Well, let’s get right into it. I was looking at Menlo Innovation and it’s such an amazing company, such a different company, too. And you have won numerous awards in this space for democratic workplace. Can you describe some of the culture and the operating of the company? What makes Menlo Innovations so democratic?
Well, I think for us culture is everything. We often talk about our culture in terms of intentionality. We say we’re very intentional about our culture. The intention we’ve chosen is an interesting word: joy. We’ve specifically chosen to create a culture of joy here. And for us, while many people talk about happy workplaces and happy workers and that sort of thing, our focus is actually external to our organization. We want the work we do to get out into the world.
We want it to be enjoyably used by the people for whom it’s intended. Well, if you choose this kind of cultural intention, you have to start custom fitting everything you do to that intention. And so what you see here, and it probably starts to express itself in these democratic kinds of ways, is a very team oriented culture. For example, when we bring new people on board, it’s actually the team that decides who gets to join the company. I have no say whatsoever even though I’m one of the owners of the company. When people join, it is the team that decides. And they actually decide by voting. They talk about it of course and it’s not the vote that is important. It’s the conversation. But the team decides who joins. The team decides who gets to stay. So it’s an interesting cultural norm from that standpoint.
So I think democracy often speaks to direct involvement of the participants in the culture and you see that a lot here. There’s a whole bunch of things we do here that feed into that democracy. The workspace itself. Just the other day, the team decided they wanted to completely reformulate the workspace, move all the tables around and form it in a different way than had been the case the day before. And it was their decision to do that. It was their decision as to how it was going to be laid out. Quite frankly, I don’t even get to decide where they put me. I showed up the next day and found my table in another place. There’s no corner office for the CEO. I just go sit where they put me. Because I figure they’re putting me somewhere where they think I would be valuable, that I would be needed. And so who am I to say where I should sit. It doesn’t really matter to me if they put me in a particular place.
Oh, that’s interesting. You know, you spoke about this when you hire people, it’s the team that decides and I want to maybe jump to that question because your culture is very important to you. So the people who work at Menlo Innovations are the key, right? To maintaining this culture you need the passionate people. You need the people in the right, I would say, fit, in terms of what you’re looking for. So what do you look for in people when you hire? And you spoke a little bit about the hiring process but maybe can you elaborate on that? Maybe let’s say someone is applying at Menlo Innovations. What sort of experience would they have?
So as you know, we’re strange on many different fronts. And the way we interview, the way we on board, the way we hire is considerably different. We consider the traditional hiring process to be one of the more broken things in corporate cultures. Usually in the interview process, there are a couple of people sitting across the table lying to each other for a couple of hours. You tell me what a great team player you are. I tell you what a great place this is to work and neither one of us actually knows if that’s true because we’ve never actually had a chance to experience it directly. And so here, we spend very little time looking at resumes, for example. We bring people in en mass. We interview them in a group. Because we work in pairs, which is part of our cultural norm, we work two people to one computer—we actually interview you in pairs.
We pair two interview candidates together. We give you something to work on and we simply watch you work for 20 minutes together with another human being. And we just take notes on what we saw. And what we’re really looking for, first and foremost, is a cultural fit. And the way we describe it here is do you have good kindergarten skills? Do you play well with others? Do you share? Are you kind? Are you understanding? Do you sense that the other person is struggling and if you do, do you help them out? This is the cultural norm we’ve established here.
And so therefore, we want to make sure that we’re fitting people to that culture. So we do this pairing during the interview. We change the pairs three different times during the course of the interview, 20 minutes each segment, and then we send you home. So imagine that, we’ve actually done an interview without asking you any questions whatsoever. We just simply give you a chance to work with another human being and we watch how it goes and then we talk about what we saw.
And so at that point, if you get through that first interview, and only about 40% of the people do—then we bring you in for a full day by yourself. You pair in the morning with one of my team members. You pair in the afternoon with another one. And then, again, we evaluate how did that go. And of course, we’re also giving you a chance to evaluate whether this is a good culture for you. Because we don’t assume that our culture is right for everybody. It’s different.
Some people want their little private cubicle and they want to work on things all by themselves. They want to put their ear buds in their ears and just silently click away at a computer, and that’s fine. We don’t have any disdain for that, it just doesn’t work at our company. And so if that’s the kind of work style you’re looking for, you’re not going to find it here so why should we hire you? No matter how strong your skills are or how smart you are, if you don’t fit our culture, we’re not going to bring you into the team. And so this is that idea of being intentional about your culture and then custom fitting every one of your processes to that cultural intention. Most companies have what I call the default culture: “Who did we hire? What attitudes do they bring in everyday and what behaviors do we choose to tolerate?”
What’s an example of the 20 minute work that you give to the first round of candidates? Do you have an example of what kind of work you would give them?
Fairly straight forward, paper-based exercises. There’s no computer involved. There’s no coding involved. It’ll often be a simple task around some critical thinking skill about project management or organizing a team or creating a screen design. But you’re all doing it with paper and pencil. So there’s no write up ten lines of Java code so we can see. We don’t do that.
This is very straight forward. It’s not necessarily a trivial task; we really do want to give you something to sink your teeth into. But what we’re really trying to do is get you to dive in an actually start working for 20 minutes, build a relationship with another human being, introduce yourself, shake hands, smile, maybe joke a little bit to make them feel comfortable. But we also want to see that you can, in the context of all that, can actually get something done.
You know, you have this unique culture within the company. But when you interact with customers, how is the customer experience different? Or is it different when they deal with Menlo Innovations?
No, the customer interaction is just as different as everything else. It has to be or it wouldn’t work. We spend a lot of time early on before you even become a customer giving you opportunities to learn about us. We do public tours. We do private tours. We do almost a tour a day at the Menlo Software Factory. In fact, right after this phone call, there will be 10 people coming in from Ford Motor Company to take a tour today. So this is a very common way to get to know us at first.
Because we’re so different, our customers need to understand both the difference, and the value of the difference. They need to conclude that we would be a good partner with them on their project. Because our cultural intention is that we want the software that we design and build to get enjoyably used and widely adopted out in the world, it requires a different kind of partnership with a customer. Our customers actually have to meet with us two hours a week every single week. They pick a day and a time that they visit with us. And most of them are local so they visit with us directly here at our office. Some of them are far away, so we visit with them electronically, although we will still try and get to their office or they get to ours about once a month.
So we make sure we want to build a relationship with our clients just like we want to build a relationship with each other. And so every week, you know, we have one client that we’ve been working on a staged project over six years. They come in every Tuesday at 3:00 and they visit with us. And the first hour or so is what we call a “Show and Tell” where they actually sit at a computer and show us the work we did the previous week.
Then they review the work plan going forward. They make adjustments to the work plan in what we call a “planning game.” And then they leave. And that planning meeting authorizes us for the work that we’re going to do for the coming week. And then, of course, a week later they come in and they touch the software that we’ve changed for them in the previous week and see how we did. And this continual reconnecting with our clients on a once a week basis, gives them a high degree of visibility into our work as well as the ability to steer their project to a successful conclusion. And that relationship building that we go through once a week with our clients is critical to the success of the project.
And I’m wondering if you have in your company, although its democratic, maybe someone called a project manager who interfaces with the customer. But do you have someone called a project manager or who plays the role of a project manager?
Absolutely, yes. Every project has a project manager that is the primary interface for a client. So the client, if they have a question about their project in the middle of the week, they call up their project manager. But the difference I think for us with our project managers is a lot of times the project management role in any company feels very hierarchical.
It feels like the project manager is the boss of the project, is in charge of the project. For us, the project manager is much like the pitcher on the baseball team. Yeah, they’re on the field but they’re just a member of the team and they have to be supported by everyone around them and they have a role to play that’s critically important to the success of the project. Everybody understands the role a project manager plays and everybody knows how to support that project manager in their role.
If I were to ask you about project management. What is your vision for the future of project management? I mean, how would you respond to that?
Well, I think our view of project management is structure without bureaucracy. People respond very well to structure. Children respond very well to structure. If you have a structured home, children can thrive on that. If you have a structured work environment, if you have a structured project management system, human beings can thrive in a structured environment.
As soon as you start layering bureaucracy—stage gate, committee reviews, meetings, sign offs, three-ring binders to describe the process itself and three-ring binders that describe the high level system requirements. As soon as you go to that level of bureaucracy, you begin to boil the humanity out of project management and it becomes a checklist. It becomes a cover your tail-end kind of system that, you know, there’s so many projects that fail that a project manager could stand back and say, “yeah, but I did my job right even though the project failed.” That’s just not our view of project management.
This has got to be a team activity. Everyone needs to feel as if they have a critical role to play in the success of the project. Often when things become bureaucratic and hierarchical, people have a place to point to and say, yeah, I’m surprised they didn’t catch that. I’m surprised that fell through the cracks. I’m really surprised that I saw the project failing the whole way and nobody saw it like I did. Well, that just leads to failure every single time and we don’t want that kind of failure here.
I see that a lot. They expect probably the PMO or maybe the program managers to start off own everything and say, yeah, I knew about it and I thought they would do it and they didn’t. The project failed.
That’s right. Exactly.
You know, what you’re doing at Menlo Innovations takes courage, I would say, and a lot of leadership. And for those out there, who want to, to some extent, create such a work environment as you have or aim towards creating a more joyful environment, what advice would you give them? Where should they start? What should they do?
Well, I view a lot of what we’ve done as an entrepreneurial journey. And whether you’re going to start your own business or you’re going to simply take an entrepreneurial spirit within your own organization, when I think of entrepreneurship, I think of it as a ‘journey to self.’ I would say that the journey I’ve been on for most of my career is a journey of self-discovery. What kind of environment do I actually want to be a part of? What kind of environment do I want to lead? What kind of environment do I want to have people remember me for long after I’m gone?
And for me, there was a point in my career where I was quite disillusioned. I didn’t want to be a part of this industry anymore and, quite frankly; it was an industry I absolutely loved. I think designing and developing software is one of the most unique endeavors that mankind has ever undertaken. And yet, I was losing my personal flame for what we were doing as an industry because of all the frustration I was experiencing. And I decided that the risk of staying the same was far greater than the risk of changing. And once I made that decision, racing towards change was actually running away from risk. And so many would describe it as courage. I would describe it as desperation. I desperately wanted to save my career.
For me, a lot of my inspiration comes from authors, comes from books, and comes from learning from others. And so I would encourage anyone on a similar journey, I would encourage anyone who is in their own personal trough of disillusionment to begin searching, as I did, for the answers that resonate with it. I don’t assume the organization I created here with my partners is the right one for anyone else in the world. It’s right for us because this is what we want to be a part of.
We aim to inspire others with our example, so that’s why we do all our tours. But we’re never so arrogant as to believe that the way we do things is the way everyone should do things. That’s a personal decision for everyone. But I would say that number one, simply be intentional about your culture. Be intentional about your goals and then begin looking at everything you do and ask “is what I’m doing fitting that cultural intention?”
How long was the self-evident journey? Was it one day you got up and had a lightning bolt and said, “oh no, now I’m going to do Menlo Innovations” I mean, was it over a period of weeks, months, maybe years?
There was, I’ll describe it in a couple of different modes. There were a couple of lightning bolt moments for me. Most of it, though, was years long searching. Most of it was reading books, getting inspired by authors, then looking back and saying “I’m not sure. You know, I just got inspired by this book, but what do I actually do with that inspiration? How do I form a new culture?” So I didn’t quite know what I was looking for. But the first big lightning bolt for me—there were a few little ones early on.
For example, probably two, maybe three books had greatly inspired me in my early search. Peter Senge’s book, The Fifth Discipline: The Art and Practice of the Learning Organization, was a very inspirational book for me. Peter Drucker’s book on management was also very inspirational for me. And Tom Peters’ book, In Search of Excellence was also very inspirational. For me, though, one of the challenges I had with those books is they described very interesting organizations, but they didn’t actually teach me how to build one. And so I was still left a little frustrated.
But in 1999, the big lightning bolt for me came sort of in two distinct events within a very close proximity to one another. There was a book by a guy named Kent Beck that came out called Extreme Programming Explained. And that book spoke so clearly to what I wanted to accomplish. It was as if I was reading a book by somebody who knew exactly the thoughts I was thinking and so it was very, very inspirational for me.
And then I saw an ABC News video on an industrial design firm in California called IDEO. And it was on redesigning the shopping cart in just five days. And literally within weeks after having read that book and seeing that video, I began transforming a team that I was a vice president of. And within six months had completely transformed that team to a new way of working. And I got two years to build the archetype. I got two years to practice all the things we now do at Menlo. And then the next lightning bolt was actually kind of a negative one I got hit by.
The internet bubble burst. The NASQAD crashed. And for the first time in my career, I was out of work. And that happened in 2001. And I didn’t get killed by the lightning bolt, but I did lose my job. And I woke up the next morning and I said “I’m an entrepreneur now. I’m going to start a new business. I’m going to take advantage of everything I’ve learned over the last two years and it’s going to be formed around these concepts. And my business partners and I formed Menlo innovations in June of 2001 and it’s been almost 11 years.
I spoke to Jeff Sutherland, who co invented SCRUM. Now, you can see the passion in what he’s trying to do with Scrum and it’s just great. It’s so contagious, I would say. It was fun talking to him. One last question, which I have, is what are some of your hobbies and interests? I know Menlo Innovations would probably be taking most of your time. But other than that, any particular hobbies, interests?
Well, certainly my greatest joy in life is my family. I have a wife and three daughters and they are always a source of joy for me personally. Beyond that, I am an avid reader, as you can probably guess from the books I’ve described. So I’ve always got my nose in some book. And getting outside, I love to do projects around the house. I love to build things with my hands. It kind of satisfies my inner engineer to rebuild the deck or do some project on the house. And just last night, I got out to my golf league. So I golf once a week. It’s springtime in Michigan, so golf has started up again so that’s a joy. And in the wintertime, I love to ski.
Well, it’s been a pleasure, Richard, and I do appreciate this time very much. Thank you so much for sharing.
You’re very welcome.