Hot Spots: Why Some Teams, Workplaces, and Organizations Buzz with Energy - And Others Don't

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Bestselling author Lynda Gratton-a world-renowned authority on business strategy-takes an extensive look at Hot Spots-places and times where cooperation flourishes, resulting in productivity and excitement. Now, these previously unexplained flares of ideas and innovation are thoroughly examined, as Gratton shows how to develop of Hot Spots within ones own environment.

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CHAPTER 1 GENERATING EXTRAORDINARY ENERGY

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COMPANIES FLOURISH WITH extraordinary energy and fade as energy wanes. The energy in Hot Spots can fuel innovation, which is fast becoming the core capability for organizational success, and ensure that best practices and ideas are incorporated into productivity improvements so that the company remains in the forefront. Hot Spot energy has the potential to trigger new ways of thinking about old problems and of revamping practices and processes to deliver superior services and products. The energy in a Hot Spot can, for example, fuel new ways of thinking about the cost base of a company that bring real insights around cost innovation. The energy of a Hot Spot can even lead us to reinvent the way we think about managing people or the practices that support performance management.

When extraordinary energy arises, it forms Hot Spots—occasions when people from inside and outside the company are able to engage with each other in a way that they have rarely been able to do. When this energy and the resulting excitement are ignited, they have the power to propel teams to work toward goals they never believed were achievable. Let us examine Hot Spots through the metaphor of thermal imaging.

 

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CHAPTER 2 HOT SPOTS BURNING BRIGHT ACROSS THE WORLD

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

EVERY MOMENT OF EVERY DAY, in every country of the world, Hot Spots are springing up. Extraordinary energy is generated, stimulating innovation and value for companies and the people who work in them. Fueled by connections and high-quality relationships, these Hot Spots are capable of generating enormous value through the power of new combinations.

Hot Spots are crucial, and the need for them has never been greater. In today’s interconnected, dynamic, global, and technically enabled world, the creation of value and innovation rarely spring from isolated individual endeavors.1

You can find Hot Spots all over the world—just watching the world over a twenty-four-hour period provides many ideas and insights about this phenomenon. Taking a look at these Hot Spots, we can begin to answer some of the questions we might have about what they are and how we might harness their power.

As the sun rises in the South American country of Venezuela, the day has started bright and fresh. In the offices of the multinational oil company BP, senior executive Carlos picks up a conference call from BP’s office in Poland. On the other end of the line are Polly and members of her team. Polly is the business unit head of BP’s Polish headquarters. Although Carlos has met Polly only a couple of times, he can hear worry and concern in her voice. A relative newcomer to the company, Polly is responsible for turning around BP’s business in Poland. As she describes the situation to Carlos, it is clear that the first year of her role had been a disaster. The unit has just lost $20 million.

 

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CHAPTER 3 THE FIRST ELEMENT: A COOPERATIVE MINDSET

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

THE CAPACITY TO WORK cooperatively is at the core of Hot Spots. In a real sense, the value from Hot Spots arises in the space between people. Fundamentally, Hot Spots are places of cooperative relationships; some of these relationships will be transitory, and others will be strong and last over time. The friendships that form in the context of a Hot Spot increase the value of a Hot Spot and are a source of real joy to the people involved.

These relationships emerge at least in part as a result of a cooperative mindset—a basic assumption and expectation of ourselves and others that we will behave in a supportive and cooperative manner. Perhaps one of the most profound insights from our research is that this cooperative mindset comes to the fore in a unique way in every situation and every company. It would be both naive and foolish to suppose that a couple of simple interventions could change what is fundamentally a cultural aspect of people, groups, and companies. When a mindset of cooperation emerges, it does so as the result of an ongoing interplay between assumptions, practices, norms, language, and behavior. To illustrate this subtle interplay, let us begin this exploration of the willingness to cooperate with a look into the origins of its opposite, a corrosive and competitive mindset.

 

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CHAPTER 4 THE SECOND ELEMENT: BOUNDARY SPANNING

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

AMINDSET OF COOPERATION is the foundation for the emergence of Hot Spots—and with this the trust and reciprocity that are so vital to Hot Spots. As the relationships within a Hot Spot emerge, they do so in a rather predictable way. Cooperating with friends in the immediate working environment often sets the stage for the birth of a Hot Spot. Yet this is rarely sufficient. When Hot Spots flourish and became productive and innovative, these initial networks of relationships expand from immediate colleagues to stretch across the boundaries of groups, functions, and companies. Amit and his colleagues at Linux are working across the world, connected as volunteers in an endeavor that fills them with passion and creates a shared sense of purpose and intellectual sparkle. Polly and Carlos at BP are engaged in a Hot Spot with relationships and friendships that link Poland and Venezuela in an effort to share knowledge and ideas. Tim and Nigel at OgilvyOne are members of teams that are linking across the boundaries of OgilvyOne and NoHo Digital. Spanning boundaries is critical to the vitality and longevity of a Hot Spot.

 

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CHAPTER 5 THE THIRD ELEMENT: IGNITING PURPOSE

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

ACOOPERATIVE MINDSET sets the stage for performance. Boundary spanning increases the probability of innovation through exploration. Both of these elements are fundamentally stage setters. They lay the foundations for Hot Spots, but they do not by themselves spark Hot Spots. In a productive Hot Spot, there has to be a point of ignition. It is at this point that all the latent energy contained within the cooperative mindset and the cross-boundary working is released. It is at this point that the thermal goggles lens referred to earlier reveals a bright red Hot Spot in the midst of green and blue. Recall from Figure 1.3, reproduced here as Figure 5.1, that the igniting purpose generally takes one of three forms.

Figure 5.1 Forms an igniting purpose can take

Although I have described these three ignition points as separate, in reality, Hot Spots can be ignited by a combination. Take the ignition for Linux as an example. The ignition here was a vision about open-source platforms; this was quickly followed by a way of working and a task that was intriguing and exciting.

 

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CHAPTER 6 THE FOURTH ELEMENT: PRODUCTIVE CAPACITY

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

THE HOT SPOT HAS EMERGED. The latent energy of cooperation has been ignited through purpose, and the boundary spanning has created the potential for innovation. But will the Hot Spot be productive? Will this release of latent energy actually create value? The answer depends in part on the productive capacity of the Hot Spot. This capacity can have a very significant effect on Hot Spots, as the formula shows. Productive capacity involves a number of crucial ongoing practices and processes within the Hot Spot. These practices and processes become ever more crucial the more complex the Hot Spot. Recall that the complexity of a Hot Spot can be assessed by the extent of the distance between members, the degree to which the participants differ from each other, and the proportion who are strangers to each other. For value to be created, the more complex the Hot Spot, the greater the emphasis on productive practices. The more complex a Hot Spot, the greater the need to actively channel the energy into productive outcomes. Complexity is low when members of the Hot Spot are located close to each other, they have many characteristics and experiences in common, and the majority already know each other. Complexity is high when the majority of the members are not in the same place and membership crosses time zones, when the members are different from each other in terms of characteristics and experiences, and when few know each other beforehand.

 

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CHAPTER 7 THE LEADER’S ROLE IN HOT SPOTS

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

IF HOT SPOTS ARE EMERGENT rather than controlled and directed, what can the role of the leader be? The old rules of command and control will have little effect on Hot Spots and may actually work against their emergence. In companies with more than their fair share of Hot Spots, my research colleagues and I found that leaders had played a crucial role by asking the difficult igniting questions, creating a network of friendships and opportunities for boundaryless cooperation, and championing and supporting the unique signature processes that create the context for the emergence of Hot Spots.

There are leaders in Hot Spot-rich companies whose vision of the future is so enticing that it results in the almost instantaneous release of latent energy. The founders of Wikipedia and Linux were able to galvanize thousands of volunteers with the promise of knowledge for all and the idea of an open system platform, respectively. Not all leaders have this all-encompassing vision of the future. What they do have is big questions. In their own way, they are latter-day versions of Socrates.

 

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CHAPTER 8 DESIGNING FOR THE EMERGENCE OF HOT SPOTS

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Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) × Productive Capacity

HOT SPOTS ARE CRUCIAL to organizational health. They are the energy that fuels constant performance improvements and the source of breakthrough innovations. Without the energy and focus of Hot Spots, companies languish and die. Yet Hot Spots pose a real challenge for executives and organizations as we attempt to craft and develop them. We can design for the emergence of Hot Spots, and to do so requires thought, insight, and courage. This chapter takes a closer look at how we can align the company to the emergence of Hot Spots and consider the tools and techniques most able to help us.

Wherever I have seen Hot Spots emerge on a regular basis, I have found that the executive group, often working closely with the human resource function, have engaged with the five distinct phases of activity shown in Figure 8.1.

Figure 8.1 The five phases of designing for the emergence of Hot Spots

The sequence of these five phases is crucial. Without the rigorous diagnosis that enables us to locate Hot Spots and areas of reduced energy, we may be significantly overestimating or underestimating the extent of the energy available. Without mapping the system, we are in danger of underestimating the way in which the whole system works together and falling back on leverage points that have served us well in the past rather than exploring new ways to create fertile ground for Hot Spots to blossom. Without an understanding of where Hot Spots will be crucial in the future, we are in danger of failing to allocate scarce resources to the areas of the business that most need it; and without establishing a course of action, we are in danger of simply addressing the “low-hanging fruit” rather than addressing the bigger issues that need to be addressed.

 

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APPENDIX A RESOURCES FOR CREATING HOT SPOTS

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THERE ARE MANY ACTIONS we can take as individuals to lay the groundwork for the emergence of Hot Spots. We can think about our cooperative behavior and decide to work more cooperatively with others. We can become more aware of the positive impact working across boundaries can have and perhaps develop our own boundary spanning capability. And of course, we can harness our courage to ask inspiring questions and develop inspiring tasks. Hot Spots are made up of people, so it makes sense that personal action can increase the probability of their emerging. But Hot Spots are more than just individuals; they are also about the relationships between individuals and the communities in which they work. Hot Spots emerge as a consequence of an interrelated system of practices and processes; behaviors and competencies. This appendix addresses this interrelated system through a number of diagnostics, profiling tools, mapping techniques, and questions. These tools and techniques follow the phases described in Chapter 8.

 

APPENDIX B BACKGROUND TO THE RESEARCH ON HOT SPOTS

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ALTHOUGH THE CASE STUDIES and the Cooperative Advantage Research helped us describe the phenomenon of Hot Spots, they did not provide a great deal of insight about why Hot Spots actually arise. To gain a clearer understanding of the phenomenon, we spent two years immersing ourselves in the research and literature that had already been produced regarding cooperation, networks, and purpose.

The conceptual underpinnings of Hot Spots lie at the intersection of six disciplines, each with its own framing, theories, and language. Synthesizing these aspects of the six disciplines became a crucial part of the thinking for this book.

One of the cornerstone disciplines in understanding why people choose to cooperate (or withdraw their cooperation) is the field of psychology, which provides great insight into individual behaviors, attitudes, and motivations. Psychologists, of which I am one, have a pretty clear idea about individual motivations with respect to cooperation, much of it deriving from extensive research into individual motivation conducted in the 1950s and 1960s. For Abraham Maslow, cooperation could be understood as an aspect of what he termed the “affiliation” motivation. Simply put, people cooperate because they like to belong to something.1 By the 1960s, psychologists such as Richard Hackman at Harvard Business School were building a deep understanding of group behavior and processes and how successful groups function.2 More recently, psychologists have focused their attention on the microbehaviors in cooperation. In experimental laboratory studies, they have looked at the means by which people negotiate in a group setting. They have also brought some fascinating insights into the aspect of time in groups and into identity and the impact of boundaries on perceptions of in-groups and out-groups. Although there are competing psychological theories as to why people would be motivated to cooperate, the body of work provides some real insights.

 

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