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Red Hat is a successful, public open source software company. It’s the first open source company to crack US$1 billion in revenue and is closing in on US$3 billion. Here is some advice from the chief executive for your own business.

Red Hat gives away all its intellectual property and products. Where it makes money is from support. To be clearer, Red Hat takes the free Linux operating system and other open source projects and makes them more robust, more scalable and more secure for enterprise and government. It sells subscriptions to its software along with support, and with the guaranteed long-term stability of the product.

iTWire had the opportunity to speak directly to chief executive Jim Whitehurst during the annual Red Hat Summit in San Francisco earlier this year, asking what a company like Red Hat can teach other companies about strategy, planning and culture. Whitehurst gave these insights:

Planning is dead, at least traditional planning as we know it is dead. However, there's still clear value in planning for, and delivering against, a set of enduring capabilities.

Five years ago we didn't know the technologies we'd be using today, and we don't know what will be big in five years time, but I do know in terms of our success we have to manage relationships with customers and build the capability to serve customers bigger than we do today, and the need to have employer brand to attract talent. Our planning is around capabilities rather than market conditions.

We've found over and over again with companies that have tried some sort of digital transformation they've moved to this or that model, buy the tools, try it, have the right titles, and buy and use a process and it fails and they say "oh, it's culture. I have a culture problem" – you do, but you can't directly change the culture, or rather if you try to directly change the culture you will fail.

Culture is like morale. If you have bad morale you can quickly fix it – buy everyone pizzas, give everyone a raise, and they will be temporarily happy, but if you didn't fix the reasons then they will become unhappy again. If you say you have a culture problem and try to fix the culture you will fail. Culture is an output of leadership style, values and processes and so if you don't change those, culture change won't happen.

I say to CxOs your transformation won't change culture unless you personally change. What does that look like and feel like? Very few companies recognise culture isn't a problem with people but you as a leader. That's not saying people are bad – I spoke to the CEO of a very large bank a couple of weeks ago and he said we want to pick two or three digital initiatives and make a team and drive success with resources behind the projects. I said no, you're a bank, people are afraid to do the wrong thing and it will be watered down.

Instead, pick the people who lead your initiatives and say "I want to see 10 proof of concepts in 90 days. We'll kill nine of them. Then let's see another 10 in 90 days, maybe some out to demo stage, but with the learnings built-in from the first 10." This tells the organisation it's ok to fail and to set up a structure where it's not a big high-stakes thing.

Leaders need to change, but they don't have to go through a personal epiphany and be a different person, but change what you ask for and accept failure and drive experimentation - this will drive your culture. Instead of saying "come back with two projects" say "come back with 10 and we will kill most of these" is a small tweak how you to talk to the organisation but it's one example of the 100 things you have to do to get a cultural change to happen.

This is more effective than hiring a consultant to convince people they should be willing to take risks. You don't change culture directly, but you do things that start to get culture change.

The writer attended Red Hat Summit 2018 as a guest of the company.

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David M Williams

David has been computing since 1984 where he instantly gravitated to the family Commodore 64. He completed a Bachelor of Computer Science degree from 1990 to 1992, commencing full-time employment as a systems analyst at the end of that year. David subsequently worked as a UNIX Systems Manager, Asia-Pacific technical specialist for an international software company, Business Analyst, IT Manager, and other roles. David has been the Chief Information Officer for national public companies since 2007, delivering IT knowledge and business acumen, seeking to transform the industries within which he works. David is also involved in the user group community, the Australian Computer Society technical advisory boards, and education.

 

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