The Open Organization: An Interview with Jim Whitehurst
By: Connie Blaszczyk
How open is your organization? Does your company culture encourage transparency and participation? Is it a place where contribution matters more than credentials? While those concepts may seem out of reach they’re being successfully adopted by a variety of companies including the largest open source software company in the world and that company is Red Hat.
As Red Hat’s President and CEO, Jim Whitehurst is an enthusiastic proponent of the open organization. Under his leadership the company uses open management principles to how it’s run to how it makes money.
Jim Whitehurst’s new book is called The Open Organization: Igniting Passion and Performance. It’s published by Harvard Business Review Press. The book explains how companies can knock down the walls and allow for collaboration from within as well as from customers, venders, and partners.
Listen in to this podcast interview with Red Hat CEO Jim Whitehurst.
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Monster: Jim, it’s a pleasure to speak with you.
Whitehurst: It’s great to be here. Thanks for having me.
Monster: These ideas of participation, communication, community — those are very holistic concepts that define the open organization. Are those really the means to generating greater profits in today’s volatile business environment?
Whitehurst: I absolutely think so. So much of what we think of is business management and theory around it was developed back in the industrial world when the primary thing that management did or its objective was to manage relatively unskilled, uneducated workers doing route tasks in a static environment where there’s very little information.
If you hear about the world today we’re primarily managing knowledge workers who need to show creativity and initiative in a world that’s moving really rapidly where we have almost unlimited availability of information and communication tools. Of course, how you manage is going to be different.
Monster: How has the open organizational model transformed Red Hat as a company?
Whitehurst: Red Hat grew out of the open source movement, so open source basically refers to computer source code and the best known project was called Linux.
We lucked on it I want to say because of the open source movement and that’s what we grew out of, but I do think one of the major challenges with management today is it starts off with the theory that people are happy to have a job.
In other words, companies choose people rather than people choose companies. That was very much an industrial revolution notion where people coming off the farms, the best job you could get would be in a factory.
Monster: What kind of initiatives has that mindset prompted within the organization to better address the needs of employees who want to be challenged, who want to feel engaged?
Whitehurst: Laying out a value proposition with a real purpose or mission to impact the world beyond a paycheck is critical.
We really work to ignite that and be passionate about it, to really bring people in and get them excited about what we do. You then need to really work hard and this is something that most leaders, I think, fail to do is work to connect people’s day to day job responsibilities with how they fit into that purpose and the ultimate strategy of the company.
Monster: That actually leads into one of the traits that is in the book describing what is an open organization. It’s kind of a radical sounding idea. It’s the idea that leaders will be chosen by the led. It’s pretty much I think what you’re talking about and I wonder how that’s impacted your role as president and CEO of Red Hat.
Whitehurst: A leader is somebody that people follow and people tend to follow the people that they respect and want to follow. Now we certainly have job titles and an organizational structure, but it’s really an overlay on top of the culture and we work to make as many decisions as possible leveraging a bottom-up approach.
Leaders can be people with no direct reports, but they are thought leaders and they’re listened to and their opinions mean a lot when we make decisions.
We even have separate career tracks. We have what we call careers of achievement and career as an advancement and careers of achievement mean you don’t have to move up an organizational ladder. It can be an individual contributor, but you are clearly recognized as someone who has achieved a lot and you’re known for that.
We basically have a whole set of internal social media that allows people to talk about almost anything to contribute and to engage and the leaders naturally emerge. It’s amazing that it doesn’t require a lot of work once you get the culture started. That leaders emerge and we know who they are and it self-propagates over time.
Monster: In terms of communications do you rely on email or do you supplement email with other platforms in terms of that communication and for employees to broadcast themselves basically?
Whitehurst: Yes, we have multiple ways that we do it. I would say a large chunk of it though believe it or not is still email. We use email mailing lists where people can subscribe. There’s some that the whole company has subscribed to, so we have something called memo lists where we talk about strategy and culture. Everyone by default in the company is subscribed to that.
We have other cloud strategy, DevOp strategy, various geography lists and so we have a whole bunch of different mailing lists which we use. I think that’s a holdover from open source where mailing lists are a key way that collaboration happens. We have IRC chat, so we do a lot of text-based chat that we use. We do have then internal sites, blogs, et cetera, but most of it actually still is by email.
One lesson I’ve learned and we’ve tried other tools and some of the other tools have over time built a role within Red Hat, but it’s less about the technology and much more about the culture where senior leaders are participating and listening. If people believe people are going to participate and listen then people will go there.
Monster: In terms of as the leader of an open organization is your door more open? Can people at any level in the organization engage you with questions and how does that access work?
Whitehurst: Certainly my email address is known to all. I get a number of emails a day directly from associates, some various things with opinions. I walk the halls a lot. I stop into our offices a lot. Being open really it’s primarily around an attitude and what you say, what you do to make sure people feel comfortable coming up and talking to you.
It’s critical in an open organization that you do that because that level of engagement is ultimately what draws the crowd into broader conversations, so absolutely need to do that. I’m often asked, well, you can do it in a small company, but can you do it in a big company?
We’re 7,500 people around the world and it’s really not that hard to do. In the end a few people will come talk to me, but the fact that people can talk to me mean more people are willing to talk to their direct supervisor. There’s a multiplying effect of that.
Monster: In that way does the open model ask more of managers and executive level employees?
Whitehurst: It asks differently of managers and executive level employees. Very simply, I think, most leaders believe their role is to be decisive and make decisions and then drive execution of those decisions. Where in an open organization you believe your role is to create an environment where people can do their best work and then work to catalyze the direction or involve others in laying out the direction that people will execute.
Basically, what happens is you spend a lot more time on culture and a lot more time engaged with others to get decisions made, so the decision making process takes a lot longer.
To some extent it does require a higher level of EQ because you have to be willing to get in and have the debates. You have to deeply, deeply believe that the best ideas can come from anywhere because you spend so many hours with groups and debating things and getting to answers, but you got to believe you’re going to get to a better answer. It probably does require a higher level of EQ, but overall for me when I was at Delta Airlines I spent 90% of my time on execution.
At Red Hat I spend maybe 10% of my time on execution and 90% on making decisions, driving strategy and people, so it’s just different.
Monster: Can we just clarify, EQ stands for?
Whitehurst: Emotional quotient, so if you think about IQ versus EQ it requires maybe a little less raw intelligence and much more of an ability to work with others. I certainly think that would be true at Red Hat because that ability to engage, to mix things up and being comfortable in that environment is something I do think are important attributes of next generation leaders.
Monster: Are there rules of engagement that everyone follows in the sense of this more open communication platform that everybody is utilizing, so that there’s respect, there’s a sense of not respect based on hierarchy, but simply respect of others.
Whitehurst: Yeah, we try. We really try hard, so in multiple regards. One, we really do evangelize that the best ideas will only emerge if people feel comfortable giving their ideas. We even contrast it with some of the open source projects which can be very, very harsh and critical. When I say we don’t want the best ideas from people who can withstand withering criticism, we want the best ideas and so we need to be encouraging of that.
Now it can be harsh at times. People aren’t very happy to say that’s a bad idea and we work to coach people to recognize that we use expression in an open source called you are not your code. Basically saying if somebody is beating up your code it doesn’t mean that they’re beating you up. We apply that same thing where we really try to make sure people recognize that even if your ideas are criticized that doesn’t mean somebody’s criticizing you.
Monster: Is it challenging to introduce these ideas of open communication? Do you have to train say boomers and even gen x to acclimate to this model?
Whitehurst: What we found so far is you don’t have to train people. Either they naturally like it or they naturally don’t and it’s interesting, we’ll hire people from big stayed companies who will come into Red Hat. Some of them just have an immediate culture shock and leave after a few months and others are like a fish to water and so I can’t imagine I could have ever worked anywhere else.
We found that it really doesn’t have a lot to do with age. It does have a lot to do with just a personality type and who likes to mix it up and who’s comfortable with ambiguity and is open to listening to ideas.
People who like that love it at Red Hat and there are so many people who say I could never imagine working anywhere else. To be frank we’ve hired people before and after a few months they just say oh, my god, this place is chaos. I can’t get things done, I can’t stand this place and we’re not trying to appeal to everybody in all circumstances.
That goes back a little to the comment I made at the beginning where you have to think about people, your people in your organization almost like customers and what your value proposition to them.
Monster: Have you found as part of the recruitment process markers or interview questions that will help you discern if someone will thrive or not in an open organization?
Whitehurst: What we’ve actually done is we put in place and aggressively work to drive an employee referral process. I know a lot of companies have these, but we drive it hard and we celebrate people who have multiple referrals that we’ve hired.
We talk about nobody knows a Red Hatter like a Red Hatter. Over half of our hires come from employee referrals. We have a dramatically higher success rate with people who Red Hatters have referred. We found that that actually works better than interview questions.
If you know the person well enough and our people know our company culture, just getting to know people and socially, et cetera, people can identify who fits, but it’s much, much harder in an interview format to really be able to tell.
Monster: I’m really curious to hear about how this open organizational model impacts customer relationships and vendors and partners. Can you talk about that?
Whitehurst: It’s an amazing thing in that generally both partners and customers get the power of sharing. We all do it in our home life. Your mother was right, it’s better to share. When we go to customers and talk about what we do and the power of actually contributing that source code into open source projects that ultimately are products. You got a lot of customers that are really interested in that.
We have a ton of customers who contribute back into projects that are products. We have vendors that contribute into these projects. I think for a long time, really around the Industrial Revolution we moved to a world where if I make it it’s mine and if I’m going to sell it I’ve got to sell it and everything is this for that in a direct transfer on every transaction.
I think people are starting to get that sharing can actually be very, very powerful and while you share you don’t get an immediate payback. That second over time the whole gets better and everyone benefits. Customers, I think, are inspired by that. Our vendors are inspired by that, so we get a ton of contribution to our projects and even we contribute to things that aren’t our products that are other projects. People get a non-financial emotional benefit from doing that.
Monster: I think research has proven it out for quite a while now — which is when people are engaged, when they feel that they are able to contribute — when they have more opportunity to do that, when they’re heard, when there’s a response — an immediate response — if you have a company of people who are in that mindset that is pretty powerful.
Whitehurst: It’s an extraordinary thing I will say. I’ve been at Red Hat seven years now and I was amazed on day one and continue to be just shocked and amazed at how powerful a phenomenon it is.
Monster: Jim, you’ve been very open and transparent in speaking with us accordingly so, but I really appreciate that and thank you again for your time.
Whitehurst: Thank you, it’s been great to chat.
Jim Whitehurst is CEO of Red Hat, the largest open source software company in the world. Before joining Red Hat, Whitehurst held various positions at Delta Air Lines, most recently as Chief Operating Office, responsible for operations, sales and customer service, network and revenue management, marketing and corporate strategy. Prior to joining Delta he was a Partner at The Boston Consulting Group. To learn more, visit theopenorganizationbook.com.
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