Red Hat’s first rule of transformation – planning is dead, get over it

red hat transformation
“Digital transformation is creating a volatile, uncertain and complex world. In this kind of world, planning in multi-year cycles is a fool’s errand.” – Red Hat president and CEO James Whitehurst. Image credit: GSMA

One of the tropes of digital transformation is that traditional telcos must copy the corporate culture of OTT players like Facebook or Google. But it’s not that simple, says the chief of Red Hat – transformation starts with the right management style that encourages innovation instead of trying to plan everything in advance.

During a keynote at Mobile World Congress 2018 on Tuesday, Red Hat president and CEO James Whitehurst explained that the companies bearing the brunt of disruption are typically used to planning several years ahead. And the management style of such companies is typically geared towards that model.

Once they’re faced with a disruptive competitor – an easy example being car companies suddenly confronted with Uber and the concept of ride sharing – the typical question they ask is: how can we plan for things like this?

The answer is simple, said Whitehurst: you can’t.

“Digital transformation is creating a volatile, uncertain and complex world,” he said. “In this kind of world, planning in multi-year cycles is a fool’s errand.”

He pointed to 5G and the IoT as examples where everyone has ideas and aspirations about what they will be used for, or what kinds of services they can enable – but in reality no one knows for sure what’s coming down that pipeline, just as car companies didn’t foresee ride sharing. That’s why organizations should spend less time dithering over planning ahead and more time preparing themselves to deal with constant change and volatility by refocusing on innovation, said Whitehurst.

As for how companies actually do that, Whitehurst warned that it’s not a case of simply copying what the disruptive companies do – CEOs need to pick the right DNA from other companies and find the right fit for their own company. And as they do that, they should keep three basic things in mind.

First, they have to accept that planning as we know it is basically dead. “In an unknowable world, you can’t prescribe what to do, know how to do it and hold people accountable if it isn’t done accordingly,” Whitehurst said. “The hardest thing for leaders to do is create a context that enables your people can make decisions rather than doing it all yourself. You have to let go, and that takes a fundamental mindshift.”

Second, companies have to be more open to ideas, whether they originate internally or externally. That doesn’t mean entertaining every dumb idea that comes along in a brainstorming session – it means listening to those ideas and being able to tease them and pick them apart to see if certain elements could be useful.

“That means creating a culture of trust where those hard conversations can happen, where employees feel encouraged to share ideas and don’t become discouraged if their ideas aren’t good or useful,” he said.

The third thing to remember is that innovation is fluid – it’s not something you can (or should) start and stop. “You can’t innovate something, then freeze it and spend the next ten years exploiting and executing on that before you decide to innovate again,” Whitehurst said. “Innovation is a continuous flow – the execution part is looking at how you can dip into that flow.”

Overall, he said, transformation starts with changing your leadership style, not your culture.  “You need to spend as much time thinking about how you unleash your people’s potential to innovate and create so that you can pivot and react to change. That’s how you succeed in the 21st Century.”

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