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Red Hat CEO: priorities and apologies part of managing
(News & Observer, The (Raleigh, NC) Via Acquire Media NewsEdge) Jan. 13--Jim Whitehurst knows the highs and lows of running a corporation.
Today he's CEO of Red Hat, the open-source Linux software company, where he's flying high. The Raleigh company's software is cheaper than proprietary products from rivals such as Sun Microsystems, which helped it post a 22 percent jump in revenue in the quarter that ended in November despite the recession.
But Whitehurst previously was chief operating officer at Delta Air Lines, a position he took just six weeks before the company filed for bankruptcy. There he had to slash costs -- and employees -- to revive the business. In the process, he earned a reputation as a turnaround specialist.
On Monday, the Harvard MBA discussed "managing in a challenging time" at N.C. State University under the banner of the College of Management's Wachovia Executive Lecture Series. He also addressed a host of other topics during the question-and-answer session that followed. Here are some of his comments:
--The key to steering a company past difficult obstacles is to focus on a few initiatives. "A key lesson, that I think is really important and really hard for business leaders to do, is to prioritize and pick two or three things and knock the cover off the ball. You see it over and over and over again where companies try to do too much."
One of the key initiatives when he was at Delta was improving the on-time performance of its flights. Delta at the time ranked last among major carriers. Nine months later, Whitehurst said, it ranked No. 1. The secret weapon: daily conference calls with company managers about their on-time performance. No one, Whitehurst recalled, wanted to be in the spotlight during those calls for failing to hit the mark.
--Don't sugarcoat bad news to employees. If you do, "you will lose credibility," he said. And in the end your work force will feel better knowing they were told the truth.
--Apologizing to employees when things have gone awry is a powerful tool.
"The bad news from my perspective for the auto CEOs is, I don't think it's possible for the guys who got you into the problem to have the credibility with employees to say, 'I'm sorry. This is what we've gotta fix.'
"One of the things that was helpful at Delta is that I was new. I had been there six weeks [as COO]. I had been in the company in finance, but I was not considered the cause of the problem. I just apologized and said, 'Here's what we've got to do to fix it.' "
Consequently, "my prescription for the auto industry is that all those guys have to go and some new guys have to come in."
--Executives need to talk to as many employees as they can.
"The times spent in your office, you're probably not having a lot of impact on people. You're not leading; you're managing, and the world is full of managers."
--Red Hat is going to need a new headquarters building in the not-too-distant future. "I think we're going to have to commit to a new headquarters building soon because we're bursting at the seams."
In a brief interview after his speech, Whitehurst said his first preference would be to remain at N.C. State's Centennial Campus, where the company now occupies two buildings.
david.ranii@newsobserver.com or 919-829-4877
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Copyright (c) 2009, The News & Observer, Raleigh, N.C.
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