Rich Sheridan, CEO of Menlo Innovations, on Eliminating Fear and Increasing Joy in Work

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My guest for Episode #448 of the Lean Blog Interviews Podcast is Rich Sheridan, co-founder, CEO and “Chief Storyteller” of Menlo Innovations, a software and IT consulting firm that has earned numerous awards and press coverage for its innovative and positive workplace culture.

He's a returning guest from Episode 189 back in 2014 — the same year that I had a chance to visit the Menlo Innovations office.

We talked then about his first book Joy, Inc.: How We Built a Workplace People Love.

His latest book, published in 2019, is Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear.

Rich is giving a keynote talk, “Lead With Joy and Watch Your Team Fly!”, at the Michigan Lean Consortium annual conference, being held August 10-11 in Traverse City. I'll be there and I hope you'll join us.

Today, we discuss topics and questions including:

  • For those who didn't hear the first episode, how would you summarize “The Menlo Way”? And how has “the Menlo Way” evolved over the past 8 years?
  • Why is “eliminating fear” so important and what drains joy from the workplace?
  • “Tired programmers make bad software”
  • Sustainable work pace
  • Paired work – Erika and Lisa
  • Individual performance reviews?
  • “We've eliminated bosses” — nobody to review you, the team gives feedback, develops growth plan
  • “Let's run the experiment”
  • Toyota talks about the need for humble leaders — why is humility such an important trait? Do you hire for humility or try to screen out those without much humility?
  • No longer say “we hire for culture fit”
  • “Not an interview, an audition”
  • Leadership lessons from the pandemic– 4 blog posts
  • In “Chief Joy Officer” you write about the proverbial “mask” that leaders feel pressured to wear… masking how we really feel. Were you able to be your authentic whole self at work, fears and all, during the early stages of the pandemic?
  • “Scared and panicked” – was it OK to share that with the team?
  • “They're all adapting” – as a result of everything we've been doing for 19 years

The podcast is sponsored by Stiles Associates, now in their 30th year of business. They are the go-to Lean recruiting firm serving the manufacturing, private equity, and healthcare industries. Learn more.

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Automated Transcript (Not Guaranteed to be Defect Free)

Announcer (2s):
Welcome to the Lean Blog Podcast. Visit our website www.leanblog.org. Now here's your host Mark Graban.

Mark Graban (13s):
Hi everybody. Welcome to the podcast, Mark Graban, here it is episode 448 for June 22nd, 2022. My guest today is Rich Sheridan. You'll learn more about him in a minute. He's the CEO of Menlo Innovations. For links and video and a transcript and more go to leanblog.org/448. As always. Thanks for listening everybody. Welcome again to the podcast. My guest today is Rich Sheridan. He is co-founder CEO and chief storyteller at Menlo Innovations software and IT consulting firm based in Ann Arbor, Michigan, they've earned numerous awards and a lot of press coverage for their innovative and positive workplace culture.

Mark Graban (59s):
Rich, you might realize is a returning guest. He was here in episode 189 back in 2014. That was the same year, the same month, January, 2014, when I had the chance to visit the Menlo Innovations office. So there's a link to the blog post I wrote about that. And that first episode links to those are both in the show notes. So back then we talked about his first book that was titled Joy, Inc.: How We Built a Workplace People Love and his latest book published in 2019 is Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear.

Mark Graban (1m 39s):
So before I tell you a little bit more rich, welcome, welcome back. Welcome back to the podcast. How are you?

Rich Sheridan (1m 41s):
Thanks Mark. It's almost like a time capsule here, thinking back to January, 2014 and how much has happened since then, I guess.

Mark Graban (1m 53s):
Well, and I tell you, I'm almost embarrassed that, I mean, I've known the book's been out for awhile. I wanted to have the on, I should've reached out sooner, but yeah, I guess pandemic time and everything that's been in the way, but I, I see your, your, your background you're, you're still in the same office space, right?

Rich Sheridan (2m 9s):
We are. Yeah. Although just for a little bit more where we're actually going to be moving September 1st. And so yeah, we'll, we'll be leaving our wonderful space. That's been our home for the last 10 years and going on a new space adventure.

Mark Graban (2m 30s):
So we'll, we'll talk more about that later. There's fewer people in the background. It seems the normal times, you know, for those who are just listening, you can check out the YouTube version. You probably won't see any dogs or babies in the backgrounds, less of that these days, right?

Rich Sheridan (2m 47s):
Yes, no babies right now. I think there's a, probably a safety concern about bringing babies into an office these days.

Mark Graban (2m 56s):
So we'll have a chance to learn more about how the business has evolved, how the practices at Menlo have evolved. But first I want to tell you a little bit about the Michigan Lean Consortium annual conference. It's going to be held August 10th and 11th in Traverse City, Michigan. You can learn more at MichiganLean.org. And the one reason I mentioned that is that Rich is going to be one of the keynote speakers is going to be giving a talk titled lead with joy and watch your team fly. So again, that's August 10th and 11th in Traverse City. And you can tell I, Michigan is my home state because I know how to say it might sound incorrect to people when they see it, but Traverse City, Michigan,

Rich Sheridan (3m 39s):
I would never have thought about that Mark you're right. Some others would Traverse City.

Mark Graban (3m 46s):
Yeah. I mean, if I ever see referenced, hear about it in the national news, they'll, they'll say Traverse City and haul cringe, but so again, I'll encourage people to go check out the Michigan Lean Consortium event. There's a link to that also in the show notes. So again, if you haven't heard it, I mean, you can get a deeper dive into this with Rich back in episode 180 9, but maybe just a, a quick synopsis for those who are hearing about you for the first time, rich, how would you, how do you define the Menlo Way? And I'm curious, you know, has the Menlo Way evolved in the eight years since we've talked? Has, has it changed a lot or is it sort of a bedrock that remains consistent even if circumstances about the business do change?

Rich Sheridan (4m 30s):
Yeah. Yeah. I think the Menlo Way is it, it draws from a lot of different sources and quite frankly, that's why you and I had got connected so long ago because we absolutely draw from lean thinking from agile thinking from a project management Institute for systems thinking from positive organizational psychology thinking. So I would say if you came in today, mark and saw Menlo in its current form, there was certainly been adjustments made largely due to the pandemic, as opposed to we fundamentally changed the process.

Rich Sheridan (5m 12s):
You would still be able to see all the same elements and the same spirit and energy behind the process. But as I'm sure we'll talk about in our time together this morning, there were some severe adaptations we had to make that were very different from our first 19 years. And just give the listeners a little bit of a insight into our history. We just, this past Sunday celebrated our 21st birthday as a company. We, we joke that it's now legal for us to drink. And, but you know, the elements of the Menlo Way start with, as Simon Sinek would say, start with our, why, why do we, what do we believe we want to end human suffering in the world as it relates to technology.

Rich Sheridan (6m 4s):
And the more positive bend on that is we want to return joy to software development. I believe joy has been missing for a long time in our industry. Quite frankly, it was missing for me personally. And that's how, you know, when people come to, like, how did you think of this? It was 15 years of pain in my own personal career where I realized there's gotta be a better way of doing things. And you know, for us, it's an experimental mindset. It is one that says, you know, I think my grandmother's very proud of us in terms of how we do this. We're probably not quite as formal as Mike would like us to be. And I appreciate always Mike's thinking on this subject, but one of the more common phrases here at MEMA was less run the experiment.

Rich Sheridan (6m 51s):
And that's where a lot of the applications come from along the way.

Mark Graban (6m 54s):
So yeah. Yeah. Lots of experiments and new things over the last two years. And, you know, I'm curious, Rich given your previous experiences and what unfortunately might be happening at other companies, you know, today, even when you, when you talk about returning joy, you know, what are some of the main things that drain joy out of people? You know, you, you talk a lot about eliminating fear is that one of the main causes of, of this loss of joy, are there other, other things that that's sort of just suck the joy out of people?

Rich Sheridan (7m 25s):
Well, you know, I, I think there's no doubt mark, that if I were to write the opposite book of joy, Inc, it would be called fury and, you know, the way the industry is typically organized, the way software teams are typically organized, it ends up in a high hero, high overtime type of environment, where you have individuals towers of knowledge, as we call them that know everything about a particular subsystem and nobody else knows what they know. And the only way to scale a hero based system is over time. And our fundamental belief is that tired programmers make bad software and we don't want to make bad software.

Rich Sheridan (8m 8s):
And so, you know, there's a scaling issue in software teams where, where we scale the individual rather than have a process in a people process that scales, which is really probably the miraculous thing we've accomplished over the last 21 years, we are able to do something that most people say there's a law against called Brooks. Law says, can't do what you suggest you're doing rich. And it's obviously we've disproved it because we have, if a project here is behind and it needs to go faster, we add more people. And you know, that's an easy thing to say.

Rich Sheridan (8m 50s):
And it is, you know, as we get into the details of how we work, it's fundamental to the process we use here, just to give you a little bit of a peek into that. Everyone here works to, to a computer, one computer sharing a keyboard and a mouse collaborating on the same task at the same time, this isn't, Hey, mark, come help me with my work. This is our work done together. And those pairs switch systematically switch at least every five days. So we have no one person on the team that is a singular tower of knowledge about any one particular point, because they are having to share their knowledge with each other through this paired work.

Rich Sheridan (9m 30s):
And the delightful thing is, let's say four people working on a project for a few months and they're switching in their pairs every week. So you get three good combinations of people, and we'll probably bring others in from time to time to cover vacations and outs and that sort of thing. But then the customer comes and says, Hey guys, something happened in our business. We need you to go twice as fast, but we'll bring four more people in pair them with the original four. And suddenly we have within a couple of weeks, a team that is producing twice the output of the original team at twice the size with the same work schedule. And we, we tend to adhere to a pretty strict 40 hour a week work schedule, no weekends, no overtime, no denying a vacation requests and that sort of thing.

Rich Sheridan (10m 16s):
And you know, and I think that's where the fear creeps in. And a lot of organizations when, you know, say the boss stops by and says, Hey mark, how's it going? How's it project you're working on? Are you coming in this weekend? You're not really thinking of taking a vacation next week. Are you going to be, we're pretty close to the deadline mark. And of course, fear starts to rise. You know, pressure, mounts, individual pressure mounts here. We just don't have that. And it's, you know, we work on hard projects. We work on long projects. We work on complex projects, but our belief again is you want to create, as Kent Beck said in his original book on this topic, extreme programming explained a sustainable work pace and software projects.

Rich Sheridan (10m 59s):
Especially these days are often very big and very long and require a lot of people. And if you don't have a sustainable work pace, you're going to get to a certain point where your team burns out. They just prior and now they're not bringing their brains into work with them every day.

Mark Graban (11m 16s):
I mean, I think it's interesting. You mentioned sustainable work pace. That makes me think of Toyota. When I used to live in Texas and I would bring healthcare people into the Toyota truck plant in San Antonio, they would see a sustainable work pace. You know, I think for people who had never been in a factory before, they, they're not sure what to expect. They may be picture maybe because of the word lean that people are going to be frantically running around. And, and that's not the case. It's a sustainable work pace because there are, you know, good systems that really support the people who need that type of work. I'm sure people would see the same thing at Menlo.

Rich Sheridan (11m 58s):
Yeah. In a lot of our system, mark is you can easily imagine, has to do with how do we manage the workflow here? How do we break the work down into, into achievable chunks so that we can give people a chance to go to work and get meaningful things done? How do we keep their focus on a single task rather than the traditional environment of multitasking, right? Which isn't actually humanly possible. The thrashing that occurs as you switch from one thing to another to another, and you go home after long days and you, and you feel like, you know what? I worked really hard today. I worked really long today and I got nothing done.

Rich Sheridan (12m 38s):
And I think the ability to go to work and get meaningful things done is probably one of the most joyful aspects of our system.

Mark Graban (12m 48s):
So I think it's interesting. You mentioned rich, the paired work, you mentioned Kent back. He's really associated with that and extreme programming. We think of paired programming, but as you write about it in the new book, I mean, there's this broader paired work that's taking place. And you know, it just occurred to me, you know, I'd gone to your website. I had downloaded the free chapter of chief joy officer, and I got an email that came back, you know, I noticed there was we language and it was signed Erica and Lisa paired work, even in sort of, I guess, this marketing or public relations function really interesting to see.

Rich Sheridan (13m 30s):
Absolutely. Yeah. And you know, it guess what Eric and Lisa like to take vacations too. They both have families. They, you know, and so again, no singular dependence on an individual, which is how, you know, every organization I was part of before you always said, you know, these towers, these heroes, these people who were specific to one particular thing. And when they went on vacation, some part of the process stopped. And my co-founder James and I often joke imagine a Toyota plant where, you know, there's one guy in charge of putting doors on the cars and he takes a two week vacation and everybody's looking around the plant like, so why are all these cars missing their doors?

Rich Sheridan (14m 10s):
And why are all these doors over there? And like, well, you know, mark went on vacation and he's in charge of doors. We just can't do doors this week. So what we want is we want to keep everybody else busy. So we're going to keep building cars. And when mark comes back, well, he's going to be a little busy cause he's got about 10,000 doors to install back. Right. And you know, and it sounds silly, right? I mean, you'd see it in a plant and you'd be like, oh, you can organize your plant that way. That's the dumbest thing ever sucks. And then you go into offices and they're all organized like that.

Mark Graban (14m 43s):
Well, you know, and I think a lot of companies, people view their job and the work they do, you know, there's the, there's the, the I, and the me language, you know, w when there's fear, there's job security, I think, and people identifying with their work, they say, oh, well, you know, Rich can't get rid of me, but I think for people to share that responsibility, or it, it probably requires you and other leaders to eliminate the fear that might cause all sorts of dysfunction.

Rich Sheridan (15m 12s):
Well, let's, let's talk about where that fear, where that fear rubber really hits the road. Right? Let's say you're in an organization that has great posters on the wall and has inspiring speeches from leaders about teamwork and collaboration and trust. Right. And yet there comes that magical day in December, when you sit down in your boss's office and the door closes, and you have your annual performance review process. So let's talk about your individual performance and right then, and there all the world of posters and inspiring speeches and in language and values and all that kind of stuff about teamwork, collaboration, trust just collapses in on itself.

Rich Sheridan (16m 3s):
Because when it comes to my job, my position, my level, my pay rate you, my ability to even keep my job. It's clear in that discussion. Yeah. That other stuff that's just rhetoric. When we're down to the things that most matter to you, mark, we're going to be talking about your individual performance performance that doesn't even make sense in a team-based environment to talk about.

Mark Graban (16m 31s):
So do, do you, have you eliminated those individual performance reviews or do you just give them less weight?

Rich Sheridan (16m 38s):
You know, it's, it's even weirder than that. We'll go down a lot of rabbit holes here today. We've eliminated bosses. We've never had any bosses here. So there would be no one for you to sit down and have your annual performance review with, even if we did have such a system in the team, devised the system, by which people get feedback, develop a growth plan and, and ultimately get raises and promotions. And it's, it's a project. One of the delightful things that we've invented during the pandemic or reinvented, cause we've always had a system like this.

Rich Sheridan (17m 19s):
It got a lot better. In the last couple of years, we named a project prosperity and I gave the team the full, you know, freedom to do whatever they want to do in this. But I told them, I said, do not make this process about raises and promotion, make it about personal of people. And the raises and promotions will follow. And what they devised is just, it's so beautiful. We do tours of it. So people come and take a, take a free tour of what we call our prosperity process about how do we give feedback to team members in order to grow them? And here's the weird thing I think about every one of our people practices.

Rich Sheridan (17m 59s):
We want you to succeed. I know that sounds silly, but think, think of how many interview processes are actually set up to try and get people to fail. Interview is exactly the opposite. We give you hints. We give you explicit instructions. This is how you succeed here. And guess what the same instructions we give you during the interview are the same ones we're going to give you when we're onboarding you in the same ones we're going to give you when you're growing here, make your peer partner look good, support the person sitting next to you, right. Be a good kindergartener play well with others, collaborate.

Rich Sheridan (18m 39s):
And it's not just a poster on the wall. It's actually how we work every single day.

Mark Graban (18m 44s):
Well, I love the way, I mean, you call that weird. I wouldn't call it weird. I think it's unusual in a good way to, to eliminate those annual performance reviews. I don't know if this is becoming trendy again, I've seen a couple of articles this year. I'm going to write probably a blog post about this soon about companies or people who are advocating to get rid of the annual performance review. And you know, it makes me think back to the, you know, w Edwards Deming who said in no uncertain terms eliminate the annual performance review, but he wasn't saying don't develop people. He wasn't saying don't give them feedback. It was meant to be a more continual process.

Mark Graban (19m 27s):
And you know, you'll also make what you were saying. Makes me think of a different Deming ism. He would say the role of the managers, not to judge through annual reviews, the role of a managers to help people succeed.

Rich Sheridan (19m 41s):
Right? Yeah. Well, you know, and it's funny. I found out after I'd written the book since I'd always been a big fan of Deming is probably no surprise to you. And then I find out that Deming himself used the word joy a lot. And it was just fascinating to me. You know, in fact, chapter 10 of, of chief joy officer, I use a Deming quote as an epitaph and it says management's overall aim should be to create a system. Everyone may take joy in their work.

Rich Sheridan (20m 22s):
And I would say if that is, if there was one phrase from Deming that describes our intention in terms of creating memo, that is it.

Mark Graban (20m 32s):
Well, I, I love that. And Dr. Deming would talk about, he would write about what he called the forces of destruction, you know, that drain joy from the workplace. And I think that would include annual reviews and targets, quotas, and incentives, the dysfunctions that come with those. But, you know, I think people come into their career. I'm sure they come into a workplace like Menlo Innovations. They they're, you know, they come in they're as excited as they'll ever be. We want to make sure we, we don't let that drop. And so I think, you know, Dr. Demmick would give that advice of, you know, don't demoralize people, don't let the forces of destruction, including fear, get in the way with people having joy in their work.

Rich Sheridan (21m 16s):
Right? No, I, and I used to say, mark in an onboarding is probably onboarding is one of the worst HR practices ever invented. Right. You know, and I used to say as a hiring manager, my old way of doing things. So my job was to try and get you productive before I demoralized you, which is exactly what you know. And I always say the best day on a new job, isn't the first day. Cause that's often one of the worst days, right? Mark. We're really glad you're here, but we forgot to get a table, a desk chair, computer, and email address. But we're really glad you're here, right?

Rich Sheridan (21m 57s):
You're like, oh my gosh, you, and then project, you were so perfect for, we canceled it between the day. So we don't know what to do with you, but here here's this book that I wrote joy, Inc. You know, you should sit in the conference room. You know, it's like really like, seriously. I mean, why is it that when people join, it feels like a surprise that you might teach them something. And you know, the pairing aspect of memo, I'll just say it as bluntly as I can trivializes onboarding trivialized because you're never alone. You're never more than a foot away from somebody who can answer the question that's on your mind.

Rich Sheridan (22m 40s):
And then we encourage you to ask those questions. We encourage you to say, I don't know.

Mark Graban (22m 45s):
Well, I think that's the sign of a healthy culture where people are willing and able to say, I don't know, you know, where they, they don't have the fear to go make something up where they're, you know, BSCU or maybe even worse be asking a customer.

Rich Sheridan (23m 1s):
Right? I mean, it's funny. We should be talking about this. Cause right there, you can see what I'm saying. There's a poster that you can't read it's on the pillar there. And what it says is one of our bigger posters says it's okay to say I don't.

Mark Graban (23m 17s):
Well, I think in, you know, probably a fear Inc company, the dynamics are one where if you're new, if you're a new employee you're told and it might often be really subtle. It, you know, if you have a new idea, it's just, whoa, just, you know, shut up. You don't know how we do things here. You should just absorb how we do it. Where I think in a joy Inc company, people would feel free to speak up from, from their fresh perspectives to ask questions, to make suggestions, to make things better.

Rich Sheridan (23m 49s):
Yeah. I think that goes to a phrase here that they will learn very quickly when somebody has an idea, the answer isn't, well, we've never done it that way before, or I think that's against policy or we tried that five years ago and it didn't work. Then the answer is typically, I don't know, let's run the experiment, see what happens. You can sign up at least one other person to join you in that experiment, the odds that you're going to be able to try something new, see how it works. But also the willingness to say, okay, that didn't work quite the way. I was hoping, how could we make an adjustment? You know? And that's why I think, you know, my grandmother and CATIA and all that sort of thing is, you know, it's, it's the same spirit and energy behind that.

Mark Graban (24m 33s):
Yeah. And I would propose, I mean, I think this is a common scenario. If somebody is skeptical about a change or an idea, there you go. You can say, let's run the experiment and see if it works. I mean, there's, there's a filter out. I often use a, well, if the idea seems really unlikely to physically hurt somebody, then let let's go and run the experiment,

Rich Sheridan (24m 55s):
You know? And it gets back. And I talked to a lot of people about this and they're like, oh my gosh, you know, how do you trust people to run good experience? Like, well, number one, if, if you're, if you're building a team of people you don't trust, you might want a harder look at how you're building your team. But the other thing is, you know, I think call it managerially. People are like, we're going to come off the rails here. People are going to be, they're going to be sending free money out to customers because they think that's a good experiment, really. I mean, do you really think people are going to do that? Because I think there's, I'll just say it about us. You know, people ask us, you know, what's part of the memo magic. And I think part of it is people believe in what we do here.

Rich Sheridan (25m 42s):
The people who join here believe in the approach we're taking and why we take it and what its purpose is. Now, I would guess some of the reasons they can believe that is because we can explain it to them. You know, we set reasonable, rational, you know, explainable expectations for people about how we work, you know? So nobody's going to come into Menlo and say, for example, you know what I think we should just stop that whole period experiment. Let's just stop hearing for a week. And, you know, I think they would reasonably expect they would get, no, we're not going to try that experiment.

Rich Sheridan (26m 24s):
And why, because the expectations about the basics of how we work pretty well set pretty well under now, you know, people save, for example, maybe we could do remote bearing. Maybe we don't have to be physical office together and that sort of thing. But you know, I think generally speaking, rational human beings are going to behave Russia.

Mark Graban (26m 50s):
Yeah. I mean, I've had similar conversations with a lot of healthcare leaders where they have, they have a fear. I don't, I don't, I was going to say an irrational fear, but that's not a good word. Nobody wants to be called irrational, but we can think and ask, what is that fear based on, you know, I think in kind of a baseline fear Inc organization employees have probably usually been conditioned to be too cautious. So as we help them become experimentalists, I mean, I think we ha we have to help them take more risks. I think it's unlikely that they're going to become super reckless, but we need to, you know, if anything, my fear would be, people are, are still fearful.

Mark Graban (27m 34s):
I keep using that word a lot. Right. We're going to help them become experimentalists. And, and that means eliminating fear for employees and for leaders.

Rich Sheridan (27m 43s):
Well, and in a healthcare environment, I'm guessing, for example, one of the biggest fears is speaking up,

Mark Graban (27m 50s):
Unfortunately say

Rich Sheridan (27m 52s):
Up to a doctor, you know, and, and figuring out what are the patterns we can use to encourage people to wash their hands.

Mark Graban (28m 2s):
Yeah. There's a lot of hierarchy. There's a lot fear.

Rich Sheridan (28m 8s):
That's often where the fear comes in. And again, go back to that annual performance review date, right? Ultimately those forms typically come down to two boxes to check boxes. Only one of which is going to get checked. And I'm pretty sure most people don't go into their annual performance review thinking. I pretty much just met expectations this year. Yes. This is my year. This is going to be the big one. Right. And then the boss says, well, you only 3.7% of you can exceed expectations this year. No. So you got to wait everywhere.

Rich Sheridan (28m 50s):
We could start every fear Inc lesson, right out of the, how are those boxes getting?

Mark Graban (28m 58s):
Yeah. So, you know, to not get too sidetracked on this, you've triggered a memory. I mean, the last time I worked for a company, big company that did these annual performance reviews, I think the annual scale went up to a nine. And my boss told me in the annual review, you know, I was, I was giving you an eight, but then, you know, some vice president told me we can only give so many, eight, so we've, we've bumped you down to a seven. And I think, well like, well, why, why even tell me all that? I don't, I don't know how that was all helpful or motivating.

Rich Sheridan (29m 29s):
Yeah. I can imagine if Deming we're in this conversation right now, it's like, what are you doing? Giving a human, being a number on a zero to 10 scale, come on seriously. And who, here's the beautiful question. And this is why our team does all the work around giving feedback, right? How on earth would, I know how you're doing here? I'm going to in one hour conversation with you right now, I'm not out there on the floor, watching how Dan's doing in relationship to a customer, you know, who is, is bare partner. And then next week, spirit partnering next week's peer partner.

Rich Sheridan (30m 12s):
You think the people you pair with every day, every minute of every day might, if they're well coached and how to give feedback to people and what to watch for and what our expectations are, you think they might be better equipped to give Dan some really, you know, informative feedback about what it might take to grow to the next level here.

Mark Graban (30m 33s):
Well, I want to ask one other question, rich. When it comes to hiring, a lot of people talk about hiring for culture, hiring for attitude, hiring for fit that we can teach everything else. And one thing you highlight is a word that's important to Toyota and that, and that's humility. So I'm curious if you are interviewing in a way that looks for humility, is it easier to find a lack of humility? How do you, you know, how would you, how do you think about that?

Rich Sheridan (31m 6s):
Well, it's, it's very important because you can imagine if two people are working together and, and you know, I've got an idea and it's gotta be my idea, you know, and it's got a win, right? It's just not going to work here, right? It for time, the team just, they won't want to work with you. You know, if every time you have a argument, if every time you have an idea, your way needs to work. And so we try and coach people right from the moment of first contact is help the person sitting with you succeed. And that is kind of a subjugation of self, an expression of humility at that particular moment.

Rich Sheridan (31m 48s):
And we're teaching it right in the moment of first contact. And I used to say, mark, that we hired for culture fit. I don't say that anymore. If you saw the variety of people, we have gathered in this team, I kept, I kept watching the team we built and I kept reflecting on this hire for culture fit thing. And I thought, there's something congruent here. What is it? And I realized what we're actually doing is not hiring for culture fit. We're teaching our cultural expectations from the moment of first contact. And if you teach reasonable, rational ideas, you know, that, that can be explained in our Bizible.

Rich Sheridan (32m 34s):
Most people will respond positively to that now. And I think the people we ended up filtering out are the people who don't believe it. They say, oh yeah, whatever, teamwork, collaboration, trust. I know what they really want. They want me to exert my, you know, by authority over this person sitting next to me, that's how I give, add here. And that'll end up, you know, if you can't adapt within our first interview and we do an audition, we don't do, we don't ask questions. We never ask questions during the interview process of the candidate, which is right again, you know, people are like, well, wait a minute. It's not an interview. It's an audition. You come in, we pair you with another human being.

Rich Sheridan (33m 17s):
Who's also interviewed, competing for the same position you are. And then we tell you, mark, your job is to help the person next, you succeed, make your partner look good, demonstrate good kindergarten skills. And you might suck at it for the first pairing, right? You may be terrible. You may be nervous. You may be trying to prove something. And then we pair you again with another person for another 20 minutes. And we do it three times. And we will literally, when we review you deciding whether we invite you back for a second interview, somebody might say, you know, there's three, three men colonias who watched you pair in three different pairings, right? And the first person might say, thumbs down, no way.

Rich Sheridan (33m 59s):
Right. I saw terrible behavior. The person, the next person says, you know, it's doing okay. And the third person double thumbs up. And, and, and, you know, there's been an interesting set of, you know, almost humor around this. You know, some people be like, well, what if mark was learning to fake it? Fake collaborations? And my co-founder James, can he fake it for 40 hours a week? Cause I don't, I don't care if he's an ex murderer in his off time, you know, collaboration while he's here. That's awesome. And, but the other, the other part of it is, wow.

Rich Sheridan (34m 42s):
Look at how quickly mark adapted in just a couple of hours. Right? Once we started setting clear expectations for mark, he adapted. And I think that's the lesson I've learned in the last few years about human beings. Guess what? We're incredibly adaptable creatures when you set out reasonable, clear, rational exponent facials for people.

Mark Graban (35m 2s):
Yeah. Yeah. Well, so one of the questions about the interview dynamic, let's say, I think you said, well, these people might be competing for a position that, that competition seems different than to what the intern at what the culture would be like within Menlo. Like, are there ever paired positions where like, you, you may have you described people rotating through different pairs, but I I'm, I'm just curious, like, would you try to structure hirings aware, you know, people that are collaborating so they can both get hired beyond trying to make your pair partner look good?

Rich Sheridan (35m 41s):
I'm not sure I fully understand the question, but I could, I could imagine going in one direction of, is there a collusion in the interview process? Like I'll make you look good to me look good.

Mark Graban (35m 55s):
Well, no, it wasn't that let limit limit. Let me try again. It was just a question of like, if you have people pairing with each other and they know there's only one position that, that, that drives a little bit competition, that would not be part of the daily culture within men. I don't mean to be critical. I'm just trying to think some of the dynamics,

Rich Sheridan (36m 16s):
What are the simple human characteristics that would say, Hey, you know, and I would say we wouldn't do our, you know, mass interview process. If there was only one position that Wouldn't be sensible to go through that amount of effort for just one open spot. And we have other ways of bringing in kind of singletons outside of the mass interview process. And maybe about a third of our team has come in that, that way. But it is still the case that they understand that, you know, if there's 30 of them, we may only be opening positions for four. And so again, it is that's back to that humility piece.

Rich Sheridan (36m 59s):
You, you brought up earlier, am I willing to say, even within the context of this interview, I might not make it okay. I'm going to come for the experience. I'm going to demonstrate the best version of myself as I can. And I'll leave it open to the, you know, the, the whims of, you know, who showed up and how did I do that? And that sort of thing. And you know, again, every interview process is, you know, everyone, every one of them, including ours as strengths, and it has weaknesses and you know, and we will Ms.

Rich Sheridan (37m 40s):
Good people from time to time. And we will bring on bad fits from time to time. And that stuff has to be sorted out later. One of the things I think that people appreciate about our process and maybe different from a lot of companies, at least ones I used to work for us, you can try as many times as you like.

Mark Graban (37m 57s):
Yeah. That's what I was going to ask. If people had a good experience and didn't get the job, how often did they come back again to try?

Rich Sheridan (38m 5s):
Yeah. There's actually a famous story in chief joy officer about one of our programmers, Scott, who's now been with us for probably close to 10 years. And he failed the first time and came back a year later instead of like to fry again. And we're like, of course, and he made it through, but just barely, just barely squeaked through. And we decided, because the last part of the process is what we call a three week paid trial. So Scott came in for three weeks and at the end of the three weeks, the team was really kind of torn. They were seeing really good things and they were seeing some really concerning things. So they went back to Scott and they did something very unusual teams in charge of this process.

Rich Sheridan (38m 46s):
So they get to decide that stuff. They said, you know, Scott, we're not comfortable saying yes yet. We're also equally uncomfortable saying no. And sending you away, would you be willing to consider another three week trial right now paid again? So he's getting paid it isn't like, you know, some torture scene pre-internship and he's like, yeah, I don't have a job right now. Why not? Right. And so weeks one and two of the second three week trial, he was still failing an important way. So he was failing to respond to the feedback. We were getting one grabbed David in the middle of that second week trial, who was the guy who was paired with.

Rich Sheridan (39m 27s):
And he said, David, I don't want to fail, help me succeed. And Dave's like, great. Can I do for you? Right. This isn't like, no, I'm not going to let you trick the system. Like tell me what you need and I'll help you. And all Scott said was, you know what? You guys keep giving me feedback at the end of the day and the end of the week. And it's not actionable. I need it in the moment. And the biggest challenge we had was Scott wouldn't think out loud, it go quiet. He'd be typing in any, always had good answers. That's why the team was confounded. But the rest of the time he'd be sitting there. Like, we're not sure he likes being here. We're not sure he's paying attention.

Rich Sheridan (40m 7s):
But then every time he said something, it was, oh my gosh, you're exactly paying attention. And all we did was we said, Scott, you, and so David, every time Scott went quiet, Dave was like, you're doing, and then he started talking in the joke and we can't get Scott to shut up. So again, he was able to adapt. Scott is a very introverted person in our team is filled with introverted people. Yeah. We'd have to corner the market and extroverted requiring. I think the team will declare it easily.

Rich Sheridan (40m 47s):
We couldn't handle a lot of, we couldn't handle an overwhelming number of extroverts on our team. It just wouldn't work. This is a very

Mark Graban (40m 57s):
Sure, but what I hear you describing riches, you're kind of teaching the culture. The culture is get better at thinking out loud that that can be taught

Rich Sheridan (41m 8s):
And, and ask questions and make sure we know what you're, what you're considering and all that kind of stuff, because ultimately, you know, and again, it gets back to, you know, what are we trying to accomplish? What's our goal here. And if you know, in a traditional organization, the goal might be, well, I want to get a raise or I want to get a job. And our goal is no, we want to create great software for our clients. And you know, and so it's, it's a caring, you know, and they know in chapter 11 of chief joy officer, I talk about how would we care for the team? And again, I love this epitaph from John wooden, the famous coach from UCLA.

Rich Sheridan (41m 53s):
He said, I worry that business leaders are more interested in material gain than they aren't having the patience to build up a strong organization. And a strong organization starts with caring for their people. And so there should be evidence of caring as often as possible.

Mark Graban (42m 10s):
Yeah. And you know, it seems like that seems deeply connected to joy in chief Troy officer, you talk about letting people be their full, authentic selves at work and caring for people and celebrating them. And I think I was going to ask you to, to talk a little bit about pandemic time adjustments. So, you know, you, you, you right. You know, vividly about this idea of this proverbial mask that people wear in the workplace and that leaders might wear the way we feel pressured to behave or present ourselves. And, you know, also I'm curious, you know, thinking back to, you know, as you wrote about in these blog posts like March, 2020, when we're all trying to figure out what's happening, how long is it going to last?

Mark Graban (43m 0s):
What does it mean? Not just for the business, but what does it mean as individuals? You know, how, how were you, I'm curious, how was it for you Rich to be your authentic whole self at work that might include all these fears and uncertainties for yourself, for Menlo, for our country, for our world? I mean, how was it to navigate that?

Rich Sheridan (43m 23s):
Yeah. I, I will say I was scared and I was panicking when, when the pandemic kit, because what we were being asked to do that week of March 16th, 2020 was turn Menlo inside, out upside down and go to the alternative universe, the inverted universe, right. You're going to take a team that has been shoulder to shoulder, closely collaborative. You're going to put them all in their individual home offices. You're going to take your high-tech anthropology practice, which is all, that's our go to the gemba team. And they're not going to be able to go to the gemba anymore because you can't get on airplanes and you wouldn't have a gambler to go to anyways, because they're all.

Rich Sheridan (44m 8s):
And then you're going to take the guy who goes out and speaks about joy and, and take him off airplanes. And he doesn't get to meet people. And oh, by the way, these thousands of people would come and visit us. They can't do that anymore either. And, and I will tell you in that moment, I thought, I couldn't, I couldn't see a path out. I saw it. You know what? It was like that, you know, that image I have of Harry Houdini, it's like shackle them up, put them in a straight jacket, put weights around his ankles, throw them in the ice cold water, and let's see if he can survive. And I thought, there's no way. There's no way. And, and I'll be honest mark. In that moment, I thought, I honestly thought this was the end.

Rich Sheridan (44m 53s):
And I thought, you know what? That's okay. You would, 19 years, it was a good run accomplish what you set out to do nothing to be ashamed of. It couldn't have anticipated this. And February was one day where Erica was sitting near me and, and she's relatively new. So she didn't know me that well. And, and I said, Erica, what is today? Tuesday? I said, no, no, no, what day is it? No, it's March 17th. I said, no, no, no. What day of the week is it? She's like, it's Tuesday. And then she swings her head looking over at my co-founder at kind of like, did richest have a stroke or something?

Rich Sheridan (45m 37s):
You know? And Jamie looks at her, says, don't worry about him. He's just panicking. He'll be fine. And you know, in what was neat mark, and it, it, there was a turning point happened pretty quickly. And I credit Molly for this. One of our senior high-tech anthropologists. We were trying to figure out how to do our first high-tech anthropology gate engagement in this pandemic world, right. Where we can't, we're going to have to do it all remotely. And I'm thinking this will never work. You know? I mean, but I'm not sharing these thoughts with the team. They're all in my head. I'm just, you know, screaming, you know, the run for the exits kind of thing in my head. And she goes, this will be so exciting to figure out how to do this.

Rich Sheridan (46m 17s):
And right then and there, it was like this grand relief, because suddenly I looked around as best you could virtually. And I thought, wait a minute, they're all adapting. This is, this is your problem. Not theirs. They're filling out how to do this. And it was in that moment where I realized all the things we had done for 19 years, the communication, the collaboration, the trust, the relationship, the focus on human energy, that empathy we have for the people we serve and others, all of it was coming to bear on this unique situation we're in. And in some ways it dawned to me, unbeknownst to me, we were building an organization that was going to be ready for this dramatic effect and everything.

Rich Sheridan (47m 6s):
Every bank account we had filled up with, you know, relationship dollars and every bank account, we filled up with joy versus fear. It was all paying off right then and there.

Mark Graban (47m 18s):
And

Rich Sheridan (47m 19s):
It was pretty cool moment.

Mark Graban (47m 22s):
That sounds like then the culmination of, yeah. All that effort to build whatever words come to mind, resiliency, agility, adaptability, because I guess it can't, it goes to show you can't force that you came speech and say, Hey, everybody go be nimble, go be actual. You, you built that culture. And if people, the freedom to adapt.

Rich Sheridan (47m 51s):
Yeah.

Mark Graban (47m 55s):
Yeah.

Rich Sheridan (47m 55s):
And you know, in that, what's up big lesson for me.

Mark Graban (47m 59s):
So then, you know, as you wrote about these blog posts, you know, the shift to a hundred percent remote and then starting to bring and starting to allow people to come back into the office. And I'm just curious, you know, some reflections on what people figured out about fully remote work or, or hybrid work, whether it's in the structure of these pairs or just in general for Menlo, what do you think some of the greatest adaptations of them?

Rich Sheridan (48m 25s):
Well, you know, the first is the part that everybody's curious about, who knows as well. They're like, how'd you make the remote pairing thing work, honestly, that was the easiest thing you and I are remote pairing in a conversation and create a podcast right now. You know, you easily come to Menlo, set up your microphone, your could have been together and all this sort of thing, but we're doing it remotely right now. Imagine if we're programming together, we're going to have a second screen. The code we're co-developing that we're discussing. I think actually in some ways, peer programming remotely might be just slightly easier because first one, simple physical reason you and I can actually look at each other when we're pairing shoulder to shoulder.

Rich Sheridan (49m 11s):
If I want to look at you, I actually have to turn my body and look at you. And then look back at the screen. In this case, I just have to dart my eyes back and forth between the coat and the screen. And so that part was easy. And we had been doing remote pairing for clients for a decade prior to prior to now the harder part. And this is the part that still worries me. And I think we're paying a little bit of a cold call and work from home tax on. This is the serendipity that happens when the pairs sitting close to one another and they're overhearing and supporting each other. And we just, we just saw that the other day, where there was one pair that was working on something and another period solve it and they didn't know it.

Rich Sheridan (49m 52s):
And I think those are the moments where like, yeah, this isn't simple the way I describe it as it's working, it is not ideal.

Mark Graban (50m 5s):
And then sounds like, I mean, and you wrote about this in the blog posts adaptations to the stand-up meeting to make that in effect the virtual standup virtual tours. Can you talk a little bit, one thing you wrote about, I think was interesting was, you know, in the spirit of let's figure it out let's experiment was your recognition that the, the virtual 15 minutes standup wasn't really time that you added some lunch sessions, you added some other time that wasn't happening in the visible workplace. Can you, can you share a little bit about that?

Rich Sheridan (50m 37s):
Yeah. And then it was actually, again, the team leading that effort. They, you know, of course when you're one of the things I think is a challenge in the pandemic that isn't as much a challenge for us as it is most organizations, loneliness and isolation, because we're all paired together and we're switching the pairs, at least every five days, you still have a social connection with the people at work. We are, we are part physically to be safe and healthy. We are not a part socially. We just thought the idea of social distancing was an incorrect term, at least in our context. And so physical distancing was important, social distancing not required.

Rich Sheridan (51m 19s):
However, one of the things the team noticed early on was they don't see Rich and Jameson. Yeah. They're used to us just being out in the room and saying good morning to him and Hey, how that sales conversation go, that I saw you in yesterday. And they just, weren't seeing that, how are you guys doing right? How are you feeling about things? How's the hour, you know, how's revenue and all that kind of stuff. And so the team said, could we get together with you? And we established this pattern of what we call Thursday lunch with Rich and James and today is Thursday we'll we'll. We have one of those scheduled and we started this maybe like three weeks into the pandemic. And it is now a staple. Every Thursday, they have lunch with Rich and James and…

Rich Sheridan (52m 1s):James isn't going to be there today. And I will, or, I mean, sometimes we're both not there. So now we call it Thursday with her without Rich and James, but it was just regular connecting point. And you know, when people are in the building, some of them would gather in the room with that, the owl camera and then the people are at home, you know, cause we're obviously we're not 100% remote anymore. And, and so that has been a really good addition to our culture and topics we talk about are timely topics, topics of interest in that moment. And so early on the pandemic, a lot of discussions about financials because we took a big financial early on in the pandemic now, because we're moving to a new building soon.

Rich Sheridan (52m 51s):
They're really curious about the new space and how's the lease negotiation going and all this stuff.

Mark Graban (52m 58s):
And final question on that for a wrap up, you said in the one blog post where pre pandemic, you might've expected to need to move to a bigger space or are you indeed? You said, well, maybe we actually need a smaller space. Is that how it looks playing out?

Rich Sheridan (53m 13s):
It is. Yeah. W we would have, in our vision, we anticipated the next move would be three times the physical size of recurrence, which would have been huge. And right now, if we go with the lease, we're negotiating, it'll be slightly smaller than the space we have today. And just, but just slightly, it'll still be a big open room. You know, you've been here, this is in the sunlight-less basement parking structure in downtown. This is going to have lots of windows and an amazing amount of glass and ability to look out in nature and see sunlight and all that sort of thing. So I know the team's excited about moving up to the ground level so we can, I am.

Mark Graban (54m 3s):
Yeah. The Menlo Way is not predicated on being in a windowless basement space. That's

Rich Sheridan (54m 10s):
I would say we proved that the Menlo Way could survive being 10 years in a windowless basement. And now we're done proving that point. We'll go prove some other points.

Mark Graban (54m 21s):
Well, Rich again, thank you for sharing your stories of adaptation and figuring things out based on that culture that you've built there at Menlo. You know, I really look forward to someday being back in Ann Arbor, come see the new space. And in the meantime, I'm really excited. I'll see you in Traverse City, Michigan Lean Consortium, annual conference, again, that's August 10th and 11th, Traverse City, Michigan, Michigan lean.org is where you can learn more about that. In the meantime, please do check out Rich's books, Joy, Inc, and Chief Joy Officer. There will be links to those in the show notes. And again, if you have come to the MLC conference, you can ask him your questions.

Mark Graban (55m 3s):
I

Rich Sheridan (55m 3s):
Asked these

Mark Graban (55m 4s):
Questions here today. I really do appreciate your answers,

Rich Sheridan (55m 8s):
That alone, the price of admission to getting to the conference. And obviously, if people come, we'll have some great conversations with them.

Mark Graban (55m 16s):
Yeah. The Michigan Lean Consortium is running the event, but it's not limited to those with a Michigan driver's license. Right. But you know, I hope some people will come travel in for this. If you are, if you live in Michigan, the Michigan Lean Consortium has all kinds of great opportunities, ways to learn and network throughout the year. So again, check them out. Michiganlean.org. Again, our guest today has been Rich Sheridan, CEO of Menlo Innovations. Thank you so much for being here, rich.

Announcer (55m 43s):
Thanks for listening. This has been the lean blog podcast for lean news and commentary updated daily, visit www.leanblog.org. If you have any questions or comments about this podcast, email mark leanpodcast@gmail.com.

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