Jim Whitehurst, CEO of the billion dollar company Red Hat, shares his perspective on the non-traditional approach required to create an open company. His big idea? Instead of working through hierarchy, catalyse a community to self-organise and solve the problems. Why would you? And how?
Here are some extracts from Jim Whitehurst describing how a leader operates in the new generation companies. …
Who is Red Hat? Anyone in a decent size company, your pay (system).. is running on our software. (It’s) like Windows, but it never crashes! We’re.. in 90% of the Fortune 500 companies. We work with.. tens of thousands of incredibly bright, accomplished people in communities from academia or (other) companies.
These Open Source communities self-organize to solve problems. People are doing their own things, nobody controls it — we work to catalyze those directions that are ultimately good for our investment. Stated simply, for leaders to be truly effective, they’re going to have to operate as catalysts… it’s incredibly important.
Why catalyse communities, and how does Red Hat do this?
We don't want to say "lead", because the people we work with don't want to be led. We want them to do (it) because they want to do it, not because we told them to do it.
I’m not a big idea guy normally, but I’m watching.. everything about our current economy is about to radically transform. In 1870, our world looked very similar to 20AD, (with) 90% of the population (in) agriculture. Then (in) the Industrial Revolution, people moved to cities and the economy changed. Now.. computers have been around since 1950, but in terms of mega-impact, we're just starting to see it. What are some specifics?
The friction costs that make up two-thirds of our economy, transaction costs are melting away. The pace of innovation, the time spent on research, document discovery, all of that is being automated, and now it's searchable. I’m excited that with ubiquitous information, knowing facts is irrelevant.
The concept of leading through hierarchy was developed to deal with information constraints. Someone had to be in control, but we have the reverse problem now: how do you make decisions with so much information provided? (That is why) networks are becoming a way to organize human behavior across companies.
A lot of people can be involved in making decisions — but Open Source isn't all about consensus. A meritocracy is different than a democracy. It's about how networks form to solve problems, and how you get people bought into the direction, but using their own intelligence to get there. You have to build the skills of the people with drive.. to take those facts, apply critical thinking, and be creative.
A lot of executives are scared to get input because they think they'll get obnoxious answers (but) the bigger problem is actually to get people to contribute. (With) a suggestion box, you'll get a few things, but mostly just the loudmouths. Most people are shy or don't want to say something negative, or just don't believe that you want their ideas. You've got to get people to open up and want to contribute.
Most people.. say everything is going well even if it’s really not. Being authentic, being open, or just working to try to engage, this is the way you can get the ideas out. Bring up where you made a mistake yourself.
People are emotional: we don't do exactly what we're told, and we don't always value just dollars and cents. Get people to buy into the fact that they're doing something bigger than just their job.
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The worst is silence! You’ve got to get it started at the top. At Delta, walking through one of the hangars, this guy stopped me — he had a suggestion but never heard anything back. I gave him my email address, and then I started publishing my email address: my commitment was, it might take a while, but I’ll get back to you. Build a culture in your organization where all suggestions get feedback.
How could you move, from relying on hierarchy, to catalysing a community across companies to self-organise and solve the problems?
Notes
- The interview took place at Marbles Big Idea Forum in October 2012. Transcript here.
- Image: zdnet.com