Why You Should Learn About Menlo Innovations
I’m almost embarrassed to say that up until a few months ago, I had not heard about a small, Ann Arbor-based software consultancy, Menlo Innovations. Normally, no one would be embarrassed by not being aware of a small company, but as a University of Michigan College of Engineering grad, albeit quite awhile ago, and a fairly frequent visitor to Ann Arbor, I hoped I would be more in the loop on Menlo, a very innovative company which was founded by Richard Sheridan, James Goebel., Bob Simms, and Tom Meloche in 2001.
You see, Menlo is not just your ordinary software consulting company. Menlo runs their company quite differently from most companies. Richard Sheridan, Menlo’s CEO, has written two books, Joy Inc. and Chief Joy Officer, that go into detail on Menlo’s practices and the ultimate mission of Menlo, and he is a frequent speaker about both Menlo and leadership topics. Menlo also offers tours, both virtual and physical, of their workspace and their practices in action. They are the opposite of secretive - they actively seek to share their practices with the world in support of their mission to return joy to technology.
Today, I am going to let you know why you should learn about Menlo Innovations if you have not already heard of them. Once you are done reading this, I hope you will sign up for one of their virtual tours and read one or more of the books so you can see their ways of working firsthand.
Menlo’s practices, such as pairing (pairing isn’t just for developers at Menlo), deep customer interactions, open workspace, ultra-transparency, and extreme programming, just to name a few, are interesting in their own right, but not necessarily novel. What separates Menlo from most other companies I have seen is the way they intertwine mission, culture, practices, and rewards to reinforce and support the success of the company, the employees, the customers, and the community.
Menlo has a set of guiding principles that are fundamental to the way they operate on a daily basis. These principles are not just for show - you will not only see reminders of the principles on the walls of their workspace, but also echoes of the principles in the essence of many of their processes. These principles act as guardrails to keep team members from going too far astray and, just as importantly, they assist team members in making decisions on courses of action on a daily basis, resulting in much quicker decision making than in many places where one or more levels of approval or sign off are required before action can be taken. In the book Chief Joy Officer, Sheridan uses the analogy of positive stability used in airplane design where the plane is designed to get back to level flight in the face of turbulence without pilot intervention. Menlo leverages its principles, processes, culture, etc. to act as positive stability for their projects and the company as a whole. In other words, doing the right thing is both natural and frictionless, while doing the wrong thing feels abnormal and painful. This is great execution of organization design that works well when creating a new organization or transforming an existing organization (where we want to make the new desired behavior seem natural and frictionless). The principles, processes, and culture that work for your organization will most likely be different from those at Menlo, but Menlo’s execution of their organizational design offers a great lesson in how to do so successfully.
Menlo has a very team-oriented culture. They value contributions from everyone in the company and are focused on success at the team level. As Sheridan states in Chief Joy Officer, “We couldn’t care less about individual performance, especially when it comes at the expense of the team.“ That’s not just lip service. Menlo reinforces this value through team structure, hiring, and financial rewards. Everyone at Menlo works as part of a pair, and these pairs change weekly. Therefore, even the basic unit of work is team-oriented, not individual-oriented. The Menlo hiring process first filters candidates based on how well they help others be successful, before even technical skills. Kindergarten skills is what they call it. If you don’t posses kindergarten skills, you won’t work at Menlo. And talk about putting your money where your values are, bonuses from the company’s profit-sharing plan are split evenly (based on hours worked during the year) across every Menlonian, regardless of their level or years of experience. That’s how you know they are deadly serious about this being a team sport. There are no mixed messages and no room for confusion.
The next thing that really resonated with me about how Menlo operates is the way that they use artifacts to enforce or encourage desired practices. An excellent example of this is how they work with clients to plan out their work for the upcoming week. Every pair’s capacity is represented by a physical 8.5” x 11” sheet of paper. Clients select cards representing the work stories they want the pair to work on for the week. Each of the work cards is sized according to the amount of time the pair has estimated the work to take to complete. The weekly capacity of a pair is 32 hours (the rest is taking up in scheduled meetings/events), so an eight hour story card is sized to take up 1/4 of the sheet of paper. If the client wants to select more than 32 hours of work for the pair, this will become very evident as the cards won’t all fit on the sheet of paper. Therefore, they’ll either have to pare down their selection of work cards or they’ll have to add in an additional pair. The sizing of the cards and the sheet of paper representing pair capacity is a visceral way to support Menlo’s values of everyone working no more than 40 hours per week.
Similarly, teams use a work board, both physical and digital, to represent the stories they are working on for the week and the status of each story. The board has rows for each day of the week and a string is placed horizontally on top of the current day of the week. The string, along with the color coding of status on each card, servers as a visual indicator of whether the team is ahead, on track, or behind on their committed work for the week. This reinforces the values of transparency, teamwork, and commitment. Anyone in the company can tell with a quick glance how the team is executing on this week’s work. If one pair on a team is ahead of pace and another pair is behind their intended pace, the team that is ahead can take on additional stories to help the team meet its commitment to the client.
Perhaps the most remarkable thing about Menlo is their mission. Menlo’s mission is “Being intentional about restoring JOY…to technology”. It’s very rare to find a company whose explicit mission is to bring joy to all - users, employees, customers, and community. Joy is something that I think most of us would agree is highly desirable, yet almost none of us set out to build a company whose main purpose is to produce joy. I’ve been fortunate to experience joy at work in pockets throughout my career, but it was not set out explicitly as our mission., and all too often ephemeral. I find Menlo’s mission personally inspiring and hope that I can do my part as I work with my clients, colleagues, and community to bring some measure of joy to them. Of course, Menlo is still a business and required to produce valuable work for their clients and achieve a profit to sustain the business. However, they do all that in the pursuit of bringing joy which is both novel and, in my mind, wonderful.
Regardless of whether Menlo’s individual practices are right for you (in fact, many may not be), we all should learn from their example of how to build a mission-oriented organization where every aspect of the organization (people, processes, structure, culture) is aligned to support the mission and success of the organization. If a few more people decide to build organizations that explicitly seek to produce joy while sustaining the business, the world will likely be better off and certainly more joyful.
Finally, I want to thank Todd Feak for asking me several months ago if I ever heard of Menlo Innovations. Without Todd asking the question, I’d still be in the dark.
Oh, and to sign up for a virtual tour of Menlo Innovations, here is where to go.