In a Crisis, Be Open and Honest
James Whitehurst is president and chief executive of Red Hat, the world’s largest open source software company.
Q. You joined Delta Air Lines at noon on Sept. 11, 2001, as acting treasurer. The company filed for bankruptcy in 2005, by which time you had been promoted to chief operating officer and had to lay off tens of thousands of people. Talk about managing through crisis!
A. I got promoted about 12 weeks before we filed for bankruptcy. That was really my first major leadership role, with 80,000 people working for me. I was 35 years old and I was too naive to know I should have said no [to the promotion]. I’m naturally a very calm person and that helped, but it was really brutal.
One of the key things I learned is that in this type of situation, your goal should not be to comfort or make people feel better, but to be open and honest.Tell people what it’s like and allow them to make the decisions that work best for them. A lot of leaders want to show a ray of optimism, but all you do is shade the truth. Be honest and say, ‘This is what it is and this is what we’re going to do about it.’
The other lesson I’ve learned is that once you’ve made the decision you believe in, you have to stick by it, because you’re making these changes for the good of the whole. This helps give you the fortitude to do these painful things if you have the clear vision of where you’re going. I think one of the things leaders have trouble with in difficult times is that they know they have this problem, but they’re not going to change their team because it’s too painful. But you never hear anybody say, ‘I moved with that change of personnel too fast.’ It’s more, ‘I wish I’d done that a year ago.’ It’s important to have the fortitude to say, ‘I’m going to do this, and it starts with my team.’
Q. Moving from Delta, an airline, to Red Hat, a technology company, must have been a culture shock. How did you handle it?
A. I knew it would be very different, but it was still a shock. I came in with a strategic point of view: ‘We’re going to focus on two products, we’re going to do a five-year plan, set goals’ — which we ultimately did. I was told, ‘O.K., how are we going to engage all the employees?’
Early on, I remember asking some people for a report about something and when I circled back for it, I was told: ‘Oh, we didn’t do it; we thought it was a bad idea!’ I remember telling my wife, ‘This is major insubordination.’ And it wasn’t like people were even embarrassed about it — it was like it was just normal. During the first six months I was pedaling hard, trying to get up to speed, traveling all the time, and they would say, ‘We’ve just done that new product category.’ I said, ‘When were you going to tell me?’
It took me a while to realize things were happening bottom-up and that it was not necessarily chaos, it was just different. It took me about 18 month to embrace it, and change my management style to fit in that corporate culture.
Q. You’ve been a strong advocate for ‘open’ organizations as a catalyst for business innovation ever since. Is this type of management style applicable to any business?
A. Yes and no. Traditional organization structures are very good at optimizing in a static environment, when you are trying to orchestrate people to do what you want them to do, and also in a world when those roles don’t have a lot of variance in potential output. You’re just trying to optimize for efficiency, and individual variance in performance doesn’t matter that much.
But in knowledge-based environments where the difference between an average and a great programmer, for example, is 10X, that’s a very different situation. In that environment where you want that 10X, maximizing that discretionary effort to get it is incredibly important. And in an environment that is moving very quickly, you can’t plan and then execute and then optimize around that, while it’s all moving too fast for the plan. You need to have an organization that can self-regulate and react quickly. You need to create an environment where people can execute and make changes as they need to.
Q. How do you achieve that?
A. You have to go to work every day remembering your team is there because they choose to be there and not because they have to. It doesn’t mean you have to be in a sell mode all the time, but if you go in thinking, ‘I’m a leader because people choose to follow me,’ it creates a very different mental dynamic. A leader’s role is to create an environment where people can do their best work, and not to tell them what to do and monitor how they are doing it. That’s how you get the lowest common denominator out of people.
The whole point of an open organization is to relax the constraints of management to create the environment in which your team can do their best work. And what is most important is to cascade this philosophy through every manager in the organization. I know that if something happens to me tomorrow, nothing will change at Red Hat because it’s really built into who we are and what we do.
Another important point is that you have to have a deep belief that a team will come up with a better solution than any individual, including yourself. If you think you have the better answer and just go through the motions, it will never work.
Q. Is it a democracy, then?
A. No. At times I’ve made very unpopular decisions. The key is that you never want to surprise people. So you must engage them first in dialogue. In a traditional model, you have a small number of people making the decision at the top, and then you announce, ‘This is what we’re doing.’ Then the organization doesn’t really do it, so you bring in management consultants to help you do it. And then the C.E.O. says, ‘This is awful; my organization is resistant to change.’
I could plan the most extraordinary vacation to Tahiti and buy the tickets to surprise my wife, but frankly I don’t think she would be happy if she hasn’t been consulted first. People want to be engaged; you involve them in the decision process. When it comes down to execution it can happen very quickly, even if they disagree with the decision; again, this is not a democracy, but if they feel they were heard, they will generally align and execute.
In terms of who is involved, it depends on the decision. You will find that 95 percent of the people don’t really want to get involved in the decision, and knowing that they could is enough. So it’s not like we have thousands of people engaged in most of these decisions.
Q. What are the risks in that system of management?
A. You have to combine that autonomy you’re giving to people with some kind of control. In our case, for example, it could be the budget system or the culture around iterative innovation — where we encourage teams to try small things and if it works, go for bigger milestones. The key thing for managers is to know how much latitude you can give to your teams. From the risk perspective, it is like balancing autonomy within a boundary and making sure you have autonomy within a box.
