It’s a Journey
As CEO of a public company, I’m a practitioner, not an academic. I don’t pretend to have developed a new management system, though I hope I have described why a new one is needed. The only proof I can offer that the leadership culture we’ve built at Red Hat is effective and worth emulating—regardless of what kind of company you run—is our results. But I also admit that since Red Hat operates on the bleeding edge of this new and better way to lead, we cut ourselves quite often as well.
In short, we’re still on a journey to find newer and better ways to build on the lessons we’ve learned about what works, and what doesn’t, in building and leading participative communities.
The Boundaries of Participative Organizations
We know participative communities can build software. We see participative communities like Silicon Valley yield tremendous innovation, and efforts like Wikipedia can collect vast amounts of disparate information. Few would doubt the power of crowdsourcing to drive unique and elegant solutions to specific problems. Conversely, it’s generally accepted that conventional hierarchies are typically miserable at driving innovation or sparking creativity. But those same hierarchies do excel at maintaining control and coordinating disparate activities like those involved in building complex machinery. Can participative organizations excel in these areas too? Put simply, could a loosely organized participative community build something as complicated as a jetliner?
This question first arose in a conversation I had with Gary Hamel, who was one of the first people to recognize the need for an entirely new management system to meet the needs of the twenty-first century. We were discussing the power of participation as a management model. While we both agree that this new system offers great potential in unlocking creativity and innovation, we were debating whether it could match and replace conventional management for purposes of coordination and, if so, what its limits might be. We ended up using the analogy of building a jetliner as our best example of a situation in which very tight coordination across literally millions of various systems and parts—the hallmark of a hierarchical system—is required. That question has been nagging me ever since.
Airplanes are truly modern marvels of coordination on a massive scale. A well-designed airplane is the result of tens of thousands of small design trade-offs that are perfectly balanced and tightly managed. Hundreds of thousands of components must come together with minute tolerances. A slight change to the wing design, intended to reduce wind drag just a bit, might require hundreds of additional changes, from the avionics to the landing gear. Every design choice and change must be analyzed across the many thousands of interconnected components. The end product is an engineering marvel of startling reliability. Indeed, the design and manufacture of an airplane represents the pinnacle of what modern coordination can produce.
Which brings me back to the question, can a bottom-up, participative system develop something as complex as a jetliner, considering the requirement for such close coordination among the various parts? When Hamel originally posed this question to me, my knee-jerk answer was no. Building a plane is not what participative systems are good at. Upon further reflection, I would more clearly say, “In the very short term and in the strictest sense of the question, my answer is no.” While participative communities have shown an amazing ability to develop highly complex systems, their power lies in the distributed nature of the innovation process.
Think about how Linux is created. Those closest to individual components are able to drive optimized solutions to those problems. In these self-emergent systems, the underlying detail and complexity of the components can be far beyond anything a top-down, centrally planned system can muster. However, if those components must be tightly coordinated to work together, I’m not sure participative systems have a way to do that.
But the more I thought about the problem, the more I realized that it’s the wrong question. It is asking whether a participative system stuck into the middle of a conventional command-and-control ecosystem can outperform it. The right question to ask is, “Could an open ecosystem in aviation produce a superior aircraft over time?” And to that question, my answer is yes.
The power of participative systems and bottom-up innovation comes from having those closest to the problems involved in solving them. Linux is successful not because Linus Torvalds specified his requirements for each component, but rather because he did not. He allowed others with different skills and expertise to drive the various components of the system, and ultimately the whole has benefited. If the various parties involved in the myriad components of aviation—from the electronic navigation system to the landing gear—were allowed to drive their own designs forward, would the benefits of the superior individual components offset the fact that they are not as tightly optimized to work together?
For many years, tightly coupled RISC/Unix systems represented the ultimate in computing performance. The idea was that, by producing both the hardware and the software together, a vendor could produce the fastest computers. These systems dominated high-end computing for years. Today, however, Red Hat Enterprise Linux, which is not designed for any particular hardware platform, runs over half the world’s equity trading volume—and those are systems bought for performance, not price. Why?
Simply, no single engineered process can keep up with the pace of change capable in an open system, which can innovate faster because it is not encumbered with the need to coordinate across an entire system. Intel can run at its own pace, delivering the promise of Moore’s Law with chips of ever-growing complexity and performance. It can do this without worrying about the software. Others are working globally to ensure the software continues to get faster and more reliable. The fact that virtually all the top supercomputers worldwide are running a combination of Intel chips and Linux demonstrates the power of allowing specialized groups to focus on optimizing in their own sphere to create a better whole. An open system could not create the tightly coupled, highly coordinated system that is a RISC/Unix computer. Instead, it created something better, faster, and cheaper.
But it did not happen overnight. A perennial garden takes years to reach maturity; the same can be said for a participative ecosystem. It took over a decade for the combination of x86 chips and Linux to surpass the power of tightly coordinated engineered systems. There are already open source projects trying to build an airplane. They are starting small, but who knows where they may be in a decade.
I’m not yet advocating the complete demolition of the conventional organizational structure. At Red Hat, we continue to experiment with the boundaries of applying this new model to a public company. We use our participative culture to drive innovation and make decisions quickly, and we still have people managers and senior leaders who play critical roles in catalyzing the company’s direction, fostering participation, and driving its purpose and passion.
We are on a journey. I doubt anyone at Intel in the early days of the microprocessor would have imagined that its chips would run the world’s fastest computers. Nor did Linus Torvalds ever dream of the same. I firmly believe we are on a path toward a new, superior management paradigm. Red Hat is one of the companies on the bleeding edge of that journey, and I hope our lessons learned—both positive and negative—about driving the principles of an open organization can help to catalyze the discussion.
A Shared Challenge
A key takeaway from this book is the notion that the Red Hat system—the way we go about getting work done—is a crucial source of our competitive advantage. Our management system and organizational culture generate unique capabilities that others simply cannot duplicate. In other words, our open organization is our competitive advantage. It’s how we have fended off much bigger rivals in the past and how we plan to defend against them into the future.
Capabilities like speed and agility, rather than physical assets, will become even more important components of every company’s competitive advantage in the future. But to capitalize on that advantage, you’ll need an open organization management system capable of fueling those fires. We at Red Hat beat our competitors to market and react more quickly to threats and opportunities not because we pedal faster, but because the organization taps into powerful energy sources like purpose, passion, and community that make it move faster.
It would have been easy for me to rely exclusively on examples from Red Hat for this book. However, I purposely included a number of examples from Delta and other organizations like Whole Foods, W. L. Gore, and Zappos to demonstrate that any kind of organization can benefit from these principles. Many conventional competitors will face an onslaught of new entrants into their markets; just look at how Amazon continues to expand into retail or how Airbnb has disrupted the hospitality industry. These new players are likely to have a different, more modern organizational model driving their success. Competing against them isn’t just about matching up your products in a market-based chess game. It’s more about pitting organizational capabilities against each other. I hope this idea serves as food for thought for executives at both emerging businesses and established ones. To leaders at emerging companies, please don’t assume that getting big means getting rigid and bureaucratic. To leaders in established companies, recognize that your organization’s capabilities may become more important than your physical assets.
There’s No Going Back
I have had the unique privilege to observe and learn this new management system up close. When I first joined Red Hat, I had my “conventional organization” filter on. I thought what I was seeing was simply chaos—the result of not adopting the tried-and-true management practices used universally by conventional organizations. Over time, however, I began to appreciate the subtleties of what I now realize is a different management paradigm. I’ve had a chance to poke and prod and experiment. I’ve seen how the principles we rely on at Red Hat operate in the extreme within open source communities like Linux. There is still much to learn, and I am sure there is much to tweak in terms of perfecting how open organizations operate. But there is one certainty in my mind: I could never go back.
Every leader who takes on a new job must undergo his or her own personal journey. I have had the unique opportunity to join a company that was already practicing the principles of open organization. That’s been transformative for how I think about what makes companies successful. Every company must have a higher purpose, for example, and an enterprise can only exist and be profitable if it is creating value for someone. An organization’s leaders have the job of sharpening and clarifying that purpose in a way that ignites the passion of its members.
To fulfill that role, I’ve learned that the leaders of tomorrow must possess traits that have largely been overlooked in conventional organizations. To effectively lead an open organization, a leader must possess the following traits:
Personal strength and confidence. Leaders in the conventional world leverage their positional power—their titles—to get things done. But when working in a meritocracy, leaders need to earn respect. They can only do that if they have the confidence to admit they don’t have all the answers. They must have a willingness to talk through problems and think on their feet in order to reach the best conclusions with the help of their teams.
Patience. The media rarely tell stories about how “patient” a leader is. But they should. When you are working to get the best effort and results from your team, to engage in dialogue for hours on end, and to do things again and again until they’re done right, you need to have patience.
High “EQ.” Too often we tout the intellectual capabilities of leaders by focusing on their IQ, when we should really be valuing their emotional intelligence quotient or EQ score. Being the smartest person in the room is not enough if you don’t have the capacity to work with the people who are in that room with you. When you work with and through communities of contributors as Red Hat does, where you can’t order anyone to do anything for you, your ability to listen, process, and not take everything personally becomes incredibly valuable.
A different mind-set. Leaders who have come up through conventional organizations have been indoctrinated in a quid pro quo mind-set—one that’s been influenced by math and hard science that says every action should receive an appropriate response. But when you take a longer-term outlook to investing in something like building a community, you need to think differently. It’s like trying to build a delicately balanced ecosystem in which any misstep you make can create imbalance and lead to long-term damage that you may not see right away. Leaders must divest themselves of the mind-set that requires them to achieve results today at all costs to one in which the big payoffs come from delaying their sense of gratification and making those investments in the future.
Of course, making these kinds of changes won’t appeal to everyone. There are times when issuing a top-down edict, for instance, would be far easier than allowing the meritocracy to reach a solution on its own time. Why would you want to open yourself up to criticism from your own troops? Wouldn’t your workplace seem less chaotic and in control if you stuck with doing the things the way you always have? To make this kind of culture work requires that leaders make an enormous investment in terms of time and energy, which can seem both daunting and wasteful. It’s almost like taking a leap of faith into the unknown. How will you know that you and your organization will be able to reap positive rewards by going down the path I’ve described?
The answer comes back to the kind of competitive environment your organization faces. If you feel extreme pressure to keep up with the rapid pace of your market and competitors, as we do at Red Hat, then I believe the investments you make toward building an open organization will be paid back in spades. Once you see the power of unlocking the full potential of the people you work with, you simply can’t imagine going back. I am gratified to be part of a system that helps enable people to achieve their potential. It’s fun and exciting. Passion is contagious. I work to kindle it, but I am also consumed by the passion of others.
Another key lesson of this book is that the sense of pride I feel in what Red Hat has accomplished actually has little to do with anything I have personally accomplished. Rather, I feel proud for what the people of Red Hat have done as a direct result of my support for the system that enables them to achieve great things. This feeling is similar to how most people feel when their child graduates from college; they feel prouder than they ever felt about their own graduation. There is just something about seeing someone you care about and support step up and take the initiative to achieve something remarkable that is very powerful and, ultimately, gratifying. Watching the people around you blossom and reach their potential is so potent. When you allow everyone to do his or her best, and are wise enough not to stick yourself in the middle and muck things up, everybody wins.
This journey has been extraordinary for me. I’ve written this book about how the new type of organization, the open organization, is more effective and more capable. It’s also a story about my own deeply satisfying and gratifying experience in learning how to lead such a workforce—something I couldn’t have done without the help and feedback from everyone who works at Red Hat. Starting with my first interview up to today’s billion-dollar company, it’s been quite a ride—one I am thrilled to continue into the future. When I add everything up, it’s easy for me to reflect on the true pleasure of working at Red Hat.
Join Us on Our Journey
Great conversations are happening on opensource.com, the website we created to spark discussions about what is possible when you open yourself to the possibilities of working in an open source way.
There is a case study on the site that specifically discusses how people are building their versions of “makerplanes” by tapping into the collective wisdom and expertise of the community. No, they aren’t making jetliners . . . yet. But I wouldn’t bet against them. This then raises the question, what else is possible when we put aside our conventional organizations and begin to tap into the power of participative communities in all aspects of our lives and businesses? The potential is limitless, which is why I invite you to join us on our journey by engaging in the discussions on opensource.com.
There is a special page related to the themes of this book, and we encourage you, in the spirit of letting the sparks fly, to share your thoughts and opinions with us on how you think we can all lead and work better in the future. We look forward to hearing from you there.