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

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

Author: Lynda Gratton Publisher: San Francisco: Berrett-Koehler Publishers, 2007 ISBN: 1576754189

Hot Spots is the third volume in the trilogy published by Lynda Gratton, professor of management practice at London Business School and global authority on the people implications of strategy. This study has something to offer to the most diverse business audience from the executives to every employee and HR professional. It presents an optimistic (appreciative) view of the future business organizations based on facts and research, not only on an academic aspiration. The study calls for those of us in business to re-examine our assumptions of what makes successful organizations and to redesign existing business and HR systems to facilitate that change.

Gratton's first volume, Living Strategy: Putting People at the Heart of Corporate Purpose (2000), starts thought-provoking conversation on the fundamental changes in the psychological contract between employees and the 21st century corporation. Gratton's basic argument is that organizations can improve their performance by placing their human resources at the center of their corporate strategy.

Her second volume, The Democratic Enterprise, Liberating Your Business with Freedom, Flexibility and Commitment (2004), fleshes out the shape and feel of the organizations moving toward corporate democracy. Gratton integrates Greek and political traditions about democracy and applies them to corporate management. Her proposition is simple and straightforward: Operating more like a democracy than a bureaucracy or autocracy can make an organization more cost effective, more agile, and a lot more fun to work for. It remains for each organization to decide what path is more appropriate to them. There are stresses and strains associated with any such change, Gratton reminds her readers.

In Hot Spots, Lynda Gratton examines organizations that have already "emerged" into the new "hot" state of productivity and innovation. Hot Spots are about those very different scenarios of corporate success that offer viable solutions for continuous innovation, employee engagement, and a flexible architecture of a sustainable enterprise of the future.

Gratton's vision of a democratic enterprise takes its most concrete and credible form in this third volume. Hot Spots are the organization phenomena that demonstrate how the twin drivers of democratic organizational change and new technologies generate powerful energy and make the movement toward innovative forms of business enterprise almost inevitable.

"You always know when you are in a Hot Spot," Gratton's opening line is an invitation to the reader to explore the new "places and times where cooperation flourishes, great energy is created, and innovation, productivity and excitement drive the day." The rest of the book is Gratton's attempt to analyze the ingredients of Hot Spots' energy, and to explain why "boundary less cooperation fuels innovation ... why some teams, workplaces, and organizations buzz with energy--and others don't."

One of the book's most profound insights is that Hot Spots' "innovative capacity arises from the intelligence, insights, and wisdom of people working together." The energy contained in a Hot Spot is essentially a combination of its individual energy with the addition of the relational energy generated between them, hence the importance of:

1. Having a "cooperative mindset."

2. Identifying "boundary spanners."

3. Sharing "igniting purpose."

4. Sustaining sufficient "productive capacity."

These four conditions must be supported by five underlying productive practices: appreciating talent, making commitments, resolving conflicts, synchronizing time, and establishing a rhythm. Dr. Gratton uses a good number of graphs and flow charts to communicate visually the relationships between the components of her key formula:

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

Gratton examines multiple ways to foster a cooperative mindset, remove boundaries between people, give them a sense of purpose, and increase their productive capacity, drawing on examples from organizations like BP and Nokia.

Paradoxically, she argues, creating a Hot Spot is first of all largely about stopping doing things. Gratton's basic argument is that in the West, organizations have spent hundreds of years perfecting the language, practices, and processes of competition. In the 21st century, the old-style competition becomes too slow, too bureaucratic, and too "uninteresting." Competition was great when the world was simple, and all you had to do was to become the best as an individual. In contrast, teams of people working together create most 21st-century innovation. So, if innovation is what defines success, we now have to start creating a language, a set of practices, and a set of processes about being cooperative. For most companies, it turns out that cooperation is more difficult than competition.

The first thing companies need to do, Gratton advises, is to stop recruiting people who are very aggressive, and who are going to destroy those democratic norms. Second, companies need to stop creating reward systems that reinforce competitive behavior and distort the necessary collaboration processes. In other words, the organizations that want to be cooperative have to enrich their current transactional processes with relational processes and make sure they select the right talent.

In Hot Spots, although Gratton acknowledges that there is a value to be gained by examining best practices in successful Hot Spot companies (e.g., BP, Ogilvy One, Nokia, and Linux), she makes it clear that the real competitive advantage comes from the organization's "signature processes." These emerge organically and embody a given organization's character. If best practices are about "bringing the outside in," with the signature processes it is about "bringing the inside out." Lynda Gratton argues that focusing on the right things such as collaborative ways of working, cultivating relationships, and motivating people through meaningful purpose, vision, and goals are what really matter.

Gratton's Hot Spots is a carefully researched and thoughtfully organized study. The introduction and Chapters 1 and 2 present and explore the "what" of Hot Spots embodied in the key formula mentioned here earlier. The remaining six chapters focus on the "how" and "why" of Hot Spots. Gratton does not disclose her ideas about the actual design (or redesign) of a Hot Spot organization until the final chapter. The process consists of five phases:

1. Locating Hot Spots;

2. Mapping the system;

3. Linking to business goals;

4. Identifying potential leverage points; and

5. Taking action.

She concludes that in spite of all rules and clever designs, Hot Spots cannot be willed or engineered. They emerge and flourish sometimes in the most unexpected places. To be a leader for Hot Spots means to create the right circumstances for them to come to life without institutionalizing them. To assist readers, Gratton provides an appendix with diagnostic questions and instruments focusing on practices, processes, norms, and behaviors for leaders to apply in their organizations.

A few words must be said about Lynda Gratton herself. One reviewer called her a Hot Spot in her own right. She always finds herself in the midst of what is most "hot" and most important. A prolific and original researcher, one of a few women who have reached the status of a management guru, she is now head of the Lehman Brothers Centre for Women in Business, the first research center dedicated to this issue in Europe. In an interview with the British newspaper The Guardian, Lynda Gratton confirmed her position on organizations: "We thought we could control people, tell them what to do, then reward them. That's just not appropriate in the world of Linux or Wikipedia [two companies that use voluntary contributions from a vast number of users]. We are moving to the next phase where organizations are becoming more humane. And the wonderful thing is, that if we make organizations more humane, guess what? They suit women." Dr. Gratton calls herself an eternal optimist. In her view, Hot Spots are the precursors of an epic change in the way we live and work in our business organizations.

Reviewer: Anna A. Tavis, PhD, VP Organization Development, AIG Global Financial Services