Lee Congdon, CIO, Red Hat: Transformation and the Digital CIO

Michael:

(00:03) Episode number 139 of CXOTalk. I’m Michael Krigsman and today I am speaking with Lee Congdon, who is the Chief Information Officer at Red Hat Software. And we are going to be discussing the role of the CIO and IT and digital transformation, and all kinds of exciting things. Lee, how are you today?

Lee:

(00:30) Michael, I’m great thanks. I’m looking forward to our conversation.

Michael:

(00:38) As am I and the audience as well. So Lee, you’re in a pretty interesting position of being CIO of Red Hat, which of course is one of the primary suppliers of software for the Internet that runs many of the websites that we use every day. So, give us a brief sense of your background.

Lee:

(01:05) Sure, I am a computer science major from Purdue. I also have an MBA from Northwestern. I’ve worked for large technology companies like IBM and I worked in financial services for City, for the NASDAQ stock market and for Capital One for a number of years as well. I’ve been at Red Hat for about eight years as CIO, and it’s been quite a journey and I like to think of it really as three different jobs as we went through the various stages of growing that company. But with a technology background and some financial services really summarizes what I have done in my career.

Michael:

(01:43) Okay so you have a pretty broad based background both in business and technology, tell us about Red Hat.

Lee:

(01:53) Sure, Red Hat is a company of about 8,000 folks. We provide enterprise software solutions and you know we don’t sell software. Many of your audience may know that we provide services associated with open source software for LINUX operating systems, JBoss middleware and a variety of cloud products. 8000 people, headquarters are running in North Carolina. Our second largest location is in the Czech republic, but we in 80 locations around the globe. Many of our associates work remotely as well, and we are really focused on I think two things you would say is central to our business model. Our ability to operate in communities that develop open source solutions, and our subscription business model that allows us to offer those solutions to customers certified with bug fixes etc., at a very attractive price.

Michael:

(02:54) So, it must be interesting being the CIO of a company that employs basically technologists who are such experts in the technologies that everybody uses on the Internet.

Lee:

(03:12) I get lots of advice, and when I first got here you know it takes an adjustment. We are an open organization and I refer you to Jim Piper’s book about the open organization, but we are very much a candid exchange of views again going back to those open source communities.

(03:30) So, when I first got here I quickly learned that folks would send me an email complaining about an IT service and copied the entire organization. And your initial reaction coming from organizations with great cultures but managed differently are you know, do you try and get that person fired, do you call their manager and tell them to be quiet, do you respond that you know you don’t understand my budget constraints, you don’t have the experience that I do etc., etc., etc.

(03:58) But it turns out that once you get beyond that and start to realise that this open culture can help you a great deal. You realise that unlike any other job you have had and you can get real-time feedback on the quality of solutions that you are delivering to the organization. You have a tremendous source of ideas for things that you can change and improve.

(04:17) So, it is different. I certainly have many people that have strong opinions about my job, but I think we have been able to turn that to our benefit in the IT organization by listening to those folks, treating them as customers, engaging in an honesty exchange about what needs to be done, what the priorities are, and has also been a very positive experience as a way I would categorize it.

Michael:

(04:41) So, tell us about your role as CIO at Red Hat, what you do and your relationship to other parts of the organization.

Lee:

(04:53) In terms of responsibilities I would class ours as pretty typical for an IT organization. We own all the IT services and systems whether it’s identifying prospects, whether it’s developing customer relationships, processing orders, collecting cash, running the website, running the internal collaboration service, email and so on. Ensuring that we provide those sorts of services and you know, the distinction we make is that we deliver the enterprise services, the product team delivers the product services. So build and test. We partner together on certain services like our customer portal, where they largely develop the customer experience but we run the production.

(05:37) In terms of our relationship with other parts of the organization, be it sales, legal, finance and so on, and we treat them as our customers. We organize around delivering services to those organizations. We have what we call towers faced up against each of our customer organizations, typically with a tower lead. Some develop in program management resources to ensure that we’re responsive to the needs of those customers.

(06:02) And then on the backend we have the typical sorts of production services, data and analytics capabilities and the other things you would expect, information security and so on. We have an office to the CIO to help us with the coordination and administration, but I would say a relatively straightforward IT organization, certainly comparable to ones I’ve seen in other organizations.

Michael:

(06:24) So, you’ve organized IT so that you mirror in a sense your customers, right, so that you can get feedback into the product groups.

Lee:

(06:37) Absolutely and I think that plays out a couple of ways. So, first of all we are organized to match to all of our customers. So we have people that are dedicated to the needs of those functional groups that I mentioned. And we have a group that interfaces with the product team and is providing services to then again, whether they’d be collaboration, messaging, data storage, networking and so on.

(07:03) But then my IT enablement or production team also works closely with the product team, and my IT infrastructure team delivers our software infrastructure, our J boss enterprise service and so on, also works closely with the product team, so that we’re engaged with them. As we start to use our products, we call the product customer one, as we start to use our products early in the cycle, we then can give them feedback on what works for us and what doesn’t work for us, new capabilities we need, and as practitioners work with them to improve the products.

(07:41) So we think that’s a very positive relationship, and in addition to that direct relationship we do participate in open source communities, so we have that option within Red Hat as well. And then over the years we’ve become a bit of a talent factor as well, as we have got folks in IT and as IT continues to develop as a business and technical function. Some of our folks really enjoy the development side of IT, actually take careers in our product organization and move over there.

(08:12) We think that a win for IT because they have career paths. Certainly a win for the product team because they get people who have actually been active practitioners using the product. And it’s a win for Red Hat because we keep those people inside the organizations. So I think there are a lot of synergies built around customer one and our use of the products. In some we’ve run all of our infrastructures internally on Red Hat products, whether it’s the operating systems and the middleware and so on.

Michael:

(08:38) So Lee, you mentioned that IT is both a business and a technical function, what do you mean by that?

Lee:

(08:47) Yeah that’s a great question. Increasingly you know, we’re transitioning from this idea of being an industrial embraced economy to being an information-based economy, and I think it’s becoming critically important for businesses, governments, educational organizations, basically all enterprises. I think there are if you are exceptions now, to understand that it isn’t just about product, it isn’t just about the service, it’s about the information wrapped around that. And we’ve seen disruption in a lot of industries, music, publications, publishing, taxicabs etc., where the fact that there is information impending or impinging on the traditional industry really changes the name of the game.

(09:33) So, every business is becoming an IT business and that means that IT organizations increasingly can’t just deliver digitization of process, but instead they need to understand the business, and help become information leaders and help drive the business in the directions that the technology enables, and it increasingly requires if you’re going to be competitive if you are a public company for example.

(09:55) So, IT and the business are increasingly intertwined, and you know you hear talk about systems of record, and systems of engagement. Typically more and more in every enterprise you need to understand your business and how you’re going to engage with your customers, prospects and so on if you’re going to be successful.

(10:14) So, IT is a key part of the business just like the people team in terms of having human resources or the finance team in terms of having the right funding for various initiatives and investments. IT has to be a part of the business. It is a service organization, but it can’t be just a service organization.

Michael:

(10:34) But one of the things I think happens in some IT organizations is the focus on infrastructure and cost-cutting and efficiency overshadows the goal to be innovative and really displaces innovation. How do you avoid that from taking place?

Lee:

(10:55) Well it’s a problem for most of the IT organizations and for the business, and I’m fortunate to have the problems of both right now, so I’ve been in other situations where I’ve had to reduce resources, and that is not a pleasant opportunity as a leader.

(11:10) But, what I will say is if you solely focus on reducing cost you are probably setting the wrong tone for the long term. And I advise folks that even if you have a lot of technology debt, even if you have a cost problem, you’ve got to get innovative and put a plan in place to get yourself moving forward.

(11:31) One of the advantages of technology is more and more capabilities are becoming more and more available at a lower cost, driven by open source, driven by cloud computing, driven by Moore’s Law.

(11:45) So this is not typically an unsolvable problem, but it does require taking the initiative and ensuring that the business doesn’t just treat IT as a cost center. IT has got to step up and deliver a broader set of business services and a broader set of business values as we’ve been discussing.

(12:03) But under those circumstances you know, you can’t save your way to success. You’re going to have to think about not just saving money in IT, but finding the right investment pattern across your entire enterprise, so you’re investing in the mobile apps, the new tools to find customers, the new solutions to engage your customers, the new solutions to improve your marketing capability, whatever it might be appropriate for you in business. You’ve got to be investing in those things; otherwise you are not likely to be as successful over the long term.

Michael:

(12:35) Well of course what you’re saying is true, and when I speak with IT leaders, such as yourself especially innovative IT leaders, this is always the message and yet for many companies view IT first and foremost awaited drive efficiency. And I wonder sometimes whether on the one hand IT folks in some of these companies have the sophistication in a sense to fully interact with the business as an equal partner. And when they do on the business side, do they have the sophistication to understand what IT can actually do for them?

Lee:

(13:25) You know, first of all IT does need to be a efficiency center and a revenues cost over time, you know I’m not trying to abdicate that responsibility at all. But, just like anything else you got to do that and the next thing I think that if you’re enterprise is going to be successful. So if you focus too much on cost control and this new environment that I described, your business partners can likely pick a software as a service solution and do it without you. They can pick a mobile app and do it without you, so you can quickly get into the situation great you are the caretaker of a depreciating set of assets. The interesting things is that are moving the business forward are occurring elsewhere and it you’ve missed an opportunity.

(14:09) So I think despite the pain, despite the challenges, of course as an IT organization you need to make the investments to refurbish your portfolio, to retire your technology debt, to lower the cost of your legacy infrastructure. But that’s just table stakes in fact you probably wouldn’t get credit for it in today’s environment.

(14:30) You’ve also got to bring new ideas about how to drive revenue or to reduce cost for the business as a whole to your business partners if you are going to be truly successful as an IT organization. If you don’t, as I say they’ll typically do it without you in some fashion where there is a critical need and they have a budget, and then you’ll end up with a non-integrated set of solutions, potentially security exposures. Probably bad deals as well, because they are not particularly experienced in negotiating technology deals, yet, you’ll have another example of the customer database in your enterprise etc., etc., etc.

(15:08) So I think one of the things that IT organizations have to do is identify the business opportunities, the shadow IT that if we get to in this conversation and treat that as an opportunity and go out and embrace those as examples of where the business is willing to spend money to improve their processes or to improve their capabilities, and to find a way to engage their as well as on the cost save that we talked about.

Michael:

(15:37) So everybody, I am speaking on episode number 138 with Lee Congdon, who is the CIO of Red Hat software, and I would like to take a moment to ask you to like us on Facebook. I know, like I was on Facebook and sign up for the mailing list.

(15:54) Lee, we have a question from Bob Rothman, who asks there are many company focus so called transformation programs, where IT is core how do you partner with other business functions?

Lee:

(16:13) You know, we are fortunate in that Red Hat is largely a digital business today, and that we aren’t in the mode of completely transforming our business model. We are rapidly evolving from being an operating system and a middleware service provider to becoming a cloud provider as well. So that change is going on within our organization. But typically it occurs to answer the question at multiple levels. Working with the senior leaders at the organization I and my direct reports need to understand where the business is going, what the strategy is, what the critical needs are, where the gaps are, where are the things that were not doing as well as we could be where our strengths are, and use those just to prioritize a set of ongoing projects and investments to improve the business.

(17:07) At all levels in the organization, we need to set the expectation with our folks that they’re going to listen to the business challenge and not just to the technical challenge. They’re going to engage with business partners, whether it’s how do we help the people team, how do we help the marketing team, how do we help the product team, and incorporate being a service organization into what we do.

(17:30) I think there are also some examples where we identified typically technology driven innovation that’s got to be relevant to the organization. Two current examples for us are pushing to make Red Hat more data driven, to increase the capability not just for reporting, but analytics and predictive analytics within our organization to drive business value. And in this world where we’ve got so many channels of information and so many tools to use, to focus on improving the productivity of our associates as well, to better tool select, to better training and so on of better consistency across the organization and better enablement.

(18:10) Now, from a transformation standpoint as we look to IT, I do believe that as organizations are moving from an industrial view of the world to an information based view of the world, and if your organization isn’t digital yet, IT has the opportunity to play a leadership role in that transformation. In partnership with the business, IT can’t do it by themselves, but based on their awareness of leading firms in your industry and leading firms in various uses of technology across the world. Relating that back to your business problems – I say business but this can apply to education, government, and other organizations as well, relate that to your business needs. And help your business partners build a strategy and a path to evolve as an organization to take advantage of these great new technology capabilities that are rapidly becoming available, frankly at lower and lower costs in many cases and with greater and greater flexibility.

Michael:

(19:15) Okay, so the cost environment is going down in terms of applications that end users within the business can purchase. What is your view of shadow IT and enabling or not enabling users to make purchases of technology on their own, and how do you work with the business to balance the various goals and constraints on both sides.

Lee:

(19:48) Yeah, it’s a great question, and I think as I said I think shadow IT is an opportunity. That’s an example of a business partner that is willing to spend money on a technology solution that I haven’t yet explained the value to the services that I can bring to the table.

(20:07) We think we have pretty good visibility across our organization, and these are no longer shadow IT, but there are some business led IT or business driven IT solutions that make sense. What we try and do is there’s a range right, to maybe something that IT runs 100% for the enterprise, or maybe something like a small website that the business has contracted with an outside provider to do on their own.

(20:33) What we like to do is look where we are going to drive value so some of the things that I touched on earlier. We have a lot of experience in negotiating with technology providers. We may be able to help improve the quality of the contract or the deal that we get. We require – this is one of the few areas where we do require, we require whatever solution the business except have the appropriate information security characteristics. But increasingly, we can bring value by integrating those solutions into for example our single sign-on package.

(21:04) We also see, which see across the enterprise, we also see that many of these cases the business organization will pick a provider, the brochure or the website looks great, but the realities of running IT production may be somewhat different than the vision that was presented by the vendor in sell mode, and the business often don’t have somebody who is willing to take a page at 02:30 in the morning local time and resolve the problem so that the service is available again, and you can’t always do that during normal business hours East Coast US West time for example.

(21:39) So all of those sorts of things are things that the IT organization can provide value to access other data and integrating data across the enterprise as well. So we use those tools and the trust and partnering relationship that we’ve built up with various paths of the organization to engage with the business, give them the freedom and flexibility to move quickly. But give them the trade-off to say, if we do this quickly, these are the short-term and the long-term benefits and costs. Sometimes you just need to move quickly and see if it’s a good idea and throw it away if it’s not. Other times you know that it has proven itself out and making a long-term investment and it’s worth spending more time to get it right so it’s sustainable.

(22:24) And we really try and be open and candid about those conversations with our business partners. Even if they start with a shadow IT and business led project to begin with, we work with them to then fold it back into the IT portfolio over time, to deliver some of the services that I have described and ensure it’s consistent with our overall technology strategy.

Michael:

(22:45) So, another related question people often have is when you’re working with let’s say marketing, marketing always want is rapid turnaround for example on the campaigns that they’re putting out. And in many companies IT is not sufficiently responsive to the needs, which that becomes the underlying driver for this kind of Citizen IT; shadow IT, whatever we want to call it. So at Red Hat, how do you work with departments and functions inside the company to make sure they get what they want in the timeframes that they need it?

Lee:

(23:30) Yeah, marketing has been a great example of a partnership, and I would argue a success story for the process I just described. Probably 18 or 24 months ago, we knew we needed to revamp Red Hat dot com. We jointly with Jackie Yeaney, our CMO worked together to devise a strategy, to pick a technology strategy, to pick a look and feel, and to really think about the stories we wanted to tell on the new website.

(23:58) You know, I give my team a lot of credit and I give Jackie’s team a lot of credit. But we were able to work together to develop a strategy. This is one of the few projects where we used technology and were able to get the technology platform up quickly. But the long pole in the tent from a project standpoint was actually getting our content translated into all of the various languages we use around the world.

(24:19) So it wasn’t just the IT deliverable that was the inhibitor in terms of getting it done quickly, but we got it done on schedule. It was a tremendous success, and then we jointly were able to reach out to other parts of the organization and we are continuing this process now of folding in some of those micro site campaigns to ensure we’re tracking them consistently, single sign-on across our where property, etc., etc., etc.

(24:44) So that has been a true partnership with the marketing organization, where we can go together with the rest of Red Hat and described our capabilities, and work as a tightly integrated team to offer in this case marketing services campaigns to the entire organization.

(25:04) It’s been a great success for us and I think and Jackie’s team would say the same thing, we are interdependent in terms of our ability to deliver these services. Again, my team focuses on the technology side of it, with hopefully a good awareness of the marketing. And Jackie’s team focuses on the marketing side of it with hopefully a good awareness of the technology that’s certainly my observation.

(25:26) But we are one integrated team offering a set of marketing services across Red Hat and I and I think Jackie, both view that as a great success, and a great example of the type of process that I was talking about.

Michael:

(25:38) So but how does the IT folks learn enough about the ins and outs of marketing and marketing campaigns and analytics from a marketing standpoint and marketing software, how do you learn enough that you can really contribute to the business discussions with such a very specialized field?

Lee:

(26:00) It’s a great question in some ways it’s a combination of things. So you have to hire folks that have that background, and have done that sort of work before and obviously if there available and they may be working for an agency or something like that. But many people have done those types of tasks before. You are willing to spend money to train your fault and develop the skills necessary to support the business. You give the team and open environment, a shared set of objectives and expect them to work together.

(26:30) So they learn from each other very rapidly in what the priorities are and what the current techniques are. You encourage them to engage with the industry through tradeshows, through benchmarking through leading organizations, through talking to vendor’s etc., etc., etc. so they all know what the trends are. And as I say it’s actually getting easier for IT people over time, because more and more marketing solutions in particular are technology driven rather than solely a ‘business’ knowledge, but rather they do require increased understanding of technology, because that’s one area where the state of the art is advancing very rapidly.

(27:12) So, it doesn’t happen without conscious thought, but if you set the expectations and recognise people in the IT organization for their contributions, not only on the technical side. But in supporting their customers and understanding the business, and ultimately leading the business, we’ve found that you get great results and you get them in a very good timeframe.

Michael:

(27:36) Okay, Lee you mentioned the term expectations, and it seems to me one of the big drivers of change inside IT is as technology knowledge proliferates out, and we have the so called consumerisation of IT, and as you just described technology in areas such as marketing is becoming more and more important. So as users become more sophisticated, they now have more changing and more demanding expectations of IT, so any thoughts on that?

Lee:

(28:14) Well you know, I like to joke that you know we have a lot of customers within the organization that have plugged a wireless router into their cable connection, and therefore assume that it’s that easy to run a global telecom network, with wireless access point in various buildings around the globe and have that all work consistently.

(20:34) So part of this is education and ensuring that your customers understand that somethings aren’t as easy as they might appear on the surface. Some of it is additional investment to make it easy for the end user if there’s going to be business value there. Some of it I think is an acknowledgement that we are increasingly looking at associates who bring their own devices, bring their own technology capabilities, and bring their own services. In part of the art of the consumerisation standpoint is figuring out as an IT organization, do I want to be in the to-do list business, or do I just tell my associates that whatever tool they use must be appropriately secure and describe how that will occur, and let them make the decision as to what to do list manager they want.

(29:29) I similarly calendar clients, similarly email clients and so on, so I think you’ill see folks that are bringing their own devices and bringing their own services we need to just leverage that to understand what we want to provide as an enterprise service to ensure that we have appropriate information to security. But also allow our associates to bring the tools to the table that they need to get the job done. So I think that consumerisation is a real challenge.

(29:50) On the enterprise side, as I said, developing good partnerships means that you can explain to your business partners that it won’t always be as easy as the vendor said it was going to be to do function X. And that these are the sorts of things that we need to work together, to put together a financial plan, project plan, what outcomes we expect, what the return is going to be, education is going to be required and so on.

(30:24) Again, those are sort of basic functions for an IT organization, things that we’ve been doing for years. But if you’ve never led a large IT initiative before on the business side, you may not be aware so I think you can add value and education there. A lot of it is based on the level of partnership and an openness and willingness to ask the questions. So you started on this path without us, you know presumably there is an opportunity for us to work together in going forward. How do we need to engage to ensure that we’re all successful here? Again, that worked very well for us in a variety of environments.

Michael:

(30:59) What about communication? How important is communication to everything that you’re describing.

Lee:

(31:06) It is essential and it is hard. And it’s hard I think because of the clutter, we have lots and lots of tools. We have that messaging, we have business social, we can post paper in the elevators, we’ve got billboards in the snack bars you know electronic billboards in those snack bars, and so many many channels for communication.

(31:29) You know, it always amazes me, and I guess I’ve learned over the years that you know an executive can be crystal clear on their vision and then messages to the organization about priorities and so on, yet it never ceases to surprise one that when you get to people within your organization that have never heard that before. And it never ceases to you know amuse me that we can do a large communication campaign, and a week later have an associate ask where are the internal distribution lists, a question that indicates they clearly never saw it.

(32:00) But that said I think we’re learning and attempting to learn from our marketing and internal communication partners, the technique that they use message to our customers, prospects and so on and apply those to how we message to our associates internally. This is very early stages but, you know we only have 8000 associates. Some want to probably get emails, some probably want to get text messages, some want to visit the business social side etc., you know, we are actually talking about how we are going to customize on our messaging to each associate in the organization, so that we deliver the messages that they need to hear in the most effective manner. And of course successful in that then obviously we’re going to share it across the organization, and let the other organizations that need to deliver messages to our associates to participate as well.

(32:48) But I like to think of it and getting back to our discussion about marketing, this is a marketing problem. We need to get the messages to our associates and we need to be flexible in terms of thinking about how we’re going to do that. You have to be thoughtful that we don’t creep there out by learning to much about them too fast. And if we tell them you know, our research shows that if we text you 3:35 on a Friday afternoon, you will in fact read the text message. You know, that may creep some people out, so we have got to think about how we are going to be you know transparent in enrolling this out.

(33:23) But that said, I think there is a lot of techniques that we can learn from what’s happening in the internet and the digital marketing that we can provide through our internal communication. That’s a bit of a pet project of mine and something we are thinking about as we go forward.

Michael:

(33:40) Okay, we have just over 10 minutes left which is a shame because we could go on for a long time here. But we have a question from Wayne Anderson, this is a thought-provoking one who says, when the impediment in the business partnership is security, does your approach change?

Lee:

(34:03) You know, security is of the essence of all of us, and having worked in financial services, where it actually was real money on the wires, you know I’m highly sensitive to this solution. It is a dangerous world and it’s getting more dangerous, so we don’t take this lightly at all.

(34:22) I think it is a combination of multiple things. First of all you have to have world-class technology and take all the technology steps that are reasonable from a business perspective to ensure that you’re secure.

(34:33) You have to have a frank and candid exchange with your business partners about what the technology trade-offs are. Often its ease of use, often it is customer engagement and finding the right balance between accepting business risks in the process and turning away customers is going to be an ongoing challenge.

(34:57) You need to be constantly looking at those processes and implementations independently from people outside the team and probing for weaknesses. You need to be engaged with others around the industry to ensure that you’re learning from current best practice. You need to hire the best people that you can afford and give them the tools and the freedom to do their job. There are no easy answers here, I think it’s one of the most difficult problems facing us in IT organizations right now in terms of the breadth of the problem. So I don’t want to make light of it at all, but applying some of the techniques I’ve described and ensuring continued rigor and focus is important for all of us to continue. I won’t say there are any easy solutions here.

Michael:

(35:48) Okay, again in this spirit that the fact that there are a lot of things I want to talk with you about, but soon we’re going to run out of time. So, when I have spoken with CIOs like Kim Stevenson from Intel for example here on CXOTalk, and you and I have had this conversation. You have to begin with what she calls operational excellence. In other words, if you want to be taken seriously and to be respected by the business and have credibility, you need to deliver your projects on time. So maybe tell us the platform for CIO credibility and IT relevance.

Lee:

(36:32) I would say for me it’s been a bit of a journey we’ve gone through at Red Hat. First, you have to deliver appropriately reliable production, that may be five nines that might be 97% it depends upon the application and it depends upon the requirements. But you have to deliver appropriately reliable applications. As I like to say, nobody wants to have a strategic IT conversation if the email server is down, so you need to start there.

(37:00) Then you need to have predictability and appropriate risk management in your project. You need to get transparency, visibility, you need to know the status, you need to know when a project goes to red and how you’re going to recover. And by the way, train your business partner, we do almost all agile now. So train your business partners to get comfortable with your project methodology that they may not be familiar with at that level of engagement for example, so that you now in a mode where you can get the basics right, and you need to never lose focus on those. The expectation is there that production will run and you will be able to deliver the project.

(37:35) If you backslide in those areas, you’ve got to get back into it instead of the conversations that you don’t want to get into. In parallel, and based on those successes you then need to think about how you’re building partnership. Some of that can be serendipity. New organization needs some solution comes to IT and can ask for help, so some of that can be conscious marketing and allocating resources to build partnerships across the organization.

(38:00) You have to do this in my opinion for all of your partner organizations, but they’ll occur at different speeds and different paces depending on the level of available funding, the priorities that they’re willing to partner your internal culture, all of those things will be drivers. Assuming you have been successful up to that point, then you need to think about where am I going to lead the organization. Not just IT, but the entire organization.

(38:24) For us, we’ve established a couple of technology-based initiatives right now where we want to be the leaders in making Red Hat increasingly data driven, as we move from reporting to analytics to predictive analytics, thinking about what IT can do to facilitate that process and make us even better at managing our data in the organization. And another opportunity that we see in leading the organization is improving our associate productivity in terms of tools, in terms of training, and in terms of good advice. In terms of providing appropriate consulting and so on.

(38:56) So those are examples where I think, the four steps that I think of it is baseline, production, baseline projects, partnership, and then enterprise leadership is the simple diagram I keep in my mind when I consider what we are trying to accomplish.

Michael:

(39:11) So when you are thinking about IT activities and plans and strategies, this four step model that you described is this really firmly in your mind.

Lee:

(39:20) Absolutely and thinking about where we are along that continuum with each of our partners, and how we continue to move up when we think of it, the pyramid, move up that pyramid with each of our partners internally is very much of how I think about the world in terms of delivering services to Red Hat.

Michael:

(39:39) And how much do you communicate this pyramid to people both inside and IT as well as outside IT.

Lee:

(39:47) The dialogue is very much driven by the business, and what their business needs are. So depending upon how they want to think about the world, we may be having strategy conversations about products. We may be having strategy conversations about marketing campaigns. We may be having strategy conversations about associate data or enterprise culture, depending upon the organization.

(40:11) I don’t know if we render it, I mean we certainly show the diagram from time to time in one fashion or another in our conversations with our partners. But I think we add the most value in the organization by talking in their terms and prioritizing our requirements within their business framework, rather than imposing the IT framework on them.

Michael:

(40:33) So you are not shoving and IT framework down their throat, your using that to guide your actions in the context of what the business wants from you from what their needs are.

Lee:

(40:43) That is correct, and the things that frankly we want to push them on aren’t IT things. We want to push them on business things. We want to push them on things that we think are going to drive more revenue, reduce cost, make us more a successful enterprise that’s to the best to all of our benefit.

(40:59) If I’m pushing them on an IT methodology issue or something you know something like that, that actually isn’t going to give us the most benefit either in IT or the enterprise over time.

Michael:

(41:11) Well you’re giving us a fast education, and we’ve just got literally a few minutes left. So let’s talk about innovation and working with start-ups. So tells about innovation at Red Hat and the role of IT in helping drive innovation.

Lee:

(41:26) Yet I think Red Hat is very fortunate to have great communities of open source developers, that gives us a tremendous innovation engine and IT participates that in several ways. We consume the Red Hat products and to a lesser degree projects. We typically consume products not projects in IT for the same reason we encourage our customers to do so.

(41:52) Our IT folks are able to participate in projects outside the enterprise, and in fact sponsor their own as well. So I think the innovation engine for Red Hat IT starts with the innovation engine for Red Hat which is this community development model.

(42:08) In addition to that we do the same things that most IT organizations do. We listen to small organizations with interesting ideas. We talk to promising vendors. We talk to our existing vendor’s. We talk to our customers and others about the tools they’re using to solve similar business problems and to solve similar IT problems, and we learn from that.

(42:37) We’re fortunate to be in a fairly aggressive mode at bring new associates into Red Hat, so we learn from the new people that joint us, how things work in their former enterprises and what their opinions are. And share those pretty broadly across the organization. We’ve got several vehicles that we use for exchanging ideas that I eluded to earlier.

(42:58) And because we are a tech company all that comes pretty naturally to us, so you know a lot of our internal discussion lists revolve around emerging technology - we have a lot of enthusiasm. So a lot of our internal discussion lists revolve around emerging technologies, the types of trends that we’re all observing. It’s great because it’s around the globe, so we see not just a US view or an East Coast view, but a global view of that. So for all of those reasons I think we tapped in pretty cleanly to a lot of ideas and sources of innovation.

Michael:

(43:29) And you sponsor of a partnership with Citrix around this as well aren’t you?

Lee:

(43:35) Here in Raleigh we are a co-sponsor of the innovators programme. We have a dozen, in fact I sat through the pitches yesterday a wide range of solutions of very interesting from pain management technology, to desalinization hardware, to mining the output of coal plants and a variety of other technologies as well, so just fascinating. But yes, we co-sponsor and we have a team, one of our teams from Red Hat is engaged in that innovative project, and they’re looking at tools that may enable us to make developers more productive by finding them the answers to their problems before they look for them, by monitoring their activity monitoring the log files in their development in the production environment, and pre-identifying potential solutions, so they don’t have to go out and search for the fix of each that each of the individual problems they encounter. It’s an interesting concept and looking forward to seeing how it works out.

Michael:

(44:42) Okay, we are really done, but let me ask you one final question. What advice do you have for technologists, for CIOs, for folks in IT who want to contribute more strategically to their business organization, to their company?

Lee:

(45:02) Don’t lose your IT skills, don’t lose your passion for technology, but realise you’re a business person. Find out everything you can about your business. Find out everything you can about your businesses challenges and opportunity and provide your unique perspective as a technologist to addressing those business challenges, and I think you’ll do just fine.

Michael:

(45:23) So really take what you already know of the technology, but enhance that knowledge with deep understanding of the business side.

Lee:

(45:32) That’s correct, and if that means investing in a business education or learning something about finance or marketing, or sales or whatever it might be, you know think about that because I think having that combined business and technology background now is a very powerful set of skills, as I say as we shift to this information driven economy. And so that plus the benefit of hopefully the lifelong learning skills that you have required as part of the process I think will pay dividends.

Michael:

(46:03) Well Lee Congdon, thank you so much for taking the time to speak with us today. It’s been such a rich conversation and I wish we had a lot more time.

Lee:

(46:13) I do too, I enjoyed our conversation.

Michael:

(46:15) Everybody we have been speaking with Lee Congdon, who is the Chief Information Officer at Red Hat software. This has been episode number 139 of CXOTalk. Next week, we are talking with the CIO of the Federal is Communication Commission along with a colleague from the Department of Defense and we are going to be talking about change agents in the federal government. So thank you for watching and please come back next time. Thank you.

 

Company’s mentioned in today’s show:

Capital One:                www.capitalone.com

Citibank:                       www.citibank.com

Red Hat:                       www.redhat.com