Staying relevant is crucial for every functional group in today’s business landscape.

Relevance has nothing to do with being outsourced and everything to do with being necessary to the operations of the enterprise.

Customer service is often outsourced, but no one questions whether it’s relevant to the company’s success.

IT has been outsourced, but now its very relevance is under attack.

This fight is different.

It’s called devops (a contraction of development and operations)

It’s the hardest kind of fight to win, because winning means a major change to both IT process and its cultural DNA; a totally different way of thinking that is based on what has always been anathema to traditional IT — breaking the system.

Red Hat CEO Jim Whitehurst explains.

“It’s not a market. It’s a culture and process, in the same way Kaizen or lean manufacturing is process. The problem is that vendors are making it into a market by saying ‘Here’s my devops product.’ But there are no devops products,” Whitehurst says. (…) “If you make a lot of changes, you’ll have to accept a few failures along the way. Throw out planning. Try little things and if they work, do more of them and if not, do less of them.”

So, no devops products, no new markets for vendors to exploit and no definitely no outside experts to do the heavy lifting — although there will be plenty claiming to de devops gurus.

But if there is anything to be learned from companies like Microsoft it’s that cultural change doesn’t come from the outside nor is it changed by edict.

“You start with small, iterative improvements. You release [changes] early and you release them often. That’s what devops is about. It’s a cultural shift. You recognize that big change is hard but little changes are easy. But a whole lot of little changes add up to bigger changes.”

Change is hard, but in this case, change equals survival.

Image credit: N@ncy N@nce

These days most CEOs acknowledge the importance of culture.

Most incoming CEOs either want to protect and extend that current culture (think Apple) or radically change one that isn’t working (think Yahoo).

There is also a percentage that want to revamp the culture in their own image even whether the current culture is working (think Home Depot) or not (think Penney’s, which I wrote about last month, and that just fired their ex Apple CEO yesterday).

Red Hat CEO Jim Whitehurst was in the first group when he joined in 2007, but it was a real stretch (more like an unexpected bucket of ice).

He came from Delta Airlines command and control culture to a cultural meritocracy based on an open source mindset.

He calls it a “meritocracy” meaning leaders arise based on their brains, not their spot on an org chart.

“The chaotic nature, the fact that people can call me up whenever and often call me an idiot to my face. We yell and we debate and we have these things out. Our culture matches the culture around open source, so the people who want to be involved in open source feel at home.”

The proof that it works is in the pudding of revenues and retention.

Red Hat, the first and only open-source software maker to crack $1 billion a year in revenues, is growing like mad.

The company has about 5,700 employees now, hiring about 1,000 workers in 2012. It will hire another 600 to 800 in 2013.

Yet the attrition rate of his R&D group—the company’s biggest group of engineers—is only 1.5%, compared to an industry average of about 5%.

Those are numbers any CEO would be bragging about, no matter what industry.

While merit rules and open source attitudes are sacred, Red Hat is in no way a democracy.

Red Hat still has managers and those managers are still responsible for decisions.

“It’s about transparency not democracy, I can make wildly unpopular decisions and at times I have to do that … as long as I have gotten feedback and articulated my reasons clearly, I can do that.”

It doesn’t need to be. People don’t want to work in a company where decisions are based on majority rule; what they want is to be heard.

They want to know that their colleagues, whether bosses, peers or subordinates, will listen to them and discuss the merits of their thought/idea/complaint no matter who they are or what they do.

Even if you didn’t click any of the above links be sure to check out these 12 Red Hat Management Tips.

The more you implement them the more things will change or, as I keep telling clients, to change how they act change how you think.
Flickr image credit: Dave Lobby