What my conversation with GE taught me about open organizations

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Most people are familiar with university foreign exchange programs, where schools send their star students out into the world to collect experiences and learn beyond their comfort zones. Fewer people probably know that big companies have internal "executive MBA" programs their HR departments develop to help fast-track top performers (we have our own such programs here at Red Hat). Recently, I acted as a subject matter expert for a corporate executive development program with high performing General Electric (GE) executives. The day I spent with these leaders was one of my favorites here at Red Hat, and it dawned on me that this could potentially be a sharing model that Red Hat and others could use more broadly.

These folks were some of GE's brightest talents, tasked with the challenge of understanding how to build "digital DNA" into a hundred year-old company. It was a three-week project GE set up as a tour of various organizations GE felt had mastered the art of building this digital DNA and creating a culture tailored to the millennial generation. The company wanted its emerging leaders to learn everything they could about the way workplaces are changing in the digital age.

So as part of their tour, they stopped by Red Hat's Atlanta offices to learn more about our company's unique culture. When I first received GE's request, I felt baffled that the company thought it had something to learn from Red Hat. The fact that a high-profile company like GE continues to evaluate its corporate culture and is willing to reach beyond its walls really impressed me. It was also refreshing that these leaders were so candid about the challenges GE faces as it evolves from an industrial goods company to something much more.

As luck would have it, I had a handy resource right at my fingertips—my boss’s new book, The Open Organization! Our CEO, Jim Whitehurst, writes about how open source principles have dramatically altered the future of management and organizational leadership. I gave each of our visitors a copy of Jim's book (as well as Charlene Li's recent book, The Engaged Leader), and we began a several-hour discussion, talking openly about the cultures of our two companies.

Sharing stories of everyday life in our organizations was a great way to break the ice. The GE folks and I may have worked in very different places, but we soon discovered we shared similar concerns:

  • How do we ensure our companies innovate and respond quickly enough to our fast-paced market environments?

  • How can we stay agile so that decision-making doesn't suffer as we continue to grow?

  • How do we continue to attract and retain up-and-coming workers who demand more autonomy and purpose at work?

  • How do we maintain what we're known for while also being flexible and adaptable for what is coming?

Our conversation was enlightening for both sides. For example, we discussed at length the place and role of metrics in organizations today. We all agreed that becoming obsessed with the most minute details of numbers was a constant danger, especially given the flood of information now available. But our visitors were clearly shocked when I told them Red Hat doesn't track the kinds of metrics GE does. Instead, Red Hat leaders expect associates to define their goals and corresponding metrics, because we trust the judgment of the people closest to the problems we're trying to solve collectively. And we feel associates can make these decisions because we've ensured that they all thoroughly understand the company's mission, purpose, and strategy. I was being completely honest when I told our visitors that I've never lost a wink of sleep wondering whether Red Hatters understand and embrace our mission. That's just something I take for granted in an open organization like ours.

We also discussed the role feedback plays in our decision-making practices. I told GE leaders how lucky I feel to be working closely with associates who'll tell me when something isn’t going well (or when they don't agree with me!). I have zero fear that people on my team are just nodding in agreement, or that issues will grow so large that they become extremely difficult to fix. When we have an issue or conflict in Marketing at Red Hat, we tend to set up quick (30-day), cross-functional "tiger teams" to hit the problem straight on. In traditional organizations, mandates and solutions tend to flow from leaders down to their subordinates, whose job is to carry out those mandates—not question them. Today's workforce is smarter than I am; I need their insights and creativity to find the right solutions. And they demand—and deserve—a culture that values their input, not simply their obedience. Open organizations tend to attract this kind of talent, I said.

During the visit, I was actually able to demonstrate firsthand the power of an open organization's collaborative atmosphere. Red Hat CIO Lee Congdon joined me so we could explain how we partnered together as CIO-CMO (an increasingly hot topic these days). We used our joint effort of re-launching redhat.com as a specific example. As anyone who's built something of this size knows, constructing a website like ours involves multiple stakeholders with all kinds of talents. A website needs to be technically sound (well programmed and speedy), but also easy to navigate and beautiful to look at. It should also embody a company's voice and brand. So when we set to work overhauling redhat.com, we formed a collaborative working group composed of experts in both web design and branding. It was another wonderful cross-cultural experience, as designers learned to work according to the principles of agile development, and developers learned to build resources that reflect our brand. We were proud to tell our visitors about such a successful partnership.

In the end, our new friends from GE felt like they'd gleaned some practical tips for continuing to evolve GE's corporate culture. They especially appreciated the way each of the Open Organization’s chapters ends with concrete and actionable tips from Jim for making a workplace more open, collaborative, transparent, and meritocratic—all characteristics they'd like to foster in the GE of the future. Shortly after we parted, I received a note from one of the attendees, who thanked me for helping the group explore issues they otherwise "couldn't see by looking in the mirror."

Follow the conversation on Twitter #theopenorg

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"Open organizations tend to attract this kind of talent" – yes, and I think it's because people who have been participating in open source for the better part of their careers are unable to function in closed environments. We have learned that our voices are integral to the advancement of the organization, so when we're hit with typical management techniques (e.g. I'm your boss), we feel disrespected. Openness as an organizational attribute is newer than the cultural and social background people have. We learned that hierarchies are how businesses function. It's a difficult lesson to unlearn, and I've seen managers in open organizations who fall back on these kinds of principles when they're challenged. My approach is to help people/orgs understand that open is an attitude, it's difficult, but it's also the most empathetic and respectful way to run a team/org/project.

It pleases me to know that corporations like GE see the necessity to change, and I'm glad to know that the "open evangelist" job is one that seems to be more and more in demand :)

It’s funny you say that as I was recently telling my husband, “I just don’t think I can go work in a traditional company ever again!” Although I’ve only worked at Red Hat for 4 years of my 25 I have truly found my home. Long before Red Hat I was espousing the notion of “open leadership - having the confidence and the humility to give up the need to be in control while inspiring commitment from people to accomplish goals,” coined by author and friend, Charlene Li. I just didn’t always find that the people and organizational structures around me understood what I meant or why it mattered to me so much.

The ideas are old and often common sense but businesses, especially large ones, have a difficult time making the shift. After all, the people in power often arrived there by command-and-control and fear-based leadership. They believed they had all the answers and that employees should just execute against them. In our current world we have two fundamental issues with this: 1) Most real problems today are too complex and the world is shifting too fast for any one person to hold the keys to the solution 2) Today’s bright, young workforce demands a purpose, a mission, a say in what a company is doing, otherwise they simply move on.

Yes, when leaders are stressed they can fall back into old ‘command’ behaviors. I’ve been known to do it on occasion as well. After all, my first job was as an officer in the US Air Force. But when I do, I admit it out loud and describe what caused me to get there. I think it helps alleviate people feeling disrespected and provides a better chance it won’t happen the next time.

In reply to by LauraHilliger

I had the good fortune to get hired by what you call an "open organization" back in the mid 80's. It was a medical device manufacturer. We were so successful that GE bought us in the late 90's. I find it extraordinarily ironic that they couldn't understand our management style. They insisted they were not going to change anything about our operation, but clearly that was a lie. Ultimately they killed off our culture and replaced it with theirs. And now they want that open culture back. GE suffers from an enormous amount of arrogance combined with a paralyzing inertia. The open organization isn't new. It's simply common sense.

Jim’s The Open Organization book has common attributes with Daniel Pink's book Drive: The surprising truth about what motivates us? He examines three attributes – Autonomy, Mastery and Purpose. Jim in his book provides a good view on importance of Purpose and Autonomy in an Open organization and touches meritocracy. Contributing to Open Source software has a tight connection to Mastery too. May be “The Open Organization” also need to nurture the Mastery attribute.

Unfortunately recognizing they have no digital DNA is only half (the easy half) of the problem for GE. They are a dinosaur. They are a supertanker in a world of speed boats. Their own momentum prevents them from maintaining pace with technology. When the digital world moves in a new direction, even recognizing the change and changing course is a 10 year process. When they finally catch up the digital world has moved on. Their initial focus needs to be not on the digital DNA, it needs to be on becoming an entity that can effectively utilize the DNA they have. Smart and ambitiuis gen-x employees will tire of waiting years to implement change and move on to faster more adaptive companies. This is also counter to GE's practice of eschewing long-term gains for short term $$$$. As long as their focus always remains on this month and this quarter, they will never evolve and they will follow the other dinosaurs into extinction.

I've been advocating for an exchange program like this at other levels of the organization. I see a lot of potential value to be gained by having our technical and business resources spend time embedded with our partners and customers, or with leading business from other industries.

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