Digital Transformation & Maturity

MWC 2018: Innovation starts with change at the top

The Mobile World Congress (MWC) keynote presentation from Jim Whitehurst, president and Chief Executive Officer (CEO) at Red Hat was a very rare thing. He didn’t mention 5G, nor technology of any kind – there wasn’t a three or four letter acronym to be heard. Neither did he promote his products or even his company directly.

Instead he described what it takes to be a leader of an innovation-centric company, and to this tech-minded observer who spent four days with their head otherwise deep in the 5G weeds, it was both refreshing and fascinating.

Whitehurst began by proffering the idea that in an industry that is changing fast, being disrupted and has so many unknowns, running a business based on executing deep structured plans, is doomed to failure.

Agility and innovation are now the primary drivers of business success, but these require a very different type of leadership. Out must go hierarchical structures and short innovation cycles followed by extensive periods of execution. He explained that innovation needs to be a non-stop process, continuing at full pace even when plans are being executed.

Whitehurst drew on his own personal experience of moving from a position as Chief Operating Officer (COO) at Delta Airlines to CEO of Red Hat to illustrate just how different execution-focused corporations are from innovative disruptors.

It’s not just a case of a relaxed dress code, or games consoles in the cafeteria; there are substantial and important differences in attitude, structure and process. He particularly highlighted the flat management structure and the lack of hierarchical barriers to both ideas and responsibility.

Whitehead cited a memory from his first weeks at Red Hat when, in a high-level meeting, a relatively low-grade engineer voiced his opinion that the company’s strategy was wrong. This engineer did so in front of his own boss, his boss’s boss and the CEO – a sackable offence in corporate America but a welcome and valued input at Red Hat. In fact, six months later the strategy was changed as the engineer was proven correct in his critique.

What this anecdote illustrates so well are two cornerstones of the culture of a company that is structured to innovate.

Firstly, ideas and opinions can and should come from everywhere. The value should be judge on the content of the argument being made, not the originator’s pay-grade.

Secondly, critiquing ideas is essential. Innovation development processes must work to challenge, critique and refine ideas, not to reinforce the ideas of a single individual. Even if ideas are encouraged from everywhere, without this important challenge phase, the chances of successful innovation are little different than for a company with a strict top down hierarchy.

Whitehurst further encouraged companies to look outside their own organizations for new ideas stating, “However big your company, there is more innovation happening outside; that’s just a result of the numbers.” Therefore to maximize exposure to innovative ideas, companies should engage with crowd communities and find ways to integrate with them.

Whitehead accepts that Red Hat is at the extreme innovation end of what he refers to as the execution innovation continuum and doesn’t suggest that every or even any company follow the Red Hat blueprint exactly. Rather he was talking to fellow CEOs and calling on them to make the changes in themselves necessary to encourage and drive innovation in their businesses.

Culture, people and organization is one of the 5 pillars of the TM Forum Digital Maturity Model. It was included because TM Forum recognized that changes to culture, leadership, talent management and workforce enablement, are just as important as big data analytics, artificial intelligence or network virtualization in digital transformation. However, in our first Digital Transformation Tracker leadership and culture were cited as the biggest barriers in the way of digital transformation.

Clearly there’s much work to be done and I hope many CEOs were in the audience to hear Jim Whitehurst live but if you missed it, watch it in full here.


    About The Author

    Senior Analyst

    Catherine Haslam is an analyst with 20 years’ experience in providing insight, analysis, and consulting services to decision-makers within CSPs. Haslam joined TM Forum in October 2016 from Ovum where she specialized in third party enablement, international service evolution and wholesale strategy, and led successful strategy consulting projects on the impact of OTT on CSP revenues. As a freelance analyst and journalist, Haslam helped develop an entertainment-focused practice at analyst firm STL Partners and set up the Asia arm of the Light Reading news service. Prior to this she worked for the GSMA where she was responsible for setting the agenda for the Mobile World Congress, speech writing for and providing background research to the management team, and advising on technical initiatives. She also held senior editorial roles including Group Editor for Mobile Europe.

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