How Hot Spot Teams Innovate

A Discussion with Lynda Gratton, Professor, London Business School: A Wipro Council for Industry Research Initiative

How do teams learn to innovate?

Professor Lynda Gratton at the London Business School has been watching teams for the last five years. Innovative teams have three things in common:

Why recessions are a good time to innovate

In turbulent environments, companies need to adapt quickly to stay ahead of the competition. “Innovation of products, services, or expertise is a key strategy for achieving this purpose,” Gratton points out.

Gratton believes recessions provide real-time opportunities for innovation. “It’s the time when executives question old myths,” she says. It’s also the time “when new possibilities emerge.”

“Recessions are times when the unspeakable happens and the foundation seems to cave in,” Gratton continues. During recessions, people “are more open to change. They will question their fundamental assumptions about the way they run their businesses. Over time, fresh ideas, engaging experiments, and interesting adaptations appear,” Gratton reports.

Past recessions wiped out cherished habits and then introduced new ways of working that gained wide acceptance over time. For example, globalization appeared during the recession of 1990. The need to slash costs encouraged manufacturers and later outsourcing service providers to move work out of the developed countries into the labor markets of emerging nations such as India and Eastern Europe, she points out. “What began simply as the exodus of low-cost work accelerated over the following 10 years into a highly sophisticated globalization of the talent markets in sectors such as information technology and research,” Gratton says.

Hot spots

Gratton believes hot spots are a great place for teams to innovate. The author of the book “Hot spots – Why some teams, workplaces and organizations buzz with energy – and others don’t” defines hot spots as a place where people work together “in exceptionally creative and collaborative ways.”

She says hot spots occur when energy “within and between people flares.” A hot spot happens when people put aside their everyday activities to work on projects that are exciting and challenging. “It is at these times that ideas become contagious and new possibilities appear, when ideas and insights from team members combine in a process of synthesis to produce eureka moments, ground-breaking ideas, and innovations.”

The professor says hot spot teams “are energized and buzzing with inspiration.” People in hot spots know they will make a difference by working together to achieve something “brilliant, important, and purposeful.” Gratton says teams working in a hot spot are highly collaborative and are “able to work quickly,” an advantage when trying to bring new products or services to market. Teams in this zone also have the ability to build trust fast.

Hot spot teams work to answer “important questions about the future,” Gratton continues. For example, teams she observed at Nokia were imagining the future of mobile phones. “They try to sort out these challenging questions,” she observes.

An important success factor is the attitude of the team’s senior leaders. Gratton says, if they have a collaborative mindset, “it’s much more likely they will build a collaborative team.” She says these leaders know innovation happens when they reward the team, not individuals.

How hot spots happen

How do you find a hot spot? The professor says companies can discover hot spots in teams, at department “away days,” in meeting rooms or factories, at conferences, or by the water cooler — any place where people work together in exceptionally creative and collaborative ways. The important thing to remember is that they have to emerge on their own.

Gratton says hot spots “flare through the spontaneous combustion” of four elements:

1. Adopting a cooperative mindsetGratton says the innovative capacity “arises from the intelligence, insights, and wisdom of people working together.” She says hot spots happen because “people are excited, willing, and able to cooperate with each other.”
2. Spanning boundariesGratton says the exploration of novel combinations of insights and ideas “opens the possibility for innovative solutions.” Novel combinations occur under two circumstances: with people who have different ways of thinking about the world and with people who are relative strangers.
3. Finding an igniting purposeGratton says, “when an igniting purpose occurs, people flock to it.” These magnets can be questions, visions, or tasks.
4. Emphasizing relationshipsGratton says in the early phases of a hot spot, there is an emphasis on working on relationships. “Members learn how to appreciate the talents of others, keep commitments, and resolve conflicts,” she explains.

Why should companies look for hot spots now? In these difficult economic times, hot spot teams can have “a strong impact on the bottom line,” she says.

Wipro and innovation

Wipro has a 60-year heritage of embracing innovation. It is the driver that has, over the decades, enabled it to adapt to the rapidly changing technology landscape from hardware to software to service. Innovation has transformed it into a $5 billion global technology business leader.

At Wipro, innovation is essentially the ability to infuse newer ideas and ways of doing things into all parts of the organization to improve business outcomes, often without major disruptive change. With this objective, it has set up the Innovation Council, which is a high-level forum of Wipro’s customers, industry experts, analysts, and thought leaders, to analyze industry trends and work on collaborative solutions to address new consumers, markets, and business challenges.

In addition, Wipro runs 50+ centers of excellence to develop domain-specific frameworks, solutions, and new services for better business and IT alignment using the global delivery model. It has 500+ professionals dedicated to the innovation agenda, managed by the central Innovation team. In fact 10 percent of Wipro’s revenues come from innovation.

Lessons from the Outsourcing Journal:

• Teams innovate if they have at least these three characteristics:
  1. Good collaborative practices
  2. The ability to network
  3. A clear ignition point
• Innovation happens when leaders reward teams, not individuals.
• Companies need to foster hot spots because they are the locus of inspiration, innovation, and excitement.

Wipro set up the Council for Industry Research, comprised of domain and technology experts from the organization, to address the needs of customers. It specifically looks at innovative strategies that will help them gain competitive advantage in the market. The Council in collaboration with leading academic institutions and industry bodies studies market trends to equip organizations with insights that facilitate their IT and business strategies. For more information on the Research Council visit www.wipro.com/industryresearch or email industry.research@wipro.com