Open Leadership at Red Hat

A Kranthi Kumar
Assistant Professor, Department of Human Resource Management & Soft Skills, IBS Hyderabad (Under IFHE - A Deemed to be University u/s 3 of the UGC Act, 1956), Hyderabad, Telangana, India. E-mail: kranthi@ibsindia.org

Jitesh Nair
Assistant Professor, IBS Hyderabad, (Under IFHE - A Deemed to be University u/s 3 of the UGC Act, 1956), Hyderabad, Telangana, India. E-mail: jiteshnair@ibsindia.org

The case study describes the open leadership approach followed by Red Hat, Inc., an American multinational software company providing open source software products. Red Hat's culture was rooted in the open source movement since it had hired employees mostly from open source communities in the initial years post its inception in 1993. Constructive criticism through open and heated debates was common and acting openly was the norm and what was expected. The top management realized that open leadership gave Red Hat a competitive advantage and efforts had to be made to retain this culture even as the company grew in size. The company management observed that in an open organization, employees evolved into leaders when they exhibited certain behaviors as a result of their beliefs. Red Hat identified the general principles (mindsets) and the resulting open leadership practices (behaviors) and took steps to interlock these mindsets with the leadership behaviors. In the initial phase of building an open leadership system, Red Hat did not find any suitable end-to-end leadership development systems that would help train its people to lead in a flat organizational structure and a culture that preferred meritocracy over hierarchy and seniority. The company decided that it would build some of those systems itself, and in other cases modify and adapt best practices used in standard organizations.

I believe that the future success for businesses to attract and retain top talent relies on a more open management and leadership approach. The workforce is evolving and the new employee is part of a major change affecting not only how we hire and who we hire, but how our companies operate on a basic level. It's especially prevalent in the new generation entering the workforce.1

- DeLisa Alexander, Chief People Officer, Red Hat, in 2012

People are emotional beings. Traditional management does its best to wring every bit of emotion out of people, which can often lead to disengagement. We recognize that if you can actually leverage emotion and the passion it creates, you can really double down the effort you get from your people.2

- Jim Whitehurst, President and CEO, Red Hat, in 2016

Leadership matters at Red Hat. And we believe that open leadership matters more. We have an open culture and we encourage an open environment.3

- Joanna Hodgson, Director of Presales, Red Hat, in 2019

Introduction

Red Hat, Inc. (Red Hat), an American multinational software company, provided open source software products such as cloud, middleware, operating platform, storage, and virtualization to the enterprise community. Since its inception in 1993, it had hired most of its employees from open source communities. This had led to the formation of an organizational culture that was rooted in the open source movement, where acting openly was the norm and the expectation.

Being an open organization, the company believed that each and every Red Hatter had the potential to lead and influence others and their behavior mattered a great deal, particularly in difficult times. At Red Hat, employees did not just receive the status of "leader" when appointed to a position or were given a title. Rather, leaders earned their positions when they adopted a certain combination of behaviors and mindsets which the company called 'open leadership.' According to DeLisa Alexander (Alexander), executive vice president and chief people officer at Red Hat, "They tend to have a growth mindset where they think everyone has something special to contribute. Everyone has something unique they can offer. A leader's role, whether it's a manager or a team lead or a technical lead, their role is to act in an inclusive way and a way that really brings out that individual's strengths, and help them to contribute their unique talents."4

The company had about 12,000 employees operating in more than 35 countries and about 25% of Red Hatters worked remotely. Red Hat made it to Forbes magazine's list of 'The World's Most Innovative Companies' in 2012, 2014, and 2015 and was also named one of the best places to work by Glassdoor5 in 2013, 2014, and 2016.6

The Open Leadership Mindsets and Behaviors

The CEO of Red Hat, Jim Whitehurst (Whitehurst), observed that it was very difficult to change the prevailing organizational culture in any organization to make it more open because that involved changing the way people worked (practices) as well as what people valued (principles). According to Whitehurst, "Open leadership is both a set of values or principles (mindsets) that people embrace, and a collection of practices (behaviors) they exhibit because of those beliefs" (Exhibit I describes some of the key mindsets and behaviors that led to the open leadership culture at Red Hat).

Red Hat believed that though some employees were expected to be a people manager, it was imperative that everyone understood open leadership mindsets and exhibited open leadership behaviors. The management at Red Hat realized that there were some big gaps in basic management skills at the individual contributor's level in terms of navigating tough conversations with respect. In open organizations, people loved to engage in open and heated debates, making their voice heard without shouting others down, and this was not always easy. Besides, many of Red Hat's people managers were engineers and people with other subject expertise who had had little experience leading teams or groups. This led the management to spend a lot of time on finding different ways to fill specific capability gaps. They were aware that the key was to interlock mindsets with observed leadership behaviors.

Leadership Development System

Red Hat's leadership was aware that it could not offer the standard leadership training programs used by many organizations because of its open culture and approach. Right from the beginning, the training and leadership development efforts at Red Hat focused on understanding its own philosophy and approach. In the initial phase of building an open leadership system, Red Hat did not find any suitable end-to-end leadership development systems that would help train people to lead in a flat organizational structure and a culture that preferred meritocracy over hierarchy and seniority. The company decided that it would build some of those systems itself besides adapting those used in standard organizations. Once a portion of an open source approach had been selected, approaches used in conventional organizations were identified and then configured in a way that would be suitable for an open organization. For instance, when the company realized that there was a need for improved goal setting, it introduced best practices like Closing the Execution Gap and the concept of SMART goals (i.e., specific, measurable, attainable, relevant, and time-bound). To make them work for Red Hat, the practices were configured to align with open leadership mindsets and practices that could be used in tandem to make the concepts resonate and become even more powerful.

Also, being an open culture that had passionate open communications and debates, it was difficult to avoid hard feelings between individuals or teams. To overcome this and make the employees realize that those kinds of conversation provided the greatest opportunity for influence, Red Hat introduced 'Crucial Conversations' training for communicating when the stakes were high, opinions varied, and emotions ran strong. Red Hat also introduced Influencer Training7 to help entire teams and organizations communicate and gain traction for their ideas across boundaries.

Red Hat believed that the training was only part of the solution. So, it began developing processes that would help entire departments develop important organizational capabilities, such as talent assessment and succession planning.

Leadership Levels

Red Hat built a leadership development system to enable organizational growth while sustaining the best parts of its unique culture. It outlined four stages for leadership development based on influence and impact (Exhibit II gives the Stages of Open Leadership). They were leadership at personal level, team level, organizational level and enterprise level.

Leadership at Personal Level

Red Hat was of the view that leadership began with each individual. People were considered to be leaders when they took the initiative and collaborated to get their work done, ultimately "giving" far more to the organization (through their contributions) than they "took" (in the form of support and help from other people). The company suggested that most of the leadership development effort should focus on strengthening personal leadership since it enriched an organization's culture as others saw these people as influential voices and they formed the backbone of the open organization.

Leadership at Team Level

When personal leaders at the company began to extend their influence beyond their personal domain, they reached the next stage known as team leadership. This was realized when project and program leaders aligned the individual strengths of every member of a group to bring about a shared vision and focus on results.

Leadership at Organizational Level

The next stage of leadership was at the organizational level where an individual's impact multiplied because he/she had compounded and integrated the strengths of teams or groups to create new organizational capabilities that drove important outcomes. Leaders at the organizational level developed the vision for an entire organization, the foresight to bring the right teams and leaders together, and the ability to channel their passion, energy, and talent for a shared organizational purpose that delivered value. This stage of leadership was required of middle and senior management in open organizations.

Leadership at Enterprise Level

The next stage of leadership with the highest impact was at the enterprise level. It was realized when an individual leader catalyzed his/her passion and contributions across organizations and boundaries to form a vibrant and dynamic ecosystem. Leadership at this level was magnified by the number of people that the leaders influenced. Enterprise level leaders were expected to have the intuition and influence and impeccable timing to know when and how to bring forward important issues and when to let those go. It was about knowing how much direction to provide, how much context to give, and how much faith to have in an organization's ability to find its own way forward.

This stage of leadership could emerge only when the culture was so robust that it helped reinforce positive mindsets, capabilities, and behaviors that permeated the company. Everyone, including executives at Red Hat, ensured that leadership at all levels remained vibrant.

Based on these leadership stages and the increasing needs of the growing organization, Red Hat realized that it needed to meet every Red Hatter wherever they were, understand and leverage their strengths, and support them in building additional leadership capabilities to accelerate their development, so they would be ready to quickly step into bigger roles.

Leadership Tools

Red Hat decided to leverage the benefits of open leadership that had become synonymous with its culture due to the impact of the open source approach and hiring in its founding years. The company wanted to ensure that open leadership became a conscious initiative. Apart from adopting best practices like Closing the Execution Gap, Crucial Conversations, and the concept of SMART goals, Red Hat created two leadership tools-the OPT model and the Red Hat Multiplier-for transforming senior management into open leaders (Refer to Exhibits III and IV for an overview of the models).

The OPT Model

One of the tools used to build the open leadership system was the Organization, Passion, and Talent (OPT) model. The OPT model was a tool that was used at different stages of leadership, whether they were managers or team or technical leads. At the individual level, it was a powerful tool for reflecting on how individuals spent their time and energy, and took ownership of their career. At the team level, the OPT model helped people think about the different kinds of work that gave them energy, and the various roles or responsibilities that were beneficial to both them and to Red Hat. At the organizational level, it acted as a conversation starter that helped the leaders think about development and ways to contribute within their current role, and also discuss the possibilities and opportunities for future roles.

Red Hat used the OPT model in coaching, development, and planning. The idea was that leaders would be performing to the best of their ability when they were doing work that they loved (their passion) were good at (talent), and that fulfilled the organization's needs. This would not only help them feel energetic and motivated but would also ensure that they felt rewarded and fulfilled, which in turn would make them feel that the organization deeply valued them. The OPT model was one of many ways that leaders in an open organization could make the most of powerful motivators like purpose and passion.

Red Hat Multiplier

At Red Hat, the management was interested in helping everyone tap into the combination of mindsets and behaviors that enabled open leaders to contribute at their best. The company also developed a framework called the 'Red Hat Multiplier' that Red Hatters could use at any leadership level to guide their own open leadership activities. It consisted of five activities that leaders had to adopt.

• Leaders must contribute and connect others to Red Hat's communities and shared purpose.
• Leaders must show confidence in the ability of others to contribute.
• Leaders must openly share information and intentions.
• Leaders must invite cooperation and productive dialogue to create better solutions.
• Leaders must empower others to contribute ideas and value solutions based on their merit, regardless of source.

Though, some employees were more naturally inclined to behave in this way than others, each of the five behaviors was something that anyone could build and develop. The company called this "the Red Hat Multiplier" because it found that individuals who cultivated these leadership behaviors were so influential that their impact multiplied. The Red Hat Multiplier helped the company articulate what leadership looked like at different stages of a leader's development and highlighted clear development areas for people who wanted to become leaders, whether they wanted to be better managers or more influential individual contributors. It also helped the company provide support and guidance on what success as a leader looked like.

Though many employees had been 'collaborative' or 'transparent' even before they joined the company, the leadership tools at Red Hat helped them practice these skills at a level they could never have conceived of in a conventional organization. The company's initiatives had the benefit of developing a shared understanding and language for talking about leadership throughout the organization. It helped build and sustain a culture where leadership was expected at all levels and in any role. Red Hat thought quite differently about leadership than most organizations. It believed that while not everyone was a manager, everyone could and should be a leader. Developing leadership in an open organization was about maximizing influence and impact.

The future of Open Leadership

Openness had increasingly become central to the ways groups and teams of all sizes worked together to achieve shared goals. This was more so in an era of remote working and virtual teams. Many forward-thinking organizations, irrespective of their missions, had accepted openness as a necessary orientation toward success. Being an open organization, Red Hat believed that its open leadership led it to greater agility, faster innovation, and increased engagement. The question was how well Red Hat would continue to foster 'open leadership' after its acquisition by IBM on July 9, 2019.

Suggested Readings and References

1. Jacob Morgan, "How Red Hat Develops Open Leadership", https://www.linkedin.com, July 16, 2019.
2. "The Open Organization Guide to Red Hat Summit 2019", https://www.redhat.com, April 23, 2019.
3. DeLisa Alexander, "What is Open Leadership?" https://opensource.com, December 4, 2018.
4. Marcel Schwantes, "The CEO of Red Hat Wants to See His Employees Cussing and Crying. The Reason behind It Is Priceless", https://www.inc.com, August 7, 2018.
5. Jan Smith, "Open Leadership: the Role of the Executive", https://www.redhat.com, May 10, 2018.
6. DeLisa Alexander, "Making Open Decisions at Scale", https://opensource.com, April 25, 2017.
7. DeLisa Alexander, "2 Tools for Transforming Senior Management into Open Leaders", https://opensource.com, March 30, 2017.
8. DeLisa Alexander, "4 Stages of Open Leadership Development", https://opensource.com, February 28, 2017.
9. "The Open Organization Leaders Manual", https://opensource.com, 2017.
10. Brook Manville, "Red Hat's Open-ish Organization", https://www.forbes.com, January 28, 2016.
11. Martin Veitch, "Red Hat CEO's Book Centres on Importance of Being Open", https:// www.idgconnect.com, May 27, 2015.
12. "What People are Saying about The Open Organization", https://www.redhat.com
13. "The Open Organization Definition", https://opensource.com