The "hot spot" CEO: why do the halls of companies like Nokia, BP and Goldman Sachs buzz with energy?

Chief Executive, The, July-August, 2007 by Lynda Gratton

For all the grand debates in the boardroom, the strategy retreats, the visions, what CEOs strive for is the crackle of imagination in pursuit of corporate goals--hot spots. Hot spots are when our energy and excitement are inflamed by an igniting question or vision of the future. They are times when positive relationships with colleagues are a source of deep satisfaction. They are the times we remember and to which we add the most value--personally and professionally.

Companies like Nokia, BP and Goldman Sachs have more than their fair share of hot spots--a phenomenon in which CEOs and senior executives play a crucial role. They do so by asking difficult questions, creating a network of opportunities for unlimited cooperation, and championing the unique signature processes that create a context for the emergence of hot spots.

Begin with Questions

Most companies have developed an environment in which doubt is perceived as ignorance or weakness, and questioning is interpreted as either manipulation or affront. This kills the spirit of inquiry and reduces conversations to ritualized, dehydrated talk. The first task of the CEO in creating a constructive atmosphere is to establish questioning and expressing doubt as routine in the way in which the company operates.

The ability to ask incisive questions requires careful cultivation. Spotting potential weaknesses or fallacies in an argument is a bit like luck; both need prepared minds. CEOs must readily expose themselves to information and stimuli both inside and outside of the company in order to generate independent and insightful thoughts.

To legitimize honest expressions of doubt, CEOs also need to recognize their own doubts and uncertainties. It takes self-confidence and courage for leaders to acknowledge their own ignorance, but nothing serves as better reminders to others of the things that they themselves do not know.

In his very first meeting with senior managers after taking over as CEO of IBM, Lou Gerstner made a new rule: no overhead projectors and no slides. Before Gerstner arrived, meetings were ritualized, formal presentations that managers spent an enormous amount of time preparing. Instead of fancy presentations, Gerstner wanted quality conversations.

Individual habits and organizational inertia lead to the persistence of poor conversations in companies. Most leaders can think of any number of such simple rules that break habits and inertia. What matters is that the leaders consciously ask the questions: What is blocking quality conversations in our organization? What can we do to eliminate the blockages?

Just Good Friends

Creating friendships is also crucial to the emergence of hot spots. It begins with the quality and depth of relationships the members of the leadership team have with each other. Sometimes these friendships require real courage on the part of the leader. For example, OgilvyOne had been a friendly place while under the direction of its founder, David Ogilvy; however, by 1992 its original entrepreneurial culture had ossified into highly autonomous factions led by those more interested in protecting their turfs than in building the business. "The London office was horrible," says a senior manager, "with constant backbiting and a lot of bad blood."

The change started with Charlotte Beers, then CEO of Ogilvy, who invited all the business leaders to a two-day, off-site meeting. Breaking the norm, she asked direct questions: "How do we feel about one another? Why can't we work together? Do we recognize what that is doing to our clients?" That meeting was the turning point.

"We simply did not know how to talk openly to each other," says the senior manager. "We were so used to being defensive and polite. It took two years and eight meetings--and some changes in the cast of characters--before we learned to deal with emotions and feelings, to be authentic. It's only through that process that we learned the power of friendship."

Your Signature, Please

Hot spots emerge; they cannot be demanded. However, leaders must personally buy into a handful of practices and processes--signature processes unique to the company--that resonate with the firm's values. Exceptional leaders use signature processes as a means to communicate their values and the values of the company.

To do so requires that the leader clearly define those values. The executive role in identifying externally developed best practices is essentially rational and analytical. In contrast, the executive role in signature processes is value-based and insightful. There is pride in senior executive Mikko Kosonen's voice when he talks of Nokia's modular structure: "One of the distinctive characteristics of Nokia is the organizational architecture. It is avant-garde."

Points of Inflection

We are at a point of inflection, as the nature of working together has changed almost beyond recognition. Much of our way of thinking about the role of management has centered on the rules of command and control. Supporting the emergence of hot spots requires a whole new set of rules and a whole new way of approaching the challenge. To take a mechanistic approach to the emergence of hot spots is to entirely miss the point of their development. This does not mean that nothing can be done, but it takes a more subtle and more sophisticated approach. It requires unlearning some old rules and embracing new ways of thinking and working.