The Open Organization: (Red Hat)

Book Review: The Open Organization:
by Dr. Toby K. Easley, March, 15, 2017
 
Jim Whitehurst, CEO, Red Hat, The Open Organization: Igniting Passion and Performance, (Harvard Business Review Press, June 2, 2015, ISBN 978-1625275271, 256).

     The author of The Open Organization, Jim Whitehurst, CEO, earned his undergraduate degree from Rice University and attended Harvard Business School. He worked for the Boston Consulting Group and was also the COO, of Delta Airlines. He is presently the CEO, of Red Hat based in Raleigh, North Carolina. In 2015, when his book was published by Viking Press, Red Hat boasted of going from $400 million in revenue, to more than $1.5 billion, with a stock price that had “quadrupled” (157).
     In the beginning of his book, Whitehurst does not waste any time giving the reader his definition of The Open Organization. In his own words he wrote, “An ‘Open Organization’ – which I define as an organization that engages participative communities both inside and out – responds to opportunities more quickly, has access to resources and talent outside the organization, and inspires, motivates, and empowers people at all levels to act with accountability” (2).
     In the same paragraph he also explains what he perceives as the inherent strengths of The Open Organization. According to Whitehurst, “the beauty of an open organization is not that it is about pedaling harder, but about tapping into new sources of power both inside and outside to keep pace with all the fast-moving changes in your environment” (2). In other words, accessing employees knowledge and outside sources is one key to utilizing the strengths of superior ideas and solutions in order to make rapid progress. In his own words he believes, “In the open source world, we believe the best ideas should win, no matter where they come from” (151). However, within the company he claims “Respect has to be earned. It’s not about a title” (104). He makes this statement because he believes people perform better who are passionate about what they are trying to accomplish. If people are working only to please the CEO, according to Whitehurst, they “will give you the minimum effort” (104). In fact, “earning a reputation” takes time within the company as a new hire, and ideas win out through what he calls a “meritocracy.” Furthermore, he states that “to become a leader in a meritocracy, you need to attract followers first, not the other way around, as is typical in most conventional organization structures. Your peers actually have to select you as their leader based on how effective they think you are, not just because you have a more impressive title or résumé” (91).
     The key differences according to Whitehurst in companies are what he defines as the “Conventional organization” that is, “cascading down” from the CEO down. The other is the “open organization” that he prefers and is “bubbling up” (20). The “Conventional” is described as beginning at the top with “what, how, and why.” The command and control does the central planning at the “what” level, setting direction.” Others who have “title and rank” participate in the hierarchical “getting things done” at the “why” level. Finally, when others in the company get the message from above, their motivation and inspiration comes from a desire for “promotion and pay” at the “why” level (20).
     The “Open Organization” that is “Bubbling Up,” begins at the bottom “motivating, igniting passion, and building engagement” in the “why” phase. The next movement upward, “getting things done” involves the “Meritocracy” and also “Letting the sparks fly” in the “how” phase. At the top is “Setting Direction” and “Catalyzing inclusive decision making” in the “What” top phase (20). The idea behind the “Bubbling Up” is in Whitehurst’s mind to “Empower your rock stars to follow their passions” (97). This underlies the philosophy that the best ideas will win out at the end of the day based on the merit of the idea, not your position (151).
     The “Open Organization” is also not afraid of internal debate. Whitehurst openly admits that, “I love to stir up a good debate and sometimes think of myself as Red Hat’s head debater” (110). However, the debate environment is guided by four values. These values are freedom, courage, commitment, and accountability (111). Freedom however is not let completely loose to meander out of control. Freedom is kept in check by “accountability” which in Whitehurst’s own words involves “each other, to our partners and customers, and to our shareholders” (112). Nevertheless, these four elements can at times involve human emotions and hurt feelings, which is why the author admits there “is not a perfect system” (120). Furthermore, the “Open Organization” is not “a democracy” either “where everyone has an equal vote” (145). When final decisions have to be made, the Red Hat leaders from the top down must still make decisions. However, what ultimately distinguishes Red Hat’s philosophy from top down companies is the process of how final decisions are made.
     All of these explained processes, philosophies, and decisions made by Red Hat serve a broader purpose to meet the high expectations of their customers. Whitehurst admits that, “Red Hat has become a larger part of our customers’ IT infrastructure, and as they begin to use more of our products, they expect us to understand their businesses.” He goes on to explain that our customers “expect us to offer solutions to their problems, not just offer ‘great technology’” (170). This also explains another motto of Red Hat that says, “Release early, Release often” (151). This motto is not intended to communicate a haphazard philosophy, it is just another way to explain the urgency and passion of the “open source way.” In their mission statement, Whitehurst tells the reader to “judge for yourself” the words behind the “mission statement” (152). “To be the catalyst in communities of customers, contributors, and partners creating better technology the open source way” (152). Having a definitive “mission statement” that clearly communicates, he adamantly states, “I would also wager that most, if not all, Red Hatters could cite it by heart” (152).
     In the conclusion of the book, Whitehurst adequately informs readers what Red Hat does for customers that also interests investors. “We generate our revenues by making open source software consumable and safe for enterprises to adopt” (201). He also explains that Red Hat provides their customers with “services they pay for on a subscription basis.” Furthermore, they are efficient for their customers by not having any “built in incentives to deliver software to customers that they don’t want or need,” and at the same time making billions of dollars “selling free software” (201-202).
     He also shares his thoughts on what he perceives as a “key turning point in Red Hat history” (200). According to Whitehurst, a “key turning point” came when a team from within the company “came up with the idea to completely shift focus from the desktop to the enterprise server” (200). Even since the publication of his book in 2015, new developments in “cloud” technology continue to create the need for change and adjustments in the “Open Organization.”
     In conclusion, The Open Organization is intriguing and interesting. For many perhaps, the philosophy is too far removed from the “top down” traditional model. However, for those who seek to feel and experience passion and incentives in their work environment, this is an appealing company. For those who have been unhappy and stuck in an organization or company that is resistant to any change, The Open Organization is stimulating. Perhaps one can assume in part, that one of the reasons Red Hat has been so successful in recent years, is due to the appealing draw of employees who enjoy working in an “open,” creative, and passionate environment. The Red Hat workplace and philosophy could potentially also satisfy an entrepreneur type who would otherwise be unhappy working for a large company. By drawing potential employees with drive, passion, courage, and vision, Red Hat has created a company on the cutting edge. One must also not forget the company has continued to perpetuate many jobs for people with superior technological skills, but also people with sales ability and problem solving capabilities.
     Having already proven to have a successful history within the technological world the company is continually moving forward at warp speed. Due to their business philosophy, Red Hat has the capability to keep pace with rapid progress and to also remain on the leading edge of future development. Jim Whitehursts’ book, The Open Organization Igniting Passion And Performance, is motivating, interesting, informative, thought provoking, and worthy of recommendation, especially for those who have a fascination toward a creative, entrepreneurial type thought process, and incentive based company. ~TKE~