Book Review: The Open Organization

Full disclosure: I own a small number of shares in Red Hat.

Three years after Red Hat become the first open source company to reach a billion dollars in annual revenue, CEO Jim Whitehurst published a tell-all book about his company. The Open Organization barely mentions the technology involved in Red Hat’s success, although Whitehurst holds a bachelor’s degree in computer science. The Open Organization, as the title suggests, is about the organizational culture of Red Hat that enables its success.

Whitehurst describes his time at Red Hat as a learning experience that made him a better leader. Previously, he had been the successful Chief Operating Officer at Delta Airlines, guiding that company through bankruptcy and revival in the wake of the September 11 terror attacks. The organizational structure of Delta is described as being “top down”, typical of most large companies.

Such a structure arises from an promotes risk aversion and central control. Red Hat prefers a bottom-up approach where employees are given a wide latitude to make decisions. The role of the CEO becomes motivator and context-setter, while accountability is handled by social pressure.

However, the bottom-up approach cannot be truly described as a democracy, a point that Whitehurst emphasizes repeatedly. Red Hat follows a “the best idea wins, no matter where it comes from” policy, but Whitehurst makes it clear that ideas have to be solicited, too. Employees have different preferences about communication, and they need different ways to provide their ideas.

In describing Red Hat’s culture across seven chapters, Whitehurst doesn’t prescribe the specifics to every other organization. In chapter 7, he acknowledges that Red Hat is still a work in progress. Nonetheless, the broader principles are applicable. Whitehurst cites examples from other companies across a variety of industries to demonstrate that it’s not only software companies that can follow Red Hat’s example.

The Open Organization is a well-written book that turns out to be an easy read. Unlike many management books, it focuses on practical effects instead of theory and provides numerous examples. The content is well laid out, establishing the “why” before moving on to the “what” and finally the “how”.

My main complaint is that Whitehurst does not address the potential criticisms of Red Hat’s method. The blunt and argumentative (although generally collegial) nature will not be appealing to everyone. Furthermore, the way the company aggressively defends its culture (a phenomenon described in several places) prevents whimsical change but it also could discourage appropriate changes from the outside.

Nevertheless, The Open Organization is an excellent book for leaders at any level of an organization. I strongly recommend it as a guide to opening up your own organization. Picking and chose what works for you.

The Open Organization is scheduled to be released on June 2. It is published by Harvard Business Review Press.

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