Build a Workplace People Love – Just add Joy

by RICHARD SHERIDAN

RICHARD SHERIDAN

Joy, Inc. author Richard Sheridan is also the CEO, Chief Storyteller and co-founder of Menlo Innovations.

Richard knew at 13 years old what he was going to do the rest of his career when he typed in a two-line program into a Teletype and the computer came back and typed back “HI RICH”. He was hooked. A year later, after having typed the entire Baseball Register into the computer, he won an international gaming contest for what would now be termed Fantasy Baseball. The amazing thing is that this all happened by 1972.

In 1973, Richard landed his first job as a programmer, creating the first email system at the Macomb Intermediate School District, a decade before the term email would even be close to a household word. He couldn’t believe people would pay him to do something he just loved to do as a hobby.

Webinar Transcript

Woman: Joy, Inc. author Richard Sheridan is also the CEO, Chief Storyteller and co-founder of Menlo Innovations. Rich earned a bachelor's degree in computer science from the University of Michigan and then followed that by earning his master's degree in computer engineering. After graduating, he worked his way through a number of Ann Arbor technology companies ending up at Interface Systems. At the midpoint of his career rise, he wanted out. He no longer experienced the joy that had first drawn him into programming as a kid. His work life was filled with weekends away from family, disappointed colleagues, and projects that were always in trouble. Rich knew that he had been on something at Interface Systems.

He learned how to build a great team with joyful culture. So he decided to do it again by starting his own company with three partners. On June 12, 2001, Menlo Innovations LLC was born. He and his partners decided that the company's purpose would be to bring joy to the world through software and to teach this method to others. Rich was featured on the cover of Forbes Magazine in 2003 sharing his hire yourself story with the world. Please welcome to Elevate 2015, Richard Sheridan.

Richard: Hi. My name is Richard Sheridan. I'm the CEO, co-founder, and Chief Storyteller here the Menlo Innovations. I'm also the author of the book called "Joy Inc.: How We Built a Workplace People Love." And today I'm going to talk about joy. But if you look at the title of my talk, there is an interesting composition of words there. Words that don't necessarily seem consistent with joy. There are words like love and fight and fear and embrace change and of course joy. Let's start with a story, a story about CIO I met a few years ago who invited me down to this office. He invited me down because one of his team members have visited our company. Gary had come to visit me and spent a day here, and Gary went back to his boss, Steve, and said, "Steve, we got to bring this guy down. We need what he's got in his company."

So Steve invited me down to his company, a major health insurance provider down south, and said, "Hey, Rich, I want to give you a tour of my operation. But before I do that, I need to talk to you about a few things." And he closes his door and he sat down and he told me, he says, "Richard, we had a disaster here last November on a project we were working on. It was a big project. It was an important project. We missed the deadline, we blew the budget, quite frankly, we didn't deliver any results." And he says, "I've got an ultimatum now from my CEO. CEO told me Steve, 'You hit that next date, April fourth or else.'" And I looked at him and I said, "Steve, or else what?" He said, "Well, he wasn't explicit, but I think you know what that means." I said, "Well, of course I do. But that ought to make April fifth around here really interesting." So Steve wanted to find out more about our company, what Gary had seen. Before I tell you any more of the story, I want to give you a peek inside of our company so you get a sense of what Gary saw when he was here.

 

Most organizations don't really spend much time thinking about their culture. Most organizations operate in chaos. Everyone wants to work on something that's bigger than themselves. I did. I started out in an industry that I was very excited about. Very quickly, I hit a trough of disillusionment and by 1997 when I was promoted to vice-president of product development, I wanted out. I wanted to get as far away from this industry as I could. And then in that moment, I decided to change the industry. And that's the story that I've captured in this book. People are coming from all over the planet to come visit this space that's in the basement of a parking structure in downtown Ann Arbor, Michigan and they are coming for a reason.

They're coming to see something. What most people are looking for is some lessons around what it takes to build an intentionally joyful culture. Imagine half of my team had joy and the other half didn't. Which half would you want working on your project? We had so many requests for these tours, we realized it was time to share the story with the world in a different way. And that's how the book came to be. This space is flexible. We work two to a computer. We assign these pairs. We switch them every five working days. The human energy that results from this kind of organization, you can actually feel the joy when you're in the room. My name is Richard Sheridan and I'm the author of "Joy Inc."

So Steve looked at me and he said, "Richard, how did you get here? How was it then you got to joy in your career? Because he says, "Around here, I'm about as far away from that as I can get." And I told him my story of going from early childhood who joy, very excited about this profession to a trough of deep disillusionment because I didn't want to be in the industry anymore. I told him about the times I was spend away from family on death marches. This is typical in our industry where programmers who are working 24/7 trying to hit a deadline and then we miss it, and we deliver poor quality to the world and the bug reports start coming in. And it always feels like firefighting and I was always spending time away from family, missing family celebrations and canceling vacations. I got to that point where my entire life was being driven by fear.

He goes, "Yeah, that's where I'm at, Rich. How do I get away from that? How did you get away from that?" I said, "Well, Steve, I had to create a new kind of culture, a culture that was about making mistakes faster." He said, "No, I don't want to hear that, Rich." He says I'm being punished now for all the mistakes I've made." I said, "Steve, this isn't about making mistakes. This is about making them quickly. It's not that we value making mistakes in my company. What we value is creating a culture where we can create them quickly, correct them while they're still small and quite frankly, correct them before they kill us. This is an important part of our culture here." He says, "How do you do that? How could you move from the traditional culture that's fear-based to one that's embracing mistakes one after another?" I said, "Well, that is a question of leadership, Steve."

The leadership that is required is one that realizes that pumping fear out of the room is probably one of the most important things we can do as leaders to create a healthy culture. I point to HVAC systems on [inaudible 00:06:57]. I point up into the ceiling and I said, "There's a metaphor for our culture. You see, what does an HVAC system do? It pumps cold air out of the room. That's what we want to do. We want to pump fear out of the room. We want to filter out ambiguity. We want to warm the air to a nice safe temperature, so we can pump safety back into the room. People feel safe, they begin to trust one another. If they trust one another, they begin to collaborate. And then, suddenly, teamwork emerges like you've never seen it before. And then you get to that place where everybody wants to be creativity energy, imagination, invention."

That's what companies want. That's the kind of culture I needed to create and make mistakes faster was at the core of that culture. I also had to realize that we were going to make big changes. We were going to tear down the old ways of doing things and put them back together in a new way. And the first big obstacle that I had to confront when I made this big change was the obstacle of sunk cost mentality, sunk cost. There're three forms of sunk cost thinking that paralyze any team. The first kind is, "This is just what we've always done and we have so much invested in the current processes. We couldn't possibly imagine tearing them down." But you have to. You have to be in questioning everything. The second form of paralysis around sunk cost thinking is that people are afraid to make decisions, to make changes because they're afraid if it doesn't work out, they'll be seen as people who do things that don't work. Another form of fear inside the organization.

And ultimately, if you do finally get over that hurdle and you begin making changes and you suddenly discover they're not working out, there's perhaps most deadly form of sunk cost thinking and that is you keep down the same path. You keep doubling down your bets just because you don't want to be seen as somebody who tries something that didn't work. So you just continue reinvesting in everything that's going wrong. We need to avoid all of those kinds of sunk cost mentality in order to make big changes to our companies, to our cultures, to give back to the human energy that drives all of our team. And the thing that diminishes human energy more than anything else is fear. And there are certain kinds of fear that are healthy kinds of fear.

We shouldn't walk into the street without looking both ways. Those are the kinds of fear that keep us alive. What I'm talking about is the kind of fear that is the manufactured in order to motivate people. You've probably seen that type of fear that generates just by having a boss going around saying, "Hey, how is it going? Hey, what you working on? Hey, are you staying this weekend?" Now that whole management by walking around and annoying people. This kind of fear can be debilitating. In fact, the story I tell in my book is that evidence of this kind of fear that played out at Morton Thiokol. Roger Boisjoly, a former insider at Morton Thiokol the maker of the infamous booster rockets and suspect O-rings that led to the explosion of the space shuttle Challenger offered the following thoughtful analysis of artificial fear at his company.

"Many opportunities were available to structure the workforce for corrective action, but the MTI management style would not let anything compete or interfere with the production and shipping of boosters." They wouldn't let anything fear including the reality that these boosters were suspect. The O-rings could fail under the right conditions. And of course, we all know, what happened. The cost of artificial fear to our organizations can, in fact, be deadly. Maybe not as an actually deadly as the explosion of the space shuttle Challenger, but it can kill a project. It can kill an idea. It can kill a product offering. It can kill market share. It can kill revenue lines. It ultimately can kill a whole company. We have to avoid that kind of artificial fear in our organization. And I will tell you that it begins with leadership. I learned how to manage with artificial fear when I was young. I had to unlearn that as I grew older.

And the word that fits into all of this, the word that managers yearn for is that word accountability. Well, let me tell you how accountability works at our company because it's different. I refer to it as circular accountability because I don't believe accountability can work unless it's two-way. I was at a company down in Atlanta talking about how we do accountability. I can tell you, the management team was excited to hear me use that word. There were like, "Yeah, Rich, you get to accountability. Tell everybody here how accountability is supposed to work." And I knew at that moment, the message I was going to deliver was going to be opposite of what they were expecting. See when I talk about accountability here at Menlo, I talk about in terms of how we do accountability around estimation. On a software team, you have estimate tasks and you try and hit those estimates, so you can keep projects on target.

But what I tell the team is the first accountability I'm going to deliver around estimation is accountability from me to you, from the CEO to the programmer. You will never ever be punished here for blowing an estimate. You will never be intimidated or cajoled to try and bring the estimate down. And in this way, by delivering this accountability to the team, I can ask for something in return, something very simple. As soon as you know you're going to blow the estimate, raise your hand, tell your project manager. Why would they be willing to do that? Because I've made it safe. I've made it so that they can raise their hand with confidence. We've actually taught our project managers to smile and thank people who deliver what is normally considered to be bad news to a project manager. Say, "Thank you. Thank you for sharing that information. Tell me what's going on." This is the key.

It goes back to that artificial fear component. Fear doesn't make bad news go away. Fear doesn't change bad news. Fear makes bad news go into hiding where we can no longer manage it. And I can tell you in this moment, when I was telling that company down in Atlanta the story about accountability, their VP of marketing Joe was upset with me. Stood up and he thrust his finger at me and he said, "Richard, this is bull. Let me tell you about how accountability works here." I can tell you the rest of the room went quite. He was fired up. I was pretty calm. He said, "Around here if you make an estimate, you're going to meet that estimate. I don't care if it's Friday night, you're not going home that night. I don't care if it's your kids birthday the next day. I don't care if it's Christmas morning. You're going to meet that estimate. That's how accountability works around here."

And I asked him a question. I said, "Joe, let's say that we switched to your version of accountability. Let's say, we go back to your version of this where I work. What might happen?" Literally like every cell in his body changed at that point and he looked and he says, "You know, Rich, here's what would happen. People would start lying about being done. Quality would begin to go down the tube. You start delivering inferior products to the marketplace. Your customers would begin to notice that your products don't measure up against your competitors. You start to get bad press. People would start not paying you for the work that you've done. You start to lose market share and revenue would begin to drop and everybody would become demoralized." He says, "Quite frankly, Rich, you would have at your company exactly what we have here."

He caught that right away. He understood the role he was playing in creating the kind of fear that destroys companies. I checked in with that company a couple of years later and that guy was never the same from that day forward. Joe had fundamentally changed because I was able to change his mindset when I brought him to the realization that he was at the center of the problem for the quality issues they were having inside of their company. This is why we talk about accountability in a circular fashion to make sure we know that it's everybody's job to be accountable for the results our organizations are producing for the world. We run a lot of crazy experiments here at Menlo. We plan with little folded pieces of paper. It's an interesting model because most people would expect a software company to use software for planning and yet we handwrite little index cards. We estimate them in hours and we fold the cards to the size of the estimate.

We'll use hot pink sometimes to denote the highest priority things just so we know relative priority, one versus another. A lot of people refer to us as the Amish of software development when they see our paper-based planning system. But it fits into a basic theme here at Menlo is we choose tools we believe work better for humans, and it fits into the broader theme of running experiments. I want to leave you with this simple story about experiments, a simple yet powerful story. And it's a story about dogs and babies and it's a fun story. You may remember the dogs and babies more than the point, but I do want you to remember the point and the point is this: run the experiment. Eight years ago, Maggie was born to Tracy and John. Tracy took three months off with maternity leave. She was ready to come back to work. There is only one problem. The daycare they were planning to use was full.

Grandparents lived too far away to help. Tracy didn't know what to do. She came into me and said, "Rich, I'm ready to come back to work." I said, "Great, we can't wait to have you." She told me the problems and I thought about it. In that moment, there were two voices yelling in my head that Tracy never heard. The first one said, "Don't you dare say what you're about to say. HR will freak out. The lawyers will be concerned. The insurance policy will probably go through the roof." The other voice said, "Heck, it's your company. You don't even have an HR department. Run the experiment." I looked at Tracy and I said, "Bring her in." She looked at me with bewilderment in her eyes and she said, "What do you mean?" I said, "Bring her into work." She said, "All day?" And I said, "Sure." She said, "Every day?" I said, "Why not?" She looked around the big open room that is Menlo and she said, "Where would I put her?" I said, Tracy, "She is not going anywhere. Put her in a bassinet on the floor where you would be working."

She said, "Yeah, but what if she makes a fuss?" I said, "Here it's like a noisy restaurant. You'll never hear it." She said, "Rich, what about that big baby fuss you know she is going to make?" I said, "Tracy, you're the mom. I trust you. You'll do the right thing. We'll work it out together." That's part of the experiment. Now, this is one of the challenges you're going have with running experiments. Look what happened between me and Tracy. She was the one throwing up all the obstacles, telling me why it wouldn't work, and I kept having to knock them down with one simple phrase. Let's run the experiment. Let's see, what happens. Now, isn't she cute? The thing is that's not Maggie. That's little Ellie, Menlo baby number eight in eight years. We're actually up to Menlo baby number 13 now.

And the beautiful thing is when you run experiments, sometimes there are surprising results. Yes indeed, Maggie fussed, but it was someone in the team that had rescued the baby. With Ellie, we found out she liked the pair program. We found out she actually did really well at design meetings. Henry came back to visit every now and then, Menlo baby number seven. He came back to visit with Tracy and Fern [SP] in this picture. And then we found out something incredibly delightful. We found out that our customers behave better when you bring a baby to the meeting. Who knew? We just thought it was a delightful part of our culture, and they became more energized, more engaged, more thoughtful realizing that what we've created here was special and quite frankly, they liked being a part of it. Joy, no question.

Having children in the office, for us, has been a delightful addition to our culture. This is Henry learning how to manage. "Hey, how is it going? Hey, what you working on?" Walking around the office. And then this happened. Another part of our experimentation culture. We've always had dogs in our office. That's always been a part of our culture but in this case, the gentleman in the orange shirt is our customer and he called us up before the meeting and said, "Hey, do you mind if I bring Buster to the show and tell today?" We said, "Who is Buster?" He says, "It's my Great Dane." I said, "Yeah, sure." What was interesting about this was Michael couldn't bring Buster in where he worked. But he wanted to participate in our culture. It wasn't that he had a bad office and they didn't want dogs. It just wouldn't have been appropriate for him in his office. But here, he wanted to be Menlonian. He wanted to be part of our culture and so he brought his dog in here. Buster was delightful. He was a great part of our culture every time he visited.

I need you to think about how to move your organization forward. The simple phrase we use here at Menlo is run the experiment. When you go back from this conference, when you read a book, when you attend some other conference, when you hear a speaker, when you're motivated by any idea, and you run into someone in your office and you share it with them and they look at you and say, "That won't work here. That's not us. I don't think that'll work." You just look them in the eyes and say, "Yeah, I know. Let's run the experiment. Let's try it before we defeat it."

I wrapped my discussion with Steve, the CIO of that health insurance provider down in the South, and I knew he was in trouble. I'd met his CEO. I could see the fear that he was generating and I didn't think it was going to work well. I didn't think Steve was going get anywhere. And I was right. A few months later, Steve was fired. Of course, then the CEO [inaudible 00:21:27] the problems from that point forward. I've checked in with that company since then and they still haven't improved. They still haven't really changed their culture. This is hard. I don't blame them for that. I understand that making the kind of changes that are required to fundamentally change your culture may be one of the most difficult journeys you can take but quite possibly the most rewarding. What I want to tell you is pierce the veil inside of your organization. Get to joy, run the experiment, increase the human energy of your team. It's worth it.

If you have questions about what you've heard from me in this presentation, if you'd like to come and visit us, if you'd like to follow us on social media or perhaps read a copy of my book, all of that information is here. It's been captured for you on a simple URL, menloinnovations.com/joy/elevate. We would love to see you here in a tour sometime in the future. But know that we want to share what we've learned with you however that works for you. I really appreciate the time we've spent together today, and I hope that this was meaningful and useful for you as you go back to your organizations and try and bring joy to the company you work at. Thank you very much.

Most organizations don't really spend much time thinking about their culture. Most organizations operate in chaos. Everyone wants to work on something that's bigger than themselves. I did. I started out in an industry that I was very excited about. Very quickly, I hit a trough of disillusionment and by 1997 when I was promoted to vice-president of product development, I wanted out. I wanted to get as far away from this industry as I could. And then in that moment, I decided to change the industry. And that's the story that I've captured in this book. People are coming from all over the planet to come visit this space that's in the basement of a parking structure in downtown Ann Arbor, Michigan and they are coming for a reason.

They're coming to see something. What most people are looking for is some lessons around what it takes to build an intentionally joyful culture. Imagine half of my team had joy and the other half didn't. Which half would you want working on your project? We had so many requests for these tours, we realized it was time to share the story with the world in a different way. And that's how the book came to be. This space is flexible. We work two to a computer. We assign these pairs. We switch them every five working days. The human energy that results from this kind of organization, you can actually feel the joy when you're in the room. My name is Richard Sheridan and I'm the author of Joy Inc.