Key principles of an open organization

What organizations can learn from open culture and technologies

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They say life imitates art. But, I believe life imitates technology.

Look at distributed systems, decentralized computing, open source, and lean principles. With these and other technical initiatives, we've pushed boundaries and improved our applications, our networks, our companies, and our lives.

We can develop and deploy new applications in minutes rather than in weeks or months.

We can communicate with strangers and loved ones around the globe in milliseconds.

We can create random crowds of investors, who together can fund a person's dream.

We can secure our data without having to lock down our networks.

Today, our lives and our work have all the ingredients to be decentralized, distributed, open, and agile.

And yet, while our lives often imitate the very technologies that enable us to do these amazing things, one aspect has not changed for most of us: organizational culture.

Most organizations today remain highly centralized and hierarchical, with minimal flexibility and speed, and with decisions following a waterfall top-down process.

No wonder most people remain unhappy at work.

Open culture, open organization

However, just as many companies and countries attempted and failed to stop the inevitable flow of information the Internet brought, so will companies fail if they continue to ignore the possibilities of being an open, agile organization.

This topic of running organizations differently has been on my mind lately, as several books and articles I've read all started to come together around these themes. Some of these include:

All of these stories depict a corporate culture nirvana, one that is both respectful and intense—a seeming dichotomy. As I was reading Lead with Respect, I kept thinking, "this is great, but does any company actually function this way?"

My initial response was "no."

I have experienced more than my share of leadership by yelling, companies struggling with what Jim calls the "elephant in the room" problem (where everyone tiptoes around the CEO and is afraid to tell the truth just to try to keep the leader happy). In these, organizational title is more important than accountability.

However, few companies and leaders appear to truly exemplify openness, transparency, and respect. In The Open Organization, Whitehurst refers to several, like Whole Foods, Starbucks, and, of course, Red Hat, where he is CEO.

While none of these organizations professes to getting it all right, their stories share common principles.

A few key principles

The same is true of the articles and books I mention above. Each illustrates this new organizational paradigm differently; however, they discuss several key concepts.

Empowerment

Hire great people and give them ability to make decisions. For example, in lean organizations, management remains, but a manager's job is helping his/her team figure out solutions to challenges, and to make decisions in real time. It's not assuming everyone has the answers or that leadership isn't needed, but it's leading by enabling everyone to be the best they can be, and allowing them to make mistakes along the way. Empowering organizations also provide opportunities for everyone to share opinions or have a voice and do new things. Costco, for example, is known as a great place to work, and one of the few companies where you can "work your way up" and have a career, even if you start at the lowest level.

Managing by example

The trappings of executive titles, offices, and entourages are typically the sign of success in today's corporations. But open and lean organizations turn this trend on its head. One can see executives in cubicles or simple offices, hierarchy is minimal and not emphasized, and oftentimes major decisions are "socialized," not dictated. The culture of SHI, for example, dictates no executive parking, no special executive compensation plan, and everyone feeling "valued." Many companies like to say they have a "flat" organizational structure. I don't think any organization is "flat"; however, open organizations don't use title to assume privilege. It reminds of me of the early lean movement in the Japanese automotive industry, where managers worked alongside the "blue collar" workers, and shared their successes and challenges. (Speaking of automotive, I should add here that I was often reminded of Deming and his quality principles when reading these books.)

Fast innovation

In the tech space, we think of innovation in terms of new products or features or design; that is, innovation for these companies is a holistic approach to business. Organizations encourage Innovation across all parts, from the factory floor to human resources to sales—and everywhere else. The idea is to be creative, push the boundaries, and get these innovations out to "market" quickly. Often, this cultural trait is combined with the authority to take risks, or as some say,

Incremental improvement

This really goes hand-in-hand with fast innovation. You innovate, knowing it will not be perfect when you "launch," so you create processes to ensure ongoing improvement. In agile software development, this is typically based on data or clear input, so you know where and what to focus on. There is always the joke about version 1.0 of a new piece of software being rough or buggy, but imagine the freedom of doing everything with not only the understanding but the expectation of a few bugs, along with the encouragement to keep making it better.

Collaboration

Everybody talks about "teamwork," and even the most hierarchical organizations refer to groups as "teams." But few teams or companies are truly collaborative. Collaboration, in this case, does not mean decision by consensus or joining hands and singing Kumbaya. That would directly interfere with fast innovation. It's more about not making decisions or working in a vacuum, bringing others into the process, sharing ideas, creating teams from different parts of the business to ensure success or accelerate action, and just working as teams. In lean organizations, this can be a literal process, as daily standups or project boards, where ideas are shared, challenged and prioritized. In other cultures, collaboration is more just a way of doing business, as at Red Hat, where collaboration is not only encouraged but expected.

I would add a couple others (implied but not stated):

"No jerks" rule

While you would assume that a collaborative culture automatically results in people treating each other more nicely, that is not always the case. This is really about learning to disagree, debate, and challenge each other with respect. Too often, title or role give people the "right" to be jerks. What is implied in a lean or open organization is that everyone at every level deserves respect.

Being "real"

Something about the people in these organizations is different. Look at Howard Schultz (the CEO or Starbucks) or Richard Branson (the founder and CEO of Virgin). They are honest, emotional, and imperfect. What you see is what you get. This instills a culture of employees also feeling they can be true to themselves, in whatever form that is. This concept is more than respecting diversity. A company can be doing a great job hiring women or minorities and still not embrace the "realness" I'm describing. You know a company is real when the CEO or a senior executive treats the janitor the same way he or she treats the board of directors.

What's incredibly powerful to me is how an organization can become more open or agile, regardless of what the culture or organizational reality has been. As technology continues to push both literal and figurative boundaries, we should look to the core attributes these technologies and systems possess—openness, decentralization, distributed, fast—and move our management and culture in the same direction.

About the author

Margaret Dawson - A 20-year tech industry veteran, Margaret is a frequent author and speaker on cloud computing, big data, open source, women in tech, and the intersection of business and technology. She is a proven entrepreneur and intrapreneur, having led successful programs and teams at several startups and Fortune 500 companies, including Amazon, Microsoft and HP. Margaret is passionate about Lean principles and has built Agile Marketing methodologies into the discipline of product marketing and management...