous. The Semco Group does not use and is not wish to implement suggestion box programs. Whenever there is a need or interest, we can institute campaigners that encourage specific suggestions.

Dynamism
The Semco Group is normally a company that implements major changes from time to time. Don’t be scared – we think this is positive. Look at the changes without fear – these are typical characteristics of the Group.

Salary Policy
The Semco Group seeks to involve people in discussions regarding what is a fair salary for each employee. Of course, there are times when people think their salaries should be higher and the company believes it cannot pay more. What is important is to always provide an opportunity for discussions regarding this type of issue.

Strikes
The decision to take part or not in this type of event is an individual one. This is part of democracy and is respected by the company.

Personal Life
Each person’s life belongs to themselves and the personal life of each person at the Semco Group is sacred. Providing it does not interfere with the work of the environment, the company is not interested in what each person does with their own life. The human resources area is available to provide support in any area, but the company will never get involved in people’s private lives.

Former Semco Employees
Whenever anybody leaves the company, they are always welcome back – we have nothing against former Semco employees. On the contrary.

Severance
Whenever there are dismissals the company spends hours and days carefully considering the case (or cases). The company avoids dismissals as much as it can and is extremely involved in protecting justice – we must all take this line – dismissals are very serious and must be dealt with carefully by everybody.

Occupational Safety
This is not only a company responsibility. Keep your eyes open, always avoid accidents, use safety equipment even when it is bothersome – we cannot take risks with our health. Make a special effort along these lines, demand that the company do its part and do not let CIPA become a pro forma commission.

Statement of Results
On a periodic basis you’ll find out the results for your unit and for the company, and will be able to discuss them. Watch the results closely and ask any questions you want – there are no issues that cannot be discussed. Very few companies offer this – take advantage!

Profit Sharing Program
The Profit Sharing Program at the Semco Group is for real. This is a participation in which each unit wins. Each company and the Group have its own program, according to the characteristics of each business.

Relations
In order to avoid injustice or embarrassment, close relations do not work at the same unit, workplace or with the same leader, except in special cases. In completely different and unrelated locations, there are no formal restrictions.

Hourly/Monthly Workers
At the Semco Group there is no discrimination – Here everybody is a salaried worker and everybody is treated the same.

Our Personnel
We avoid using terms like “employees”, “staff”, collaborator and similar terms. We are a team and we only have people. This is what we call everyone who works with us. Try as hard as you can not to use terms which are so common, but which do not express equality.

Use of Company Resources
Do not mix company work and resources with personal services. During working hours, nobody should provide services to other people only for personal benefit, which does not stop people using a colleague’s services outside business hours, agreeing the conditions between themselves, without involving the company.

Customer Services
This is very important. Never fail to serve a customer well; do not run away from the customer, and do for the customer exactly what you would expect if you were in their position. Be honest about deadlines, prices and service conditions – never promise something you cannot deliver.

Communication
The Semco Group and its people must communicate openly and honestly. You must be tranquil and believe what is said in company notices demand transparency when you are in doubt.

Pregnancy
Pregnancy is considered a time of great importance and happiness by the company. Never allow an injustice to be committed with one of our pregnant women they deserve our respect and care.

Informality
Having a birthday party at the end of the working day or using nicknames is part of the company culture don’t feel intimidated, and don’t stick to formalities.

Pride
It’s only worth working for someone you are proud of. Create this pride in the quality in what you do. Never deliver a product or service that fails to meet customer expectations, do not write a letter or communiqué that is not honest, and do not let the company’s stature fall always fight for your pride.

Respect to Visitors
Give our visitors all of your attention and respect. Never let anyone wait more than 5 or 10 minutes. Meet everyone with courtesy, be they a supplier, customer or anyone else.

From the little I’ve seen, I’m quite impressed with Semco. If there are any that would care to chime-in on what they know of Semco — I’d love to hear about it in the comment section. Below is an interview with Ricardo Semler, the CEO of Semco.