Open Organization: A new way to business

With a changing society comes a changing business culture

What is an Open Organization?

An illustration of Open Organization from the perspective of Red Hat’s CEO James Whitehurst.

The idea of having an Open Organization is fairly new in the corporate world. Unlike traditional companies that has their set ways of conducting business as usual, an Open Organization focuses on empowering their employees to be the best professional versions of themselves. Yes there are still business concepts such as the “corporate ladder”, but unlike a traditional organization, people who are higher up in the chain of command are not separated from the company. There is no red carpet rolled out for them, and they are treated like any other employee.

Qualities of an Open Organization

As displayed in the diagram above, an Open Organization takes the “top down” structure of a traditional organization and flips it. Below are 5 qualities that that make an Open Organization what it is — purpose and passion, engagement, meritocracy, debating, and inclusive decision making.

Purpose and Passion

Many people (including myself), love rewards for when we do something right or accomplish a goal or task, whether it be a tangible object or a feeling. Organizations know this, and try to create incentives to inspire and motivate employees to do their best. For a traditional company, their incentives are promotion and pay. When an employee constitently goes above and beyond what their job requires them to do, the typical response of the company is to give that employee either a promotion or a pay raise. In an Open Organization, however, they give little or no tangible incentive to their employees. Instead, they give the employee a sense of purpose and passion. Open Organizations realized that giving an employee a promotion or pay raise can only go so far, but the feeling of being passionate about what the employee does can benefit both the company and the employee.

Engagement

This brings forth the next quality of an Open Organization, engagement. As stated by James Whitehurst, the CEO of Red Hat, an open software company, many companies often mistaken “morale” for “engagement”. All companies want their employess to be happy where they work, but the difference between a traditional organization and an Open Organization is an employee’s engagement. As noted in the previous paragraph, an incentive for a traditional organization’s employee is either a promotion or a raise. Using a tangible object as an incentive does not give the employee a continuous incentive to go above and beyond in the workplace. An Open Organization has realized this, and instead gave their employees a sense of passion and purpose. When employees are passionate about what they do, they are more likely to be engaged in the company. This not only helps the employees become the best versions of themselves, it also helps the company become the best version of their company they can be.

Meritocracy

For the past 50 years, corporations have used what was known as the Hierarchical system where employees are ranked above one another according to their authority. Although this system may have worked in the past, it will not work in today’s society. In the Hierarchical system, there is a very limited opportunity for job advancement and communication in between the tiers. The concept of “climbing the corporate ladder” is an outdated approach of reaching an employee’s full potential.

An Open Organization uses a different system. This approach is called Meritocracy. Through Meritocracy, leaders can emerge and advance not because their job title, but because they have earned the right to do so by gaining the mutual trust and respect of fellow employees. This allows an employee from any department, whether he or she is on the lowest tier or on the highest, to advance in the company. Employees’ purpose and engagement in the company help them develop excellent leadership skills that could have been hindered in a traditional, hierarchical system.

Debating

Traditional organizations have the capability to be “too polite” when it comes to team discussions and meetings. Members of the team are afraid to speak about what they believe is the best way to solve a problem because they are too afraid of what may happen. Having this ideology hinders not only the team but potentially the whole company from making the best decision. Unlike the traditional organization, an Open Organization encourages a bit of friction in the board rooms. Having a civilized debate on the issue at hand not only creates en excellent solution or decision, it establishes a sense of mutual trust and respect for all parties involved, which is critical in a workplace.

Inclusive decision-making

At a traditional corporation, the CEO and other top dogs make all of the decisions in regards to the company. This hierarchical approach to decision-making is not only outdated but it makes it very difficult to make an important decision that benefits the company. The top rungs of the corporate ladder do not necessarily know what is needed and what decision would be beneficial to all other departments involved. This is what Open Organization aims to fix. Through a term called “inclusive decision-making” representatives from other departments within the company have an input on the decisions that are being made. Yes. this does slow down the decision-making process itself, but important decisions that affect multiple departments of a company should not be a quick process. Having a say in the company’s decisions will produce more efficient and better results because the affected departments will be active in the decision-making process.

In the end…

As the babyboomer generation hit retirement age, they take with them the concept of how they believe a business should be run. With millennials entering the workforce, they bring with them an entirely new concept of how they believe a business should be run. This concept is called an Open Organization, full of promise and growth, both within and outside the company. These young men and women do not want to sit behind a desk and get told what to do by someone who sits behind a bigger desk, they want to be involved and engaged. They want to help make decisions, and have the ability to voice their opinion on what decision they think is best. Companies began to realize this and started to alter the way a business is being run. And it turns out to be working quite well.


Want to know more about the Open Organization concept? Watch short videos about Open Organization by visiting Red Hat’s website at:

Or check out the book The Open Organization: Igniting Passion and Performance by James Whitehurst, the CEO of Red Hat.

Or check out Red Hat’s website at:

https://www.redhat.com/en/explore/the-open-organization-book