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My guest for Episode #220 of the My Favorite Mistake podcast is Rich Sheridan, the 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 the author of two books — first, Joy, Inc.: How We Built a Workplace People Love, and then his latest, published in 2019, Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear.
I’ve interviewed Rich twice in my “Lean Blog Interviews” podcast, we’ve crossed paths at conferences (such as the upcoming Michigan Lean Consortium event), and I’ve been able to visit the Menlo Innovations office in Ann Arbor (2014).
In this episode, Rich shares two favorite mistake stories from his time as a senior leader at a previous company. Why did one mistake change his life? How did the second mistake help him put himself in the CEO's shoes?
Rich also kindly endorsed my new book:
“At Menlo Innovations, one of our favorite phrases is ‘Make Mistakes Faster!’ It’s not that we like making mistakes, we just prefer making small mistakes quickly rather than BIG mistakes slowly. The difference comes from creating a culture where we are safe to share our mistakes. In The Mistakes That Make Us, author Mark Graban teaches all of us how to do this and shares story after real story of the benefits. It would be a BIG mistake to ignore this wisdom!”
Questions and Topics:
- Why the title “chief storyteller?”
- How do you define “joy” in the workplace?
- What’s your role as CEO in helping others find joy or be joyful?
- Joy vs. happiness?
- Deming connections: pride, fear
- Why is eliminating fear so important to you and Menlo?
- You say, “one of your favorite phrases at Menlo Innovations is ‘Make Mistakes Faster!” — tell us more about that…
- “Fear makes bad news go into hiding…”
- “Let’s run the experiment” — tell us more, “try stuff and see if it works”
- Being open to small mistakes as a way to avoid big ones? An experiment in working with you?
- “Without the stories, Menlo doesn’t make sense”
- Paired work
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- Full transcript
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Automated Transcript (Likely Contains Mistakes)
Mark Graban (0s):
Episode 220. Rich Sheridan, CEO and Chief Storyteller at Menlo Innovations.
Rich Sheridan (7s):
Well, my personal favorite is one that actually changed my life.
Mark Graban (15s):
I'm Mark Graban. This is My Favorite Mistake. In this podcast you'll hear business leaders and other really interesting people talking about their favorite mistakes because we all make mistakes. But what matters is learning from our mistakes instead of repeating them over and over again. So, this is the place for honest reflection and conversation, personal growth and professional success. Visit our website at MyFavoriteMistakepodcast.com to learn more about Rich, his company, his books, and more Look for links in the show notes or go to MarkGraban.com/mistake220. Well Hi everybody. Welcome. back to My Favorite Mistake.
Mark Graban (56s):
I'm Mark Graban. Our guest today is Rich Sheridan. He is the co-founder CEO as as he describes Chief Storyteller at Menlo Innovations. They're a software and IT consulting firm based in Ann Arbor, Michigan, they've earned numerous awards and press coverage for their innovative and positive workplace culture. So Rich beyond that is the author of two books. His first book was called Joy, Inc.: How We Built a Workplace People Love. And his latest book was published in 2019, Chief Joy Officer: How Great Leaders Elevate Human Energy and Eliminate Fear. So, Rich Welcome to the podcast, How, are you today?
Rich Sheridan (1m 31s):
Great, Mark. Wonderful to be with you. Good to see you again.
Mark Graban (1m 34s):
Yeah, it's good to see you. For people who are watching on YouTube, we're getting a little glimpse behind you of a workplace people
Rich Sheridan (1m 42s):
Venmo environment. Yes.
Mark Graban (1m 44s):
Okay. Hi. Rotating the camera. Hi. The back of your colleagues there. And, and when Rich says, good to see me again, it's good to see him again. You know, compared to some guests who are sort of meeting for the first time during a pre-call, I've interviewed Rich twice in my podcast series called Lean Blog Interviews. We've crossed paths at conferences, including the Michigan Lean Consortium. That's the, the polo shirt. Rich is wearing there today. are you gonna be at the, at at the conference again this year in August?
Rich Sheridan (2m 15s):
You know, I don't know. Okay. I may well be it. You know, it is hard to turn down an opportunity to go to Traverse City, Michigan in August.
Mark Graban (2m 25s):
Yes. Yes. That that is true. And it's a great organization and a great event. So, I'll be up there again this year. I hope to see you or some of your, your colleagues. I saw Rich speak of that conference last year and then I've been able to visit now. It was not this office. Different Menlo Innovations office, previous office back in in 2014. You've moved.
Rich Sheridan (2m 44s):
Yes. We just moved about five months ago, so we're just settling in still
Mark Graban (2m 50s):
No longer in the, no longer in the basement. You're moving on up, right?
Rich Sheridan (2m 53s):
We have, I would say we have sunlight, but it's Michigan in spring. We have natural light right now. Sunlight will come in the summertime.
Mark Graban (3m 1s):
Yeah. Yeah. We're almost there, you know. So, Rich, we're gonna have a chance to talk about your books and a little bit more of the culture and, and what you're doing there at Menlo. I wanted to ask first, before getting into the favorite mistake story, the title Chief Storyteller. Like, tell, tell us a little bit about what that means to you, how that came to be.
Rich Sheridan (3m 20s):
Yeah, it was kind of a title anointed onto me by the team. And Mark, as you know, we, our culture is interesting enough that thousands of people a year ignore the pandemic years Of course would get on airplanes, travel from all over the world to come visit us, spend anywhere from a day to a week, learning about our culture, learning about our practices, our processes, and so on. We share what we've learned with the world. There's nothing, we're trying to keep a trade secret. We are an open book for the world to come visit. And Of course, I lead a lot of those tours. I teach a lot of the classes we teach, not all of them Of course.
Rich Sheridan (4m 2s):
And in the process of sharing what we've learned over the course of the 22 years of Menlo and my own personal 20 years before that I find, the best way to share that is through story telling, stories of triumphs and tragedies of the past, stories of vision of the future, of where we're headed, what we're trying to accomplish. And the team eventually became quite enamored with my storytelling prowess because I was doing it so often. And they just tapped to me on the shoulder one day and said, rich, we're gonna add this title to your business. Chief Storyteller. Yeah.
Mark Graban (4m 38s):
Well, so now that doesn't set any pressure here. I'm gonna ask you to tell, I'm gonna ask you to tell a story, but I, you know, I don't know if it's from your time at Menlo or different things you've done before, you know, Rich. Thinking back, what would you say is your favorite mistake?
Rich Sheridan (4m 55s):
Well, my personal favorite is one that actually changed my life. Back in around 1997. I was a senior level leader at a public company here in Ann Ann Arbor called the Interface Systems. Bob Niro, the CEO, who was two or three levels above me, brought me into his office and made me an offer And. he said, Rich, I, I've heard a lot of good things about your leadership, your skills, how you helped direct the technical efforts of our teams. Cause I was embedded in the r and d part of the company, And. he said, I would really like to promote you, maybe not tomorrow, but over the next year or so, to head up all of the r d I wanna make you the VP of r d of all of interfaces, which kind of a neat offer.
Rich Sheridan (5m 47s):
Right? You know, one of those career moments, I think I'd been out of college then by about 15 years. so it felt like the right kind of timing for me. And, and I looked at him and I said, no way.
Mark Graban (6m 1s):
Wow.
Rich Sheridan (6m 3s):
I said, I am not interested in signing up for the uncapped personal commitment that comes with being a VP at a troubled public company. Mm.
Mark Graban (6m 15s):
Why? Well, why, why, why troubled And, and what would Yeah, what did you think would be involved then?
Rich Sheridan (6m 22s):
So what I had witnessed Mark over all these years at that point was that, you know, and this, and I was part of it, so it wasn't like I was innocent of all of this, but I was seeing projects that were failing on a regular basis. Phones ringing off the hook with quality problems of software we'd already put out in the world. Missing deadlines, blowing budgets, having unhappy users, unhappy customers, unhappy s project sponsors within the company. It was, I mean, I was literally coming out of a trough of disillusionment at this point in my career. And here's Bob saying, and now I want you to take over all the R&D efforts for the company.
Rich Sheridan (7m 4s):
And I was part of a unit that was having this trouble, but I knew all the other units were too. And so why would I sign up for all that trouble? And Bob, who is a very gentle guy, I will tell you, he's one of the most wonderful human beings you meet, threw me out of his office yelling at me. This isn't the way he remembers it. Certainly the way it felt for me that he was, he was a upset with me that I didn't grab this position. And, you know, but I thought, I, I, I can't do it. Now, interestingly enough, and you and I have probably read many of the same books over the years, Tom Peterson's In Search of Excellence, Peter Drucker's book On Management, Peter Senge's book, The Fifth Discipline on the Art Practice of Building a Learning Organization.
Rich Sheridan (7m 53s):
I had been studying organizational design principles for much of the last 15 years. Cause I knew there had to be a better way. So I went home that night after having told my boss, no And, he was relatively new to the company. He'd only been there a year or so. So here I am, you know, almost abrogating a relationship with a guy who's gonna be my big boss. Right? And, and I thought about the opportunity put in front of me, and I thought about what I wanted to do in my own career. I thought about this picture of things can be better. I didn't know exactly how, but all these books I've been telling me is, there are companies that had achieved this greatness.
Rich Sheridan (8m 35s):
They didn't actually, the books didn't actually tell me how to do it myself, but, but at least gave me hope that there was a better picture. And So I went in the next morning, and if I could see Bob again, and I said, Bob, I'll take the job on one condition. Now you can imagine Bob's looking at me like, wait a minute, what do you mean one condition? You just went on me yesterday. And I said, no one condition. He says, what is it? I said, I need your help. I said, I wanna build the best damn software team that this town has ever seen, and I can't do it without you.
Rich Sheridan (9m 18s):
And, he looked at me saying, what on earth happened between yesterday afternoon? Yeah. This morning. And I told him my journey. I told him my story. I told him what I was wanting, wanting to accomplish in my career, what I thought was possible that I never gotten to. And I didn't even know how I was gonna get there. I just knew that this was the kind of opportunity that comes once in a lifetime. And I'll tell you, mark, that the reason This is My Favorite Mistake. That literally changed the course of my life, that discussion that day.
Mark Graban (9m 52s):
Wow. And I mean, it's good you had the opportunity to have it. I mean, you said Bob threw you out. He didn't fire you but you.
Rich Sheridan (9m 59s):
No, it was more like, Okay, I gotta go to plan B. I don't know what plan B is. Yeah. You messed up everything for me. You know, and it was like, you were the guy Rich, you were the, I thought you were the guy. Clearly I was wrong, you know, and And, he was right. I was the guy. I knew that. And, and Bob and I are still incredibly close friends to this day. And I tell him, beyond a shadow of a doubt that Menlo Innovations would not exist today, where it not for his influence in my life back at systems.
Mark Graban (10m 36s):
So it sounds like what you're saying, the, the mistake was saying no, but you were able to recover from that at least.
Rich Sheridan (10m 43s):
Yep. Well, I think a lot of us probably make decisions and we wonder, do we have to stick with those decisions? Because I could have gone home that night and said, well, I threw that opportunity away. I wonder when the next one will come. And I decided, Nope, I'm gonna reconsider. And, you know, and part of that was eating some humble pie. Mm. Right. Yeah. Cause it was not a pleasant conversation with Bob the previous day. So I had come in a little bit detail between my legs and say, Hey, I, I've thought about it again. Yeah.
Mark Graban (11m 16s):
Well, it's interesting. I mean, your recollection of it sounds like, I mean, he, he didn't, he wasn't prepared to, in that first discussion, to try to convince you, apparently he heard you say, no way. And it must have sounded real definitive or, I mean, it seemed like chance he could have probed or help me understand, or let me convince you.
Rich Sheridan (11m 37s):
I think he, and and it wasn't like the first time he had hinted at this kind of thing, but this was the first time he was making it entirely clear what my career path was going to be. He even, even cleverly threw in. He says, you know, Rich, you have those three teenage daughters who are gonna want to go to college and are gonna get married someday. So I think, you know, the, the stock options we're gonna put in your, you're gonna help quite a bit with that. Which he was right about all fronts. But, you know, I think he had thought he had built a plan. I think he had thought he had done all the homework he needed to do, and this was just confirming everything.
Rich Sheridan (12m 22s):
And I look at him and say, not interested.
Mark Graban (12m 25s):
Right. So I mean some, some mistake. So
Rich Sheridan (12m 29s):
Yeah, he thought it was a done deal as I was walking in the room. So maybe it was both of our favorite mistakes, you know, at that point. So,
Mark Graban (12m 37s):
Yeah. Well, so then you, you, you ended up down that path. I mean, you, you told him or he agreed to give you help. How specific did you have to be in terms of saying, Hey Bob, here, here's what I mean by help. Or what types of action?
Rich Sheridan (12m 50s):
Yeah. You know, I didn't, I will say I didn't know at that time Mark exactly. Like, I didn't know how hard it was gonna be. What I, what happened in that night for me was a change of conviction. I went from trough of disillusionment to, I'm excited about the unknown of the future. I am interested in doubling down on my effort to figure out how can I turn this thing around. And quite frankly, for two years from that conversation forward, all I did was try harder. And I'll be honest with you, it didn't work.
Rich Sheridan (13m 31s):
I mean, yeah, did things get a little better? Yeah. But it was like 5% better, 10% better. I needed like 200% better in order to really escape. But two years in, I met my co, my future co-founder James Gobel as a consultant. I read a book by a guy named Kent Beck on a new way of programming team organization called Programming. And saw the industrial design firm IDEO highlighted on Nightline as they redesigned the shopping cart just five days. And it literally produced this click moment, which those come when you prepared your mind for so long.
Rich Sheridan (14m 11s):
You've gone through some painful episodes, you've had some nascent thoughts about how to get it. And then all of a sudden click everything became clear. And that's when I really needed Bob. Cause the kind of change I was about to make was actually going to be expensive. And So, I put together a plan. This is maybe my second favorite mistake.
Mark Graban (14m 35s):
Yeah, okay. Bonus story.
Rich Sheridan (14m 36s):
I don't know if you ever get two, but we
Mark Graban (14m 38s):
Can sometimes go ahead. Yeah.
Rich Sheridan (14m 40s):
But I went to Bob telling him what I wanted to do with my technical team. And I told him I wanted to teach 'em object oriented programming. And I wanted to organize how they worked and all that. And I wasn't connecting with Bob. You know, he could hear the words, he could tell I was excited And, he was encouraged by that Of course. And then he started asking me the key question that every CEO would ask somebody like me, who was heading up the most expensive part of the company. He says, how much is it gonna cost me? Right? And I said, Bob, the money doesn't matter. Mm. I said, this is so critical to where we're going as a company. And so on. He's like, Rich, you're scaring me. How much is he gonna, he,
Mark Graban (15m 19s):
He did, he didn't agree with the whole, the money doesn't matter.
Rich Sheridan (15m 22s):
So I told him, I said, Bob, this will be at least a million dollars to get this transformation going. And. he threw me out of his office again and again, I thought through, I tried a few more times, he wasn't biting. And one day I came back to him and I said, Bob, I've been thinking about this really hard and here's what I see happening. Interface Systems is running out of cash. We're a public company. We're meeting quarterly as the executive team. We're meeting with board members and the cash is gonna run out before I get the new products. You're counting and I'm done And.
Rich Sheridan (16m 2s):
he goes, yep, that's a good assessment, Rich. I said, I know how this works. There's only three hour outs out of this secondary offering on the public markets. Sell more shares, private equity placement. We go private, somebody acquires us And. he goes, yep, those are the only three options available to us. I said, Bob, any one of those options, they're gonna send a due diligence team interface systems. They're gonna look at our people, our process and our products. They're gonna come to my end of the building. And I said, we're not gonna pass muster. That deal will fall through and we'll go bankrupt. I said, that's why I need to do this deal.
Rich Sheridan (16m 42s):
He signed off on it that afternoon. What was the difference? My mistake was I was talking to him in terms, I understood, yeah. My realization after the mistake was I had to put myself in Bob's shoes. What were the challenges Bob was facing? I had to learn to speak Bob's language. Mm. Once I did that, he in now the support was now he was introducing me. He was bringing me to board meetings to present what I was gonna do. He was introducing me to significant shareholders of the company to double check. Cuz Bob was careful. I mean, he is running a public company. He has to be. But all of those people bought in.
Rich Sheridan (17m 23s):
And so literally over the next two years we worked together to transform interface systems into something that looks like Menlo does today. Yeah.
Mark Graban (17m 32s):
Yeah.
Rich Sheridan (17m 33s):
Wow. And every, every time I slowed down, Bob would put his gentle hand on my shoulder and say, Rich, I got you covered. You're doing the right thing.
Mark Graban (17m 40s):
Yeah. Yeah. Wow. I mean, I think there, there's, there's definitely some great generalized advice there about when communicating or pitching something, whether that's to your boss, to
Rich Sheridan (17m 53s):
Customer
Mark Graban (17m 53s):
Customer, to put yourself in their shoes and speak their language and talk about benefits as much as the, you know, not not just what we're gonna do, but here's why, why it matters, why we should do this.
Rich Sheridan (18m 6s):
Yeah. And my Mistake In that conversation early on was I was just, I was spewing out all the technical jargon. Yeah, right. We're gonna learn Java, we're gonna learn object-oriented programming, we're gonna learn how to do automated unit testing program. Bob's like, okay, is that important? You know, it's like you seem really excited about it, Rich.
Mark Graban (18m 26s):
Yeah. So then after, well, I'm sorry.
Rich Sheridan (18m 29s):
No, I was just gonna say, and his question was, what will I get for all that investment? You know? And just having smarter programmers wasn't particularly interesting.
Mark Graban (18m 38s):
Yeah. So then how long did you continue down that pathway then before starting Menlo?
Rich Sheridan (18m 44s):
So, James and I, I brought James in as a consultant. We paired together and moved everything forward and we rebuilt interface systems within about six months and ran it that way for two years. Two years from 1999 was 2001. Yeah. The internet bubble at Burst interface systems. Exactly as I predicted. Mark Tumblewee communications took an interest in us, sent a due diligence team to interface. Within six months of the conversation I had with Bob, they came in, they came to my end of the building. They looked at my, my newly retrofitted people, my newly retrofitted process, and the newly building products.
Rich Sheridan (19m 29s):
And they bought us like that for 10 times the share price of the day that I talked to Bob. So that happened within six months. Wow. And Bob, to this day, credits that sale to what I had done with my team. So, so the prediction came exactly true. They bought us in September of 2000. And by April of 2001, they had to shutter every remote office had, not cuz of trouble at interface, but because of trouble at the parent organization. Yeah. Their stock had slumped. They had been buying everything with shares and they had to shutter every remote office they had, including our Ann Arbor office.
Rich Sheridan (20m 14s):
And so that afternoon I'm going home with, you know, no job, no paycheck, no stock options. The number for the unemployment office was rattling around in my head somewhere. And I told my wife and she said, what are we gonna do? And I said, well, I'm not unemployed, honey, I'm an entrepreneur now cuz they can't take away what I had learned in those two years. And that become the, became the basis for what would become him. Menlo innovations.
Mark Graban (20m 39s):
Yeah. And then you, you have that opportunity then to really explore some of these different ideas and different ways of doing things. You know, there at Menlo and you know, you've written two books with the word joy in the title. Why, how, I mean, first off, how do you define joy in a workplace setting? And then what's your role as, as CEO in, in helping others find joy or be joyful?
Rich Sheridan (21m 4s):
Sure. Yeah. And I differentiate mark between joy and happiness. I don't think you can do the hard work of any company without and and be happy every minute, every day. At least not without medication. Joy is the much longer arc. Yeah. And for, for people in more technical professions, engineering professions, in my case software, I believe there is only one definition of joy for a team like mine. And that is to see their work get out into the world and delight the people. It's intended to serve so much that they come back later and say, I love what you've created.
Rich Sheridan (21m 46s):
Your work has made my life better. That is joy for our team. When we see the work of our hearts, our hands and our minds deliver to the world. That's what I was being denied in my previous trough of disillusionment days. We ever shipped it all, we were shipping poor quality usability. Everybody was frustrated with it. We were phone calls were ringing off the hook saying, this doesn't do what I needed to do. It doesn't solve the right problems. Even when it does, it doesn't do it correctly cuz there's bugs and errors. And it was like, oh my gosh, there is zero joy in that. Right. And I love the Deming quote That says, all anyone asks for is a chance to work with pride.
Rich Sheridan (22m 27s):
Yeah. In those days of bugs and errors and missed deadlines and blowing budgets, there was no pride in those days. Right. Now what we see is our regular and systematic ability to deliver quality work to our clients that actually is used. Yeah. And through the people it's intended to serve the end users of the software. That's how we define joy. Now, I don't believe for a second you could produce that kind of joy in the world without having some joy in the room. Yeah. So there's a lot of things we do. And I would say you asked, you know, what's my role in all of this? I think number one, my role is to inspire. And the way I do that is through storytelling.
Rich Sheridan (23m 9s):
I think the chief storyteller title is actually probably my most important.
Mark Graban (23m 13s):
Yeah. Yeah. The, the Deming connection that you make there that we're talking about, books that we've read, similar influences there. Deming would talk about, he would use words like pride and joy. And I mean, kind of going in a different branch of literature there. I mean, it sounds like you're helping get people further up toward I, think what Maslow called self-actualization. Right. Not just providing a paycheck and a steady job, but just the, the, that that sense of accomplishment that they can, that they can feel good about. They're delighting bringing joy to customers then, I mean, feeling good about your work. That that's, that's real important. Yeah.
Rich Sheridan (23m 54s):
You know, and Mark, I will say we p pay our people well here, but we're not at the top of the scale. You know, anybody here who works here for any amount of time can lead Menlo tomorrow and find a higher paying job somewhere else. My view of the word compensation, if we look at the dictionary definition of compensation, to me it's, if you have a table that's out of kilter, the the four legs aren't even and the table's wobbling. You know, like the restaurant table sometimes you get at where your beer's gonna tip off because the table's wobbling. Right? Yeah. What do we do? We, we stick some coasters under the leg that's short. We compensate.
Rich Sheridan (24m 35s):
I think the word compensation in our professional work environments is one where Of course we have to pay you a lot of money. It sucks to work here. Your life is out of kilter. We have to compensate
Mark Graban (24m 49s):
Right
Rich Sheridan (24m 50s):
On that. And, and I'm not saying we get away with paying our people low wages. Right,
Mark Graban (24m 54s):
Right, right.
Rich Sheridan (24m 55s):
But they're not walking out the door saying, why am I working here?
Mark Graban (24m 60s):
I mean,
Rich Sheridan (25m 1s):
If I gotta work in a sucky environment, I'll at least go work somewhere. I can make more money.
Mark Graban (25m 5s):
Yeah. Right. Yeah. I mean that's, that's all really important. And, and and having that, that that pride and joy and that connection, you know, to, to what they do really matters. There's another Deming word that, that you talk about a lot. You know, Deming would say eliminate fear. You knows, you've talked about and written about why, why tell us what that means to you. Because I, I think sometimes, you know, people might hear that phrase and they might have different interpretations and they might say, well, isn't a little bit of fear good? I mean, if we fear or competition or Well, but what, how do you explain this?
Rich Sheridan (25m 38s):
Absolutely. There is no question that a certain amount of fear keeps us all on our toes. We should fear not being able to make payroll. We should fear going outta business. We should fear our tribal competitors. Absolutely. Why, why wouldn't we do that? We, why, why we look both ways when we cross the street. Right. Right. You were getting hit by a car. The, there are the fears. Fears that actually keep us alive every day.
Mark Graban (26m 1s):
Right.
Rich Sheridan (26m 3s):
The fear I talk about is the one that I think there must be some special class at every business school in, in the world that teaches you how to try and motivate people by artificially manufacturing fear.
Mark Graban (26m 17s):
Right. Yeah.
Rich Sheridan (26m 19s):
And, you know, and, and it sometimes market can be as simple as a raised eyebrow in a meeting or a here we go again. Right. Right. I mean, you think about those feelings in a business meeting where the top guy is like, great, wonderful. We go again. Yeah. All of a sudden what happens? Everybody's blood pressure rises, their adrenaline starts pumping and the most interesting part of our brain shuts down because we are afraid the part of our brain that's gonna produce creativity, imagination, invention and innovation gone. Yeah. We're now in full reptile brain.
Rich Sheridan (27m 1s):
And I will tell you, there is no benefit to any business on planet earth these days where you're not gonna move faster and further ahead if you, if you don't have creativity, imagination, invention and innovation. Right. And it's more critical now than ever. And so we have very explicit, I i i it's not rules but sort of concepts here about fear One is when we're interviewing, we pair people during the interview cuz we do pair work here. You can talk about what you want. We pair people during the interview and we tell you your job.
Rich Sheridan (27m 41s):
You're paired with another candidate who's competing for the same position you are. We say your job is to help the person sitting next to you succeed. Make your partner good. Demonstrate good kindergarten skills. And this is teaching them our culture from the moment of first contact, because that's the way it works here. We tell them our interview process is trying to weed people in rather than weed people out. And people are like, what? I mean, every interview process I've ever had, they're trying to like cut everything and eh, push half the, you know, throw resumes out before they even talk to the people and all that kind of stuff. Like why would we do that to human beings? Why don't give them the best chance to succeed?
Rich Sheridan (28m 21s):
Some other big statements here make mistakes faster.
Mark Graban (28m 24s):
Yeah. Is
Rich Sheridan (28m 25s):
That cause we prefer making Mistakes, we're human. We prefer not to make any Mistakes. What we prefer to do is make small Mistakes quickly so we can correct them before they kill us. Yeah. Right. Right. And one of our big posters in the room is fear doesn't make bad news go away. Fear makes bad news go into hiding, you know? Right. My favorite statement about the Toyota culture is no problems is a problem. Right. Right. And their charts will have red dots on 'em. There's other large automotive organizations where their charts are always all green. Yeah. Right. And if it's always all green, you're not gonna figure out what do we need to focus on? Where should we focus our attention?
Mark Graban (29m 5s):
Right. And it similar, I mean this is all, it seems like it's all very interconnected. Reducing fear of admitting these small Mistakes means that you know about them. And then it sounds like the focus then is on learning and iteration and, and, and progress. So if, if, if there's this fear of well, you know, you can never be wrong. You can never fail even on a, on a small scale Yeah. That, that gets really harmful, dysfunctional. Right?
Rich Sheridan (29m 34s):
Yep. Yeah. We we're a recent customer of ours, you know, it takes a while for a customer to get used to us. And this one hasn't yet. I will just say and talk to me in six months, whether, you know, maybe my next biggest stake was actually letting this customer in the room. But they sat in a meeting with us and they, they pointedly said, I don't ever wanna hear you. Hear you guys say, I don't know. And don't ever tell me. You're just guessing what the answer is. Right.
Mark Graban (30m 9s):
You're being honest. Right. I mean, right. I mean,
Rich Sheridan (30m 12s):
One of the biggest posters in our room is it's okay to say, I don't know. It's like, oh my, I got some teaching to do for this customer. Cause let me tell you, there are gonna be a lot of times doing what we do for a living that we just don't know and we're gonna tell you. Right. Rather than fake it, you know?
Mark Graban (30m 29s):
Right. I mean, what's the difference? I mean, Toyota people are, are fond of, of, of trying to draw out what do we know and if we know it, how do we know it versus what's an assumption or a hypothesis or a guess until real information kind of fills in behind. And there's another phrase you use I was gonna ask you about, let's run the experiment.
Rich Sheridan (30m 50s):
Right? Yes.
Mark Graban (30m 51s):
Tell tell us more about that.
Rich Sheridan (30m 52s):
Yeah. So, you know, I think a lot of companies get paralyzed. Somebody has a new idea, they wanna try something. And the initial instinct is, well let's take a meeting.
Mark Graban (31m 4s):
Hmm.
Rich Sheridan (31m 5s):
Maybe if it's a bigger idea, well we'll form a committee to write a policy about that. Right. Any of those approaches is gonna kill the idea and a second. And you kill enough ideas in succession ideas stop flowing. Yeah. Here our attitude is take action versus take a meeting.
Mark Graban (31m 23s):
Yeah.
Rich Sheridan (31m 24s):
Let's try stuff and see if it works and if it doesn't stand in it. And so our favorite phrase is, yeah, I don't know if it'll work. Let's run the experiment. Well this lifts the human energy of our team. Right. Because now you got a place where people are like, Hey, I'm running an experiment today. I'm trying this, I don't know if it'll work. It's okay. We run experiments all the time here and guess what you wanna do? Continuous improvement. And I think Mike Rother would be right there with us in this conversation. Run a series of small experiments and then pay attention to what actually happens. Right. Right. Cause the biggest disconnect in experimentation is you only run experiments where there's a known result.
Mark Graban (32m 4s):
That's not,
Rich Sheridan (32m 5s):
That's not an experiment. Exactly.
Mark Graban (32m 8s):
That's, there
Rich Sheridan (32m 9s):
Is no learning going on there.
Mark Graban (32m 11s):
That's experiment theater, perhaps.
Rich Sheridan (32m 14s):
Yes. Yes, that's right.
Mark Graban (32m 15s):
Call it that. But yeah, I mean, just that ability to go and test an idea. And you, you, you know, you talk earlier about small Mistakes versus big Mistakes and these different situations and you know, there's a difference between, you know, wanting to run an experiment. I'll think of an example from Conexus of like the way we run a webinar, the way we facilitate a webinar. I might have an idea, someone else has an idea. We, we talk it through, we think about here's how we think it's gonna work. Maybe we'll do a little testing, we'll learn something and then we'll do something differently in a, a public way. And we might say, well what, what, what's the worst that can happen? Like, really. Okay. If there's something that goes wrong.
Mark Graban (32m 56s):
No, I mean, fine, let's run the experiment. It's pretty risk free. As opposed to, back to your example of, you know, the thing of the busy street behind you. I wanna run an experiment of blindfolding myself and just trying to cross the street. My hypothesis of cars will stop. Like, well come on. That's not, that's not really a reasonable experiment to run. Right.
Rich Sheridan (33m 13s):
Yeah. It, it's a little bit hilarious that you had mentioned that because Ann Arbor being Ann Arbor in the University of Michigan in the Center for Mobility and that there are a lot of experimental autonomous vehicles running down the street. So I'm trying to imagine putting the blindfold on and walking out in front of the other experiment that's going on where somebody's got a self-driving vehicle, you know? Yeah.
Mark Graban (33m 38s):
Yeah. But I mean, there's a progression of experiments I bet. When you're developing something new. Right. You know, what, what small scale or what private, I'm sure the people doing the autonomous vehicles do a lot of testing in ways that eliminate the risk. Like testing in a big open, empty parking lot or something before moving it out into slightly less controlled environments. It might be a reasonable progression that is focused on learning and iteration instead of this bureaucracy of like, oh, we gotta have it all figured out before we try.
Rich Sheridan (34m 7s):
Yeah. And what I love about the way we work and the way the Agile software development communities evolved over the last 20 years is this idea of iterative and incremental approach to software where you do small cycles. That plan, do, check, act cycle. In our case, we do it once a week. And you know, I remember one time early on when we were doing this in interface systems, long before the word agile was coming into the forefront, we were just doing iterative and incremental. And one of my old time engineers, the cod engineer looked to me And. he goes, if this was such a good idea, why didn't NASA do this when they went to the moon?
Rich Sheridan (34m 48s):
And I looked at him, I said, that's a great example they did. He says, what do you mean? I said, well, do you remember Mercury that went like suborbital? And then they put a dog in and they put a monk in and then they put John Glenn in And. he went around the earth and Alan Shepard. And then they tried to walk out and then there was Gemini and then there was, you know, and, and we just did it recently, right? We just sent the Artemis one capsule, unhand around the moon and come back again. Yeah. A lot of people would look at that and say, well, what a waste of money they should have put the people in. No, given what SpaceX did yesterday, we know where we don't put the people in right away. Right. Because we're pushing the envelopes of things everywhere, everywhere we can.
Rich Sheridan (35m 31s):
So we're gonna take those measured approaches, those small experiments, try it out, see what happens, learn from it, and then try the next one. Or abandon. That's okay too. And what, what I love about the word experiment, because when you say the word experiment, people are like, oh, well yeah. I mean it might not work, but let's try it.
Mark Graban (35m 53s):
Right. So we, it's funny, I wanted to probe a little bit more think. It's fascinating you brought up the idea without naming names, Of course here of like, if a customer's getting used to working with you and you know, trying to find fit or they're, they're doing an initial, an experiment, whether they're framing it this way, they may have s they may view it as we've made a decision to work with Menlo Innovations. Is, is how, how do you go through may maybe ask a, a broader question cause maybe there's parallels. So you talk about interviewing, you talk about, you know, selling and, and and, and maybe choosing which customers are the best fit for you. Are what, what have you learned about trying to maybe minimize the time where the customer or you or the candidate or you end up thinking, oh, this was a mistake?
Rich Sheridan (36m 43s):
Yeah, so we, one of the things we look at Mark, is that the human relationship between our teams is more important than the technology that we're building. And so what we look for are what are some small projects kinda like dating a new customer, right? Because by the time we really get into a project, it can last years Absolutely feel like we've married our customers. And, and I will tell you when that happens, it is delightful. We have, we have multiple clients that have been with us for 10 years coming back with project after project after project. And they know how we work, they know why we work, they know what its value is.
Rich Sheridan (37m 26s):
They can play our little orchestra here as well as we can. But those early customers who fantasize that software is easy and that just, yeah, you've done this a hundred times before, you know, you should be able to stamp this out in a week. We will start with smaller projects, smaller engagements, start building the human relationships, start to see where the disconnects are, and quite frankly start telling some stories. Cause I will tell you, without the stories, Menlo doesn't make sense. Mm. We pair people in a big open room, we switch the pairs every five days. We write these automated unit test frameworks around the code, which means half the lines of Cobra writing at least are test lines that won't ship with the actual product.
Rich Sheridan (38m 13s):
And people who fantasize the software disease are like, why are you doing all this? Sounds really expensive. Well it is until you consider the expense of the cost of delivering poor quality. Right. A product that doesn't meet the user's needs and never gets used.
Mark Graban (38m 26s):
Right.
Rich Sheridan (38m 27s):
Right. If you spend 2 million with us and the product actually launches successfully in the marketplace versus 1 million with somebody can do it half as cheap as us, but it never gets used. That feels like a divide by zero A.
Mark Graban (38m 43s):
Right. So our guest today, Rich Sheridan, CEO in chief storyteller at Menlo Innovations, I'll, I'll put links to the company and his books and, and previous podcasts that I've done with Rich before. But lemme lemme ask one other question before we wrap up. Rich, you know, back to this idea of doing things differently. Menlo Innovations, you talk about the interviewing process might not be everyone's cup of tea. Same thing might apply, you know, with, with customers and, and, and you're trying to find, you know, people who are fit to that style of work. You mentioned earlier the paired work, which I think has origins in paired programming, but you've extended that. Tell, tell us a little bit more about that.
Mark Graban (39m 24s):
Not just the paired interviewing, but now the paired work and Yeah.
Rich Sheridan (39m 28s):
Yeah. When people come to visit Memo, they're looking at a lot of different things. We we're very visual management oriented company, which appeals a lot to the Lean community Of course. We do paper-based planning, which blows the minds of people in my industry. Like, aren't you using software for this? And we tell them we choose tools that work better for humans, but the part that they're just blown away by, even if they knew it when they were coming in the door that they were gonna see it is two programmers, for example, sitting side by side of one keyboard sharing a keyboard and a mouse working together all day long. Then they find out our high tech anthropologists work like that. Our QA people work like that.
Rich Sheridan (40m 8s):
And they see evidence of this everywhere in the company. And they're like, why do you do that? Doesn't that double your cost? Well, you know, the simple example with programming is yes, indeed it would double the cost. If you believe for a second that the, that the cost of programming was directly related to the programming or the typing speed of our programmers. Right. If that was the case, we would just teach our programmers typing, you know, we would just give 'em typing classes. Right. But everywhere at Menlo, what we are doing, and particularly the innovative projects we work on for our clients, you know, building custom software for all kinds of stuff is, is a problem solving contest.
Rich Sheridan (40m 51s):
And we are typically solving problems. No one has ever solved more, not just Menlo. And so two people are always better at solving problems together than they are apart and solving. Well, the other big problem that we avoid is this what I call the Tower of knowledge problem. I will tell you, you'd show me any software team that works in a traditional fashion, and I will ask the executive, tell me the first name of one of your towers of knowledge and they will snap 'em out like that Eric, bill, Susan, Jim. Like, great, what if they left tomorrow? If they left tomorrow, I'd be out of business. Right. I literally had a multi-billion dollar life insurance company here.
Rich Sheridan (41m 35s):
And they said if four of our programmers leave, we won't be able to conduct our business. Wow. Can you imagine that, that they were willing to take that kind of risk given they're an insurance company.
Mark Graban (41m 46s):
It's
Rich Sheridan (41m 46s):
Like you guys are supposed to be mitigating risk, not Right. Not endorsing it. And so, you know, and Tower of Knowledge problem in the software industry is incredibly strong. Yeah. And we don't have that here. No one here owns a piece of line of code. You know, the pair switching means that everybody has knowledge of what's going on, which means people can take vacations without taking laptops with
Mark Graban (42m 10s):
Yeah, yeah. And, and it seems like, boy, when when a company is beholden to those towers of knowledge, it's maybe a reverse situation. Bob asked you, Hey Rich, you've got daughters who are gonna go to college and weddings to pay for could then flip, were those college of know towers of knowledge? Come to the boss and say, Hey, hey boss, you're, you're, you've got kids coming to college soon. You, you wanna get your bonus, don't you?
Rich Sheridan (42m 38s):
Right. Yeah. I once asked an executive, I was talking to him about Towers of lounge. He goes, yeah, but Bill's so happy here. I said, really? Let's go talk to Bill. So we did, we walked down the hall, we found his tower of knowledge and I said, bill, if you won the lottery tomorrow, are you coming to work the next day? And Bill smiles, he says, absolutely. And the boss is just beaming. See how happy Bill is? Bill says, yep, I'd come in, throw my cell phone in the garbage, say goodbye to all my friends and I'm outta here. And the boss is like,
Mark Graban (43m 10s):
What? Yeah. Wait to hear the full answer there. Yeah,
Rich Sheridan (43m 13s):
Exactly.
Mark Graban (43m 14s):
But, but back to that question of what do we know versus what are we assuming to be true? I mean, you could go in and ask an employee, you might get an honest answer. You never, you know. Yeah.
Rich Sheridan (43m 25s):
Well and why would Bill be willing to offer such a blatantly honest answer possible Cause his boss can't do anything about it
Mark Graban (43m 34s):
And that could get ugly or toxic or dysfunctional
Rich Sheridan (43m 37s):
Of course it does. You tell me, you show me one tower of knowledge and I'll show, show you your most cantankerous employee. Yeah. Why? Because they're trapped in a prison they can't escape from
Mark Graban (43m 49s):
Without joy. Yeah. Yeah. There's a different path. Go from jail to Joy
Rich Sheridan (43m 54s):
Because you know a lot of people, well they'll just quit. Yeah. But you know what? If you go into the boss as a tower of knowledge and Bill goes in and says, Hey boss, I'm quitting and I found a job down the street, you know what the boss can do? He's gonna throw $50,000 more bill and then Bill's gonna stay. But Bill's still miserable. And eventually due to that two or three times, bill has priced himself outta the market and now he is trapped in a prison he can't escape from. And I will tell you my view is humans do not trap well ever.
Mark Graban (44m 25s):
Wow. That's well said. Powerful thoughts there, rich. So thank you. And I do wanna thank, speaking of pairs, when there were some emails going back and forth about getting this scheduled, I've gotten used to this interacting with you and Menlo. I get an email that's signed, like in this case Lisa and Victoria.
Rich Sheridan (44m 43s):
Thank
Mark Graban (44m 44s):
You. Thanks. Thanks to them both. It's only one email address, but there was a pair
Rich Sheridan (44m 48s):
And the neat thing about that is Victoria just went to Iceland a few weeks ago and Lisa's got a big vacation coming up. Guess what? Your level of service wouldn't change at all because they're not both gone at the same time.
Mark Graban (45m 4s):
That's very cool. Very cool. So Rich, thank you for being here. It's great talking to you again, as always, Rich Sheridan, co-founder, CEO and Chief Storyteller of Menlo Innovations. His two books again are Joy Inc. and Chief Joy Officer. Is there a third book in you at some point?
Rich Sheridan (45m 24s):
Percolating Roundup here, but no contract signed for such.
Mark Graban (45m 28s):
Okay. But we'll look, look forward to that and encourage people to go check out those previous books. So Rich, thanks. Thanks for what you do. Thanks for what, what you shared, you know, not just here today, but in general. Really appreciate it.
Rich Sheridan (45m 39s):
You bet. Mark, thanks for having me, and congratulations on your new book.
Mark Graban (45m 43s):
Well, thank you. Well, thanks again to Rich Sheridan for being our guest today. For links and more information about Rich, his company, Menlo Innovations, his books, and more, look in the show notes or go to markgraban.Com/mistake220. As always, I want to thank you for listening. I hope this podcast inspires you to reflect on your own Mistakes, how you can learn from them or turn them into a positive. I've had listeners tell me they started being more open and honest about Mistakes in their work, and they're trying to create a workplace culture where it's safe to speak up about problems because that leads to more improvement and better business results. If you have feedback or a story to share, you can email me MyFavoriteMistakepodcast@gmail.com.
Mark Graban (46m 27s):
And again, our website is MyFavoriteMistakepodcast.com.