“It is always more fun to work with people who are smarter than you are. It really stretches you,” said Rice University alumnus Jim Whitehurst, CS/ECON ’89, in a recent lecture.
His open mind and willingness to learn and change have led to roles as a partner with the Boston Consulting Group (BCG), treasurer and chief operating officer for Delta Air Lines, and his current position as president and chief executive officer of Red Hat.
“I was all lit up for computer science in high school, and Rice was the best CS school that offered me scholarship funds,” he said. “I was doing well after a couple of years, when I looked around at the graduate students who were just brilliant – and I’m sure they still are – and realized I would always be a good programmer but probably not an outstanding programmer. I wanted to be a standout at whatever I did.”
Whitehurst had enjoyed his economics classes and decided to spend a year studying at the London School of Economics. When he returned to Rice, he realized he could double-major and still graduate in four years by taking additional upper-level classes in his senior year. His combination of CS and economics led to his first job as a consultant at BCG.
While there, one of his biggest clients called during a crisis. It was the morning of the 9/11 attacks and the CEO of Delta Air Lines asked Whitehurst to join them as treasurer. Although Whitehurst first resisted, he was named Delta’s acting treasurer by noon. Once he had raised enough funding to get Delta through the immediate airline industry crisis following the terror attacks, he began downloading information about the company’s transportation network, looking for ways to improve their on-time record.
Rice University CS alumnus and Red Hat CEO Jim Whitehurst during a fireside chat with students. Photo by Doni Soward.
“When I wanted to do some analysis on the airlines’ ticket flow, I learned we could get a sample – 10% of our tickets sold – from the FAA as a download,” he said. “In 2000, I couldn’t download a 4GB file on my Microsoft system at work, so I downloaded it to my home computer using Linux and worked on the analysis there.”
A new CEO at Delta heard about Whitehurst’s transportation network research and promoted him to COO in 2004. Despite Delta’s improved time performance, the company slid into bankruptcy in 2005. Within three years, Whitehurst had finessed the company’s painful, ultimately successful turnaround, and it was time for a change.
“Working through a bankruptcy at Delta was like the way Marines describe boot camp – ‘It was awful, I’m glad I did it, and I never want to do it again.’ Laying off 30,000 people was tough. I didn’t want to go into that kind of turnaround role again,” he said. “Using Fedora on my home computer was almost all I knew about Red Hat when they called, but it sounded interesting. Although their CEO did say using Fedora at home didn’t make me techie enough.”
He’d come a long way from his days of waiting for the code can in COMP 310 at Rice. “Those were the days when if more than one person tried to compile at the same time, it took down the system,” said Whitehurst. “People would wait in line for the code can and there were definite social repercussions if you jumped the queue.”
Like the code can queue, traditional organizational hierarchies have been structured to address and efficiently solve specific engineering processes. Based on his own experience and the stories he’s heard from other executives, Whitehurst found historical organizational structures leave little room for innovation.
Red Hat CEO Jim Whitehurst (center) talks with team members. Photo by Missy McLamb.
“At Red Hat, I discovered a very different organizational structure, one better suited to the rapidly changing pace of our world,” he said. “There is an engaged decision-making process here and the conversations include a lot of push-back that can seem harsh to new hires. But we get buy-in on our strategies because they have been crafted by all the people involved in implementation, and that’s something you can take to the street.”
He talked about the need for new organizational structures that empower employees to suggest and initiate changes. “You need people you can trust to make changes,” Whitehurst said, “and there are things you have to get right so you have to get people excited about it. We can no longer specify what each employee does because their jobs are constantly evolving with our products and services, so you have to get and keep them engaged.”
According to Whitehurst, top-down decision-making no longer works in rapidly evolving businesses. Decisions must involve the people closest to the process and output. “If you think you need to go north, but you have someone close to the problem that says, ‘No, we need to go slightly northwest to hit the target,’ you need those kinds of people pushing back.”
He credits his Rice education, particularly how he developed rigor and the ability to think about hard problems, for much of his success. “I am where I am because of my CS degree. It got me to BCG, which led to Delta, which led to Linux, which led to Red Hat.”
“More broadly, my ideas about this whole lateral hierarchy really started at Rice. Most schools are more hierarchical than Rice. For example, in Jones College [Whitehurst’s residential hall at Rice], everyone is invited to every event. If you decide not to go, that’s fine. But no one is not welcome or not invited. There were no cliques that excluded others at Rice. The culture at Rice helps breed an environment – if you are comfortable enough with it – that will serve you well.”
Whitehurst believes there are two primary problems with the current environment in traditionally hierarchical organizations. “The management systems we use came out of the 1900’s, which took their learning from the military, for doing relatively specific tasks in a relatively static environment.”
“Change moved at a different rate 100 years ago. When you take all those constraints and look at the most effective engineering solution, it was to optimize efficiency in a static environment. But that world doesn’t exist anymore. Consider how much we’ve automated now with robotics, technology and AI. Today, every job left requires problem-solving skills, judgment and creativity.”
The second issue with retaining a hierarchical organizational structure involves our limited ability to forecast the future. “We’re looking at a world that is moving so ridiculously fast that predicting the next six months is difficult,” said Whitehurst.
“We have unlimited broadband high-speed technology in our pockets. So the techie-oriented executive who looks at a static, rote-task management style applied to a very fast, unlimited information world is beginning to ask, ‘does the engineering system needs to change?’”
He said executives often blame the failure to make broad sweeping changes on employee culture. “The executives may say they have a culture problem, but culture is an output of a system, not an input,” he said.
The actions of executives are what must change in order to change employee culture. “My behaviors, what I measure, who I promote, who I hold accountable, those are all the leftovers of the old management style. Many companies haven’t realized that most of the new graduates want to create something of value and that has meaning. And the culture that supports that kind of employee isn’t going to grow out of the old management style.”
Learning, changing and encouraging employees to grow in Red Hat’s evolving culture is what Whitehurst enjoys most about his role as CEO. “Find a place you want to work and the projects you want to work on. You’ll think less about what you do and more about what you’ve enabled others to do, and that’s much more satisfying.”
Jim Whitehurst completed his B.A. in Computer Science and Economics in 1989.