As the world’s first and only billion-dollar fully open source company, Red Hat has a unique corporate culture. The employees collectively have more power than any one person, even the CEO.No one is more aware of this than Red Hat CEO Jim Whitehurst. He calls it a “meritocracy” meaning leaders arise based on their brains, not their spot on an org chart.
Whitehurst took the CEO job in 2007 after being COO of Delta Airlines, a cultural shock if ever there was one.
Like much of corporate America, airlines are modelled after the military. They are hierarchical and the boss holds the power. A public act of disagreement is insubordination quickly followed by the words “You’re fired.”
With Red Hat’s meritocracy, the collective holds the power and people don’t follow an idea unless they believe it’s a good one (even if it’s the CEO’s). The CEO could even be called a moron on open forums where ideas are discussed — and argued over.
“It’s not about everybody holding hands and singing Kumbaya. A lot of people find our culture kind of harsh,” Whitehurst told Business Insider.
But it’s also a brilliant, unique culture that foreshadows what the workforce will look like when millennials enter in droves.
In a meritocracy, the people choose their areas of interests and participate.
The more they are interested, the more likely they are to excel and build up some street cred as a leader.
Decision making isn't about getting feedback from every employee. It's about giving every employee a chance to participate. 'Decisions don't require consensus but they do require employees being listened to,' Whitehurst says.
We're not talking about group-think, or the ineptitude of being lead by the masses, Whitehurst says.
Employees don't get to vote.
Red Hat still has managers and those managers are still responsible for decisions.
'It's about transparency not democracy, I can make wildly unpopular decisions and at times I have to do that ... as long as I have gotten feedback and articulated my reasons clearly, I can do that,' says Whitehurst.
For instance, when the company needed to buy an ERP system, Whitehurst chose one that was proprietary, not open source. People were upset. They had offered suggestions on open source products. But Whitehurst explained that the proprietary system was the only one that could handle all of their needs and people understood.
Red Hat doesn't use fancy collaboration tools. It uses old fashioned e-mail lists.
'Everyone's talking about the importance of engaging employees, and the Facebook generation and collaboration tools. All of that is garbage … collaboration is a culture. It's not a set of tools.'
Executives at other companies might tell human resources to go out and buy collaboration tools, but unless the company has the structure in place to let employees honestly talk to each other and the bosses, the tools won't help. So managers should first listen and then find the right communication tools.
Listening to employees means that sometimes they won't have nice things to day. You can't moderate that by deleting or reprimanding or setting rules. You'll have squashed the conversation.
'A lot of execs think they need to moderate. I actually go out of my way to encourage people to constructively criticise because most people won't. You get the 1% of jerks who say something obnoxious. Those people get quickly shouted down. The real problem is getting people who are genuinely nice to say something that might be harsh. I have to go out of my way asking people 'what did you mean by that?' He explains.
This means that sometimes he's 'called an idiot' on a mailing list. But that's ok. 'Because that's how you break down those walls and get people working together.'
Honest discourse isn't always polite.
'Our forums aren't the types of forums where everyone's opinion is politely listened to. It's not collaboration but COLLOBERATION. But the worst thing is not someone calling you a moron. It's no one responding at all,' says Whitehurst. That means they didn't think enough of the idea to discuss it.
As employees argue it out, some will be more listened to than others. They may have junior titles, but they know the topic well and they will arise as your leaders in this area.
If you can't moderate and things are getting out of control what can you do? Let employees self police.
As people grow comfortable expressing opinions, the obnoxious opinions will naturally be shouted down. If that's not enough, go to the employees most involved and ask for suggestions.
Red Hat has an all-employee mailing list called Memolist. It's for company business items. People were sending out funny pictures of cats and consequently people were starting to tune it out. Whitehurst went to the most active users of Memolist and asked them what to do. They came up with a simple solution -- they created another list for humour stuff.
Self policing solves Red Hat's parking problem, too. There are barely enough spaces so when someone parks badly and takes more than one space, employees take a picture and circulate it on the mailing list.
The person is razzed by his/her co-workers and won't do that again.
Employees also self police when 'someone leaves stuff in conference room. People take a picture,' says Whitehurst. In this way, bosses never have to play parent.
Whitehurst laughs at Google's famous 20% on think projects.
At Red Hat, engineers who earn the respect of their peers get to spend '100% of the time to do what they want and everyone else gets zero. If you are truly trying to build a meritocracy it only works if you truly differentiate the best brightest and everyone else.' he says.
Employees without 100% do the jobs they were hired to do. This includes plenty of opportunities for suggesting new projects that the group can chew over.
Listening to employees means it takes a lot of time for every decision. That can be painful for managers. But it's worth it.
'It takes us a lot longer to develop strategy. We engage our people so decisions get made a lot more slowly but once made, we have nearly flawless execution. Everyone knows what we are doing and why we are doing it and are all in. We don't have failed initiatives,' he says.
It doesn't take an MBA to realise that failed initiatives equal a failed company and successful initiatives equal a successful company.
Employees can't be heard if you've delegated the task of listening.
Whitehurst answers every employee e-mail himself -- although he warns employees that it could take him a couple of days to respond.
You're role isn't to tell people what to do but to 'tell people how they are important and how they fit in.'
The worst possible thing you can do is ask employees to contribute their best ideas and have nothing happen. It tells them not to bother. And then management will have to come up with every brilliant idea and executive perfectly, without employee buy in.
By that time, your brightest will find themselves some other boss to talk to.
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