TED Talk Tuesday: Running a Company With (Almost) No Rules

This is part of our monthly TED Talk Tuesday series, spotlighting can't-miss TED Talks and their key takeaways. You can learn more about our partnership with TED here.

True wisdom comes to those who have a profound understanding of why they do what they do, says Ricardo Semler, former CEO of Brazilian equipment supplier Semco. Tired of the status quo at the company, Semler and his team eliminated most of the rules and bureaucracy associated with running a large corporation. Employees no longer had to come in at a designated time, or report to a specific office—there were virtually no rules or management in place, and with employees accountable for themselves and their success, the company thrived.

For Semler, doing something just for the sake of doing it is worthless. Instead, every act, whether related to work or leisure, should be deliberate and have meaning. And while it's unlikely that organizations can do away with traditional structures and become entirely free flowing businesses overnight, Semler urges workers—and organizational leaders—to keep asking themselves "why" they do certain things. And to not stop asking until they get to core of the task at hand, whether it's menial or significant; Only then will they truly be wise.

Watch the video below and read on for three key takeaways from his talk.

From long commutes to redundant meetings, there are many aspects of work that employees grow to dread. But what happens when an organization eliminates all these elements of work, and leaves employees to solely focus on the job that needs to be done? Semler experimented with this approach at his company, and found that people thrived in an environment that was more transparent, democratic and purposeful.

Even when asked to set their own salary, employees were fair in their assessment of how much they should earn based on the income of fellow employees and workers across the industry, according to Semler. The lesson: It can be beneficial to loosen the grip on employees—if you've hired the right people, chances are they'll continue being productive, effective workers even if you give them some free reign.

Being wise doesn't always mean knowing the right decision to make, according to Semler. In fact, the path that seems most intelligent doesn't always "jive," he explains. Rather than immediately looking for the best course of action in a given situation, wise individuals ask questions to better understand the challenge at hand.

At work, applying wisdom means being inquisitive and getting down to the reasoning behind specific strategies, processes and other organizational fundamentals. Sometimes the status quo is fine, but leaders shouldn't be afraid to question it and make a change for the better, Semler urges.

One way to get to the bottom of why something is done a certain way is to ask "why" three times consecutively. Answering the first two "whys" might be simple, but by the third, the answer will be harder to determine. If there isn't a good response to that last "why," then the process or strategy might be obsolete and ineffective, Semler says.

It's a healthy exercise not only for organizational leaders tasked with building business strategy, but also HR departments, where important tasks such as hiring or developing learning opportunities for workers can sometimes become robotic and automated. Stepping back to ask "why" can set these processes back on the right track.

Photo: TEDx