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Red Hat’s Jim Whitehurst ‘on the bleeding edge’ of change with 'cred'

Jim Whitehurst

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Editor’s note: Jim Whitehurst, chief executive officer of Raleigh-based Red Hat (NYSE: RHT), is one of the speakers at the eighth annual Fuqua School of Business and Coach K Leadership Conference next week in Durham. Whitehurst recently talked with Kate Catlin of MMI Public Relations about Red Hat, Red Hat’s Linux-based business, the challenges in changing from his former role as an executive at Delta Airlines to Red hat, and the leadership required to be successful in business today given the ongoing economic crisis.

This is the first of a two-part interview.

The theme of this year’s Fuqua School of Business and Coach K Leadership Conference is leading in times of uncertainty. Red Hat has faced significant uncertainty from the outset, and this is continuing. How do you lead when uncertainty is so high and so continuous?

For Red Hat, we live in a very uncertain environment. We are a 21st century company living in a 20th century world and so at times I feel like we are on the bleeding edge of a whole series of managerial challenges and we work through that and actually embrace that because I think we are competitively advantaged as long as we can keep things uncertain.

We have built our culture around a meritocracy. We’ve built our culture around letting the best ideas win. We have built organizational structures and funding structures to ensure that our people have an opportunity to invest in their own ideas. Several of our key products and several of the things we have recently announced started off as garage efforts by people within Red Hat in part of their free time.

So if you look at our engineering department a number of people at any given time are working on skunk works. And one could look at that and say, “That’s inefficient”, but we look at that and say, “That’s how innovation happens. That’s how we get the most out of our people”.

And in doing so, frankly, it plants a lot of seeds, which I guess in economic terms you could call optionality or creating option value. We looked at it as planting a lot of seeds; some of those are going to flourish and I think we have a system, while far from perfect, has been developed into a 21st century business model and therefore have a greater likelihood of success because we do think about and know how to foster creativity within our walls but also more broadly and in broader communities.

So we can bring to bear to potential innovations of hundreds of thousands of people involved in the communities in which we are a catalyst.

One of the real benefits of Red Hat as well is we are a very, very solid company financially. So, we have a significant base to work from and so when we think about uncertainty out there we can look at our customers, we can look at our employees, we can look at our partners and say, “if you are going to make investments, if you are going to make bets around companies we’ll be there and you know we’ll be there”, which gives us both the ability to attract communities, again these are either employees or customers or academics or from all walks of life, we can attract these communities to us because there is a general sense that Red Hat will be there and has the staying power to be there.

So, being rock-solid stable helps us address uncertainty, not from the sense of we can sustain a large loss, but more from the fact that it allows us to place more bets and it attracts even more people to us as, again a catalyst in the communities in which we operate.

How were you able to make the transition in leading a company in one industry and moving to such a different industry and organizational context?

I think there are a couple things that have helped me make the transition.

First, my original career was in professional services. I was a partner at the Boston Consulting Group and BCG, as Mackenzie and the other strategy consulting firms have no assets either. And so I kind of grew up as my first all the way through to partner there in a world where we were creating a meritocracy because ideas were important. So, I think luckily I started off from those roots and when I came to Delta and the when I ultimately became COO there, I did a lot of work to basically do front line empowerment.

It seemed like a big hard thing, it says easy, does hard when I say that, but we did a whole series of things to unlock the power of the front line. And I was really excited about the results there, but looking at it from Red Hat’s terms, those were very minor iterative movements in terms of how to better engage a work force.

Frankly, I do think my predecessor had read a couple articles about that and thought that was interesting and was one of the reasons I ended up here at Red Hat. And so I have tried to really take that 101 education from Delta and apply it in a massively new way.

I think most importantly, it’s having a very, very open mind and being very, very comfortable not being the center of a hub and spoke but rather, at times I’m a chief cheerleader, at times I’m a bit politician and at times I have to play a little heavier role in directing, but I rarely pronounce and I spend probably more time communicating than I do anything else.

Because again, this is a company where the “whys” are equally as important to the “what’s” because people will determine the “what’s” based on the rationales of the direction Red Hat is trying to go.

With Red Hat as a leader in open source software being dependant on a community outside of your control, does it present special leadership challenges for you and other Red Hat leaders?

Given the fact that our corporate boundaries are so porous, it creates significant challenges. We can’t lead by mandate. We can’t lead by fiat. We have to lead through our own personal ability to influence and influence comes from credibility, people will talk about here about having deep cred, but it’s having credibility, it’s about establishing a reputation that we are doing the right thing and that’s via our words and via our actions and something that builds up over time.

And most importantly it is, even in places where we might have leverage, not using that leverage if we can find any other way to get things done. So it’s much more about influence and about being a catalyst than it is about, kind of driving a specific agenda.

Part Two: An inside look at Red Hat, Linux and open source.

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