July 29, 2021 • 28 mins
In this episode of Smart Talks, Malcolm talks to Jim Whitehurst, senior advisor at IBM and an expert in open source software and innovation. During their conversation, Jim reveals how embracing moments that initially feel like chaos can ultimately lead to more open organizations, and broader access to new ideas.
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Speaker 1 (00:03):
Hello, Hello. This is Smart Talks with IBM, a podcast
from Pushkin Industries, High Heart Media and IBM about what
it means to look at today's most challenging problems in
a new way. I'm Malcolm Gladwell. In this episode, I'm
speaking with Jim Whitehurst, senior advisor at IBM. In his
(00:24):
time with IBM, as both an advisor and former president,
Jim was responsible for the IBM Cloud and cognitive software
organization and corporate strategy. Jim is an expert in open innovation.
During his time as president of IBM, Jim embedded his
philosophy into the company, helping clients and partners on their
(00:45):
own digital transformation journeys. Today, we'll be talking about the
ways open culture companies can change the way we lead
and work together. Realize, Hey, this isn't insanity or chaos.
It's actually different way to run an organization is trying
to seek its way into the future. Before coming to IBM,
(01:06):
Jim was the president and CEO of Red Hat. Red
Hat has been a leader in enterprise open source software
and while CEO, Jim helped it become the first one
billion revenue open source software company. In let's dive in Hi, Jim, Hey,
(01:33):
how are you? I'm good. Thank you for joining me today.
Let's do so many things I want to talk to
you about. Whenever I read the resume of someone like you,
I always wonder how did he get there? Like? What
tell me? Can you give me a short version of
how did you end up thinking about things like innovation
(01:55):
and creating these kinds of receptive cultures. It's such a
kind of there must be a million paths to that direction.
I'm just curious about what your path was. You know,
graduated from college, thought I wanted to be in technology,
interviewed with the Boston consulting group, love client service. Never
thought I would leave the craft of working with clients
and working in small teams I loved. I didn't realize
(02:18):
that was kind of the nub of how teams and
innovation work. Uh and then a litterally I was a
partner there. I never thought i'd leave it. Literally, at
noon on nine eleven, the CEO of Delta called me
and said, I need you now to be my treasure
And I said, you know, you're out of your mind.
I know nothing about being a treasurer. And he said, well,
that's okay. Nobody in the right mind would loan his
(02:38):
money right now. I just need kind of a creative
strategic person. So I joined Delta literally at noon on
nine eleven, and then kind of ran through the bankruptcy restructuring,
and then was approached by Red Hat. And I had
been a geek playing with Lennox in my spare time
for a long time and I joined. I think that's
where my interests really started. You know, Delta is considered
(02:59):
a very low run company. It's always on the list
of the most environant companies. And I got to Red
Hat and I thought, okay, I know what leadership looks like.
And I'd say in the first month, I thought this
place is absolute chaos. I understand they brought me in
here to clean it up, right. The problem at Delta
is how do you run a tightly integrated has to
(03:22):
be run with excellence operation Red hats all about innovation.
You know, there isn't a leadership style that solves every problem.
There's a leadership style for you know, driving efficiency and
driving out variants in a static environment, which is what
most leaders have been raised to do. And then there's
a leadership style for trying to drive a faster pace
(03:45):
of innovation, and those fundamentally look different. So wait, I'm
I'm curious about this. So you go from Delta to
Red Hat. So you couldn't if we were if we
sat down Jim and tried to figure out tried to
name two companies that were more different, Yeah, you couldn't
do it. So now how long did it take you
(04:07):
to come to the insight? You just spoke? So you
go from A to Z and you say, WHOA, this
place looks different because you could have gone the other way, right,
you could have said I have to turn Red Hat
into Delta, but you didn't. I'm guessing nine out of
ten people would have tried to turn Red Hat into
(04:27):
Delta and would have flamed out. But you didn't. Why Well,
I do think a big part of it was I
was also learning a new business, and so I literally
spent the first six months on the road, traveling, seeing customers.
And if that hadn't happened, I think you're exactly right.
I would have said, no, my job is to bring
in quote unquote professional management. But I was traveling enough
(04:48):
that I didn't kind of focus on change. I was saying,
let me learn the business understand our clients, etcetera, etcetera.
In that period of time, I saw a couple of
amazing things happened. My second week on the job, I
was being briefed on this area called virtualization, and I'm
getting briefed on the strategy and when we picked the
technology we picked, and in the room was kind of
(05:11):
the head of engineering, a couple of people who worked
for him, but all the way down to some engineers
working on virtualization there told me the strategy and why
we picked the technology we did, and what are the
engineers So that the most junior people in the room
and the briefing said, yeah, this is what we're doing,
but you know it's wrong. Fundamentally, we picked the wrong technology.
There's this new technology that's emerged which is kind of
(05:33):
upstream and Linux, and this is when we should pick
And a huge argument erupts, No, no, no, we did this,
And so I'm list of this back and forth, and
I remember going home and telling my wife that night,
I said, I am living in chaos. There's a briefing
in front of the CEO where these people are just
like literally food fight arguing this stuff out. Four months later,
that same set team came in and said, you know what,
(05:54):
we were wrong. We need to acquire the company behind
the other technology, because that's the way to go. And
what I realized is, you know what if they had
just come in and given me a briefing on here's
the technology, why we did it, and four months later
and come in and said no, no, no, we want
to buy this other I would just in a way,
you gave me all the reasons why this is right
and even infested in it. Why would I do that?
(06:16):
But because I heard the arguments that it was a
fifty five forty five decision and understood it wasn't clear cut,
and that changed over time because of changing circumstances, it
was much easier for me to go to the board
and say, you know, let's spend hundreds of millions of
dollars buying this other company because you know, I'm convinced,
convinced it's right because I've heard both sides of the argument.
(06:38):
I've seen how it's involved over time. So that was
a time when I realized, like wow, this system that
seemed like chaos was a way that we socialize, you know,
the problems that we need to solve. An innovation and
recognizing that circumstances changed and therefore our output can change
all of sudden over elise like, No, that argument wasn't chaos.
(06:59):
That was a great way to make sure that we
were all on the same page on both the facts
and where we felt we should act coming out of
those facts. And then I realized, Hey, this isn't insanity
or chaos. It's actually a different way to run an
organization is trying to seek its way into the future.
M M, Now, can you let's talk a little bit
(07:21):
about that transit. You have these two modes, and you're
not saying mode A the Delta mode isn't useful. You're
saying it works if you're in an industry that is
well established, where the technology is moving incrementally, where you're
where it's about. It's where it's about. Delta has to
execute perfectly, right. You do not want anyone experimenting with
(07:45):
the safety procedures before she right. I mean that's a
strong example now because most companies have some of both.
You do want people tinkering with trying experimenting on you know,
Delta's website, right or the mobile app, and so all
companies have a degree of difference in the types of
of of operations that they're running. Right. You know, Red
(08:08):
Hat has financial accounting and you know, I go to
jail if those UH numbers are wrong, so you want
to make sure that those are locked down. The key
is for executives to recognize there are different approaches to
your organization, your leadership, your management processes, depending on which
objective function you're trying. You're trying to drive variants out
(08:31):
to drive standardization or you're trying to inject variants in
to drive innovation, and you have to do a little
bit of both and recognizing that there's a continuum around that.
But importantly, more and more of the world is moving
to you know, innovation is important, So walk me through.
Let's let's break down all of the components of this
(08:53):
open innovation model. What is it? What does it look like?
Does it feel like? Does it you know, give me
a kind of prepare me, So Malcolm's gonna move, Malcolm's
gonna join to do this transition and enjoin. Prepare me
for what it looks and feels like. Sure, so, first off,
it is absolutely clear what the strategy of the company is.
(09:16):
But your work steps are typically left somewhat ambiguous, so
you can work to improve, trying new things, observe what's happening.
So I think most large companies will say frontline really
needs to understand the work task to get their job done,
and let's make those efficient. They don't really need to
know the corporate strategy. We would flip that around and
say everybody needs to know the corporate strategy and exactly
(09:37):
what we're doing and why we're gonna leave the worksteps
blurry so you can work to figure it out. And
the other thing I think people see out of it,
at least certainly a red hat is everybody thinks are
gonna come in and everybody's gonna be nice and holding
hands and seeing in kubaya. And one of the first
things they find out it's like, wow, it's kind of harsh.
I throw up an idea and immediately people shoot it down.
(10:01):
And one of the things that we've learned over time,
and I do think this is beyond red. This is
kind of a broad. Important point is that great ideas
are fused together from many good ideas and people arguing
and fighting it out and building on top of each other.
Let me ask you a very random, odd question. I
suppose I can do Jim and said I would like you.
(10:23):
I'd like to bring you into my really good, you
know school. Your job is to redesign the curriculum and
pedagogy of this school to prepare our students for the
world you just described. Yep, so look the broad way.
I would say this is true for any organization. The
(10:44):
traditional approach to thinking about solving the problem or leading
is very simple is three big steps your plan, Right,
You come up with a plan, You then prescribe the
activities to whoever has to go executed, and then you
execute and executes about driving compliance to that plan. You know,
(11:06):
in university, what do you teach. You need to teach
the a the capacity to be curious, to experiment, to try. Um,
you need to teach the the comfort with ambiguity. And
that's a tough thing to do. And so that's why
I do think engineers in particular need to take more
humanity right, you know, more open ivied, whether it's you know,
(11:29):
philosophy or political science or sociology, where some of these
questions don't have firm answers. I think it's really important
for people to learn because comfort with ambiguity and recognizing
that there are things that there is no firm, hard
answer to combine with engineering skills or what enables great
(11:49):
engineers to say, I'm gonna learn from others, I'm gonna
try them an experiment, I'm gonna come up to an answer.
There is no right answer to solving X, y Z innovation.
There are multiple approaches and getting people comfortable with that,
and those are key important points that I would advise
anyone going to university or universities is thinking about curriculum.
It's um, there are no right answers and innovation. They're
(12:11):
different approaches, and we do spend a lot of time
on right and wrong um, you know, versus kind of
experiment in building and then the final thing's working together. Um.
There's a lot of evidence that shows that teams come
up with better UH answers than individuals. I always talked
(12:33):
about your red hats known for open source, which is
you know, thousands of people working together to build like
Linux other software, and I always make sure people understand
open source is not the same thing as crowdsource. Crowdsourcing
should get a million people to throw an idea, and
when I'm probably gonna be good, open source, or what
I'm talking about with an open organization is how you
get multiple people work together to give you better solutions
(12:55):
than any one of those individuals could on their own.
And so the social skills about how you get people
to work together to get better solutions is important. But
if I, if I look at just take high school
and university education in this in this country, so little
of learning is taking place in groups. We are sending
(13:17):
kids off by themselves to tackle problems that have been
handed to them, prescribed, planned and prescribed and asked them
to execute the problem that we've given them on their
own in large part and to the extent that they
are part of a team, it's a very very informal team.
But then we break them up again when we evaluate them. Right,
I mean, there's a complete disconnect between the world you
(13:42):
are describing right, which is responding to the technological challenges
of the century, and the world we're preparing kids for. Well,
this is the lag. This is so it's not only
you know, the leaders who don't realize their management systems
built for you know, the proto typical factory work, road task,
static environment, etcetera. Education Lighting people up in rows individual
(14:06):
you know, you make a mistake, that's you know, that's wrong,
that's bad. Where we know experimentation is so important for
for innovation. Yeah, we have an education system that is
optimized for the industrial world that no longer exists, and
there is a lag there that we have to fix
and we really have. If anything, we're sliding backwards with
social media and other things that gets kids even more
(14:28):
isolated from each other, and that core insight that we know.
There's tons of academic evidence, uh in research that says
groups do better at solving problems than individuals. Yet somehow
we then want to split people up. It's just I
think it's a lag problem. It's a recognition problem. To
take that all the way back, you know, Ronald Coast
(14:49):
letting Nobel Prize for explaining why a company exists. You know,
the whole idea was transaction costs. You know, so in
other words, the question is why companies exist versus everybody's
an individual actor and kind of coordinating. And his point was, well,
when transaction costs are lower, um by coordinating inside a
company than when a market cost would be old, people
will get together and kind of create a company that
(15:11):
all assumes interactions between people are cost which is true
when you're trying to coordinate and you know, kind of
drive building something scale. But when you're trying to innovate,
we know interactions between people are in benefit because teams
to are more innovative than individuals. So all of a sudden,
we built the corporate entities and how we put them together,
(15:31):
how we educate people. It's all about minimizing transaction costs
and optimizing you know, the individual output and assuming that
there's some greater way of you know, some scientists somewhere,
he's gonna plug all that together. Yet it is the
interactions where you know, the magic happens when you're trying
to innovate. Yeah, this reminds me I. In my podcast
(15:55):
Revisions History, the one of the last episodes this season
is all about war games and basically asked the question
why does the military play war games? They play a
lot of war games, and one of the reasons is
exactly the one you articulated, which is that you can
do all the plans formal planning and prediction. You can
(16:15):
send your experts off to come back with reports and
you will learn and get a certain kind of insight
from that. With another way, more valuable insight that will
only come if you bring a group of people together
and have them interact over a problem. Every one of
the war gaming world quotes this line from Thomas Shelling,
which is something to the effect of even the smartest
(16:36):
man in the world cannot make a list of the
things that haven't occurred to him, right, which is so lovely.
And that's the point, right, that you only learn about
the things that haven't occurred to you when you are
in this kind of free flowing, interactive social environment. That's
the point. That's why we throw people together in these
(16:59):
in the end create the kind of chaos you're talking about,
because it's going to force you off the narrow path
that you put yourself on. Yeah, speaking of the military,
one of my favorite kind of pieces to read on leadership,
it's uh commander's intent. And the whole point is intent
is so important for you know, others in the field
to understand because you can get separated, frankly, commander to
(17:21):
get killed, and understanding the intent and the objective is
so much more important than understanding the kind of the
specifics that go around that because as soon as you're
on a battle field, things changed by definition, and so
if you you need to really understand intent and how
do you convey that as a leader? It's uh, I
do think those are critical in an ambiguous environment? Yeah,
(17:44):
do you? Is there a way to adopt the war
gaming model UM in the kind of more conventional corporate setting,
and it was running simulations, real world social simulations of
anticipated problem. Is that something that we that we're doing
or at least doing enough. I think I remember talking
(18:07):
to to the CEO of one of the major global
banks and they were saying, basically, hey, we got this
issue with you know, uh, fin techs attacking us, and
you know, I've asked my team, you know what's our
you know, two big initiatives we're gonna go and attack
this and and I basically told him, don't go out
and say you have two initiatives to do this, because
(18:30):
a an initiative fails, the person is probably gonna get fired.
So how much is anybody really really really gonna go
out and try something radical? So what you need to
do is say, hey, I want to see our twenty
five best ideas. You've got six months. Each one can
have no more than you know, two hundred fifty dollars
to experiment with. Let's come back in six months and say,
(18:51):
let's see where those are, and we're gonna maybe kill
all of them and talk about the lessons learn, or
we're gonna take two and then we're gonna take the
lessons learn and launch another twenty five and we're gonna
keep doing that until we feel the right things emerge
and those are the ones that we're gonna go do.
That's a management approach that says, let's experiment and try
and learn and kind of quickly modify around that. As
(19:12):
soon as you launch these big, big, big initiatives, by definition,
you're not doing much experimentation in it because you've already
put dollars behind it with a you know, with an
outcome predefined. And that's the problem in general with so
many of the existing management process It's uh, I call
it's drive a future state. When the words I'll use
with with leaders as seek a future state. How do
(19:34):
you build an organization that can seek a future optimal state?
You know? That's so we went backwards and talked about
high school and college education. Let's now go forward, Let's
go beyond the corporation. I understand now that a lot
of your focus is on UM philanthropic stuff, climate change,
you know, larger kind of society wide issues. Let's apply
(19:58):
that that model to s of those. How would you
guide us in the way that we think an attack
a problem, like, for example, climate change. Well I'll come
back to that model of instead of plan, prescribe, execute, configure, enable,
and gave so much of what we're talking about is like,
what are the big ways we're gonna go elect electrify
(20:20):
UM the country and you know, put stations around for
autonomous driving, etcetera, etcetera, etcetera. And how do we preplan
all that out? My census? We need to configure for success.
And what I mean by that is if all of
a sudden, battery technology takes a leap forward and we
get triple the density UM in a car battery that
we have today, well guess what the number of stations
(20:42):
recharging stations probably drops by half. I don't know the
asthemtopicy that maybe by four x with the three X battery.
IM not sure how that math works, but somebody I'm
sure would figure that out. Which means the number stations
you need, which means the number of like colides you
need are all going to change. And what I know
is that no one knows what the innovation curve of
(21:03):
batteries look like. We can model things, but nobody knows,
and innovation is discontinuous often, so we need to set
context for that to happen. So what does that mean?
I would argue, And I know IBM does advocate for
a price on carbon because if you know what carbon costs,
that you have a carbon tax associated with it. Now, innovators, entrepreneurs,
(21:24):
well everybody, large companies know here's the cost and therefore,
what am I willing to invest in the literally millions
of decisions to get made in the economy, Whether that's
for an innovator to invest in the technology to try
to make a batter battery, or whether that's companies and
how they think about fleets and what they're doing. Um,
that's what I mean by configuring. Now do you think
every could play a role in you know, substantial investments
(21:47):
and fundamental research at the right sets of universities or
partnerships with companies. That again is configuring. So it's not
saying here's the specific steps and pathway to get there,
because in the context of innovation, you know you're gonna
be wrong, and that's how you build a bridge to nowhere.
The dollars were there, but you didn't realize, well, that
no longer makes sense. So setting up the context is critical.
(22:09):
And I will say I'm very encouraged by what we're
seeing happening around the world in terms of interest on
climate change. But I do think there's a knee jerk
reaction from governments in particular to say, Okay, what are
the multi hundred billion dollar, massive twenty year initiatives when
almost for sure those are gonna be wrong because you
(22:30):
need to take a more nimble, agile approach that as
we learn, you know, how do you kind of move
I'm not saying we don't want to spend hundreds of
billions of dollars on them. We do, but the approach
for how we do it can't be these multi year
plan things in the world there we don't know what
the world's gonna look like or the pace of innovation. Yeah.
I had somebody had a conversation with so recently that
(22:51):
was so fascinating. He was talking entirely about light. Led
lights have driven down the cost of light by levels
that would have been unimaginable when we we didn't realize
it was going to be so radical. Lights essentially moving
towards not going to be free. But it's getting really,
really cheap, and with all these things that it has,
(23:12):
all these impacts that no one, not a single person
would have imagined. For example, that lighting is getting so cheap,
it means that you can grow you know, vegetables in
greenhouses cheaper than you can grow them in fields, which
never occurred to anybody. Right, if you had started with
I'd like to make greenhouse vegetables cheaper than farmers. If
you started with that is your goal, you never would
(23:34):
have gotten there. It's an impossible physics problem. But I
don't know how you build a kind of social and
political infrastructure with that kind because it takes the very
things that you were talking about. To be comfortable with uncertainty,
you have to to kind of give up on the
notion you can push the world in a given direction.
You just have to set something like you say, put
(23:55):
the stick in the see and let the life them
around it. Right. That takes an incredible amount of is
it self confidence? What's the quality that requires of us? Yeah?
I think one of the I see this in companies
as well, and you can argue it's self confidence. You
can argue it's uh needing to check your ego because
(24:17):
so much of I think senior executives sense of worth
is I'm the smartest person in the room, or I
came up with the answer because I'm here, I've driven
this where building these types of things. You are the facilitator.
You're trying to say, if I'm the smartest person in
the room, I've done a lousy job of building the
(24:38):
right team around me. There's something you said that I
think is a lovely way to tie up the conversation.
And I have to say, even after talking to you,
what you said took me by surprise when you said,
if I'm silent during a meeting, the meeting is going
well or things are I just think that's so beautiful.
So you say the people. If I say thing, I'm
(25:00):
the leader here. If I say nothing, then we've succeeded.
So moving from red Hat to IBM, I mean, obviously
twelve years of red Hat, everybody knew me in style
and it would kind of organically grow over time. I
was very explicit at IBM on the point of, hey,
if I'm silent in a meeting, don't be uncomfortable. That
is positive. It means I am listening to and observing
(25:23):
the dynamics among everyone, and um, I'm feeling really really
good about how the conversation is going. If I have
an opinion, I might decide to voice it, but I'm
always a little bit, especially um in new groups of people,
I'm a little hesitant to voice of because I'm worried
that that starts to jade others points of view. And
(25:43):
if I'm silent, that's great. If I jump in, it
could be because I have an idea that I just
want to throw out there. As a participant, it could
be that I'm throwing out the exact opposite of what
I believe because I think that's going to help the
dialogue happen. And as the team, you shouldn't rate what
I say any higher lower than anyone else in the room.
I would participant in the room, but that's how we're
(26:05):
going to get the best ideas out there. If my
idea turned out to be best and it was what
I really believe, great. If it's a horrible idea, I
you know, threw it out on purpose to try to
take the conversation in a way in areas we want
to poke. I think that's really really critical because most
leaders go into a room and think their job is
the content. And my view is no. If you believe
(26:25):
teams do better than individuals, your job is to make
sure that tenor and tone are the conversation is happening,
because then the best idea will emerge. But it makes
me want to work for you. It sounds so much fun. Well,
I'm sure we can find a job discussion. So what's
next for you? Well, using the same approach of not
(26:48):
overly planning, I'm configuring myself for going forward. Right, you
have created a foundation around climate change. I want to
spend some time trying to see how I can participate
using some of these open principles and in solving that problem.
I'll continue to work with some technology companies as an
advisor and we'll see what happens in the future. Yeah, well,
(27:10):
good luck. Jim has a big challenge ahead as he
focuses his efforts on climate change. It will be interesting
to see what kind of solutions he'll find with using
an open culture strategy. Thanks again to Jim for taking
(27:30):
the time to chat with me. I can only hope
we'll all learn something from taking a more collaborative approach
towards problem solving. Smart Talks with IBM is produced by
Emily Rostak with Carlie Migliori and Katherine Gurdo, edited by
Karen Shakerji, engineering by Martin Gonzalez, mixed and mastered by
(27:53):
Jason Gambrel and Ben Holiday music by Gramoscope. Special thanks
to Molly Sosha, Andy Kelly, Miila Belle, Jacob Weisberg, Hadaphane,
Eric Sandler, and Maggie Taylor and the teams at eight
Bar and IBM. Smart Talks with IBM is a production
of Pushkin Industries and iHeartMedia. You can find more Pushkin
(28:16):
podcasts on the I Heart Radio app, Apple Podcasts, or
wherever you like to listen. I'm Malcolm Gladwell, See you
next time.
Hello, Hello. This is Smart Talks with IBM, a podcast
from Pushkin Industries, High Heart Media and IBM about what
it means to look at today's most challenging problems in
a new way. I'm Malcolm Gladwell. In this episode, I'm
speaking with Jim Whitehurst, senior advisor at IBM. In his
(00:24):
time with IBM, as both an advisor and former president,
Jim was responsible for the IBM Cloud and cognitive software
organization and corporate strategy. Jim is an expert in open innovation.
During his time as president of IBM, Jim embedded his
philosophy into the company, helping clients and partners on their
(00:45):
own digital transformation journeys. Today, we'll be talking about the
ways open culture companies can change the way we lead
and work together. Realize, Hey, this isn't insanity or chaos.
It's actually different way to run an organization is trying
to seek its way into the future. Before coming to IBM,
(01:06):
Jim was the president and CEO of Red Hat. Red
Hat has been a leader in enterprise open source software
and while CEO, Jim helped it become the first one
billion revenue open source software company. In let's dive in Hi, Jim, Hey,
(01:33):
how are you? I'm good. Thank you for joining me today.
Let's do so many things I want to talk to
you about. Whenever I read the resume of someone like you,
I always wonder how did he get there? Like? What
tell me? Can you give me a short version of
how did you end up thinking about things like innovation
(01:55):
and creating these kinds of receptive cultures. It's such a
kind of there must be a million paths to that direction.
I'm just curious about what your path was. You know,
graduated from college, thought I wanted to be in technology,
interviewed with the Boston consulting group, love client service. Never
thought I would leave the craft of working with clients
and working in small teams I loved. I didn't realize
(02:18):
that was kind of the nub of how teams and
innovation work. Uh and then a litterally I was a
partner there. I never thought i'd leave it. Literally, at
noon on nine eleven, the CEO of Delta called me
and said, I need you now to be my treasure
And I said, you know, you're out of your mind.
I know nothing about being a treasurer. And he said, well,
that's okay. Nobody in the right mind would loan his
(02:38):
money right now. I just need kind of a creative
strategic person. So I joined Delta literally at noon on
nine eleven, and then kind of ran through the bankruptcy restructuring,
and then was approached by Red Hat. And I had
been a geek playing with Lennox in my spare time
for a long time and I joined. I think that's
where my interests really started. You know, Delta is considered
(02:59):
a very low run company. It's always on the list
of the most environant companies. And I got to Red
Hat and I thought, okay, I know what leadership looks like.
And I'd say in the first month, I thought this
place is absolute chaos. I understand they brought me in
here to clean it up, right. The problem at Delta
is how do you run a tightly integrated has to
(03:22):
be run with excellence operation Red hats all about innovation.
You know, there isn't a leadership style that solves every problem.
There's a leadership style for you know, driving efficiency and
driving out variants in a static environment, which is what
most leaders have been raised to do. And then there's
a leadership style for trying to drive a faster pace
(03:45):
of innovation, and those fundamentally look different. So wait, I'm
I'm curious about this. So you go from Delta to
Red Hat. So you couldn't if we were if we
sat down Jim and tried to figure out tried to
name two companies that were more different, Yeah, you couldn't
do it. So now how long did it take you
(04:07):
to come to the insight? You just spoke? So you
go from A to Z and you say, WHOA, this
place looks different because you could have gone the other way, right,
you could have said I have to turn Red Hat
into Delta, but you didn't. I'm guessing nine out of
ten people would have tried to turn Red Hat into
(04:27):
Delta and would have flamed out. But you didn't. Why Well,
I do think a big part of it was I
was also learning a new business, and so I literally
spent the first six months on the road, traveling, seeing customers.
And if that hadn't happened, I think you're exactly right.
I would have said, no, my job is to bring
in quote unquote professional management. But I was traveling enough
(04:48):
that I didn't kind of focus on change. I was saying,
let me learn the business understand our clients, etcetera, etcetera.
In that period of time, I saw a couple of
amazing things happened. My second week on the job, I
was being briefed on this area called virtualization, and I'm
getting briefed on the strategy and when we picked the
technology we picked, and in the room was kind of
(05:11):
the head of engineering, a couple of people who worked
for him, but all the way down to some engineers
working on virtualization there told me the strategy and why
we picked the technology we did, and what are the
engineers So that the most junior people in the room
and the briefing said, yeah, this is what we're doing,
but you know it's wrong. Fundamentally, we picked the wrong technology.
There's this new technology that's emerged which is kind of
(05:33):
upstream and Linux, and this is when we should pick
And a huge argument erupts, No, no, no, we did this,
And so I'm list of this back and forth, and
I remember going home and telling my wife that night,
I said, I am living in chaos. There's a briefing
in front of the CEO where these people are just
like literally food fight arguing this stuff out. Four months later,
that same set team came in and said, you know what,
(05:54):
we were wrong. We need to acquire the company behind
the other technology, because that's the way to go. And
what I realized is, you know what if they had
just come in and given me a briefing on here's
the technology, why we did it, and four months later
and come in and said no, no, no, we want
to buy this other I would just in a way,
you gave me all the reasons why this is right
and even infested in it. Why would I do that?
(06:16):
But because I heard the arguments that it was a
fifty five forty five decision and understood it wasn't clear cut,
and that changed over time because of changing circumstances, it
was much easier for me to go to the board
and say, you know, let's spend hundreds of millions of
dollars buying this other company because you know, I'm convinced,
convinced it's right because I've heard both sides of the argument.
(06:38):
I've seen how it's involved over time. So that was
a time when I realized, like wow, this system that
seemed like chaos was a way that we socialize, you know,
the problems that we need to solve. An innovation and
recognizing that circumstances changed and therefore our output can change
all of sudden over elise like, No, that argument wasn't chaos.
(06:59):
That was a great way to make sure that we
were all on the same page on both the facts
and where we felt we should act coming out of
those facts. And then I realized, Hey, this isn't insanity
or chaos. It's actually a different way to run an
organization is trying to seek its way into the future.
M M, Now, can you let's talk a little bit
(07:21):
about that transit. You have these two modes, and you're
not saying mode A the Delta mode isn't useful. You're
saying it works if you're in an industry that is
well established, where the technology is moving incrementally, where you're
where it's about. It's where it's about. Delta has to
execute perfectly, right. You do not want anyone experimenting with
(07:45):
the safety procedures before she right. I mean that's a
strong example now because most companies have some of both.
You do want people tinkering with trying experimenting on you know,
Delta's website, right or the mobile app, and so all
companies have a degree of difference in the types of
of of operations that they're running. Right. You know, Red
(08:08):
Hat has financial accounting and you know, I go to
jail if those UH numbers are wrong, so you want
to make sure that those are locked down. The key
is for executives to recognize there are different approaches to
your organization, your leadership, your management processes, depending on which
objective function you're trying. You're trying to drive variants out
(08:31):
to drive standardization or you're trying to inject variants in
to drive innovation, and you have to do a little
bit of both and recognizing that there's a continuum around that.
But importantly, more and more of the world is moving
to you know, innovation is important, So walk me through.
Let's let's break down all of the components of this
(08:53):
open innovation model. What is it? What does it look like?
Does it feel like? Does it you know, give me
a kind of prepare me, So Malcolm's gonna move, Malcolm's
gonna join to do this transition and enjoin. Prepare me
for what it looks and feels like. Sure, so, first off,
it is absolutely clear what the strategy of the company is.
(09:16):
But your work steps are typically left somewhat ambiguous, so
you can work to improve, trying new things, observe what's happening.
So I think most large companies will say frontline really
needs to understand the work task to get their job done,
and let's make those efficient. They don't really need to
know the corporate strategy. We would flip that around and
say everybody needs to know the corporate strategy and exactly
(09:37):
what we're doing and why we're gonna leave the worksteps
blurry so you can work to figure it out. And
the other thing I think people see out of it,
at least certainly a red hat is everybody thinks are
gonna come in and everybody's gonna be nice and holding
hands and seeing in kubaya. And one of the first
things they find out it's like, wow, it's kind of harsh.
I throw up an idea and immediately people shoot it down.
(10:01):
And one of the things that we've learned over time,
and I do think this is beyond red. This is
kind of a broad. Important point is that great ideas
are fused together from many good ideas and people arguing
and fighting it out and building on top of each other.
Let me ask you a very random, odd question. I
suppose I can do Jim and said I would like you.
(10:23):
I'd like to bring you into my really good, you
know school. Your job is to redesign the curriculum and
pedagogy of this school to prepare our students for the
world you just described. Yep, so look the broad way.
I would say this is true for any organization. The
(10:44):
traditional approach to thinking about solving the problem or leading
is very simple is three big steps your plan, Right,
You come up with a plan, You then prescribe the
activities to whoever has to go executed, and then you
execute and executes about driving compliance to that plan. You know,
(11:06):
in university, what do you teach. You need to teach
the a the capacity to be curious, to experiment, to try. Um,
you need to teach the the comfort with ambiguity. And
that's a tough thing to do. And so that's why
I do think engineers in particular need to take more
humanity right, you know, more open ivied, whether it's you know,
(11:29):
philosophy or political science or sociology, where some of these
questions don't have firm answers. I think it's really important
for people to learn because comfort with ambiguity and recognizing
that there are things that there is no firm, hard
answer to combine with engineering skills or what enables great
(11:49):
engineers to say, I'm gonna learn from others, I'm gonna
try them an experiment, I'm gonna come up to an answer.
There is no right answer to solving X, y Z innovation.
There are multiple approaches and getting people comfortable with that,
and those are key important points that I would advise
anyone going to university or universities is thinking about curriculum.
It's um, there are no right answers and innovation. They're
(12:11):
different approaches, and we do spend a lot of time
on right and wrong um, you know, versus kind of
experiment in building and then the final thing's working together. Um.
There's a lot of evidence that shows that teams come
up with better UH answers than individuals. I always talked
(12:33):
about your red hats known for open source, which is
you know, thousands of people working together to build like
Linux other software, and I always make sure people understand
open source is not the same thing as crowdsource. Crowdsourcing
should get a million people to throw an idea, and
when I'm probably gonna be good, open source, or what
I'm talking about with an open organization is how you
get multiple people work together to give you better solutions
(12:55):
than any one of those individuals could on their own.
And so the social skills about how you get people
to work together to get better solutions is important. But
if I, if I look at just take high school
and university education in this in this country, so little
of learning is taking place in groups. We are sending
(13:17):
kids off by themselves to tackle problems that have been
handed to them, prescribed, planned and prescribed and asked them
to execute the problem that we've given them on their
own in large part and to the extent that they
are part of a team, it's a very very informal team.
But then we break them up again when we evaluate them. Right,
I mean, there's a complete disconnect between the world you
(13:42):
are describing right, which is responding to the technological challenges
of the century, and the world we're preparing kids for. Well,
this is the lag. This is so it's not only
you know, the leaders who don't realize their management systems
built for you know, the proto typical factory work, road task,
static environment, etcetera. Education Lighting people up in rows individual
(14:06):
you know, you make a mistake, that's you know, that's wrong,
that's bad. Where we know experimentation is so important for
for innovation. Yeah, we have an education system that is
optimized for the industrial world that no longer exists, and
there is a lag there that we have to fix
and we really have. If anything, we're sliding backwards with
social media and other things that gets kids even more
(14:28):
isolated from each other, and that core insight that we know.
There's tons of academic evidence, uh in research that says
groups do better at solving problems than individuals. Yet somehow
we then want to split people up. It's just I
think it's a lag problem. It's a recognition problem. To
take that all the way back, you know, Ronald Coast
(14:49):
letting Nobel Prize for explaining why a company exists. You know,
the whole idea was transaction costs. You know, so in
other words, the question is why companies exist versus everybody's
an individual actor and kind of coordinating. And his point was, well,
when transaction costs are lower, um by coordinating inside a
company than when a market cost would be old, people
will get together and kind of create a company that
(15:11):
all assumes interactions between people are cost which is true
when you're trying to coordinate and you know, kind of
drive building something scale. But when you're trying to innovate,
we know interactions between people are in benefit because teams
to are more innovative than individuals. So all of a sudden,
we built the corporate entities and how we put them together,
(15:31):
how we educate people. It's all about minimizing transaction costs
and optimizing you know, the individual output and assuming that
there's some greater way of you know, some scientists somewhere,
he's gonna plug all that together. Yet it is the
interactions where you know, the magic happens when you're trying
to innovate. Yeah, this reminds me I. In my podcast
(15:55):
Revisions History, the one of the last episodes this season
is all about war games and basically asked the question
why does the military play war games? They play a
lot of war games, and one of the reasons is
exactly the one you articulated, which is that you can
do all the plans formal planning and prediction. You can
(16:15):
send your experts off to come back with reports and
you will learn and get a certain kind of insight
from that. With another way, more valuable insight that will
only come if you bring a group of people together
and have them interact over a problem. Every one of
the war gaming world quotes this line from Thomas Shelling,
which is something to the effect of even the smartest
(16:36):
man in the world cannot make a list of the
things that haven't occurred to him, right, which is so lovely.
And that's the point, right, that you only learn about
the things that haven't occurred to you when you are
in this kind of free flowing, interactive social environment. That's
the point. That's why we throw people together in these
(16:59):
in the end create the kind of chaos you're talking about,
because it's going to force you off the narrow path
that you put yourself on. Yeah, speaking of the military,
one of my favorite kind of pieces to read on leadership,
it's uh commander's intent. And the whole point is intent
is so important for you know, others in the field
to understand because you can get separated, frankly, commander to
(17:21):
get killed, and understanding the intent and the objective is
so much more important than understanding the kind of the
specifics that go around that because as soon as you're
on a battle field, things changed by definition, and so
if you you need to really understand intent and how
do you convey that as a leader? It's uh, I
do think those are critical in an ambiguous environment? Yeah,
(17:44):
do you? Is there a way to adopt the war
gaming model UM in the kind of more conventional corporate setting,
and it was running simulations, real world social simulations of
anticipated problem. Is that something that we that we're doing
or at least doing enough. I think I remember talking
(18:07):
to to the CEO of one of the major global
banks and they were saying, basically, hey, we got this
issue with you know, uh, fin techs attacking us, and
you know, I've asked my team, you know what's our
you know, two big initiatives we're gonna go and attack
this and and I basically told him, don't go out
and say you have two initiatives to do this, because
(18:30):
a an initiative fails, the person is probably gonna get fired.
So how much is anybody really really really gonna go
out and try something radical? So what you need to
do is say, hey, I want to see our twenty
five best ideas. You've got six months. Each one can
have no more than you know, two hundred fifty dollars
to experiment with. Let's come back in six months and say,
(18:51):
let's see where those are, and we're gonna maybe kill
all of them and talk about the lessons learn, or
we're gonna take two and then we're gonna take the
lessons learn and launch another twenty five and we're gonna
keep doing that until we feel the right things emerge
and those are the ones that we're gonna go do.
That's a management approach that says, let's experiment and try
and learn and kind of quickly modify around that. As
(19:12):
soon as you launch these big, big, big initiatives, by definition,
you're not doing much experimentation in it because you've already
put dollars behind it with a you know, with an
outcome predefined. And that's the problem in general with so
many of the existing management process It's uh, I call
it's drive a future state. When the words I'll use
with with leaders as seek a future state. How do
(19:34):
you build an organization that can seek a future optimal state?
You know? That's so we went backwards and talked about
high school and college education. Let's now go forward, Let's
go beyond the corporation. I understand now that a lot
of your focus is on UM philanthropic stuff, climate change,
you know, larger kind of society wide issues. Let's apply
(19:58):
that that model to s of those. How would you
guide us in the way that we think an attack
a problem, like, for example, climate change. Well I'll come
back to that model of instead of plan, prescribe, execute, configure, enable,
and gave so much of what we're talking about is like,
what are the big ways we're gonna go elect electrify
(20:20):
UM the country and you know, put stations around for
autonomous driving, etcetera, etcetera, etcetera. And how do we preplan
all that out? My census? We need to configure for success.
And what I mean by that is if all of
a sudden, battery technology takes a leap forward and we
get triple the density UM in a car battery that
we have today, well guess what the number of stations
(20:42):
recharging stations probably drops by half. I don't know the
asthemtopicy that maybe by four x with the three X battery.
IM not sure how that math works, but somebody I'm
sure would figure that out. Which means the number stations
you need, which means the number of like colides you
need are all going to change. And what I know
is that no one knows what the innovation curve of
(21:03):
batteries look like. We can model things, but nobody knows,
and innovation is discontinuous often, so we need to set
context for that to happen. So what does that mean?
I would argue, And I know IBM does advocate for
a price on carbon because if you know what carbon costs,
that you have a carbon tax associated with it. Now, innovators, entrepreneurs,
(21:24):
well everybody, large companies know here's the cost and therefore,
what am I willing to invest in the literally millions
of decisions to get made in the economy, Whether that's
for an innovator to invest in the technology to try
to make a batter battery, or whether that's companies and
how they think about fleets and what they're doing. Um,
that's what I mean by configuring. Now do you think
every could play a role in you know, substantial investments
(21:47):
and fundamental research at the right sets of universities or
partnerships with companies. That again is configuring. So it's not
saying here's the specific steps and pathway to get there,
because in the context of innovation, you know you're gonna
be wrong, and that's how you build a bridge to nowhere.
The dollars were there, but you didn't realize, well, that
no longer makes sense. So setting up the context is critical.
(22:09):
And I will say I'm very encouraged by what we're
seeing happening around the world in terms of interest on
climate change. But I do think there's a knee jerk
reaction from governments in particular to say, Okay, what are
the multi hundred billion dollar, massive twenty year initiatives when
almost for sure those are gonna be wrong because you
(22:30):
need to take a more nimble, agile approach that as
we learn, you know, how do you kind of move
I'm not saying we don't want to spend hundreds of
billions of dollars on them. We do, but the approach
for how we do it can't be these multi year
plan things in the world there we don't know what
the world's gonna look like or the pace of innovation. Yeah.
I had somebody had a conversation with so recently that
(22:51):
was so fascinating. He was talking entirely about light. Led
lights have driven down the cost of light by levels
that would have been unimaginable when we we didn't realize
it was going to be so radical. Lights essentially moving
towards not going to be free. But it's getting really,
really cheap, and with all these things that it has,
(23:12):
all these impacts that no one, not a single person
would have imagined. For example, that lighting is getting so cheap,
it means that you can grow you know, vegetables in
greenhouses cheaper than you can grow them in fields, which
never occurred to anybody. Right, if you had started with
I'd like to make greenhouse vegetables cheaper than farmers. If
you started with that is your goal, you never would
(23:34):
have gotten there. It's an impossible physics problem. But I
don't know how you build a kind of social and
political infrastructure with that kind because it takes the very
things that you were talking about. To be comfortable with uncertainty,
you have to to kind of give up on the
notion you can push the world in a given direction.
You just have to set something like you say, put
(23:55):
the stick in the see and let the life them
around it. Right. That takes an incredible amount of is
it self confidence? What's the quality that requires of us? Yeah?
I think one of the I see this in companies
as well, and you can argue it's self confidence. You
can argue it's uh needing to check your ego because
(24:17):
so much of I think senior executives sense of worth
is I'm the smartest person in the room, or I
came up with the answer because I'm here, I've driven
this where building these types of things. You are the facilitator.
You're trying to say, if I'm the smartest person in
the room, I've done a lousy job of building the
(24:38):
right team around me. There's something you said that I
think is a lovely way to tie up the conversation.
And I have to say, even after talking to you,
what you said took me by surprise when you said,
if I'm silent during a meeting, the meeting is going
well or things are I just think that's so beautiful.
So you say the people. If I say thing, I'm
(25:00):
the leader here. If I say nothing, then we've succeeded.
So moving from red Hat to IBM, I mean, obviously
twelve years of red Hat, everybody knew me in style
and it would kind of organically grow over time. I
was very explicit at IBM on the point of, hey,
if I'm silent in a meeting, don't be uncomfortable. That
is positive. It means I am listening to and observing
(25:23):
the dynamics among everyone, and um, I'm feeling really really
good about how the conversation is going. If I have
an opinion, I might decide to voice it, but I'm
always a little bit, especially um in new groups of people,
I'm a little hesitant to voice of because I'm worried
that that starts to jade others points of view. And
(25:43):
if I'm silent, that's great. If I jump in, it
could be because I have an idea that I just
want to throw out there. As a participant, it could
be that I'm throwing out the exact opposite of what
I believe because I think that's going to help the
dialogue happen. And as the team, you shouldn't rate what
I say any higher lower than anyone else in the room.
I would participant in the room, but that's how we're
(26:05):
going to get the best ideas out there. If my
idea turned out to be best and it was what
I really believe, great. If it's a horrible idea, I
you know, threw it out on purpose to try to
take the conversation in a way in areas we want
to poke. I think that's really really critical because most
leaders go into a room and think their job is
the content. And my view is no. If you believe
(26:25):
teams do better than individuals, your job is to make
sure that tenor and tone are the conversation is happening,
because then the best idea will emerge. But it makes
me want to work for you. It sounds so much fun. Well,
I'm sure we can find a job discussion. So what's
next for you? Well, using the same approach of not
(26:48):
overly planning, I'm configuring myself for going forward. Right, you
have created a foundation around climate change. I want to
spend some time trying to see how I can participate
using some of these open principles and in solving that problem.
I'll continue to work with some technology companies as an
advisor and we'll see what happens in the future. Yeah, well,
(27:10):
good luck. Jim has a big challenge ahead as he
focuses his efforts on climate change. It will be interesting
to see what kind of solutions he'll find with using
an open culture strategy. Thanks again to Jim for taking
(27:30):
the time to chat with me. I can only hope
we'll all learn something from taking a more collaborative approach
towards problem solving. Smart Talks with IBM is produced by
Emily Rostak with Carlie Migliori and Katherine Gurdo, edited by
Karen Shakerji, engineering by Martin Gonzalez, mixed and mastered by
(27:53):
Jason Gambrel and Ben Holiday music by Gramoscope. Special thanks
to Molly Sosha, Andy Kelly, Miila Belle, Jacob Weisberg, Hadaphane,
Eric Sandler, and Maggie Taylor and the teams at eight
Bar and IBM. Smart Talks with IBM is a production
of Pushkin Industries and iHeartMedia. You can find more Pushkin
(28:16):
podcasts on the I Heart Radio app, Apple Podcasts, or
wherever you like to listen. I'm Malcolm Gladwell, See you
next time.
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