In every other way, however, Goebel and Sheridan are not traditional bosses. Overarching strategy is their domain, but the tactical stuff—the daily squall of code-making and high-tech “anthropologizing” that drives the company—belongs entirely to the employees. On the days I spent at Menlo, I never once saw any worker pay Sheridan or Goebel any special deference. No one talked any differently in their presence. They were there as team shrinks and advisers, and yet they were also not there—the rest of the office thrummed on around them, regardless of what either of them did. Sheridan’s troubling “bottleneck” had been removed; in its place was a largely self-sufficient software-coding machine.
I asked Sheridan if he ever missed his old office and the clout that came with it. “I liked being the person everyone came to,” he admitted. “There was glory to it. I felt like the smartest guy in the room. But that doesn’t matter to me anymore. It’s not my goal.”
Menlo’s hiring process is called “Extreme Interviewing,” and it bears a striking resemblance to speed-dating. Applicants, sometimes as many as five for each open position, are brought into the offices for a series of rapid-fire interviews with a range of current employees. The emphasis is on “kindergarten skills”: geniality, curiosity, generosity. As the Menlo white paper on Extreme Interviewing puts it, technical proficiency is less important than a candidate’s “ability to make [his or her] partner look good.” (Sample interview question: “What is the most challenging bug that you helped someone else fix?”)
Later the Menlonians gather to compare notes. Lobbying is common; so is argument. Eventually, the candidates are ranked partially on their technical skill and partially on what the white paper describes as the team’s “value set.” Offers are extended to the applicants at the top of the list.
“The collective aspect allows one of us to say, ‘Okay, he did really well at this,’ ” one employee, Greg Haskins, told me. “And another of us to say, ‘But not so well at that.’ And we bounce opinions back and forth before deciding. Basically, we build our team together.”
In an old-fashioned, top-down work environment, employees get rewards from three main sources. One is pay (the better we do, the more we get). The second is title (the better we do, the higher we ascend). The third is a sense of achievement (recognition for having performed a task admirably). In a bossless environment, the calculus is significantly changed. Achievement is tied to the team as a whole—you can write a particularly nice piece of code, but it won’t mean squat until the whole project is up and running, and for that, you’ll need the assistance of your peers. Individual achievement is obviated and replaced by shared achievement. Friendliness and congeniality start to matter more, ladder-climbing a whole lot less.
And herein an important point: Horizontally managed companies work in large part because they tend to attract people who are okay working in a bossless environment and weed out the ones who aren’t. (“I can smell a corporate-ladder climber from a mile away,” one Menlonian explained.)
Which is not to say that everything at Menlo is peace and love and synergistic intellectual communion. It’s not. It couldn’t be—no matter how lofty the theories espoused in the glossy, professionally bound 73-page Menlo guidebook (available for free to visitors), its adherents are human, who by their very nature gossip, back-talk, and bicker. “Are there fewer problems here than elsewhere?” Goebel asked me rhetorically. “I’m inclined to say no. We just deal with our problems differently. And the problems themselves are different.”
Most of those problems originate in the vacuum left by the traditional management structure. Stephen Courtright told me the story of a manufacturing company that had “misunderstood,” in his words, what self-management was all about—few boundaries or guidelines were set for the work teams, and the feedback loop was practically nonexistent. (Courtright, who was consulting for this company, declined to disclose its name.) “They were just kind of set loose to do their thing,” Courtright said, “and they produced too much inventory, and the company ended up with a stockpile of unused stuff.” An executive decision was made to go back to a top-down hierarchy.
At Menlo, employees must necessarily be self-starters and willing to work collaboratively; if they aren’t, the rest of the team will show them the door. Several Menlonians recalled for me the story of a man I’ll call John. At first John seemed like an ideal employee—diligent and hardworking. But the horizontal structure at Menlo clearly ate at him, and under-the-breath grumbling soon gave way to very loud bellyaching.
One afternoon at lunch, he stood up and told his colleagues that they were “insane—that they needed to be freed from this weird Nazi regime,” in the recollection of someone who witnessed the explosion. Sometime after, the team fired him.