In 2008 Jim Whitehurst abandoned the comfortable hierarchy of Delta Airlines for the freedom-loving culture of Red Hat. Before long, he grasped that the ethos of his new technology company mirrored the spirited communitarianism of the open source Linux movement on which Red Hat depended. CEO in name, but now facing a different game: Whitehurst saw his success would require (as I wrote last August) unlearning command and control.
The leader took the challenge to heart and since then has been pursuing a personal transformation: fewer executive prerogatives and more “igniting and catalyzing” the raucous tribe of open source enthusiasts at Red Hat. Last spring he published his memoir-cum-exhortation for lessons learned, seven years in: The Open Organization. The book was a paean to a new kind of leadership, suited to our ever more competitive and connected age.
Refining The Secret Sauce
Whitehurst’s story found a ready audience among other leaders eager to transform their own businesses by “becoming more open.” This CEO’s clarion call, backed by the company’s continuing strong financial performance, began to sound as if a new secret sauce was cooking at Red Hat. A few weeks ago I asked if we could lift the lid off the pot, and have another look. Had Jim’s post-publication experience led to any new ideas? Improvements? Recantations?
To Whitehurst’s credit, he has always acknowledged his Red Hat leadership journey as a “work in progress.” As I listened to his reflections of the past year, I heard a leader fine-tuning the gentle schizophrenia of the network age: how to be in charge without being in charge? In search of the Open-ish Organization.
Six Insights
1. The greatest value of an open organization is fostering innovation and enabling change. The Red Hat CEO is more clear than ever that open organizations are a strategic response to business disruption. He cited a recent McKinsey study highlighting the large gap between today’s leaders’ perceived need for innovation and their companies’ abilities to transform themselves to deliver it. “This approach is not just about ‘holding hands’ or ‘creative class’ situations. Even traditional manufacturers are under pressure now to innovate. The opportunity to work open is less about collaboration per se than facing the need for change coming into your company. Hierarchies are not responsive enough for managing and adapting to change.”
2. The open leadership challenge is building culture that blends accountability and efficiency with creative and frontline freedom. Whitehurst was equally clear that hierarchy still has its place in the world: “Bureaucracies can get bloated, but they remain good for driving down accountability. The trick is building an organization that maintains the accountability while also encouraging freedom and debate.”
Whitehurst stressed that Red Hat’s open model is in fact a hybrid. “The book should have brought out the combination of accountability and freedom more clearly. Even when I was at Delta our rise from ‘worst to first’ was based on complementing front-line empowerment with top-down management of results. There are some things like safety which shouldn’t be debated after a certain point. At Red Hat we do have people in control. For example, we deliver mission-critical software security that requires high integrity and accountability. We might explore different approaches in our community for securing a system of a nuclear submarine or a major bank, but once we decide, we settle—and expect everyone to follow along.”
Jim began to sketch the bigger pattern. “Red Hat does have a CEO and a chain of command. We use open culture and networks to innovate and develop strategy, and a top-down hierarchy to deliver quarterly results. There’s ultimately a continuum that every company has to consider. Where they fall on a spectrum of efficiency versus agility and being able to change—that’ll determine how open they should be. But even the most staid companies will need some combination—because everyone has to innovate at some level today. And yet they also need to deliver quality products. The book should have been more articulate about finding the balance. The open leader has to manage the inevitable friction points between the two sides of this kind of culture.”
Management, Leadership, Or Both/And?
3. Open requires rethinking “management” vs. “leadership.” The Red Hat CEO implied finding such a balance means abandoning the historical split between “management” and “leadership.” He began with the analogy of the behavioral revolution in economics. “For years that discipline was based on simplifying assumptions that people were rational. All economists then built models around that. It was imperfect, but you could do the math. Today economists are embracing human emotion and revolutionizing their theories accordingly. There’s not yet a universal science because the math of behaviorism is too hard. But we’re understanding more and more that emotions are part of what drives markets.”
“In the last century the ‘science’ of management began with similar simplifying—but imperfect–assumptions: that people would be rational in the workplace. The idea evolved that leadership was different, primarily for motivation and inspiration—tapping into emotions, getting people to want to do things. By contrast, management was about rational coordination. So we started to have different disciplines dedicated to leadership and management.”
“I wanted to write the book because the Red Hat culture is about bringing both leadership and management to scale—and doing that means also bringing them together. Communities have to be inspired and motivated, but also coordinated for results. In an open organization you can’t separate leadership from management. I would emphasize this more if I wrote another book.”
Shaping A Hybrid Culture
4. Focus, tools and techniques can shape the hybrid culture. Jim Whitehurst acknowledged that “it can be fuzzy how accountability gets grooved in an open organization—so I spend a lot of time thinking, talking, and memorializing how to make our culture work. It can be hard to learn, for new people coming in.”
As I questioned further, he mentioned a few mechanisms Red Hat has been developing, to clarify ownership and expectations in a company that also celebrates dialogue and autonomy. “We just published an ‘open decision-making framework.’ As we get bigger, we wanted to document and promote best-in-class approaches to making decisions using open principles, without getting pulled into consensus thinking. Our decisions are inclusive, but not democracy.”
Cultural Multipliers
“We’re also now trying to measure the ‘Red Hat multiplier effect’—specific ways our cultural values contribute to performance: collaboration, trust, etc. But we need to get crisper. We’re also beginning to measure why it is certain people make a positive difference to a team, even if they themselves aren’t the biggest star. It’s similar to what’s been discovered about Duke basketball player Shane Battier—whenever he’s on the court the team overall performs better–but he’s not the top scorer.”
5. For most organizations, moving to open will be a gradual transformation. Since his book’s publication, Whitehurst has been questioned about how to create the open organization culture in other enterprises. Emphasizing the transformational challenge for any company, he’s brainstormed with other leaders about possible accelerating strategies, e.g. “employee surveys or other bureaucratic jiu-jitsu that actually uses hierarchy for employee engagement. In the end, however, energy needs to come bottom up. And culture building is always a long process.”
He pivoted to another analogy. “The reason the U.S. legal system is so good is because it’s evolved through hundreds of years of case law. You can top-down mandate something like the Napoleonic Code—but it’s not going to be as durable or engaging as ours.”
Watching For Movement
6. The rising influence of technology in all businesses is now the likeliest driver of a broader “open organization” movement.
So is there an open organization movement actually building now? Whitehurst paused.
“Not really yet. I see a lot of companies doing this here and there, in pockets. But we don’t have a long list of other examples so far. Remember, it’s hard to do this at scale. That’s what’s been distinctive about Red Hat. ”
But The Open Organization author finished with a few buoyant thoughts. “Remember, I had the benefit of being thrown like a frog into the boiling water when I came to Red Hat. I had to start quickly, though I soon saw the process itself would be long. But as technology becomes ever more central to companies, and the disruptions and pressure for change and innovation continue, I think open-style culture will become more mainstream, and spread to more businesses. It’s not restricted to technology, but will likely began in that part of large enterprises.”
“We’re already seeing that in some of our clients, and also competitors. The movement will expand, most likely following the open source philosophy itself: ‘start small, iterate, and grow from there.’”
Frogs everywhere, please note.
Originally published on Forbes.com