This is part two of my interview with Jim Whitehurst, president and CEO of Red Hat, the world’s leading provider of open source enterprise IT products and services. In this post Jim discusses his approach to management at Red Hat as well as the book he published in 2015 with Harvard Business Review Press entitled “The Open Organization: Igniting Passion and Performance.” In the book he shows how open principles of management – based on transparency, participation, and community – can help organizations navigate and succeed in a fast-paced connected era.
If I were a new employee starting at Red Hat tomorrow, how would I figure out where I fit?
Jim: Red Hat is very much a bottom-up organization. With that, we have a lot of ambiguity, and need people who can self-start. Typically, people join Red Hat because they’re passionate about open source software and the benefit it provides versus closed source software. My role is to create context for people to do their best work. As a new associate (e.g., Red Hatter), you need to be comfortable with ambiguity. Nobody is going to tell you exactly what to do. They’ll give you a general idea of what they want accomplished, and you have the freedom to figure it out from there.
Some people don’t like that and have real trouble with it. That’s what we really try to impress on people when they come in. It sounds fun and everyone thinks they want autonomy. However, autonomy also means you need to use your own judgment and logic to ultimately decide how you are going to accomplish work. Some love it and some don’t. We do our best to attract people who thrive in that open, freewheeling type of culture.
Do you set up some guideposts for the organization on a quarterly or yearly basis?
Jim: Once every four years, we update “the house.” That doesn’t mean we update our overall strategic direction every four years, but rather it’s a good time to take a fresh look at “the house,” see if there’s anything we’re missing or need to tweak.
Also, every year we have a set of relatively consumable goals (customer, market, people) that we communicate during quarterly meetings. It’s not financial but more a set of macro KPIs (key performance indicators), such as the Net Promoter Score for customers. We don’t want to make it too prescriptive. We focus on outcomes so people can decide how they get there. It goes back to the concept of creating context for people to do their best work rather than tell people what to do and monitor them doing it.
You are one of the few CEOs I know who has actually written a methodology around doing the job. Who were your influences in learning and thinking about the job of CEO?
Jim: The odd part about Red Hat is that it is so different from most organizations. The open source movement grew out of a self-participating, not-for-profit kind of thing. There are great books out there on leadership and management, but they didn’t quite apply to Red Hat. When I went on my own journey about how to manage a more creative place, there are several books that were very impactful to me. Gary Hamel’s “The Future of Management” does a good job articulating that managing uneducated people doing rote tasks in a static environment is a very different skill set than managing educated people who have to apply initiative and creativity in a fast-moving environment. Simon Sinek’s “Start with Why” was also an influence for me. A newer book – “Team of Teams” by General Stanley McChrystal – is a phenomenal book on how to think about building a more creative, bottom-up networked organization in a hierarchical system.
Jim: As I mentioned, in his book “The Future of Management”, Gary Hamel nailed the problem: The traditional management bureaucracy was built to measure and monitor rote tasks. That’s not what exists now. I reached out to Gary and said, “You’ve absolutely nailed the problem, but how do we solve it?” He said, “I wrote the book, but I haven’t seen the solutions yet. Red Hat seems like it’s far along. Why don’t you write a book on it?”
It had nothing to do with what I’ve accomplished or done. It’s all about what I’ve learned at Red Hat. I went to Harvard Business School, became a partner at BCG, and ran Delta Air Lines, which is a very large traditional company. I thought I knew a lot about how to lead and manage. I get to Red Hat and initially thought it was chaos. I wondered if they brought me in to clean the place up and bring in some adult supervision! I quickly realized that it’s not chaos. It’s a very different culture and way to manage and lead. It’s about coordinating people’s behavior to get results. There is very much an assumption that people join because they want to and not because they have to. We show the importance of mission as well as the importance of individual interactions vs. lines and boxes. I wanted to share what I found so effective at running an organization with creative people in a fast-moving environment.
In talking to other CEOs, they were complaining that their change management efforts were failing; they were not growing fast enough; their people were disenchanted with the work, millennials all wanted to be CEOs, etc. It’s not a problem with people wanting to change or millennials. The problem is management structures designed for factory workers 150 years ago. There is a different way to coordinate, and at Red Hat we’re doing it at a reasonable scale. The book is much more an articulation of mistakes I made and things I’ve learned at Red Hat. I felt the story needed to be told about how Red Hat has developed a management system out of the principles of open source. And show others that they too could adopt the same model, and become an open organization.
Do employees read the book and call you on your own words? I know mine do.
Jim: Yes, absolutely. There are people who have read the book and keep us in check when they think we’re not living up to our values. There are also those who have joined the company after reading it. I like to say the book is Red Hat on our best day. While we’re not perfect, we’re constantly striving to be better and be the best open organization we can be.
Anything you are seeing with your view into the markets that you think other CEOs would be interesting in knowing?
Jim: The context for leadership is changing. All of the systems and everything we learned in business school was to manage in a different context. It was much more about prescribing what people needed to do and holding them accountable for doing it. We are moving to a world where if it’s easy to prescribe, it’s easy to program. If you can automate it, that job is going away. The jobs that remain are where people have to apply initiative and creativity in fast-moving environment. They have to move from telling people what to do and monitoring, to creating context for people to do their best work.
There’s an analogy I heard from General Stanley McChrystal that applies: Gardeners don’t grow anything. Plants grow. The gardener just creates the best condition they can for them to grow. What would you advise if a 20-something came to you and said they want to be a CEO? What is the right preparation?
Jim: In the end it comes back to do what you love to do, and the right things will happen. Many people choose a job or make a move in their career, because they believe it’s the right next stepping stone. This should take a back set to doing what you love to do with people you enjoy being with. If you do that, you will be seen and will rise to the top. The worst thing is doing something because you think it’s the right next step.