The Office of Happy: Hiring, Firing and Promoting by Consensus

The Office of Happy: Hiring, Firing and Promoting by Consensus

Menlo sparks joy among their 55 employees.

Why you should care

Michigan software company founder Richard Sheridan just wants everyone to be happy. But is that a real business strategy? 

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If you ask Richard Sheridan what dooms a shoddy piece of software to failure, he’ll drop a somewhat graphic comparison: that of an organ transplant gone wrong. “As soon as it gets injected into an organizational structure,” the 61-year-old tech entrepreneur says emphatically, “it’s rejected.”

Why? Because it simply doesn’t “delight” users. He asks, “How many times do people, when they touch a new piece of technology, think to themselves, ‘Did they ever actually watch anyone use this?’”

The same thinking has led the co-founder of Michigan-based software firm Menlo Innovations to the most unusual of management styles — a workplace where hiring, firing and promotions are all carried out by consensus of the whole team. Sheridan has been on a yearslong mission to promote, within his own business and among many others, what he believes is the single most important factor in any company: joy. He’s even written two books on the topic. Whether satisfying clients or keeping employees happy, Sheridan believes no workplace is complete — and no product truly successful — without joyful people.

These methods have increasingly grabbed industrywide attention, attracting some 3,000 people to Menlo’s office each year.

While that sounds like common sense, Sheridan believes it’s rare. He toiled through a somewhat inauspicious first half of his career utterly unsatisfied, and although he attained financial success, he says he got there largely through creating “manufactured fear,” the way he claims many companies are run. For a wide-eyed programmer who graduated the University of Michigan in the early 1980s, the best possible moment for computer geeks to have entered the job market, it was a journey that didn’t quite lead to the success he’d expected.

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Sheridan has been on a yearslong mission to promote joy.

“I was trapped, and I was stuck, and I was scared,” Sheridan says. So he turned to books and, through careful study of better business practices over the course of two years, began laying the building blocks for what would become Menlo within the “tired, old public company,” Interface Systems, in which he’d served as a senior officer.

In 2001, with co-founder James Goebel, Sheridan launched Menlo — and along with it, a fresh start. From the outset, the firm implemented a set of unconventional measures Sheridan later detailed in Joy, Inc.: How We Built a Workplace People Love. Employees work in pairs, make communal personnel decisions, work strict 40-hour weeks and are peer pressured to stay off the grid during vacation. Meetings — “mind-numbing, spirit-sucking, energy-draining devices of management,” according to Sheridan — are mostly shunned, and targets are communicated clearly rather than in, say, ambiguous percentages.

These methods have increasingly grabbed industrywide attention, attracting some 3,000 people (including representatives from McKinsey & Co., Progressive insurance and even the Utah Transit Authority) to Menlo’s office each year to see what they’re doing right. In this sense, Sheridan and his company appear a decade or two ahead of the curve. According to Sonja Lyubomirsky, a professor of psychology at the University of California, Riverside, an ever-increasing batch of studies are now focusing on just how much more productive, creative or even healthy a satisfied employee can be. “If you’re happier in the workplace,” she says, “you’re going to do better.”

That’s not to say Menlo’s methods are a silver bullet — or for everyone. By Sheridan’s own admission, some decision-making processes take more time because he and Goebel “tend to avoid a ‘command-and-control’ management style.” In other words, it can get frustrating when employees just want a higher-up to make a call already. Ultimately, though, both Menlo co-founders believe it’s worth the trouble to build the team’s collective decision-making capacity.

Either way, it’s a high-quality product that matters most. Here, Sheridan and Goebel extend their belief in joy to their customers by imagining what the end user values most. That’s why the team is made up of what they describe as high-tech anthropologists — whose goal is to thoroughly research a user’s day-to-day experience and apply it to the software they design for clients.

Take, for instance, a program that helps auto mechanics perform wheel alignments. “We would go to a mechanic’s shop, a garage somewhere, and watch the mechanic actually performing a wheel alignment,” says Andrew Muyanja, who has been with the company for four and a half years. “What do they do? How far back are they standing from the computer?”

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Joyful employees of Menlo.

It’s this level of attention to detail to the experience of both user and employee that Sheridan — a persuasive, disarming salesman from whom you might actually want to buy something — believes sets Menlo apart. “We want to deliver things that actually work reliably,” he says in an endearing Midwestern drawl, “and at a level of quality that, quite frankly, I had never imagined was possible.” That Sheridan is happily married (his wife also works at Menlo) with three grown daughters and two granddaughters certainly helps complete the picture.

Menlo is still a small company of 55 employees and $8 million to $10 million in annual revenue, the kind in which it’s entirely common to shout out the day’s news to the rest of the office instead of holding a meeting. Gluing several dozen employees into a more cohesive and communicative team is far more feasible than at a company of much greater size, So how could a larger company, perhaps bogged down by institutional legacy, possibly achieve Menlo’s kumbaya factor?

First, Sheridan cites several more prominent companies, such as multibillion-dollar packaging giant Barry-Wehmiller, that he believes have attained, through years of exploration and visionary leadership, the “same level of joy” that Menlo has. But, more importantly, he believes that even in massive bureaucracies, managers can start small by reforming their own teams and hoping the example catches on.

Besides, Sheridan suggests, there’s not much of an alternative. “This isn’t about ‘easy,’” he says. “This is about ‘important.’” Organ-transplant-level important.

Read more: The French finally say ‘oui’ to telecommuting.

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