GA 300 | Leadership, Teamwork, and Taking Flight with Richard Sheridan

If we really want to get our human organizations to fly, I think all of us do. We need more human energy than bureaucracy. We need more purpose and thrust than we want the drag of fear. And if we get the balance right, because we'll never eliminate fear, we'll never eliminate bureaucracy. But if we get the balance right, we can get our organizational aircraft off the ground every day.

Hey folks, this is Ron Pereira and I'd like to wish you all a very happy new Year. I Hope and pray 2020 brings you and your loved ones Jo and success across all areas of your life. Now, in addition to this being the first Gemba Academy podcast of 2020, I'm also happy and humbled to say that this is our 300th episode. Now, this podcast started as an experiment in April of 2014, and man, am I ever glad we decided to give this whole podcasting thing a try. So in order to celebrate episode 300, I thought it would be fun to welcome my good friend Richard Sheridan back to the show. Richard was one of the keynote presenters at the recent AME conference. In fact, we recorded this episode the day after his keynote. During today's episode, Richard and I chat about how the forces that work in a human organization are similar to the forces that enable an airplane to fly. We also talk about how Richard's company, Menlo Innovations, practices what they refer to as extreme interviewing. We also discuss a few other unique Menlo characteristics, such as how and why they post every employee's pay grade on a wall for all to see. We then wrap things up with a discussion of where Richard sees our lean movement headed over the next few years. Show notes for this episode, which will include links to everything we talk about in can be found over@gembapodcast.com just look for episode 300. Finally, if you'd like to virtually tour Menlo Innovations, Gemba Academy has you covered. Since we visited Richard and his team and produced a multi video Gemba Academy live episode. Just reach out to us over@gembaacademy.com and we'll get you to the right place. Okay, enough from me. Let's get to the show.

Richard Sheridan, how are you my friend?

Doing well, Ron, Great to be with you.

Thank you. Thank you. So heard you speak yesterday. As always, it was really, really good.

Thank you.

Are you like, have you like practice your keynoting or what? Because you're like the professional keynoter up.

There, man, I'm probably hitting the 10,000 hours thing, you know, where you just. Man, you do it enough and people Start to notice.

I mean, you've always been good, but I was like, man, this guy is.

All right, enough about me. Let's talk about you, Ryan.

Really good. So thank you. So, yeah, this is episode 300.

That's amazing. Yeah, congratulations. Thank you.

So, yeah, I was telling you before we hit record, you were on episode number three. So episode number one was like, hey, welcome to the Game Academy podcast. We're going to do a podcast. Bye. And then episode two was Matt May.

I know Matt. Yep.

And then you were episode three. Yeah. So. And then you are on again in episode seven. That's the one where he made my colleague Jennifer cry. Okay.

So I love her for that.

Yeah, yeah. And, yeah. So now episode 300. So. Well, listen, just in case some people are living in a hole somewhere and they're not connected to the lean world at all and they don't know who Rich Sheridan is. A little bit about. About who you are and tell us about Menlo and just, you know, the highlights and we'll dive into whatever we want to dive into.

Yeah. I'm an entrepreneur. I started Menlo Innovations with my co founder James Goble in 2001. We are a contract software design and development firm in Ann Arbor, Michigan. I know that's one of your favorite places on the planet, right?

Go blue. Right. My brother over here, you know, like, I got too many Michigan guys.

You're surrounded.

Yeah.

And our mission is to end human suffering in the world as it relates to technology. That's a big one. We can't do it by ourselves. We take a very different approach to software. I'm sure we'll talk about that in the podcast as we have in the past. But the notion is, as I talked about my keynote yesterday, is this purposeful intention to create joy in the world through the work that we do to delight others, the people who actually use the work that we do every single day. And we know we can't accomplish that big mission I described by ourselves. So we actually teach what we do to others, and people come by the thousands every year just to see how we do what we do and take home some piece of Menlo wisdom and experience and knowledge back to their own places and hopefully bring some joy back to their cultures.

Yeah. Yeah. So the thing that I enjoyed the most, I think, in your talk yesterday was you have you used an analogy that I had not heard you mention before in a speech at least, and that was of this. Of this airplane.

You talked about lift and weight and.

Thrust and drag, and I thought it was a brilliant analogy for leadership.

So talk about that.

You don't have graphics for anybody to look at your pretty airplanes and all that flying around. That was really nice.

Sure, I can draw it with my hands in the air and describe it for people. I wrote a book five years ago called Joy How We Built a Workplace People Love. And a lot of that book was the practices, the artifacts, the methods we use and that sort of thing, and how they all bind together into a culture. But there was one chapter there that we wanted to take further, and it was the chapter on leadership. And the chapter was titled Enjoying Growing Leaders, Not Bosses. And not that bosses are bad and leaders are good because you can have good and bad examples of each. But this idea that we don't need to lean on hierarchy in order to have effective leadership in our organizations. Leaders have a harder job because if they don't have hierarchical authority, they have to lead with influence rather than just do it because I told you to do it. And I'm your boss and I'll give you a bad review if you don't.

Yeah.

So we wanted to look through that book through the lens of Menlo on the more invisible aspects of the company. How does the leadership of Menlo bind itself together? So the book that resulted from that was Chief Joy How Great Leaders Elevate Human Energy and Eliminate Fear. And as I started to put together talks around the content of this book, the airplane metaphor popped out. And it's. It's been a gift, quite frankly, because the feedback I've gotten on this idea that the forces at work on a human organization are analogous to the forces at work on an airplane. There's lift, then there's a countervailing force of weight that holds it down. There's thrust provided by a propeller driven engine or a jet engine pulls us forward and the drag that holds us back. So then I just draw the line between that and a human organization. What are the equivalent forces? And I talk about the lift of human energy. How can we keep our teams spirits high? And I talk about simple things like clarity over ambiguity. The ability to go to work and get meaningful things actually done can really lift the human energy of our team. The weight of bureaucracy is the countervailing force that holds us back. And I talk about meeting load and how some people are human sacrifices to meetings at certain levels of management and above. And then often we have meetings where we don't make decisions and if we do, we don't act on them. And then the thrust of purpose. And I talk about externally focused purpose. This idea of who do we serve and what would delight look like for them? And then the drag of fear. And what are the ways we have learned over time, any of us who are in leadership positions to try and motivate people with artificially created fear rather than motivating them with the spirit of purpose and so on. So I just draw these pictures and then talk about the fact that if we really want to get our human organizations to fly, which I think all of us do, we need more human energy than bureaucracy. We need more purpose of thrust than we want the drag of fear. And if we get the balance right, because we'll never eliminate fear and we'll never eliminate bureaucracy. But if we get the balance right, we can get our organizational aircraft off the ground every day.

So a question I have, and I'm no airplane engineer expert, so I know nothing about the science of flight, but I'm guessing.

But I bet you get in a lot of airplanes.

I do.

And it works for you every single time.

God willing, it'll work on the way home. You know, I assume that there is an, a certain amount of drag and weight that is critical to successful flight. So is there such a thing as a necessary amount of drag and weight and gravity in business?

Absolutely.

To keep us.

I mean, for example, let's, let's just, let's torture the metaphor just for a second. The structural engineering, the aluminum, the ribs and the plane and so on, that structure provides safety. And there are many structures inside of our human organizations that will feel the weight of bureaucracy. The checklists we want to go through things that someone might call non value add processes, but in fact they are adding value. What we want to do is take off the excessive weight. Right. The things that are, they're weighing us down that aren't actually producing any value at all, but there is certainly value to the weight of the aircraft because we wouldn't have a plane to sit in. We wouldn't have the carts to deliver coffee and all that sort of thing. And of course, the people themselves are part of the weight of the aircraft and the drag of fear. I think there's really healthy fears for us when we're running an organization. We should be afraid of harming our customers. We should be afraid of going out of business. We should be afraid of becoming unprofitable. Those are healthy fears that can actually keep us alive. Just like you and I look both ways when we step out into a street.

Yeah. Or the caveman heard rustling in the bushes and they got away Exactly.

And so it wouldn't be practical or even rational to try and eliminate all fear. What I really like to focus on is what processes are we using that are somewhat generating what I call an artificial fear in order to motivate people. And that just puts us in reptile brain mode and actually steals away the best part of our humanity, that part that gives us creativity, imagination, invention, and innovation.

Yeah, yeah. So you didn't talk about it yesterday, but it's one of my favorite things about Menlo is, well, just the way there's so many things. My goodness. The way, you know, two. You did mention two to a computer yesterday, but you're like, extreme interviewing process. And you assume you're still doing this.

Absolutely. Yep.

Talk about that a little bit, because I think it's. It's a very, very powerful way of going about. And you guys have a, you know, a very unique workplace. Right. And you're looking for unique folks. I guess.

So talk about that.

So I often back up into cultural intention, and a lot of companies don't actually create an intention around their culture. A lot of people come to me and they say, so how do you build a culture? I said, you already have one. They're like, no, we don't have a culture. Like, yes, you do. It might be the default culture. Who did we hire? What behaviors do we tolerate? What attitudes walked in the door this morning. That could be your culture of the day.

Yeah.

And those can work sometimes really well for a really long time. And then one day, they don't. Nobody knew why it worked in the past, and nobody knows how to get it back on track because something broke. Some personality left or some personality came in that changed things. So I try and guide people towards this idea of being intentional about your culture. You should be able to describe it. Describe it in words and values and stories. It should be present in everything you do. It should just be visible. It should be tangible. It should be palpable. And I think that's what people see when they come to menlo. That's what you saw when you came to menlo. And of course, there are certain practices we do that are unusual, like working two people to one computer, switching these pairs every five days. And this is, you know, two people not, hey, Ron, come over and help me. We're working on the same task together all day long. And it is our shared work together. We mutually own the goal of the task. And people wonder, like, where do you find people who like to work like this? And I always say that if you Want to create an intentional culture, and you don't look at your HR practices, then it's just a poster on the wall.

Yeah.

So you've got to look at all of your human practices. And so we recrafted, reinvented the interview process at menlo, we call it Extreme Interviewing. Not about bungee cords and rope courses or anything like that. Yeah, we actually named it in honor of Extreme Programming, which is where we learned the pair programming piece from. From Kent Beck. And what we do is we don't. We have an interview where we don't ask questions and we don't look at resumes. We make it an audition. We bring in 30, 40, 50 people all at once for two hours. We pair them, one candidate with another, because this is the way we work. So we're already teaching our culture right from the start. And we tell them a very unusual construct in this, and that is, Ron, your job is to get the person sitting next to you a second interview. Even though you're competing for the same position, support the person sitting next to you. If they struggle, help them out. If they're nervous, use your best techniques to calm them, make them feel better. We tell them we're looking for good kindergarten skills. Do you play well with others? Do you share? We give you one task to work on, one piece of paper and one pencil, and we tell you what we're looking for. We're not trying to surprise anybody. We actually send a white paper out ahead of time so everybody knows what to expect. This is not like.

I didn't know that.

Okay, you know, watch this and see how you do. No, we don't want any surprise. We actually. I think one of the weirdest parts of our interview process is we actually want people to succeed. I think that's different than a lot of interview practices, which are literally find a weakness.

Right.

Yeah. We can reject them and move on to the next candidate. And we're like, no, we really want you to succeed. So you pair together, working. A melonian is watching, just taking notes about what they see, because they're going to discuss it later with our own internal team. And then 20 minutes in, we switch the pairs. Because that's the way we work. We switch the pairs every five days. So we want to see how you work with different human beings. We want to see how you respond.

On the same task.

Still different tasks.

Okay, different tasks.

You know, the tasks themselves are. They're not complicated. It's not like, you know, how many golf balls would it take to fill up the Auditorium or anything silly like that. These are simple practical tasks. We want you to get lost in the work because we don't want you just trying to. It's not really about the work. It's not about the answer or anything like that. And then we do it three times, so three different pairs. So you would have paired with three different people. Then we send you all home. You're there for two hours.

Okay?

No, we didn't ask you any questions. We didn't ask you about where you went to school or where you've worked in the past. Because what really we want to do is look at the human. We don't want to look at the 8 1/2 by 11 piece of paper. We'll test skills later, but right now we want to find out, are you a good kindergartener? Do you play well with others? And of course what we're doing, and I think this is maybe a subtle but really interesting part of our practice, is we're teaching you our culture during the interview. So if you do eventually join the team, from the minute you've already been on the board. Yeah. And so after you all leave, usually we do them between 4 and 6 in the evening, in the late afternoon at 6 o', clock, if there were 30 of you, there would have been 15 of us watching, taking our notes. The 15 of us gather and we just talk about what we saw over the next couple of hours. And by the end of the evening, about 8:30 that night, we have made decisions on all 30 people as to whether we're going to invite you back in for a second interview or not. So it's fast. Most interview processes are torturously slow.

All day?

Yeah, well, not even all day, but I'm. Even the decision making process. How many people take an interview and don't hear back for weeks or months that anything's happening? Right. And then those companies call up, say, hey, Ron, by the way, we finally made a decision and we'd like to extend an offer. And you're like, I'm sorry, who are you?

Yeah.

Oh, you. Oh, yeah, yeah. Hey, listen, I got a job two months ago. And of course those same companies, you know what they do? They complain about the talent shortage. It's like, nope, you had him right there. Yeah, he was excited. If you would have moved faster, you might have had him. But your slow process, you know. Yeah, let's. Let's think lean now. Lean hr.

Right, right, right.

And so by the next day, we're already sending out notifications, positive and negative, whether you Made it or not to the second interview.

Yeah.

And the second interview you come in on your own. You pair in the morning with one Melonian, you come pair in the afternoon with another and you're there for the whole day. And we pay you. Okay. That's good compensation for a day's work. And now you're starting to actually do work and works programming type. Yeah. If it's. If you're coming in for a programming position, you'd be doing that high tech anthropologist, you'd be doing some design work. Project manager, you'd be helping assist a project manager. But you're doing real work in the environment and you get to see what this feels like now. Okay. If that day works, we're looking for three thumbs up at that point where the two people you paired with and you. Because you might say, you know what, this seemed really neat, but it's really not for me. Yeah, I couldn't work in this environment. Where's my cube gonna be? Like, we don't have those.

Yeah.

Because we work in this big open room. If the day does work for all three of us, then we invite you back in for a paid three week trial. And you're going to pair with at least three different people over the course of the next three weeks. And again doing real work. And at the end of the three weeks we make a decision. And some people on the team jokingly say that they're 14 years into their three week trial.

Oh my gosh. Oh my gosh. So it's been a while since I've visited. I need to come back.

If.

When I come back, what is anything going to be different?

You know, I think the differences you'd see at Menlo, some of them are invisible. I think we're focusing more on the things you can't see these days on a tour than the things you can. The things you can see. Our work authorization board, our paper based planning systems are still the same. You'd recognize them. We haven't varied. Financials up on the back wall, financials all up on the back wall. You'd probably see one of the things that really attracts people these days. And I don't know if it was there the last time you were there. We have this artifact on the wall. I call it our HR department because we don't actually have an HR department. So we have an HR artifact. And it's 18 different colored boxes of pay grades. And if you're, if your post it note is in one of those boxes that defines your pay grade and everybody who's in the same box you are has the same pay grade you do. So it's a public display, certainly to our team and actually to the world, because everybody comes in a tour, can see it, of how we pay people. And so what's the point of that?

What's the purpose of that?

Yep. So it's sort of a hyper transparency. Because our fundamental belief in management is when you don't share information, people make up stuff in its absence. And they never make up a better story, they always make up a worse one. And so this is a display of how am I doing relative to my peers. I know exactly who makes the same amount of money I do. I know who's above me. You know, the next level up. And I can start to do my own AB test. Am I more like them or am I more like my peers? I can start to ask my peers, hey, I'd like to be up there, I'd like to be up with the people above me in the next level. What do I need to do to get there?

So I was gonna ask you, so what? How does one get promoted or move up ladder, if you will, at Menlo.

So we have this bizarre no bosses thing. I'm fortunate that I met some folks here at the conference from W.L. gore, who had 13,000 employees, also have a bossless culture. And I'm always very careful to say bosslessness does not mean leaderlessness. Yeah, but the only way you move up is through peer evaluation and you ask for feedback. So if you want to move up in the system, you would gather about six or seven of your peers around you. People are in the same role at the same level. People who are at different roles at different levels. People are at lower levels than you, people are upper levels than you. If you're a programmer, you'll invite other programmers that you've paired with, you'll invite high tech anthropologists. You interact with project managers who depend on you for your work and so on. You gather together and you talk about how you're doing and where you need to, what you need to work on and what accomplishments have you had and that sort of thing. And it can happen at your own pace. So you can do. Some people do two or three of these a year, some people might do just one a year. But it's really up to you. How often do you want to get feedback? And based on that discussion, your peers will gather and maybe reach out to others on the team and say, hey, this is what we talked about. Do you have Any other input, and then they'll make a decision whether you're staying where you are and here's the things you need to work on to get to the next level, or we think you're ready to move up. So it's kind of a neat system, imperfect, of course, because it's. It's subjective. There's a few basic rules about how this should work, but there's no rubric. There's no, like, checkbox thing that says if you check these three boxes, you get up to the next level. Because our fear in that is that we don't want. We don't want everybody looking the same. There's different reasons people are gonna be moved up. Yeah, everybody brings a different quality of leadership, of mentorship, of teaching, of learning, all that sort of thing.

So, last question for you, Rich. You've been involved in around the Lean movement for many, many, many years, and you've seen a lot of things, you know, change and stay the same and all the rest of it. What do you think is next for this movement of ours over the next five to ten years?

Yeah, and I love this community. I mean, between the events that Lei puts on Ame and so on, I get involved in so many of these, and I'm just delighted to be part of this community. And what I talked about yesterday in my keynote is that I think I went through this same journey myself as I kept digging down deeper and deeper. Why does this matter? Why do we spend all this time thinking about this stuff? What's behind it all? I got back to this idea of joy, and I'll describe it in simple terms for me personally and for the kind of work we do at menlo. But I think you'll find that anywhere here in a purpose driven organization. If you think of software, which can be very difficult for a lot of organizations, software, we look at it and say it often tortures people. Right? Because it doesn't do what you want it to or doesn't work all the time. Blue screen of death. Or just how does it work? How do I do this simple task? Why is this so hard? All that kind of stuff. At the end of the day, it dawned on me that what does an engineer actually want out of their work? When you're building products or services, what do you actually want? What you really want is to see your work at some point in time. And it's always hard work. Whatever we're doing, whatever any of these companies do here, it's hard work, sometimes years in the making, but one day that work is sent out to the world and someone is going to receive your work and use it potentially every day. And what the engineer wants more than anything else is for those people to love what it was you created. This idea that somebody later finds out you did X, whatever that is, a car, a piece of software, some device you use in your home and they look at you and go, you got to work on that. I love that you made my life better because of your work. At the end of the day, that's what it's all about. And I think as you look at this community and all of the practices, all of the tools, you know, value stream maps or a threes or whatever you want to pick out in software environment, like backlogs and planning sessions and estimates and all that kind of stuff, all of this work is focused on producing that kind of joy in the world. And when it happens, the joy comes back to the people who created it. And I think if, if everybody's honest with themselves, if we start jettisoning all the other stuff that happens in our work lives, like what's my title, what's my authority, what office do I have, what's my bonus going to be this year, how are my stock options doing? At the end of the day, what we really want is that. And I think that's where the, that's where I see this community heading. It's the theme I hear over and over again. And all of the keynotes we have here is we're working on that as a goal. And if we don't lose sight of that goal, this idea of who do we serve and what would delight look like for them? Yeah, that purpose driven goal. We can get through a lot of tough times, a lot of hard work, a lot of interpersonal conflicts, a lot of all the difficulty of change. Because, you know, the trouble with changes, I'm all for change as long as it's you changing and not me. Right.

They always say, you know, help enough people get what they want and it'll come back to you. Maybe we could even turn it around with a joy Analogy is help enough people experience joy and the joy will be returned back to you.

Absolutely right. Exactly.

Yeah.

Beautiful.

Rich, what's the best way for folks to connect with you?

Yeah, you know, we do tours at Menlo, about 3,000 people a year. So if people really want to see what happens, and a lot of people do, just go on our website. You can sign up for either public tour class we offer menloinnovations.com menloinnovations.com yep. Yep.

And Menlo Prezi.

Menlo Prez is my Both my Twitter ID and my LinkedIn ID if they want Snapchat.

Don't lie.

I do not have a Snapchat. That's for my kids.

I know me to work it probably should.

I do have an Instagram account and they can attach to me there, but I think I have like 80 followers or something as you are. Right, exactly.

All right, always a pleasure. Thank you again for everything that you do and well, maybe when we get to 600 or something. Well, we can't wait that long.

It's too long.

Maybe 400 or something. We'll have you back on.

Hey, I might have an extra seat to the Michigan Ohio State game if you. You want to come up. Are you being serious? I don't know. I have to see who wants to come with me. My wife is.

You already said it on a podcast now, so you're kind of obligated now.

I'll keep you posted.

Hey, man. Oh boy. That would be something else. You know, I don't know if I would wear my Ohio State gear or not. I went to a game in the big house and I with a Michigan guy and I did wear my gear and all that and I didn't get beat up too bad or anything like that. I think actually the Michigan crowd is funny. Far nicer than the Columbus crowd. Not to say it too loud with the Ohio State across the way here, but Columbus crowd's a little rough, but.

Well, you guys have humbled us over the last number of years.

You know, it's funny, my 13 year old son, he's grown up a Buckeye fan, obviously because his dad is. And so all he's known since he's literally been able to understand what actually is going on is he's never seen Ohio State lose to Michigan. And last year, you know, the world, including myself, was sure it was going to happen. Right? I mean, Michigan was great, you know, Iowa State was eh. It did. And then my son was like, dad, of course they're gonna win. You know, he's so confident, you know, and I'm just, I've like, I grew up in a John Kimber era, you know, I'm like, you've never experienced pain?

Yes.

And it's gonna come and it could come this year. You just don't know, you know, don't ever assume that we're gonna win.

It's always a good game.

Yeah, it is. All right, well, hey, even if we don't meet up there. It's always a pleasure. Thanks again, Rich.

All right, take care, Ron.

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