Leading Wisely

Listen to Ricardo Semler's Podcast

As the CEO of Menlo Innovations, Richard Sheridan has plenty of experience of doing things in a completely different way. From challenging the very idea of what a “boss” is to undoing all of the preconceptions that we have around how an organization is supposed to run. He’s been so successful in his approach that he wrote a wonderful book called, Joy, Inc.: How we Built a Workplace People Love. Today, Richard speaks with us about scaling his ideas up for larger organizations and how his team is planning for the year 2027.

Ricardo Semler:

Tell me a little bit about where Menlo Innovations is right now and what challenges you see on the horizon?

Richard Sheridan:

Yeah that's very timely question for us because we're actually working on our 10 year vision for the company right now. We've decided that February 11, of 2027 is kind of an interesting day in the history of the company. That will be the celebration of Thomas Edison's 180th birthday and we are going to have a party to celebrate. So, we're going through a visioning process where we're actually describing that day in utter detail. We’re answering questions like, “What's happening?”, “Who's at the party?”, “Why are they here?”, “How do we know them?”. “How did we come to know them?”, “What kind of conversations are going on?”, “Who works here?”, “What former employees are coming?”, “What are they saying about us?” and so on. And essentially we're using that backdrop of the party conversations to describe the future version of Menlo Innovations: How big are we? How many people work here? As you can imagine, it’s a daunting task.

Ricardo Semler:

Why do you feel that this is an important process?

Richard Sheridan:

The idea is fundamentally built on a belief that we all carry around ambition in our heads - this idea of where we're heading. But, when we don't share that vision with others and when it doesn't become a commonly shared vision amongst the whole team, it's likely that we’ll wander from it. We won't take explicit steps to get to that future state. So, our aim is to create an inspiring shared vision that is written down and communicated to everybody to help guide us towards our future.

We've always had a strong mission statement but “mission” is a lot like the North Star - it just points us in a direction. The vision is very explicit. The vision is what we imagine we're heading towards and it also tells us how we’ll know when we get there and how will we know we're taking the explicit steps to get from where we are today to where we've going. This whole process is very inclusive process - the whole team is participating. This means that this isn't just the vision of the founders even though we'll have a strong voice in the process.

People will ask, “So why do you want to grow? Why don't you stay just where you are?” So James and I talk about that with the team. What are we hoping to accomplish? This isn't just growth for growth’s sake. It’s not that we want to be bigger so we can make more money because I don't think that's inspiring to people. There has to be an aspect of this that is both inspiring but has to be strategically sound. If we said we're going to be a five billion dollar company in 10 years (which we're not saying, by the way), but if we did say that, I'm probably not going to be the leader. I'm probably not the guy to run a five billion dollar company that's not likely in my wheelhouse. And so, therefore, maybe I'm not the guy here anymore. But, quite frankly, in this particular vision I am still here even though I’ll be 69 years old at that point. I still plan on working.

Ricardo:

But, it’s possible that after the 10-year vision process is complete, that you might find a completely different role for yourself. How many people are participating in this exercise?

Richard:

We have a team of 50 here and, in one way or another, everyone is participating in the visioning process. We're making it is inclusive as possible. They're not writing the vision per se, but they are contributing ideas and feedback. I also think the visioning process itself is assisting in creating the shared vision component because it may be that there are some people that get to the end of this process and say, “you know, this is really interesting, but I don’t think this is the company I want to work for.” So they decide to leave and go somewhere else and that’s okay. As you know, we're not trying to force anybody out. But, on the other hand, it's better for them to know where we're going as a company and choose to stay or go rather than just assume anything. At the end of this, they will know what kind of company we are. That idea has been a big part of our in our history. That’s why I was able to write a book about what we've created here and the book itself has become a bit of a piece that communicates quite clearly to anyone who might want to work here or stay working here what we're all about.

Ricardo:

How do you do find a common denominator between this process that you're trying to put forward and your hi-tech, anthropology desires? How do you put the tribal version of this and your vision together?

Richard:

Yes. I love the tribal concept because we certainly are a tribe here. We call ourselves “Menlonians” and we use a plastic Viking helmet to control daily stand-up meetings and so on. There's definitely a culture that evokes a tribe of Menlonians. And the way we drive this point home is literally through storytelling - and the stories we tell are the stories of joy. What kind of joy are we trying to produce in the world and what impact does that joy produce? And so that is a fairly continual discussion here.

We do one to three tours a day here and thousands of people come from all over the world just to see us. The tours happen in one big open room and so the team overhears (or tells themselves if they’re leading the tour) the stories of joy and the story of where we’re heading over and over again. They hear what kind of impact we’re trying to create in the world, who we serve, and all of our other values. So, that’s the common denominator here that underlies everything we do. We may end up in a different style of business in terms of the exact services and offerings we have, but it's very clear that we can talk about joy and we can talk about the impact that that joy creates for the people we serve.

Ricardo:

You’ve built an amazing corporate culture, obviously, but what about the people who say, “That’s great, but you’re only doing it with 50 people? We have a humongous company with thousands of people”?

Richard:

There’s two ways that I approach this. The first way is that I look for examples of larger companies that have learned to use something at a much bigger scale than us. I probably have talked about Semco from time to time. W.L. Gore is interesting to me from that standpoint - they’re a company operating at a scale of 10,000 with a structure that's very similar to ours.

Secondly, I also ask a pointed question which often makes people very uncomfortable. It is seldom that any organization literally has thousands of people working on one thing. An organization is usually a consolidation of teams of 50 all flying a common flag. We have the University of Michigan right near us which is a big public university with 40,000 students and probably just as many employees. There is no one unit of the university that's probably as large as Menlo. They are a bunch of little units. They are all sort of little fiefdoms that fly a common flag. So, the questions are, “How do you scale a culture? How do you scale a mindset or a belief system?” We’ve thought about that. I don't know that we'll ever get to 1500 people, but I am intrigued by the question and I am fascinated with companies who have learned to operate at a much larger scale than us and yet haven't lost their mojo.

Ricardo:

The big issue for these organizations probably will be “How do I make these 57 groups of 10 work together if their ideas do not add up to one common thread?”

Richard:

When I look at what’s happened to Ford recently I see the impact that Alan Mulally, a single individual, had when he entered into this company from Boeing. It was an existential crisis for Ford. His simple leadership approaches were able to turn that ship around incredibly quickly. A couple of people left the company along the way, but he didn't have to fire people to do it. He galvanized the entire corporation as one individual. I don't know Mark Fields. I know of him. I don't know him as a leader or as a person or anything like that, but what a mantle of leadership that was passed from Alan to Mark. It’s incredible to me that when you see those examples of leaders of any size organization who communicate in a clear, concise way. Both Alan and Mark were able to galvanize people they will probably never meet. You know the size of Ford Motor Company, there’s no way Alan could have met everyone. And yet he was still able to turn that ship around? Was it universal? Did it impact every level and layer of the organization? Likely not, but it did enough to not only get them to survive but to get them back to a thriving place.

I find that whole process of leadership just utterly fascinating and that’s where I spend a lot of time in books trying to figure it out. I'm staying in learning mode and trying to learn from others, but I also think leadership is has such a personal component. There has to be a part of it that just comes from my heart, my upbringing, and my wiring. I realize that I can't read a book and go be like Ricardo Semler. I can't read a book and go be like Alan Mulally. But, I can certainly learn from them and start to internalize it. How does that change me as a leader? How do I lead that organization that grows? How role should I play and how do I adjust? I know I'm not the right person yet today to be the leader of that larger organization and I'm imagining I'm going to have to change in this process.

Subscribe to our newsletter for bi-weekly inspiration & the latest news on the future of work.

Get inspired