By , Brian Fielkow
Published May 03, 2016
Imagine this: You've built a business that is succeeding beyond your dreams. And the business continues to grow, centered around a small group of key leaders.
Related: 4 Ways to Start Preparing the Future Leaders of Your Organization Now
But, then comes a downturn: A few years in, the demands of the business have outstripped what originally worked. Sales growth slows; profit stagnates. Employees are not engaged the way they once were or could be. The business has hit a wall.
I recently spoke with Jim Whitehurst, CEO of Red Hat, the open source software company; COO of Delta Airline; and now author of The Open Organization. His book lays out for companies a compelling vision that addresses the entrepreneur’s dilemma described above. What the book addresses in particular is the importance of a healthy company culture, which I agree is the foundation of a healthy business.
My conversation with Jim focused on the concepts in his book specifically as they apply to entrepreneurial and “main street” businesses. In my opinion, the ideas in many business books can be difficult for entrepreneurial companies to integrate. The Open Organization, in contrast, is a valuable resource, offering the following concepts:
An open organization is a business model based on igniting employee passion and engagement. It is designed to foster an employee-owned, inclusive, decision-making process. This contrasts with a traditional “top-down” business model, centered around hierarchy and dictating from the top. In an open organization, employees are more vested in their work, and both quality and execution improve.
I asked Jim, “If you were just starting to build an open organization, what is the first thing you would do?” He replied: “Start with engagement. Meaning must be attached to every job function.” Employees have to understand the company’s mission and strategy, he said. If employees are not deeply engaged in the company, an open organization cannot grow.
Related: Why Company Culture Is More Important Than Ever
Jim described his role as Red Hat’s CEO as follows: “My job is to create the context for people to be successful.” In an open organization, the CEO’s role is to ensure that people understand meaning, direction and strategy, and that they have the knowledge and tools necessary to successfully perform their jobs.
Jim also said that it is essential that managers be "in line,” meaning that they're driving context to the front lines of the company. “Managers need to be sure people understand their roles,” he said. Both Jim and I agreed that recent efforts by companies like Zappos to eliminate management do not seem practical. But, we strongly agreed that the role of the manager must change in tomorrow’s company.
Think back to the scenario I outlined above, where the entrepreneurial company has hit a stumbling block because it's entered a new stage of its life cycle. What used to work no longer does.
Jim commented on misconceptions of how to manage growth: “As we grow, we think that we need ‘professional management,’" he said. "What a mistake!” Often this professional management is not in sync with the organization’s culture. As the startup grows, the transition must be culture based. A healthy culture will shape the new leaders -- not the other way around.
Even though the time will come when a leader can no longer know everyone’s name, he or she must always explicitly model the values and expected behaviors in the organization and groom successors who model these values.
Asked how entpreneurs can find employees who fit the open organization and help it prosper, Jim made several points:
I found Jim's ideas to be a blueprint for entrepreneurs' future success, regardless of the size of their companies. Small stature is an asset; small thinking is the kiss of death. My conversation with Jim reinforced my belief that a healthy company culture is the foundation of a successful business, and, as leaders, we must be prepared for change and healthy growth even as we create a team of empowered employees.
Related: The 8 Essential Steps to Building a Winning Company Culture
https://www.foxnews.com/us/open-your-organization-unlock-your-potential