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The Small Business Safari
Have you ever sat there and wondered "What am I doing here stuck in the concrete zoo of the corporate world?" Are you itching to get out? Chris Lalomia and his co-host Alan Wyatt traverse the jungle of entrepreneurship. Together they share their stories and help you explore the wild world of SCALING your business. With many years of owning their own small businesses, they love to give insight to the aspiring entrepreneur. So, are you ready to make the jump?
The Small Business Safari
[Revisiting] Reshaping the Tech Industry With a Customer Experience Mindset
On this episode of the Small Business Safari we welcome Rich Sheridan! While his focus has always been around technology, his passion is actually process, teamwork and organizational design, with one inordinately popular goal: the Business Value of Joy! Rich goes in-depth on how he achieved these goals. So take a listen. I am sure any entrepreneur will learn something from this episode! Did you know our amazing voices can go beyond just the microphone? Yes, we have video! Subscribe to our YouTube channel here!
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Rich’s Links:
• https://menloinnovations.com/
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GOLD NUGGETS:
(03:00) - Rich’s Bio
(07:50) - Tackling the Biggest Problem in the Tech Industry
(21:40) - How to Tell Your Wife You’re an Entrepreneur
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Previous guests on The Small Business Safari include Amy Lyle, Ben Alexander, Joseph Sission, Jonathan Ellis, Brad Dell, Chris Hanks, C.T. Emerson, Chad Brown, Tracy Moore, Wayne Sherger, David Raymond, Paul Redman, Gabby Meteor, Ryan Dement, Barbara Heil Sonneck, Bryan John, Tom Defore, Rusty Clifton, Duane Johns, Beth Miller, Jason Sleeman, Andy Suggs, Chris Michel, Jon Ostenson, Tommy Breedlove, Rocky Lalvani, Amanda Griffey, Spencer Powell, Joe Perrone, David Lupberger, Duane C. Barney, Dave Moerman, Jim Ryerson, Al Mishkoff, Scott Specker, Mike Claudio and more!
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If you loved this episode try these!
• How to Launch Your Business to the Stratosphere with Chris Hanks
• Does your Online Reputation Reflect Your Offline Reputation? - Tracy Moore
• Corporate Quitter To Entrepreneurial Meteor - Gabby Ianniello
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Have any questions or comments? Connect with me here!
From the Zoo to Wild is a book for entrepreneurs passionate about home services, looking to move away from corporate jobs. Chris Lalomia, a former executive, shares his path, discoveries, and tools to succeed as a small business owner in home improvement retail. The book provides the mindset, habits, leadership style, and customer-oriented processes necessary to succeed as a small business owner in home services.
And so what happens here is a lot of people who are thinking they've heard about Menlo, they want to come see it. They're not sure, of course. Well, they'll come on a tour, because we do tours all the time. Now you can imagine you show up on a tour you don't have to tell us why you're here, just curious about Menlo. But now they're looking around, they're hearing the stories, they're seeing the people and maybe something in their head says maybe. So they send in a resume. Then we invite them in for a crazy interview process. We don't ask any questions during interview. We not only tore down the traditional way of writing software, we jettisoned the entire standard HR practice book. We have interview process with no questions whatsoever. It's completely on audition. You come in in a group with other candidates, we pair you with another candidate and then we give you the weirdest instructions you'll ever hear in an interview. Your job is to help the person sitting next to you get a second interview. Make your pair partner look good, demonstrate good kindergarten skills.
Speaker 2:Show us you can help another human being and then we will have more interest in you. Welcome to the Small Business Safari where I help guide you to avoid those traps, pitfalls and dangers that lurk when navigating the wild world of small business ownership. I'll share those gold nuggets of information and invite guests to help accelerate your ascent to that mountaintop of success. It's a jungle out there and I want to help you traverse through the levels of owning your own business that can get you bogged down and distract you from hitting your own personal and professional goals. So strap in Adventure Team and let's take a ride through the safari and get you to the mountaintop. Welcome back, adventure Team, to the Small Business Safari.
Speaker 2:Chris is going solo today because Alan's out there closing deals, making business happen, doing what everybody should be doing anyway, and that's making money doing this thing that he loves to do. He loves being here, but this is, of course, his passion project and my lead project. But today we have an exciting guest on, somebody who I feel is a kindred spirit. We have Rich Sheridan from Menlo Innovations on. We actually come from the same great state of Michigan, which is why I wish Alan could be here so we could talk about how great Michigan is compared to Oregon, but he's going to have to miss out on that. But, rich, thanks for joining us today.
Speaker 1:Great to be here, chris. I think we figured out when we talked the first time. You and I grew up about four miles away from one another, because I was in Clinton Township, you were in Harrison Township.
Speaker 2:That's right Pretty close by and look at this. And then, when we started to talk about parallels in our business world and our journeys through corporate America, I was like holy crap, it is almost identical to me, just in a completely different industry.
Speaker 1:I lived different lives.
Speaker 2:Yeah, so Rich, you're author of two books. We'll go ahead and talk about those books a little bit later, but go out there and take a look at that. But why don't you just give us everybody just the thumbnail version of kind of who you are, where the hell you came from and where you are today?
Speaker 1:Yeah, chris, I am the CEO, co-founder, chief storyteller here at Menlo Innovations. I'll probably get a chance to share some stories. Menlo Innovations itself just turned 21 years old this past summer and we are a software design and development firm that is really well known for the culture we've built here, and people come from all over the world just to see how we do what we do, because it's so different. We typically non-pandemic years, of course have gotten between 3,000 and 4,000 visitors a year to travel from all over the planet just to spend a day to a week with. We have a group from General Motors here for two days studying us, learning from us and so on. But our primary business, what we do the people in the room behind me there are designing and developing custom software on behalf of our business clients. It is the approach that we use. That's so different.
Speaker 2:So your approach is so different and let's go jump into that Just what makes you guys so unique? Because, if you're listening and again, we've been a very home services focused podcast but, as you know, we've had a lot of different industries on because we can always learn from others. But we're talking about programming and if you know anything about computer programmers, those guys are the epitome of lone wolves. They want to sit there in front of their computer, interface with that computer and please don't make me interface with too many humans. That's the typical programmer that's out there, but you guys have come up with a different model. Can you explain a little bit more about how you do it?
Speaker 1:We have. You know, chris, just to give an ounce more of my background because the rest of the story will make a little bit more sense. I grew up as a programmer. I actually started programming at my high school back in 1971 and launched a career after going to the University of Michigan and, quite frankly, I think I was pretty good at it. But the results me, or the teams I was part of, or the teams later as I rose the managerial ladders the results they were producing were just terrible and I thought, man, maybe I'm not as good at this as I thought I was. Maybe I have to get out and go do home services versus programming. I don't know. But at that moment I decided you know what? I think there's a better way to do this than my industry has typically done it. And you're absolutely right.
Speaker 1:Our industry is just largely comprised of these lone wolf programmers, largely introverts. No surprise there, stuck in sensory deprivation chambers, you know cubicles, headphones on, coming in at weird hours that don't overlap with other human beings, and everybody later laments that they lack interpersonal skills. Shockingly, when would they have a chance to practice such things? But the real challenge is even for the people who do the work if you don't end up delighting the people you intended to serve, which is our goal. It is a very hollow career. You end up doing work, you get paid for it, that's okay, but there is no sense of accomplishment of purpose, there's no sense of serving others, and that's really what was driving me is look, I want to delight the people who one day use the work of our hearts, our hands and our minds. And in order to do that, we had to change everything about the way software is designed and developed. So, as opposed to a library quiet space, we have a noisy big room, and we've been in person in the noise for we'll call it 19 and a half of our 21 years. We had a little interruption through COVID, of course, and we're starting to. You know, we're pretty much 80% back into the office now.
Speaker 1:All of our programmers work two people, one computer. They share a keyboard and a mouse. All day long, every single day. Those pairs are working together to solve a problem and we switch those pairs every five working days so that you're getting a chance to actually work through things with another human being who thinks differently than you do. You have to talk about those things with one another and you have to learn to listen to the other person. And then, of course, five days later, new pair partner, you might be continuing the work you did the previous five days that you did with your other pair partner, and now you have to explain to this new person what you and your previous pair partner were working on. And in doing that explanation you're getting smarter about what you just built.
Speaker 1:And so by doing this sort of business corporate square dance with our team every single week, you end up with teamwork, collaboration, trust, communication and an avoidance of one of the biggest problems in the software industry, this lone wolf tower of knowledge problem, where there's only one person in your team that knows anything about a particular system and nobody else knows what they know, and that person feels trapped or the company feels held hostage by that person, and it's not a pleasant situation for either of them and those hero-based systems. The only way to scale them is to scale the heroes. The only way to scale heroes is overtime, and the trouble with software is tired people make bad software and we don't want to make bad software.
Speaker 2:There are so many things there that I just obviously you just resonated with so many vibes that I have going. I just got to go back to the beginning. So you started in 1971 programming. So that was punch cards. Yeah, Actually it was teletypes.
Speaker 1:teletypes paper tape dial up modems to a central computer at the McCormick school district Nice.
Speaker 2:Yeah, so there you go. Now you talk about. That's one I just want to go through. You know they talk about Moore's law of scaling computing. You talk about where we are today and you want to talk about what you've seen. You have definitely seen that curve and the hockey stick. That is that Moore's law, which is the power computing power doubles every year.
Speaker 1:I'm pretty sure this little device in my pocket has more computing power than the entire world had in 1971.
Speaker 2:Exactly, I love that. So let's keep going down that journey of that storytelling of what you did. So you did. What typically we all do in every industry is we follow with a model that has been put forth before us, and in your case it was sit there and interface with that computer, because I do not want to interface with humans. And I got to do this and you started to realize that maybe those results weren't there. And I know you had that aha moment when you were the manager that you didn't want to be and you told me that offline before we started. And that's what started this culture.
Speaker 2:And that's why we'll jump back to that story in a sec, because I know everybody is dying to hear a number of these things, but let's just take this out for just a minute. So he just said he puts two people on one computer and he just makes two people work together to do on one computer. Now you know why people are coming to see this, because if you're listening to this podcast, you're probably sitting there going. How does that work? Because there's only one keyboard. That can't possibly be. And now you know why General Motors is sitting in your office today going. There's no way this is happening.
Speaker 1:That's right.
Speaker 2:So they're like, I can't believe it. I hear you, Rich, I hear the story man, but I don't know.
Speaker 1:And Chris, you can imagine instinctively. Everybody looks at it and goes but wait, isn't this cutting productivity in half? Couldn't you take those two people, put them on separate computers and have them typing away by themselves? And of course you'd be back to the same way of doing things that everybody else does. And the challenge is programming. And there's a lot of other industries that could take lessons from this, but I apply it to the programming industry. Programming was never about typing speed. It was always about how fast can you solve a problem well, and two heads are always better than one at solving difficult problems.
Speaker 2:I'm part of a mastermind group and one of the things we talk about as we issue processes what is the right question. And you just hit on that. What is the right question? The question is what's the quickest way to solve a problem? Not the quickest way to type out programming code, because you don't get paid by the amount. You get paid by the solution you provide.
Speaker 1:Yeah, and does it work? Is it robust? Let's just reflect. This will put a little bit of a timestamp on our podcast today, but just yesterday the entire flight system of the United States was shut down for hours because of a computer error. It's a big deal when computers don't work these days.
Speaker 2:It's a big deal when computers don't work these days. You hit on that and you're right to put a pin on this one. So timeline it's beginning of January 23 when you listen to this, and what happened was the safety system in the FAA went down because, as the way I heard it, one corrupted file and it took them a long time to reboot. Identify and then re-put the planes back in the air, and that took them out of business. Identify and then re-put the planes back in the air, and that took them out of business. I've heard anywhere that it could take between 36 and 48 hours just to recover from this and get all the planes back in a program and a system that gets back to the flow we expect, and think about the disruption that just happened.
Speaker 1:Oh, you know, there's people who missed family events or weddings or whatever. You know I mean it's catastrophic. And you know, look, when I started programming computers in 1971, it wouldn't have been that big a deal if the computer didn't work right for a day or two. Now our very lives depend on those computers working.
Speaker 2:Yeah, you're right, that's an astounding, just to drink that in for a minute. You also said something. You alluded to it. It's an astounding, just to drink that in for a minute. You also said something. You alluded to it. It's one of my favorite phrases. I use it in my own company and, yeah, I found it from.
Speaker 2:St Francis of Assisi back in the 1500s said if you work with your hands, you're a laborer. If you work with your head in your hands, you're a carpenter. But if you work with your heart, your head in your hands, you're an artist. And my challenge to my guys every day is go out there and be an artist today, because we work in people's homes and can produce magical and extraordinary things. If we think like an artist and you actually said that the same way is that you're challenging your programmers not to sit there and work in a silo and create a code, but go out there and work with your heart, your head and your hands and you can produce something that is extraordinary that most people would probably say, oh my gosh, that's voodoo.
Speaker 1:Yes, absolutely, and we are magicians in our industry. The people who don't know what we know marvel at what we can accomplish. Unfortunately, most of what we accomplish sucks, and we didn't want to do that. We wanted our team to be proud of what they created. Deming said it best once upon a time. He said all anyone asks for is a chance to work with pride, to feel good about the labor you did today, to feel like you made a difference, to feel like you had a chance to do high quality work to delight the people you intended to serve. Everything that we do is laser beam focused on this really funny word in business. We call it joy, and that became the subject of two of my books.
Speaker 2:I love that and I'm glad you brought up Deming, because I was going to say I wonder how he would react to the fact that you said you have two guys working on one computer, because I think a lot of the premise around Deming was also efficiencies. But I think you'd have to sit there and really have to argue with them and show, hey look, I'm solving a problem faster and my team is actually reacting and getting more joy out of what they're doing. So I would love that debate. I would love to hear that debate.
Speaker 1:Oh, obviously I never had the chance to meet Deming. That would have been delightful because in fact he passed away before our company was born. I've had a lot of Deming experiences, devotees, even people who work directly with them. Come and study us and I will say I think we would have had a great discussion.
Speaker 2:Yeah, I love that one because it's just obviously two sides of the same coin and you'll find out that both are probably right. But in this case, obviously it's winning because you have developed a culture, and that's also the thing I really want to talk about for a minute. The culture that you have created is against the culture of almost every other programming company out there and the way that they're developed and done, and you started with that when you first set out into your business and doing this when you started day one. Was this the culture that you had in your head then, or is this something that has evolved over time?
Speaker 1:Yeah, certainly most of it was in place on day one. So if you had seen Menlo on the very first day, you would still see most of the elements on that first day here present today. Obviously, we've continued to evolve and adapt and things like that as we grew, that sort of thing. But it was mainly, chris, because I had had a delightful opportunity, that I didn't think of it as this when it was happening, but two years before that I was a VP at a tired old public company and I reinvented that company from my VP of R&D position into something that looks like Menlo does today.
Speaker 1:I got two years to run that experiment inside of that tired old public company and then in 2001,. Boom, the internet bubble burst. All of us were laid off and while I lost job, title, authority, paycheck, stock options, all went to zero. They couldn't take away what I had learned in those two years with my co-founder James couldn't take away what I had learned in those two years with my co-founder James, who was a consultant I'd brought in to help me with that transformation. And so we started on day one with almost everything in place already, because we'd had two years to experiment with these practices at my old company.
Speaker 2:I think that's a big gold nugget for everybody to hear on this one is that he was so in my case, I jumped completely out of industry and started a handyman company with no experience running a handyman or remodeling company at all. But you had two years to develop your processes and to see some things that worked, and you got to do it in a safe environment that didn't cost you thousands or tens of thousands or, in my case, a lot of thousands of dollars, making mistakes. You get to do it before and I think that's a big gold nugget. If you haven't made that leap, start it now. I always talk about business plan, business plan, business plan. But in this case, how about practice? How about working in that world, putting yourself in it, because you get to do it for free and you actually might be getting paid for it at the same time.
Speaker 1:Well and honestly, Chris, I wasn't prototyping. A business I was imagining started, I was trying to do the thing I thought would work and it did. It worked remarkably well. It was a tremendous transformation of that old company. And then the company was taken away from me and you know, it's just one of those one door closes, the other door opens moments, and I realized, wait a minute, they can't take away what I had learned. That was profound. So I like to say sometimes I built a really great engine room. Just the first time I built it was inside the Titanic.
Speaker 2:That's a great line. The first time I built my engine was in the Titanic. That's a great line. The first time I built my engine was in the Titanic, but you got the opportunity to go build it again and you hit on a thing that I hear the same it's a common theme in a lot of our podcasts is that a lot of entrepreneurs a door closes, you get laid off of a job or you failed at that one.
Speaker 2:But if you're always looking for that opportunity, guess what's going to find you that opportunity? And if you're open for it and you're ready to receive it, it's good. And whether it's a good mentor of yours or something like that, I don't think a lot of people have ever set out from the time they were born saying this is where I'm going to be at age X through an entrepreneurial venture, because we all go all over the board, spaghetti everywhere rolling through things. So I love how you were able to grasp that opportunity. Did that opportunity idea hit you day one, or was there some? Oh my gosh, what just happened to me.
Speaker 1:Actually, the story will get even stranger now. I had come together with James Goebel, who was a consultant when I was a VP, and it was love at first sight. At that point, james had never met anyone like me who was willing to try crazy new experiments. Now the reason I was willing to try some of these crazy new experiments was because everything else was working so poorly and I could see the sensibility of some of the things he was suggesting to me. So he pulled me aside one day and he said you don't understand how this consulting thing works. I said what do you mean? He says you have to say no at least once, or you'll be able to hold me accountable for the results we get out of this experiment. And I said, james, I'm not interested in holding you accountable, I want to succeed. And he looked at me I've never met a client like you. And I said, well, I've never met a consultant like you. And so we started working together, just like the first pair almost, and I think we blew each other away. You know in terms of just what we accomplished, how far we went, how fast we got there. It was incredible.
Speaker 1:And then my company was bought and they kicked all the consultants out, including James, and I was so frustrated. This was, you know, he was my partner in making all this stuff happen. And now he's gone and I can't hire him because our business contract with his firm prevented it and he couldn't come work for me because his consulting contract with his company prevented it, and so we were locked out from each other and this became a big problem for me and I started noodling on how will I ever work with James again? How will I ever work with James again? And then one night I sat bolt right up in bed and I said to my wife I said I've got it. And she's like what, what are you talking about? I said I know how I'll work with James again.
Speaker 1:She says what do you mean? I said well, I can't hire him, but I can quit, start my own company. He and I will be co-founders. We can do everything we're doing at Interface Systems in a new company. And she looked at me because let me tell you, chris, that was an insane idea. I was this big deal six-figure VP with stock options galore that were going through the roof. There was no way she kind of looked at me like whatever go back to sleep. And then, of course, six months later, when everything collapsed, looked at me like whatever, go back to sleep. And then, of course, six months later, when everything collapsed, I went home and told my wife I'd lost my job, and she looked at me with tears in her eyes. She said you're unemployed.
Speaker 2:And I said no, honey, I'm an entrepreneur. Now I'm going to use that one too. Are you unemployed?
Speaker 1:No, I'm an entrepreneur, especially those first couple years for me, because it was now in the spirit of your book, uh, on the wild, uh, I will say that I and now I am officially unemployable because I've been out in the wild way too long I just met with a guy earlier this week who had come from corporate america.
Speaker 2:Now he's a consultant a typical story for many people who want to get into the entrepreneurial world and he said you know, I really enjoy the corporate world. I said that's funny. I said I probably can't have you on my podcast because I said I sit there and make fun of it all the time and, yes, I am completely unemployable at this point. So either I make this a success or I got to go find another one. So we got to keep on rolling. It's true. It's true, so you jumped in. I want to come back a little bit to the culture Again. When you think about the wolves that you are hiring and I talk about my lone wolves can I invite them into a wolf pack here at my company? Because they got to have that mentality. They're skilled trades, they're going to go out there. They got to be an artist every day, but they still like to take care of all that great stuff that they're doing by the way there's two mucking behind me right there.
Speaker 2:Oh, there he went. Hey, you guys are back together, the band is back. I love it, so all right. So we'll have to say hi to James. So shout out, love that one. So when you go to hire these people into this culture and you're hiring them are you finding some people are just opting out or not really believing you have that culture and that they're going to get to do the thing they were supposed to be doing, that they were trained to do, which is sit in their silo and work at two o'clock in the morning?
Speaker 1:Yeah, safe to say, Chris, no one in my industry I mean, it's safe enough to say no one there might be some tiny, tiny little percentage is prepared for what we're going the way we're going to work here, is prepared for what we're going the way we're going to work here. You know they've all gone the traditional route, the traditional education route, the traditional work route, and all of a sudden they encounter us and look, I think anytime you decide to create an intentional culture like we have, and you can describe it as clearly as we can and show it as clearly as we can um, there's going to be. People are like there's no way I could work like that. There's no way that would work for me. That's okay, we're not trying to solve people.
Speaker 1:Um, what we are is we are very clear and we set what we believe are very reasonable, rational expectations for, and it's amazing how many can adapt once they see the reasonableness and the rationality of what we're doing. And so what happens here is a lot of people who are thinking they've heard about Menlo, they want to come see it. They're not sure, of course. Well, they'll come on a tour, because we do tours all the time. Now you can imagine you show up on a tour. You don't have to tell us why you're here, just, you know, just curious about men law. But now they're looking around, they're hearing the stories, they're seeing the people and maybe something in their head says maybe. So they send in a resume and then we invite them in for a crazy interview process.
Speaker 1:We don't ask any questions during interview. We not only tore down the traditional way of writing software, we jettisoned the entire standard HR practice book. We have interview process with no questions whatsoever. It's completely on audition. You come in in a group with other candidates, we pair you with another candidate and then we give you the weirdest instructions you'll ever hear in an interview. Your job is to help the person sitting next to you get a second interview. Make your pair partner look good, demonstrate good kindergarten skills. Show us you can help another human being and then we will have more interest in you.
Speaker 2:Wow, that is something to talk about breaking the mold and trying something. If you're listening to this and you're going, ah, that can't ever work, that can't ever work If you haven't gone out, go out to the YouTube. We got the Small Business Safari channel out there. Go out there. Listen to this, watch this one and you look behind Rich, and you're going to see a beehive of activity and you're not seeing them open around and you're not seeing people not in their seats. You see people in their seats making things happen. So obviously you have that culture. So once you get them hired, tell us a little bit more about the onboarding and how much I'm assuming a lot of emphasis goes on onboarding. Tell us a little bit about how that works.
Speaker 1:You know, onboarding is literally in every minute of every day, for the entire time you're here, no matter whether it's three weeks or 13 years. Because what happens, chris, is we start onboarding you during the interview process. So this is another weird aspect of our interview process Most interviews I've heard about people are trying to weed people out. We're trying to weed people in. So our interview process is success oriented. We expect you to succeed and we're going to give you every chance you possibly can. Now still might not work. We get probably about 50% of people washing out during the process.
Speaker 1:But after that first mass interview where we paired you with three different people, 20 minutes each watching your behaviors with other humans, the first day of work is actually the second interview. We pay you, we invite you in for a full day. You do real work on a real client project. For one day give you a small stipend. You pair in the morning with one and you pair in the afternoon with another one. We start teaching you how to fill out a timesheet. We teach you how to write automated unit tests. We're putting your hands on the keyboard and mouse, teaching you through your ears and your fingertips. So we're already investing in you, even though we haven't decided to hire you, and we're giving you a chance to ask us questions during this time and if that one day works out, we invite you in for a paid three-week trial where the onboarding continues. Now you're turning in timesheets every week because we're going to pay you.
Speaker 1:Now you're pairing with different people on different projects. You're learning how work is assigned. You will present at client show and tells during this interview process. You will get a chance to interact with actual customers along the way. You will do real work for three weeks and again, if that trial works out, you're in. You're a full-time employee here and you're running ahead, but we're continuing to build on that tradition of every week. What does Chris need to learn? Where is he struggling? Who would be a good teacher for him? What are the things that Chris knows that he could teach somebody else? So within a few weeks here, you're already becoming teacher to other people. So we're teaching you how to teach as well. What an amazing thing.
Speaker 2:I think you just take it away that basically what you've done is shorten the timeline of. You know, there's always that phrase that says hire slowly, fire quickly. But um, what I talk about, especially in my business, is that people either select in or select out pretty quickly. Now, with the way we onboard, we explain our culture, we show culture, we have them work with people, bring them in after two weeks, talk about how they're doing, and then we usually find out right then whether or not these people are going to stick.
Speaker 2:And I have a high turnover world that I'm working in and a lot of us do, whether it's the restaurant business or in the handyman, and how to get people to stick. We just actually celebrated a ninth and an eighth year anniversary at my company and I I I posted that out and people are like, are you kidding me? Really? You were able to. I'm like, yeah, and why? Well, the culture right, and how we, how we do, continually invest back in training. It sounds like that's what you've done, but for any industry, just showing you, you got to get these folks on board with what your culture is and then they'll start to see where they fit in and they always want to be part of something bigger, and if they feel like they're part of it, man, they're going to do great things for you and themselves.
Speaker 1:In my old managerial life, when I hired this standard way, when I onboarded the typical way, this standard way, when I onboarded the typical way, I used to say that my job was to try and get you productive before I demoralized you, and it was about a three-week to three-month race that I typically lost and then you either quit on me in those early days which was actually better than what happened with most of them, where they quit, but they still came to work every day. They were just, you know, over at the water cooler pissing and moaning with everybody else. Why can't I hire good people? And you know and the fact of the matter is they were good people when they came in the door and I did it to them I had a bad system for getting people into the work world here, you know, not at Menlo, of course, but in my old company, and so for me, I just knew that that part had to change as well.
Speaker 1:And I don't think you can create an intentional culture in the way we describe it here, an intentionally joyful culture, without taking a hard look at every single step of the HR process. How do you recruit, how do you interview? How do you select? How do you onboard, how do you give feedback, how do you promote, how do you give raises, how do you give bonuses? How do you fire people? I mean, all of those things better align exactly with the cultural intention, or your cultural intention is just a poster on the wall.
Speaker 2:I'm continually learning. You actually said something that I think everybody needs to understand, and that's especially as an entrepreneur. The problem usually starts with you, and if you got to, you got to solve you first, and if you're starting to blame others, you're starting to look the wrong way and you've got to really look at you. And we did that at the end of last year 22, and we're actually overhauling our HR process as well. Just because I went. It's just not as good. It's good. I especially compared to other people in my business and in my industry, when I compare how long I've been able to keep people. It's good, but it's just not great.
Speaker 2:And we're actually going through that right now. And and we're actually going through that right now and I've uh, created an initiative where I'm just kind of involved in it but I'm not leading it and I'm letting the people who have to deal with everybody, day in and day out, lead how it's going to change, and I just actually get to provide some advice and listen to what they got going on. And so far, uh, we're one week into it and, uh, we've already created something and had a guy text back saying, wow, this is the first company I've ever been involved with or worked around, because a lot of my guys have never worked for anybody else. They've already worked on their own. That actually shows they care about us. I'm like, well, that's pretty cool, and it wasn't me, it was those guys. So that's always a nice win.
Speaker 2:So, uh, you know, we're coming, we're coming towards the. We're kind of like at halftime, maybe even third quarter now talking about this. There's so many more things I want to talk about with you. Let's talk about the scaling Obviously a very successful company where people actually want to come see you. We've already kind of outlined what it looks like and you've got to go check this out again on the YouTube channel. Was there ever a time where you just went nope, this isn't working? I can't believe I just did this.
Speaker 1:I'm an entrepreneur, but this isn't working. I'm done, I'm out of here. You know, the only time I remember feeling that way and it wasn't so much like I'm done, it was like I felt the whole thing just slip out of my hands was the week of March 16th of 2020. When we sent everybody home. We have this special group of people on our team called high-tech anthropologists. It's a whole other discussion we could have about going out in the world and studying the people you intend to serve. So whatever software you built will actually work for real people, not just the programmers who built it. There was no place for them to go, because they couldn't get on airplanes. They couldn't go visit people in their native environment because those people were stuck at home as well. I couldn't go out and speak, which was typically what I would be doing is getting on airplanes once a week, going around the world speaking about this culture, and it was like every single tool I had that we had built so carefully over 19 years had suddenly been taken away from me.
Speaker 2:So that must have been a tough day. So your day of, I guess, the three phases of truth First you ignore it, then you vehemently deny it, and then you accept it as intuitively obvious. And so when did you accept this COVID shutdown as intuitively obvious? And that sounds like it was on March 16th.
Speaker 1:Yeah, it was that week, you know, and I remember looking at Erica because we were, as we were, filing out of the office that week. I looked at her and I said what is today? She said it's Tuesday. I said no, no. What day of the week is it? She said Tuesday. I said no, no, no, like Monday, tuesday, wednesday, thursday, what day it's? She swings her head around, looks at James and he says oh, don't worry, he's just panicking, he'll be fine.
Speaker 2:Oh boy, we were all there. So you went home and sent everybody home, um, and basically staring at zero revenue coming in, expenses still going out, still trying to take care of employees probably doing a skeleton thing, how'd you react? Let's talk about the basically staring at zero revenue coming in, expenses still going out, still trying to take care of employees, probably doing a skeleton thing How'd you react? Let's talk about the COVID response that you had.
Speaker 1:So, number one we gathered the team together and we said tsunami's coming. We don't know how big, we don't know how long, but we know it's huge and it's probably not like anything we've ever seen before. And and it wasn't our revenues dropped by 60 that year. So we said, guys, we're making some drastic changes. Right now and it was a big group meeting we didn't think a lot about it we said owners are going to zero. We're cutting all of you to your base level pay. We're going to cut hours, which means they're going to cut their pay any sooner, even sooner. And we said any money we send out of you, for God's sakes, put it in the bank, because we don't know how long we'll be able to do this. And you know and that was that was like day one, that was that Monday of that week that we've gathered the whole team together and told them what we were going to do. And we said we're going to try and hang on to you. We're going to keep healthcare benefits in place because, goodness knows, we're going to need those if this thing is as bad as everybody says it is. And so we did everything we could and fortunately, we'd come off our best year ever. So we had lots of cash in the bank, so it wasn't like we had to panic, but, boy, we had to respond quickly.
Speaker 1:And then I remember, you know, as everybody had filtered out, I was one of the last people standing in the office and all I thought at that point was you know what this might be it? Wow, it might have been a good run. You know, 19 years in, you accomplished what you set out to do, and you couldn't have anticipated this. And then, shortly into this time where we're all apart and we're starting to get together on Zoom calls, like you and I are right now, and one of our senior high-tech anthropologists was trying to figure out how are they going to do their work from a Zoom call rather than be in person, and of course, my brain is like that's impossible. They have to be observing people in their native environment.
Speaker 1:And Molly leans in and she goes this will be so exciting to figure out how to do this. You know remotely and I'm like, oh my God, we're going to be okay. The culture we built at this very basic level knows how to run experiments, knows how to adapt experiments, knows how to adapt. And at that point, chris, I just let them leave. I stepped back because, as I opened my eyes to what was actually happening, the team, without me leading, was figuring it out, and figuring it out way better than I would have, and so I just thought you know what just let them go you.
Speaker 1:Yes, I gave little bits of guidance here and there. I didn't step out of leadership entirely, but I knew I didn't have to lead in this adaptation of what was happening in the business. And that's hard, I do feel like.
Speaker 2:I can let go at times. People have asked me that, but when that happened, I felt like I had to step in even further and get a hold on things even further to figure out what was about to happen. Because I did, I ignored it. I heard from a guy on March 9th that this is going to end all his business and I asked him how he could help, how he could help him, and he said you can't help me, you're going down too.
Speaker 2:I'm like oh man, you're like chicken little bro. Slow down, man. It's no big deal. And on March 16th, which is my birthday, I had two big things happen to me. One my son got accepted to a local public school as opposed to going off to a big high paying private school. So I just realized I got a raise and I also realized I had I had to basically not shut down my business. But I did.
Speaker 2:I cut drastically, I laid people off. I said you're going to make more money on unemployment than you would with me. I'm going to go ahead and lay you guys off. I'm going to keep you guys. I'll keep you guys as busy as I can, because we were deemed essential and we were able to work around houses.
Speaker 2:And I sat there with my number one and I said I think he goes. Oh, the first one you're going to fire is me. And I went, oh, and so I did. I gathered people in the office and I'm crying he's the one who had me on the back going. It's okay, it's okay. It's kind of like that episode from Norm from cheers, where he was the firing guy would go in and cry for everybody. And I'm sitting here crying in front of everybody Like I just cause. I felt I felt like I could write it back down. I had ridden my company back, I had ridden my company up, I could ride it back down to me and a handful of people. But how long? How long was this going to last? And nobody had that answer. You're just staring at option A in the face and it was hard to pivot and go for option B and C.
Speaker 1:It sounds like your employees helped you get that pivot in your head and make it happen. And my contribution during that time was once once I regulated my own emotions, which didn't take too long. Um, I said, guys, we are going to thrive again and here's the way we're going to get there. We're going to go through a five-step process. First, we're going to survive, and that's what we're doing right now. We're doing everything we can just to guarantee simple survival and we are going to try and keep you all together as long as we possibly can. Number two we're going to have to adapt. I'm watching you do it already. We're going to have to continue to do that. Then, three at a certain point we have to get to a point where we can convince ourselves we can sustain whatever level of business we're doing, because we don't know how long this storm is going to last.
Speaker 1:And I actually use the metaphor of we got tossed out of our little good ship Menlo and a desert island, and it was kind of like Swiss family Robinson. We're figuring things out again, right, and I said but number four is going to be the most important part, and I actually learned this from Patrick Lencioni, the business book author. He had a conference at this time and I just loved what he said. He said look, in times like this, yes, there's going to be a lot of companies that die Just is but those that survive face a fundamental leadership choice. You can choose to emerge stronger and if you don't, you will emerge weaker. And when we get back to thriving again, the strongest companies will take off. And I told the team that's what we're going to do. I don't know how we're going to do it, but we are going to emerge stronger from this and when we do these four things over and over again, enough we will get back to thriving again. And I'm delighted to say, chris, we just finished 2022, our best year ever.
Speaker 1:We are absolutely awesome amazing about the biggest checks we've ever given out in our history. Uh, and the team, the team did it. They, they, literally. We made big changes to emerge stronger and we will never look back.
Speaker 2:Yeah, I think, um, I've been on a number of podcasts as well. People ask me about, uh, my experience and I was in home services and you know one thing that happened was the home services space was a great space to be in. I, uh I remember saying after we got through that first period uh of uh despair for me and then going I'm going to ride this ship back down. I just the mental image of Slim Pickens going down and Dr Strangelove going down with the big bomb.
Speaker 1:I think I said it was one of my favorite movies.
Speaker 2:Well, that that's how I was feeling on March 16th, as I went back and had to do what I did, but I started to see it. You know, at the time we talked about it here in Georgia. I figured I had a two month down, but by Memorial day I was hoping, of course. What do we all know at that time? You know we I was watching the.
Speaker 1:Eight weeks, man. I was going to last eight weeks. That was my mindset.
Speaker 2:Yeah, so. And so we were good. And our governor here in Georgia opened up and said far be it for me to call anybody essential. As long as you follow these guidelines, we'll start opening up. And he said that on Memorial Day, right before the week before Memorial Day. And sure enough, our phones started ringing. And I remember getting on a podcast in August, going for the first time ever. I felt like I was in the right spot, I was in the right business. And then what hits me? I can't find people to work. And then what hits me again, oh, there's that supply chain thing. So now I can't put materials in people's houses and I'm like you know what, as an entrepreneur and a business owner, you're always solving problems.
Speaker 2:Your job is to be proactive and trying to see which ones are coming, but sometimes you got to be reactive and get after it. Yeah.
Speaker 1:It certainly has been a few years of one thing after another, after another.
Speaker 2:Yeah, yeah, you know that's. It's funny because you know we grew up in probably the same time periods where you would hear from grandmas and grandpas about the great depression and you'd hear from your parents about going through the missile crisis or the Vietnam war or whatever. And you look at now what our kids and we will say we went through and you know I'm I'm thinking if I can live long enough, I'm going to tell people just how bad it was, because you've seen the dot-com crash, you've seen the great recession in 2008, then you've seen the pandemic, then everything that's fallen out from there, and then and then again, a stupid war in europe the stupidest thing ever. But uh, but. So you know we're coming to the end. We got just a few more minutes left.
Speaker 2:So one of the things you mentioned before is that you're out there speaking and doing that, and so obviously you've had enough time to and people talk about having that financial freedom, or you know what's your exit strategy Brace. Something that a lot of people are interested in is that you're out there speaking and talking about different things. You're talking about your business. You're actually not working in the business. You're out there doing this. When did you start to make that pivot. And how do you split your time now a week.
Speaker 1:Yeah, you know I'm still CEO of the company and they still need me. I think Although you know there'll be a line of people outside the door waiting for me to make 14 decisions because the team is very, very capable without me. But early on in the history of the business, way back in 2001, they were already the team was saying Rich, we need a public face for the company. Get out there, meet people. I started doing talks back then.
Speaker 1:We had decided we were going to open our doors and share what we learned with the world, so we were doing classes and tours even back in our earliest days, and so I ended up finding that there was one part of the business that I just absolutely loved to do was to go out and do public speaking about what we do, why we're doing it, what we're trying to accomplish, what is the culture that we're building to do this leading tours and writing and so you know that's largely my contribution. Now, of course, that naturally leads to the things you might expect a CEO like me to be involved in in a company our size, where I'm building new relationships with people who want to do business with us, but my tip of the spear keeps getting shorter and shorter, where I could just so effortlessly hand it off to the rest of the team and go out and build new relationships. So I would say the majority of my time is spent out there in the world building new relationships, speaking about what we do and writing.
Speaker 2:That's genius marketing and I'm a big marketing fan. I love this stuff. I mean, that is incredible. You talk about being a relatively low cost advertising source. It's your time and you're getting to do something you love too. And people ask me you know, I get out and do a lot of networking. That's how I was able to build my business early. And people say how can you do that? I say you know I get more energy going to those meetings than I do sitting there in QuickBooks trying to figure out why the books aren't just exactly right, and that really just drains the-.
Speaker 1:I had Emily over there looking at quick books and she'll, you know, she'll tell me if something's going wrong I need to take a look at. But um, you know, chris, I will hear some broad advice to to anybody, no matter where they are in their business, but especially the ones that are just starting out. Uh, when we had our first office in downtown Ann Arbor, um, it was right next door to a coffee shop. We were at, we were in a storefront, a tiny little storefront. We were right next door to a coffee shop. We were in a storefront, a tiny little storefront. We were right next door to a coffee shop.
Speaker 1:So every morning I'd get into the office, I'd go next door to the coffee shop get my cup of coffee, and invariably because Ann Arbor is a pretty cool town. It's a small town but a lot of famous people walk through here. In fact, the vice president of the United States was literally about a block away from our office just about a half an hour ago. I would run into these really interesting people who could potentially be future customers. And then one day it dawned on me Rich, stop carrying your coffee back to the office, just bring your laptop to the coffee shop and hang out in the coffee shop while you check your morning email, and it was remarkable, all of a sudden, all these people who had come in. You see somebody the first time. You greet them, you say hello. They're like oh, aren't you running the company next door?
Speaker 1:And then, next time you see them it's a little friendlier and by the third or fourth time you're long lost friends. At that point You're asking about family members, about vacation plans and you're building relationships. And I would say that's probably a big mistake a lot of companies make is everybody's focused on landing the next piece of business, everybody's focusing on the inside of the company. But there is a great benefit to getting out in the community, building those relationships, even if you don't know where they're going to go, because they end up paying off in really, really weird ways later on, with somebody saying, yeah, I was at this party and they were talking about this problem and I said, oh, I know a guy right, and you never know where those things come from.
Speaker 2:You're exactly right. I can't. I can't stress that enough. That's great advice. Everybody take that in. That's a gold nugget dropping hard, Loving that one. That's awesome, Rich. Thank you so much for your time today. How can people find you? We're going to put all the information in the show notes, but just go ahead and tell everybody how we can find you.
Speaker 1:I am really, really good at keeping up on LinkedIn. It took me a while to get there, but I am all caught up on my networking requests and I'm all caught up on my messages there. So if you want to reach me, just look for Richard Sheridan at menloinnovationscom on LinkedIn. Reference this podcast because I don't accept every networking request I get, but if somebody's out there and says, hey, I heard you on Chris's show, I'd really love to connect with you. I've got a couple of questions from what you guys talked about. I'm always open to doing that Awesome.
Speaker 2:Thank you again. We're going to go ahead and put the books in there. You can always get Rich to come speak I know he's out there doing that and to network, but go check these guys out. I mean, we didn't even get the chance to talk about where Menlo came from and he the first time I met him.
Speaker 2:I'm like I know exactly We've got three more podcasts coming, Chris, oh my gosh, you know what, be careful, I might take you up on that and bring you back eventually, because I'd love to have you talk some more. But before we leave, I've just got to ask you my favorite three questions. I ask everybody when they come on, because I love these topics. I love hearing the answers and I've had some great ones. But the first thing is what is the favorite feature of your house?
Speaker 1:Favorite feature of your house, Favorite feature of my house. We built this delightful little upstairs den. After we bought the house we actually went up and it's got this great gas log fireplace and the TV that we watch the football games on and it is just so cozy up there. It is absolutely my favorite thing inside the house and then outside I have this nice little water feature in the backyard. I call it the Accurate Garden because it was one of our customers' successes that allowed me to do this wonderful little garden outside and it's just heavenly out there.
Speaker 2:You know what? That's a great idea. I think next time I get a big success. I might name part of my house a feature based on the customer that we had. That's awesome. Number two when you're out there and you're not working in your business but you're getting served by others, what is a customer service pet peeve of yours?
Speaker 1:You know, I think my biggest pet peeve is when they make a promise to you that they know that it can't keep and they never come back and apologize. They always try and equivocate um and uh. You know, I I had that happen with one guy who's just trying to service my bike and they ran into all the supply chain problems and and they kept my bike for like six months. I lost the whole bike riding season. I'm like, guys, just be honest about it. You know, and the thing was they had set up an appointment for me to come in and then you know I missed it because they never sent me a notification about it. And you know, and they're like, oh well, we can't go through, we can't let every customer know when your appointments are, and I'm like come on.
Speaker 2:Yeah, exactly right, you know, especially at a home services business, that I'm in you don't want to make that call that, hey, I can't get your tub filler. And that happened to us. We had a $60,000 bathroom all but finished except for one tub filler, and I got an email from a customer saying you know, I'd really like to pay you guys, because I said how come we aren't getting paid, but you guys haven't finished. So I got my project manager. I was like what's going on? He said well, we're all done. But I said no, no, you're not done. And I said did you tell him what's going on? Well, no, well, they were going to yell at me. I'm like no, they wouldn't have yelled at you if you just would have said look, the tub filler is coming from overseas and we can't get it because it's stuck in a shipping container and I don't know anything. But I will let you know and all you do is just keep telling them every week.
Speaker 2:Still don't know, still don't know. Hopefully you're enjoying the shower. Just communicate with me, especially if it's bad news. It doesn't happen so bad if you come clean quick, all right. The third thing give us a diy nightmare story. I love open houses and I love fire, we love water, we love really bad things hey, um gosh, uh, diy nightmare story.
Speaker 1:Um, oh gosh. I've done so much on my house, on my daughter's house is plural, all three of them, in fact. I'm helping my daughter. I'll tell you the one DIY story that has been going on for six months now. My daughter had, in her lovely home, had a drain line break on her dishwasher and it flooded underneath all of the wood, the laminate wood floors, and destroyed them all, went into the house to the other and we've been working six months. These hands are callous. My computer can't even read my fingerprint anymore.
Speaker 2:That's a good one. It's been.
Speaker 1:There's a lot of professionals that are helping too, but there's a lot of stuff I'm doing along the way with her and of course it's an old house. None of the walls are square and none of the none of the lines are straight and all that kind of stuff. But we're creating a beautiful home. But oh my gosh, what a ton of work it is.
Speaker 2:Six months. Yep, that would be one Yep. That's a great story. Well, rich, thank you so much for joining us today. Hopefully you had some fun, and everybody out there adventure team keep. Thank you so much for joining us today. Hopefully you had some fun, and everybody out there adventure team, keep going up that mountaintop of success. You define what it looks like, but you got to develop those habits. Keep learning from listening to this podcast, keep learning from listening to other people and get out there and make it happen each and every day. Let's go solve some problems. We're out of here.
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