Carter FamilyToday we celebrate great American music and honor one of its founders, Mother Maybelle Carter who was born on this day in 1909. Now known more as the mother of June Carter Cash, the wife of Johnny Cash, Mother Maybelle was a true musical pioneer. Together with her cousin Sara and Sara’s husband A.P. Carter, they formed the Carter Family who were recorded by a producer for the Victor Talking Machine Corporation in Bristol TN. The Carter Family recorded a body of songs that are a significant part of the country and bluegrass canon – songs like “Wildwood Flower” and “Can the Circle Be Unbroken (By and By).” Those recordings earned the Carter Family a shot at their first regular live radio program and those live radio programs influenced an entire generation of country and rock-and-roll stars.

I thought about the change fashioned by the Carter Family in what we now call Roots Music when I read an article in the Global Manager column of the New York Times (NYT), entitled “In a Crisis Be Open and Honest, where Sonia Kolesnikov-Jessop interviewed James Whitehurst, the Chief Executive Officer (CEO) of Red Hat Inc., the world’s largest open source software company. While the larger part of the interview was Whitehurst’s view on dealing with crisis, I found many of his thoughts very useful for the Chief Compliance Officer (CCO) or compliance practitioner to use in the day-to-day doing of compliance.

While in a previous position as Chief Operating Officer (COO) at Delta Airlines, Whitehurst stated, “One of the key things I learned is that in this type of situation, your goal should not be to comfort or make people feel better, but to be open and honest. Tell people what it’s like and allow them to make the decisions that work best for them. A lot of leaders want to show a ray of optimism, but all you do is shade the truth. Be honest and say, “This is what it is and this is what we’re going to do about it.””

It appears that Whitehurst’s real education began after he became the CEO at Red Hat. One of the first things he asked for from his direct reports was an employee engagement plan for his five-year product lifecycle. He never got it. When he did not receive one, Whitehurst thought, “This is major insubordination.” And it wasn’t like people were even embarrassed about it — it was like it was just normal.”

But finally he came around to the realization that something else was going on. He said, “It took me a while to realize things were happening bottom-up and that it was not necessarily chaos, it was just different.” From there on, Whitehurst reported, “it took me about 18 month to embrace it, and change my management style to fit in that corporate culture.”

Let that sink in for a moment. A new CEO was not groveled to or even responded to when he directly asked for information. Instead, the response was along the way of “that is not the way we do things around here”. Most importantly the key insight the new CEO took away was that this type of action was a plus for the organization because the organization was a bottom-up organization and not a top-down organization.

Whitehurst went on to observe that in a more top-down organization, they are “very good at optimizing in a static environment, when you are trying to orchestrate people to do what you want them to do, and also in a world when those roles don’t have a lot of variance in potential output. You’re just trying to optimize for efficiency, and individual variance in performance doesn’t matter that much.”

Yet “in knowledge-based environments… that’s a very different situation. In that environment… maximizing that discretionary effort to get it is incredibly important. And in an environment that is moving very quickly, you can’t plan and then execute and then optimize around that, while it’s all moving too fast for the plan. You need to have an organization that can self-regulate and react quickly. You need to create an environment where people can execute and make changes as they need to.”

For the CCO or compliance practitioner this is an incredibly important insight. If you can get bottom-up buy-in to compliance, this will drive the ethos through the organization. While not every entity will be reverse-hierarchical like Red Hat, the Whitehurst experience does demonstrate what can be achieved certainly from the bottom of an organization up through the middle of a company.

As Whitehurst said, “if you go in thinking, “I’m a leader because people choose to follow me,” it creates a very different mental dynamic. A leader’s role is to create an environment where people can do their best work”. In the compliance realm, this means providing the business unit the tools to management their risks in a quick and efficient business manner. He ended this section by observing, “The whole point of an open organization is to relax the constraints of management to create the environment in which your team can do their best work. And what is most important is to cascade this philosophy through every manager in the organization. I know that if something happens to me tomorrow, nothing will change at Red Hat because it’s really built into who we are and what we do.”

Another important point was around change. I think everyone who has ever worked in a corporation understands that management does not like surprises. But Whitehurst’s key insight as a CEO was that the rest of the troops do not like surprises any more than senior management like them. He said, “The key is that you never want to surprise people. So you must engage them first in dialogue. In a traditional model, you have a small number of people making the decision at the top, and then you announce, “This is what we’re doing.” Then the organization doesn’t really do it, so you bring in management consultants to help you do it. And then the C.E.O. says, “This is awful; my organization is resistant to change.””

If it is not obvious, the key is to engage. Whitehurst related, “People want to be engaged; you involve them in the decision process. When it comes down to execution it can happen very quickly, even if they disagree with the decision; again, this is not a democracy, but if they feel they were heard, they will generally align and execute.”

Once again for the CCO or compliance practitioner, Whitehurst’s insight provides guidance. No employee should be surprised by a compliance initiative. Consultation and engagement is the key. If a change is going to happen make sure the key stakeholders know about so there will not be resistance going forward.


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© Thomas R. Fox, 2016