According to Jim Whitehurst, business has changed.
As he writes on the very first page of his 2015 management advice book, The Open Organization:
“The classic rules of the game—which used to define who won or lost in business—are being swept away.”
And as a result, Whitehurst adds, “You can’t keep doing the things the way you’ve always done them” (p. 2).
Whitehurst is the CEO of Red Hat, a publicly traded company that offers customer support to the users of open-source software, including Linux. The organization employs just over 10,000 people, and in 2016 took in $2.4B in revenue. And for over 20 years, according to Whitehurst, that company has been managed as an “open organization.” And, as he insists:
“Managing and leading an open organization could not be more different from leading a more conventional one.”
So for this installment of my “Paradox of the week”-series of posts, a look at a couple of his management “principles.”
Funny thing, though. They seem pretty familiar.
Everything new is old again
“It starts with a purpose,” Whitehurst writes on page 27 of his text.
This, to his mind, is critical to the generating the passion and engagement necessary to the success of any open organization.
But, of course, companies of all sorts (including conventionally managed companies) already craft their own mission statements. Indeed, some of the statements of purpose that Whitehurst then cites as exemplary belong to some pretty old, and well-established organizations. For example (p. 28):
- The Walt Disney Company, founded in 1923 (“To use our imagination to bring happiness to millions.”)
- BMW, founded in 1916 (“To enable people to experience the joy of driving.”)
- Johnson & Johnson, founded in 1886 (“To alleviate pain and suffering.”)
Are mission statements a good idea? Some businesses seem to think so. But are they innovative, “unconventional,” or something that could be considered unique to an “open organization”?
Not so much.
Whitehurst also attributes Red Hat’s success to hiring passionate people (p. 40), making efforts to celebrate the company’s culture (p. 47-48), offering a dual “ladder” of advancement for those who would prefer not to go into management (p. 95), and even its casual dress code (p. 126).
Again, these are all fine ideas. But are they management “principles” that could be considered unique to an “open organization” like Red Hat? Not really. For example, companies having been trying to hire passionate people probably since the beginning industrial revolution. Even Delta Airlines, Whitehurst’s employer before he was hired by Red Hat, aspires to recruit workers with passion.
And by his own admission, Delta is managed in a far more traditional manner (p. 11).
Up is down?
Finally, for someone who thinks “the conventional way of running companies” has “major limitations” (p. 11), and who argues that you can “no longer rely on top-down management hierarchies to solve problems” (p. 63), Whitehurst sure draws an awfully familiar diagram to depict this new type of management paradigm.
[Note that the figure on the RIGHT represents an “open organization” in Whitehurst’s estimation, while a “conventional organization” is on the LEFT.]
Looks to me like Whitehurst has it reversed…or is it upside down?
See you next Friday.
 These are instances in which a management author/”expert”/advice-giver/guru offers contradictory advice or makes paradoxical claims, typically without any awareness of having done so. For more examples of this phenomena, click here. For an explanation as why this happens—and why it happens so often—check out my post “Why you can throw out that management advice book” (Parts 1,2&3).
 Interestingly, Whitehurst brings this paradox full circle by later contradicting himself yet again when it comes to mission statements. On page 40, he seems to dismiss their utility (as well as admits that the idea itself is not at all novel): “Most companies have a stated corporate purpose or mission statement. Unfortunately, these are rarely used words that do little to drive purpose or passion within the company.”