Hello, Hello. This is Smart Talks with IBM, a podcast from Pushkin Industries, High Heart Media and IBM about what it means to look at today's most challenging problems in a new way. I'm Malcolm Gladwell. In this episode, I'm speaking with Jim Whitehurst, senior advisor at IBM. In his time with IBM, as both an advisor and former president, Jim was responsible for the IBM Cloud and cognitive software organization and corporate strategy. Jim is an expert in open innovation. During his time as president of IBM, Jim embedded his philosophy into the company, helping clients and partners on their own digital transformation journeys. Today, we'll be talking about the ways open culture companies can change the way we lead and work together. Realize, Hey, this isn't insanity or chaos. It's actually different way to run an organization is trying to seek its way into the future. Before coming to IBM, Jim was the president and CEO of Red Hat. Red Hat has been a leader in enterprise open source software and while CEO, Jim helped it become the first one billion revenue open source software company. In let's dive in Hi, Jim, Hey, how are you? I'm good. Thank you for joining me today. Let's do so many things I want to talk to you about. Whenever I read the resume of someone like you, I always wonder how did he get there? Like? What tell me? Can you give me a short version of how did you end up thinking about things like innovation and creating these kinds of receptive cultures. It's such a kind of there must be a million paths to that direction. I'm just curious about what your path was. You know, graduated from college, thought I wanted to be in technology, interviewed with the Boston consulting group, love client service. Never thought I would leave the craft of working with clients and working in small teams I loved. I didn't realize that was kind of the nub of how teams and innovation work. Uh and then a litterally I was a partner there. I never thought i'd leave it. Literally, at noon on nine eleven, the CEO of Delta called me and said, I need you now to be my treasure And I said, you know, you're out of your mind. I know nothing about being a treasurer. And he said, well, that's okay. Nobody in the right mind would loan his money right now. I just need kind of a creative strategic person. So I joined Delta literally at noon on nine eleven, and then kind of ran through the bankruptcy restructuring, and then was approached by Red Hat. And I had been a geek playing with Lennox in my spare time for a long time and I joined. I think that's where my interests really started. You know, Delta is considered a very low run company. It's always on the list of the most environant companies. And I got to Red Hat and I thought, okay, I know what leadership looks like. And I'd say in the first month, I thought this place is absolute chaos. I understand they brought me in here to clean it up, right. The problem at Delta is how do you run a tightly integrated has to be run with excellence operation Red hats all about innovation. You know, there isn't a leadership style that solves every problem. There's a leadership style for you know, driving efficiency and driving out variants in a static environment, which is what most leaders have been raised to do. And then there's a leadership style for trying to drive a faster pace of innovation, and those fundamentally look different. So wait, I'm I'm curious about this. So you go from Delta to Red Hat. So you couldn't if we were if we sat down Jim and tried to figure out tried to name two companies that were more different, Yeah, you couldn't do it. So now how long did it take you to come to the insight? You just spoke? So you go from A to Z and you say, WHOA, this place looks different because you could have gone the other way, right, you could have said I have to turn Red Hat into Delta, but you didn't. I'm guessing nine out of ten people would have tried to turn Red Hat into Delta and would have flamed out. But you didn't. Why Well, I do think a big part of it was I was also learning a new business, and so I literally spent the first six months on the road, traveling, seeing customers. And if that hadn't happened, I think you're exactly right. I would have said, no, my job is to bring in quote unquote professional management. But I was traveling enough that I didn't kind of focus on change. I was saying, let me learn the business understand our clients, etcetera, etcetera. In that period of time, I saw a couple of amazing things happened. My second week on the job, I was being briefed on this area called virtualization, and I'm getting briefed on the strategy and when we picked the technology we picked, and in the room was kind of the head of engineering, a couple of people who worked for him, but all the way down to some engineers working on virtualization there told me the strategy and why we picked the technology we did, and what are the engineers So that the most junior people in the room and the briefing said, yeah, this is what we're doing, but you know it's wrong. Fundamentally, we picked the wrong technology. There's this new technology that's emerged which is kind of upstream and Linux, and this is when we should pick And a huge argument erupts, No, no, no, we did this, And so I'm list of this back and forth, and I remember going home and telling my wife that night, I said, I am living in chaos. There's a briefing in front of the CEO where these people are just like literally food fight arguing this stuff out. Four months later, that same set team came in and said, you know what, we were wrong. We need to acquire the company behind the other technology, because that's the way to go. And what I realized is, you know what if they had just come in and given me a briefing on here's the technology, why we did it, and four months later and come in and said no, no, no, we want to buy this other I would just in a way, you gave me all the reasons why this is right and even infested in it. Why would I do that? But because I heard the arguments that it was a fifty five forty five decision and understood it wasn't clear cut, and that changed over time because of changing circumstances, it was much easier for me to go to the board and say, you know, let's spend hundreds of millions of dollars buying this other company because you know, I'm convinced, convinced it's right because I've heard both sides of the argument. I've seen how it's involved over time. So that was a time when I realized, like wow, this system that seemed like chaos was a way that we socialize, you know, the problems that we need to solve. An innovation and recognizing that circumstances changed and therefore our output can change all of sudden over elise like, No, that argument wasn't chaos. That was a great way to make sure that we were all on the same page on both the facts and where we felt we should act coming out of those facts. And then I realized, Hey, this isn't insanity or chaos. It's actually a different way to run an organization is trying to seek its way into the future. M M, Now, can you let's talk a little bit about that transit. You have these two modes, and you're not saying mode A the Delta mode isn't useful. You're saying it works if you're in an industry that is well established, where the technology is moving incrementally, where you're where it's about. It's where it's about. Delta has to execute perfectly, right. You do not want anyone experimenting with the safety procedures before she right. I mean that's a strong example now because most companies have some of both. You do want people tinkering with trying experimenting on you know, Delta's website, right or the mobile app, and so all companies have a degree of difference in the types of of of operations that they're running. Right. You know, Red Hat has financial accounting and you know, I go to jail if those UH numbers are wrong, so you want to make sure that those are locked down. The key is for executives to recognize there are different approaches to your organization, your leadership, your management processes, depending on which objective function you're trying. You're trying to drive variants out to drive standardization or you're trying to inject variants in to drive innovation, and you have to do a little bit of both and recognizing that there's a continuum around that. But importantly, more and more of the world is moving to you know, innovation is important, So walk me through. Let's let's break down all of the components of this open innovation model. What is it? What does it look like? Does it feel like? Does it you know, give me a kind of prepare me, So Malcolm's gonna move, Malcolm's gonna join to do this transition and enjoin. Prepare me for what it looks and feels like. Sure, so, first off, it is absolutely clear what the strategy of the company is. But your work steps are typically left somewhat ambiguous, so you can work to improve, trying new things, observe what's happening. So I think most large companies will say frontline really needs to understand the work task to get their job done, and let's make those efficient. They don't really need to know the corporate strategy. We would flip that around and say everybody needs to know the corporate strategy and exactly what we're doing and why we're gonna leave the worksteps blurry so you can work to figure it out. And the other thing I think people see out of it, at least certainly a red hat is everybody thinks are gonna come in and everybody's gonna be nice and holding hands and seeing in kubaya. And one of the first things they find out it's like, wow, it's kind of harsh. I throw up an idea and immediately people shoot it down. And one of the things that we've learned over time, and I do think this is beyond red. This is kind of a broad. Important point is that great ideas are fused together from many good ideas and people arguing and fighting it out and building on top of each other. Let me ask you a very random, odd question. I suppose I can do Jim and said I would like you. I'd like to bring you into my really good, you know school. Your job is to redesign the curriculum and pedagogy of this school to prepare our students for the world you just described. Yep, so look the broad way. I would say this is true for any organization. The traditional approach to thinking about solving the problem or leading is very simple is three big steps your plan, Right, You come up with a plan, You then prescribe the activities to whoever has to go executed, and then you execute and executes about driving compliance to that plan. You know, in university, what do you teach. You need to teach the a the capacity to be curious, to experiment, to try. Um, you need to teach the the comfort with ambiguity. And that's a tough thing to do. And so that's why I do think engineers in particular need to take more humanity right, you know, more open ivied, whether it's you know, philosophy or political science or sociology, where some of these questions don't have firm answers. I think it's really important for people to learn because comfort with ambiguity and recognizing that there are things that there is no firm, hard answer to combine with engineering skills or what enables great engineers to say, I'm gonna learn from others, I'm gonna try them an experiment, I'm gonna come up to an answer. There is no right answer to solving X, y Z innovation. There are multiple approaches and getting people comfortable with that, and those are key important points that I would advise anyone going to university or universities is thinking about curriculum. It's um, there are no right answers and innovation. They're different approaches, and we do spend a lot of time on right and wrong um, you know, versus kind of experiment in building and then the final thing's working together. Um. There's a lot of evidence that shows that teams come up with better UH answers than individuals. I always talked about your red hats known for open source, which is you know, thousands of people working together to build like Linux other software, and I always make sure people understand open source is not the same thing as crowdsource. Crowdsourcing should get a million people to throw an idea, and when I'm probably gonna be good, open source, or what I'm talking about with an open organization is how you get multiple people work together to give you better solutions than any one of those individuals could on their own. And so the social skills about how you get people to work together to get better solutions is important. But if I, if I look at just take high school and university education in this in this country, so little of learning is taking place in groups. We are sending kids off by themselves to tackle problems that have been handed to them, prescribed, planned and prescribed and asked them to execute the problem that we've given them on their own in large part and to the extent that they are part of a team, it's a very very informal team. But then we break them up again when we evaluate them. Right, I mean, there's a complete disconnect between the world you are describing right, which is responding to the technological challenges of the century, and the world we're preparing kids for. Well, this is the lag. This is so it's not only you know, the leaders who don't realize their management systems built for you know, the proto typical factory work, road task, static environment, etcetera. Education Lighting people up in rows individual you know, you make a mistake, that's you know, that's wrong, that's bad. Where we know experimentation is so important for for innovation. Yeah, we have an education system that is optimized for the industrial world that no longer exists, and there is a lag there that we have to fix and we really have. If anything, we're sliding backwards with social media and other things that gets kids even more isolated from each other, and that core insight that we know. There's tons of academic evidence, uh in research that says groups do better at solving problems than individuals. Yet somehow we then want to split people up. It's just I think it's a lag problem. It's a recognition problem. To take that all the way back, you know, Ronald Coast letting Nobel Prize for explaining why a company exists. You know, the whole idea was transaction costs. You know, so in other words, the question is why companies exist versus everybody's an individual actor and kind of coordinating. And his point was, well, when transaction costs are lower, um by coordinating inside a company than when a market cost would be old, people will get together and kind of create a company that all assumes interactions between people are cost which is true when you're trying to coordinate and you know, kind of drive building something scale. But when you're trying to innovate, we know interactions between people are in benefit because teams to are more innovative than individuals. So all of a sudden, we built the corporate entities and how we put them together, how we educate people. It's all about minimizing transaction costs and optimizing you know, the individual output and assuming that there's some greater way of you know, some scientists somewhere, he's gonna plug all that together. Yet it is the interactions where you know, the magic happens when you're trying to innovate. Yeah, this reminds me I. In my podcast Revisions History, the one of the last episodes this season is all about war games and basically asked the question why does the military play war games? They play a lot of war games, and one of the reasons is exactly the one you articulated, which is that you can do all the plans formal planning and prediction. You can send your experts off to come back with reports and you will learn and get a certain kind of insight from that. With another way, more valuable insight that will only come if you bring a group of people together and have them interact over a problem. Every one of the war gaming world quotes this line from Thomas Shelling, which is something to the effect of even the smartest man in the world cannot make a list of the things that haven't occurred to him, right, which is so lovely. And that's the point, right, that you only learn about the things that haven't occurred to you when you are in this kind of free flowing, interactive social environment. That's the point. That's why we throw people together in these in the end create the kind of chaos you're talking about, because it's going to force you off the narrow path that you put yourself on. Yeah, speaking of the military, one of my favorite kind of pieces to read on leadership, it's uh commander's intent. And the whole point is intent is so important for you know, others in the field to understand because you can get separated, frankly, commander to get killed, and understanding the intent and the objective is so much more important than understanding the kind of the specifics that go around that because as soon as you're on a battle field, things changed by definition, and so if you you need to really understand intent and how do you convey that as a leader? It's uh, I do think those are critical in an ambiguous environment? Yeah, do you? Is there a way to adopt the war gaming model UM in the kind of more conventional corporate setting, and it was running simulations, real world social simulations of anticipated problem. Is that something that we that we're doing or at least doing enough. I think I remember talking to to the CEO of one of the major global banks and they were saying, basically, hey, we got this issue with you know, uh, fin techs attacking us, and you know, I've asked my team, you know what's our you know, two big initiatives we're gonna go and attack this and and I basically told him, don't go out and say you have two initiatives to do this, because a an initiative fails, the person is probably gonna get fired. So how much is anybody really really really gonna go out and try something radical? So what you need to do is say, hey, I want to see our twenty five best ideas. You've got six months. Each one can have no more than you know, two hundred fifty dollars to experiment with. Let's come back in six months and say, let's see where those are, and we're gonna maybe kill all of them and talk about the lessons learn, or we're gonna take two and then we're gonna take the lessons learn and launch another twenty five and we're gonna keep doing that until we feel the right things emerge and those are the ones that we're gonna go do. That's a management approach that says, let's experiment and try and learn and kind of quickly modify around that. As soon as you launch these big, big, big initiatives, by definition, you're not doing much experimentation in it because you've already put dollars behind it with a you know, with an outcome predefined. And that's the problem in general with so many of the existing management process It's uh, I call it's drive a future state. When the words I'll use with with leaders as seek a future state. How do you build an organization that can seek a future optimal state? You know? That's so we went backwards and talked about high school and college education. Let's now go forward, Let's go beyond the corporation. I understand now that a lot of your focus is on UM philanthropic stuff, climate change, you know, larger kind of society wide issues. Let's apply that that model to s of those. How would you guide us in the way that we think an attack a problem, like, for example, climate change. Well I'll come back to that model of instead of plan, prescribe, execute, configure, enable, and gave so much of what we're talking about is like, what are the big ways we're gonna go elect electrify UM the country and you know, put stations around for autonomous driving, etcetera, etcetera, etcetera. And how do we preplan all that out? My census? We need to configure for success. And what I mean by that is if all of a sudden, battery technology takes a leap forward and we get triple the density UM in a car battery that we have today, well guess what the number of stations recharging stations probably drops by half. I don't know the asthemtopicy that maybe by four x with the three X battery. IM not sure how that math works, but somebody I'm sure would figure that out. Which means the number stations you need, which means the number of like colides you need are all going to change. And what I know is that no one knows what the innovation curve of batteries look like. We can model things, but nobody knows, and innovation is discontinuous often, so we need to set context for that to happen. So what does that mean? I would argue, And I know IBM does advocate for a price on carbon because if you know what carbon costs, that you have a carbon tax associated with it. Now, innovators, entrepreneurs, well everybody, large companies know here's the cost and therefore, what am I willing to invest in the literally millions of decisions to get made in the economy, Whether that's for an innovator to invest in the technology to try to make a batter battery, or whether that's companies and how they think about fleets and what they're doing. Um, that's what I mean by configuring. Now do you think every could play a role in you know, substantial investments and fundamental research at the right sets of universities or partnerships with companies. That again is configuring. So it's not saying here's the specific steps and pathway to get there, because in the context of innovation, you know you're gonna be wrong, and that's how you build a bridge to nowhere. The dollars were there, but you didn't realize, well, that no longer makes sense. So setting up the context is critical. And I will say I'm very encouraged by what we're seeing happening around the world in terms of interest on climate change. But I do think there's a knee jerk reaction from governments in particular to say, Okay, what are the multi hundred billion dollar, massive twenty year initiatives when almost for sure those are gonna be wrong because you need to take a more nimble, agile approach that as we learn, you know, how do you kind of move I'm not saying we don't want to spend hundreds of billions of dollars on them. We do, but the approach for how we do it can't be these multi year plan things in the world there we don't know what the world's gonna look like or the pace of innovation. Yeah. I had somebody had a conversation with so recently that was so fascinating. He was talking entirely about light. Led lights have driven down the cost of light by levels that would have been unimaginable when we we didn't realize it was going to be so radical. Lights essentially moving towards not going to be free. But it's getting really, really cheap, and with all these things that it has, all these impacts that no one, not a single person would have imagined. For example, that lighting is getting so cheap, it means that you can grow you know, vegetables in greenhouses cheaper than you can grow them in fields, which never occurred to anybody. Right, if you had started with I'd like to make greenhouse vegetables cheaper than farmers. If you started with that is your goal, you never would have gotten there. It's an impossible physics problem. But I don't know how you build a kind of social and political infrastructure with that kind because it takes the very things that you were talking about. To be comfortable with uncertainty, you have to to kind of give up on the notion you can push the world in a given direction. You just have to set something like you say, put the stick in the see and let the life them around it. Right. That takes an incredible amount of is it self confidence? What's the quality that requires of us? Yeah? I think one of the I see this in companies as well, and you can argue it's self confidence. You can argue it's uh needing to check your ego because so much of I think senior executives sense of worth is I'm the smartest person in the room, or I came up with the answer because I'm here, I've driven this where building these types of things. You are the facilitator. You're trying to say, if I'm the smartest person in the room, I've done a lousy job of building the right team around me. There's something you said that I think is a lovely way to tie up the conversation. And I have to say, even after talking to you, what you said took me by surprise when you said, if I'm silent during a meeting, the meeting is going well or things are I just think that's so beautiful. So you say the people. If I say thing, I'm the leader here. If I say nothing, then we've succeeded. So moving from red Hat to IBM, I mean, obviously twelve years of red Hat, everybody knew me in style and it would kind of organically grow over time. I was very explicit at IBM on the point of, hey, if I'm silent in a meeting, don't be uncomfortable. That is positive. It means I am listening to and observing the dynamics among everyone, and um, I'm feeling really really good about how the conversation is going. If I have an opinion, I might decide to voice it, but I'm always a little bit, especially um in new groups of people, I'm a little hesitant to voice of because I'm worried that that starts to jade others points of view. And if I'm silent, that's great. If I jump in, it could be because I have an idea that I just want to throw out there. As a participant, it could be that I'm throwing out the exact opposite of what I believe because I think that's going to help the dialogue happen. And as the team, you shouldn't rate what I say any higher lower than anyone else in the room. I would participant in the room, but that's how we're going to get the best ideas out there. If my idea turned out to be best and it was what I really believe, great. If it's a horrible idea, I you know, threw it out on purpose to try to take the conversation in a way in areas we want to poke. I think that's really really critical because most leaders go into a room and think their job is the content. And my view is no. If you believe teams do better than individuals, your job is to make sure that tenor and tone are the conversation is happening, because then the best idea will emerge. But it makes me want to work for you. It sounds so much fun. Well, I'm sure we can find a job discussion. So what's next for you? Well, using the same approach of not overly planning, I'm configuring myself for going forward. Right, you have created a foundation around climate change. I want to spend some time trying to see how I can participate using some of these open principles and in solving that problem. I'll continue to work with some technology companies as an advisor and we'll see what happens in the future. Yeah, well, good luck. Jim has a big challenge ahead as he focuses his efforts on climate change. It will be interesting to see what kind of solutions he'll find with using an open culture strategy. Thanks again to Jim for taking the time to chat with me. I can only hope we'll all learn something from taking a more collaborative approach towards problem solving. Smart Talks with IBM is produced by Emily Rostak with Carlie Migliori and Katherine Gurdo, edited by Karen Shakerji, engineering by Martin Gonzalez, mixed and mastered by Jason Gambrel and Ben Holiday music by Gramoscope. Special thanks to Molly Sosha, Andy Kelly, Miila Belle, Jacob Weisberg, Hadaphane, Eric Sandler, and Maggie Taylor and the teams at eight Bar and IBM. Smart Talks with IBM is a production of Pushkin Industries and iHeartMedia. You can find more Pushkin podcasts on the I Heart Radio app, Apple Podcasts, or wherever you like to listen. I'm Malcolm Gladwell, See you next time.

Hello, Hello. This is Smart Talks with IBM, a podcast from Pushkin Industries, High Heart Media and IBM about what it means to look at today's most challenging problems in a new way. I'm Malcolm Gladwell. In this episode, I'm speaking with Jim Whitehurst, senior advisor at IBM. In his time with IBM, as both an advisor and former president, Jim was responsible for the IBM Cloud and cognitive software organization and corporate strategy. Jim is an expert in open innovation. During his time as president of IBM, Jim embedded his philosophy into the company, helping clients and partners on their own digital transformation journeys. Today, we'll be talking about the ways open culture companies can change the way we lead and work together. Realize, Hey, this isn't insanity or chaos. It's actually different way to run an organization is trying to seek its way into the future. Before coming to IBM, Jim was the president and CEO of Red Hat. Red Hat has been a leader in enterprise open source software and while CEO, Jim helped it become the first one billion revenue open source software company. In let's dive in Hi, Jim, Hey, how are you? I'm good. Thank you for joining me today. Let's do so many things I want to talk to you about. Whenever I read the resume of someone like you, I always wonder how did he get there? Like? What tell me? Can you give me a short version of how did you end up thinking about things like innovation and creating these kinds of receptive cultures. It's such a kind of there must be a million paths to that direction. I'm just curious about what your path was. You know, graduated from college, thought I wanted to be in technology, interviewed with the Boston consulting group, love client service. Never thought I would leave the craft of working with clients and working in small teams I loved. I didn't realize that was kind of the nub of how teams and innovation work. Uh and then a litterally I was a partner there. I never thought i'd leave it. Literally, at noon on nine eleven, the CEO of Delta called me and said, I need you now to be my treasure And I said, you know, you're out of your mind. I know nothing about being a treasurer. And he said, well, that's okay. Nobody in the right mind would loan his money right now. I just need kind of a creative strategic person. So I joined Delta literally at noon on nine eleven, and then kind of ran through the bankruptcy restructuring, and then was approached by Red Hat. And I had been a geek playing with Lennox in my spare time for a long time and I joined. I think that's where my interests really started. You know, Delta is considered a very low run company. It's always on the list of the most environant companies. And I got to Red Hat and I thought, okay, I know what leadership looks like. And I'd say in the first month, I thought this place is absolute chaos. I understand they brought me in here to clean it up, right. The problem at Delta is how do you run a tightly integrated has to be run with excellence operation Red hats all about innovation. You know, there isn't a leadership style that solves every problem. There's a leadership style for you know, driving efficiency and driving out variants in a static environment, which is what most leaders have been raised to do. And then there's a leadership style for trying to drive a faster pace of innovation, and those fundamentally look different. So wait, I'm I'm curious about this. So you go from Delta to Red Hat. So you couldn't if we were if we sat down Jim and tried to figure out tried to name two companies that were more different, Yeah, you couldn't do it. So now how long did it take you to come to the insight? You just spoke? So you go from A to Z and you say, WHOA, this place looks different because you could have gone the other way, right, you could have said I have to turn Red Hat into Delta, but you didn't. I'm guessing nine out of ten people would have tried to turn Red Hat into Delta and would have flamed out. But you didn't. Why Well, I do think a big part of it was I was also learning a new business, and so I literally spent the first six months on the road, traveling, seeing customers. And if that hadn't happened, I think you're exactly right. I would have said, no, my job is to bring in quote unquote professional management. But I was traveling enough that I didn't kind of focus on change. I was saying, let me learn the business understand our clients, etcetera, etcetera. In that period of time, I saw a couple of amazing things happened. My second week on the job, I was being briefed on this area called virtualization, and I'm getting briefed on the strategy and when we picked the technology we picked, and in the room was kind of the head of engineering, a couple of people who worked for him, but all the way down to some engineers working on virtualization there told me the strategy and why we picked the technology we did, and what are the engineers So that the most junior people in the room and the briefing said, yeah, this is what we're doing, but you know it's wrong. Fundamentally, we picked the wrong technology. There's this new technology that's emerged which is kind of upstream and Linux, and this is when we should pick And a huge argument erupts, No, no, no, we did this, And so I'm list of this back and forth, and I remember going home and telling my wife that night, I said, I am living in chaos. There's a briefing in front of the CEO where these people are just like literally food fight arguing this stuff out. Four months later, that same set team came in and said, you know what, we were wrong. We need to acquire the company behind the other technology, because that's the way to go. And what I realized is, you know what if they had just come in and given me a briefing on here's the technology, why we did it, and four months later and come in and said no, no, no, we want to buy this other I would just in a way, you gave me all the reasons why this is right and even infested in it. Why would I do that? But because I heard the arguments that it was a fifty five forty five decision and understood it wasn't clear cut, and that changed over time because of changing circumstances, it was much easier for me to go to the board and say, you know, let's spend hundreds of millions of dollars buying this other company because you know, I'm convinced, convinced it's right because I've heard both sides of the argument. I've seen how it's involved over time. So that was a time when I realized, like wow, this system that seemed like chaos was a way that we socialize, you know, the problems that we need to solve. An innovation and recognizing that circumstances changed and therefore our output can change all of sudden over elise like, No, that argument wasn't chaos. That was a great way to make sure that we were all on the same page on both the facts and where we felt we should act coming out of those facts. And then I realized, Hey, this isn't insanity or chaos. It's actually a different way to run an organization is trying to seek its way into the future. M M, Now, can you let's talk a little bit about that transit. You have these two modes, and you're not saying mode A the Delta mode isn't useful. You're saying it works if you're in an industry that is well established, where the technology is moving incrementally, where you're where it's about. It's where it's about. Delta has to execute perfectly, right. You do not want anyone experimenting with the safety procedures before she right. I mean that's a strong example now because most companies have some of both. You do want people tinkering with trying experimenting on you know, Delta's website, right or the mobile app, and so all companies have a degree of difference in the types of of of operations that they're running. Right. You know, Red Hat has financial accounting and you know, I go to jail if those UH numbers are wrong, so you want to make sure that those are locked down. The key is for executives to recognize there are different approaches to your organization, your leadership, your management processes, depending on which objective function you're trying. You're trying to drive variants out to drive standardization or you're trying to inject variants in to drive innovation, and you have to do a little bit of both and recognizing that there's a continuum around that. But importantly, more and more of the world is moving to you know, innovation is important, So walk me through. Let's let's break down all of the components of this open innovation model. What is it? What does it look like? Does it feel like? Does it you know, give me a kind of prepare me, So Malcolm's gonna move, Malcolm's gonna join to do this transition and enjoin. Prepare me for what it looks and feels like. Sure, so, first off, it is absolutely clear what the strategy of the company is. But your work steps are typically left somewhat ambiguous, so you can work to improve, trying new things, observe what's happening. So I think most large companies will say frontline really needs to understand the work task to get their job done, and let's make those efficient. They don't really need to know the corporate strategy. We would flip that around and say everybody needs to know the corporate strategy and exactly what we're doing and why we're gonna leave the worksteps blurry so you can work to figure it out. And the other thing I think people see out of it, at least certainly a red hat is everybody thinks are gonna come in and everybody's gonna be nice and holding hands and seeing in kubaya. And one of the first things they find out it's like, wow, it's kind of harsh. I throw up an idea and immediately people shoot it down. And one of the things that we've learned over time, and I do think this is beyond red. This is kind of a broad. Important point is that great ideas are fused together from many good ideas and people arguing and fighting it out and building on top of each other. Let me ask you a very random, odd question. I suppose I can do Jim and said I would like you. I'd like to bring you into my really good, you know school. Your job is to redesign the curriculum and pedagogy of this school to prepare our students for the world you just described. Yep, so look the broad way. I would say this is true for any organization. The traditional approach to thinking about solving the problem or leading is very simple is three big steps your plan, Right, You come up with a plan, You then prescribe the activities to whoever has to go executed, and then you execute and executes about driving compliance to that plan. You know, in university, what do you teach. You need to teach the a the capacity to be curious, to experiment, to try. Um, you need to teach the the comfort with ambiguity. And that's a tough thing to do. And so that's why I do think engineers in particular need to take more humanity right, you know, more open ivied, whether it's you know, philosophy or political science or sociology, where some of these questions don't have firm answers. I think it's really important for people to learn because comfort with ambiguity and recognizing that there are things that there is no firm, hard answer to combine with engineering skills or what enables great engineers to say, I'm gonna learn from others, I'm gonna try them an experiment, I'm gonna come up to an answer. There is no right answer to solving X, y Z innovation. There are multiple approaches and getting people comfortable with that, and those are key important points that I would advise anyone going to university or universities is thinking about curriculum. It's um, there are no right answers and innovation. They're different approaches, and we do spend a lot of time on right and wrong um, you know, versus kind of experiment in building and then the final thing's working together. Um. There's a lot of evidence that shows that teams come up with better UH answers than individuals. I always talked about your red hats known for open source, which is you know, thousands of people working together to build like Linux other software, and I always make sure people understand open source is not the same thing as crowdsource. Crowdsourcing should get a million people to throw an idea, and when I'm probably gonna be good, open source, or what I'm talking about with an open organization is how you get multiple people work together to give you better solutions than any one of those individuals could on their own. And so the social skills about how you get people to work together to get better solutions is important. But if I, if I look at just take high school and university education in this in this country, so little of learning is taking place in groups. We are sending kids off by themselves to tackle problems that have been handed to them, prescribed, planned and prescribed and asked them to execute the problem that we've given them on their own in large part and to the extent that they are part of a team, it's a very very informal team. But then we break them up again when we evaluate them. Right, I mean, there's a complete disconnect between the world you are describing right, which is responding to the technological challenges of the century, and the world we're preparing kids for. Well, this is the lag. This is so it's not only you know, the leaders who don't realize their management systems built for you know, the proto typical factory work, road task, static environment, etcetera. Education Lighting people up in rows individual you know, you make a mistake, that's you know, that's wrong, that's bad. Where we know experimentation is so important for for innovation. Yeah, we have an education system that is optimized for the industrial world that no longer exists, and there is a lag there that we have to fix and we really have. If anything, we're sliding backwards with social media and other things that gets kids even more isolated from each other, and that core insight that we know. There's tons of academic evidence, uh in research that says groups do better at solving problems than individuals. Yet somehow we then want to split people up. It's just I think it's a lag problem. It's a recognition problem. To take that all the way back, you know, Ronald Coast letting Nobel Prize for explaining why a company exists. You know, the whole idea was transaction costs. You know, so in other words, the question is why companies exist versus everybody's an individual actor and kind of coordinating. And his point was, well, when transaction costs are lower, um by coordinating inside a company than when a market cost would be old, people will get together and kind of create a company that all assumes interactions between people are cost which is true when you're trying to coordinate and you know, kind of drive building something scale. But when you're trying to innovate, we know interactions between people are in benefit because teams to are more innovative than individuals. So all of a sudden, we built the corporate entities and how we put them together, how we educate people. It's all about minimizing transaction costs and optimizing you know, the individual output and assuming that there's some greater way of you know, some scientists somewhere, he's gonna plug all that together. Yet it is the interactions where you know, the magic happens when you're trying to innovate. Yeah, this reminds me I. In my podcast Revisions History, the one of the last episodes this season is all about war games and basically asked the question why does the military play war games? They play a lot of war games, and one of the reasons is exactly the one you articulated, which is that you can do all the plans formal planning and prediction. You can send your experts off to come back with reports and you will learn and get a certain kind of insight from that. With another way, more valuable insight that will only come if you bring a group of people together and have them interact over a problem. Every one of the war gaming world quotes this line from Thomas Shelling, which is something to the effect of even the smartest man in the world cannot make a list of the things that haven't occurred to him, right, which is so lovely. And that's the point, right, that you only learn about the things that haven't occurred to you when you are in this kind of free flowing, interactive social environment. That's the point. That's why we throw people together in these in the end create the kind of chaos you're talking about, because it's going to force you off the narrow path that you put yourself on. Yeah, speaking of the military, one of my favorite kind of pieces to read on leadership, it's uh commander's intent. And the whole point is intent is so important for you know, others in the field to understand because you can get separated, frankly, commander to get killed, and understanding the intent and the objective is so much more important than understanding the kind of the specifics that go around that because as soon as you're on a battle field, things changed by definition, and so if you you need to really understand intent and how do you convey that as a leader? It's uh, I do think those are critical in an ambiguous environment? Yeah, do you? Is there a way to adopt the war gaming model UM in the kind of more conventional corporate setting, and it was running simulations, real world social simulations of anticipated problem. Is that something that we that we're doing or at least doing enough. I think I remember talking to to the CEO of one of the major global banks and they were saying, basically, hey, we got this issue with you know, uh, fin techs attacking us, and you know, I've asked my team, you know what's our you know, two big initiatives we're gonna go and attack this and and I basically told him, don't go out and say you have two initiatives to do this, because a an initiative fails, the person is probably gonna get fired. So how much is anybody really really really gonna go out and try something radical? So what you need to do is say, hey, I want to see our twenty five best ideas. You've got six months. Each one can have no more than you know, two hundred fifty dollars to experiment with. Let's come back in six months and say, let's see where those are, and we're gonna maybe kill all of them and talk about the lessons learn, or we're gonna take two and then we're gonna take the lessons learn and launch another twenty five and we're gonna keep doing that until we feel the right things emerge and those are the ones that we're gonna go do. That's a management approach that says, let's experiment and try and learn and kind of quickly modify around that. As soon as you launch these big, big, big initiatives, by definition, you're not doing much experimentation in it because you've already put dollars behind it with a you know, with an outcome predefined. And that's the problem in general with so many of the existing management process It's uh, I call it's drive a future state. When the words I'll use with with leaders as seek a future state. How do you build an organization that can seek a future optimal state? You know? That's so we went backwards and talked about high school and college education. Let's now go forward, Let's go beyond the corporation. I understand now that a lot of your focus is on UM philanthropic stuff, climate change, you know, larger kind of society wide issues. Let's apply that that model to s of those. How would you guide us in the way that we think an attack a problem, like, for example, climate change. Well I'll come back to that model of instead of plan, prescribe, execute, configure, enable, and gave so much of what we're talking about is like, what are the big ways we're gonna go elect electrify UM the country and you know, put stations around for autonomous driving, etcetera, etcetera, etcetera. And how do we preplan all that out? My census? We need to configure for success. And what I mean by that is if all of a sudden, battery technology takes a leap forward and we get triple the density UM in a car battery that we have today, well guess what the number of stations recharging stations probably drops by half. I don't know the asthemtopicy that maybe by four x with the three X battery. IM not sure how that math works, but somebody I'm sure would figure that out. Which means the number stations you need, which means the number of like colides you need are all going to change. And what I know is that no one knows what the innovation curve of batteries look like. We can model things, but nobody knows, and innovation is discontinuous often, so we need to set context for that to happen. So what does that mean? I would argue, And I know IBM does advocate for a price on carbon because if you know what carbon costs, that you have a carbon tax associated with it. Now, innovators, entrepreneurs, well everybody, large companies know here's the cost and therefore, what am I willing to invest in the literally millions of decisions to get made in the economy, Whether that's for an innovator to invest in the technology to try to make a batter battery, or whether that's companies and how they think about fleets and what they're doing. Um, that's what I mean by configuring. Now do you think every could play a role in you know, substantial investments and fundamental research at the right sets of universities or partnerships with companies. That again is configuring. So it's not saying here's the specific steps and pathway to get there, because in the context of innovation, you know you're gonna be wrong, and that's how you build a bridge to nowhere. The dollars were there, but you didn't realize, well, that no longer makes sense. So setting up the context is critical. And I will say I'm very encouraged by what we're seeing happening around the world in terms of interest on climate change. But I do think there's a knee jerk reaction from governments in particular to say, Okay, what are the multi hundred billion dollar, massive twenty year initiatives when almost for sure those are gonna be wrong because you need to take a more nimble, agile approach that as we learn, you know, how do you kind of move I'm not saying we don't want to spend hundreds of billions of dollars on them. We do, but the approach for how we do it can't be these multi year plan things in the world there we don't know what the world's gonna look like or the pace of innovation. Yeah. I had somebody had a conversation with so recently that was so fascinating. He was talking entirely about light. Led lights have driven down the cost of light by levels that would have been unimaginable when we we didn't realize it was going to be so radical. Lights essentially moving towards not going to be free. But it's getting really, really cheap, and with all these things that it has, all these impacts that no one, not a single person would have imagined. For example, that lighting is getting so cheap, it means that you can grow you know, vegetables in greenhouses cheaper than you can grow them in fields, which never occurred to anybody. Right, if you had started with I'd like to make greenhouse vegetables cheaper than farmers. If you started with that is your goal, you never would have gotten there. It's an impossible physics problem. But I don't know how you build a kind of social and political infrastructure with that kind because it takes the very things that you were talking about. To be comfortable with uncertainty, you have to to kind of give up on the notion you can push the world in a given direction. You just have to set something like you say, put the stick in the see and let the life them around it. Right. That takes an incredible amount of is it self confidence? What's the quality that requires of us? Yeah? I think one of the I see this in companies as well, and you can argue it's self confidence. You can argue it's uh needing to check your ego because so much of I think senior executives sense of worth is I'm the smartest person in the room, or I came up with the answer because I'm here, I've driven this where building these types of things. You are the facilitator. You're trying to say, if I'm the smartest person in the room, I've done a lousy job of building the right team around me. There's something you said that I think is a lovely way to tie up the conversation. And I have to say, even after talking to you, what you said took me by surprise when you said, if I'm silent during a meeting, the meeting is going well or things are I just think that's so beautiful. So you say the people. If I say thing, I'm the leader here. If I say nothing, then we've succeeded. So moving from red Hat to IBM, I mean, obviously twelve years of red Hat, everybody knew me in style and it would kind of organically grow over time. I was very explicit at IBM on the point of, hey, if I'm silent in a meeting, don't be uncomfortable. That is positive. It means I am listening to and observing the dynamics among everyone, and um, I'm feeling really really good about how the conversation is going. If I have an opinion, I might decide to voice it, but I'm always a little bit, especially um in new groups of people, I'm a little hesitant to voice of because I'm worried that that starts to jade others points of view. And if I'm silent, that's great. If I jump in, it could be because I have an idea that I just want to throw out there. As a participant, it could be that I'm throwing out the exact opposite of what I believe because I think that's going to help the dialogue happen. And as the team, you shouldn't rate what I say any higher lower than anyone else in the room. I would participant in the room, but that's how we're going to get the best ideas out there. If my idea turned out to be best and it was what I really believe, great. If it's a horrible idea, I you know, threw it out on purpose to try to take the conversation in a way in areas we want to poke. I think that's really really critical because most leaders go into a room and think their job is the content. And my view is no. If you believe teams do better than individuals, your job is to make sure that tenor and tone are the conversation is happening, because then the best idea will emerge. But it makes me want to work for you. It sounds so much fun. Well, I'm sure we can find a job discussion. So what's next for you? Well, using the same approach of not overly planning, I'm configuring myself for going forward. Right, you have created a foundation around climate change. I want to spend some time trying to see how I can participate using some of these open principles and in solving that problem. I'll continue to work with some technology companies as an advisor and we'll see what happens in the future. Yeah, well, good luck. Jim has a big challenge ahead as he focuses his efforts on climate change. It will be interesting to see what kind of solutions he'll find with using an open culture strategy. Thanks again to Jim for taking the time to chat with me. I can only hope we'll all learn something from taking a more collaborative approach towards problem solving. Smart Talks with IBM is produced by Emily Rostak with Carlie Migliori and Katherine Gurdo, edited by Karen Shakerji, engineering by Martin Gonzalez, mixed and mastered by Jason Gambrel and Ben Holiday music by Gramoscope. Special thanks to Molly Sosha, Andy Kelly, Miila Belle, Jacob Weisberg, Hadaphane, Eric Sandler, and Maggie Taylor and the teams at eight Bar and IBM. Smart Talks with IBM is a production of Pushkin Industries and iHeartMedia. You can find more Pushkin podcasts on the I Heart Radio app, Apple Podcasts, or wherever you like to listen. I'm Malcolm Gladwell, See you next time.