While Nvidia’s research teams were making major, albeit quiet, moves designing processors that would be uniquely powerful for the needs of AI and deep learning, there was a new company out there looking for just that. OpenAI was founded in 2015 with the goal of advancing AI in a way that benefits humanity, and they quickly realized that the computational demands for training large AI models were immense. OpenAI, from the outset, needed highly scalable computational power to achieve its ambitious goals, and Nvidia’s GPUs were the natural choice—few alternatives could match Nvidia’s hardware capabilities for AI training. OpenAI’s AI models grew in complexity and turned increasingly to Nvidia’s GPUs for their unmatched performance in processing the massive datasets required for training.
The results of Nvidia’s preparation emerged in a whirlwind almost a decade later when ChatGPT propelled into the public view and demand for Nvidia’s GPUs and other chips skyrocketed in turn. Within two months of release, ChatGPT gathered a hundred million users, the fastest adoption of any platform in history. In 2019, Nvidia’s market value was around $100 billion. From the launch of ChatGPT to March 12, 2024, Nvidia’s stock price increased by 428 percent. By mid-2023, Nvidia’s valuation had surpassed $1 trillion for the first time. As of this writing, its value has exceeded $3 trillion, making Nvidia one of just three companies to boast such a value.
ChatGPT—the spark to Nvidia’s preparation—set in motion a fire that’s still burning. To some observers, the explosion of products from Nvidia since 2022 is evidence that the company had developed innovations and brought them to market very, very fast. But what looked to observers like sudden momentum was in fact the result of intentional, and tedious, preparation. Nvida co-founders Jen-Hsun Huang and Chris Malachowsky, the archers who had pulled a full sheaf of arrows further and further back in their company’s bow, set in motion a display of momentum few other companies will ever experience. Nvidia’s momentum may have appeared sudden to those watching the market but in fact was built through years of intensive research and strategic patience, which catapulted them to the forefront of technological advancement.
The spark (massive public adoption of AI products) would never alone catapult Nvidia into the force it is today. Other elements of our Momentum Model had laid the groundwork. For example, Huang’s leadership demanded a culture where senior executives are expected to operate independently, work relentlessly and take aim for the mark. And, Malachowsky shared with us, Nvidia had a concrete, intentional approach to recruitment. Malachowsky shared a lesson that may be uncomfortable for other teams to replicate: If they didn’t find the right talent, they didn’t hire at all.
‘A State of Want’
“We committed ourselves that we were just going to hire the best, that we’re not going to bring on the mediocre. We’re just going to wait it out. Maybe be understaffed, but we’re going to hire the best,” he explained. “We’ve got a workforce that’s not put off by being undermanned. I actually think it’s a badge of strength. I think depravity may not be the right term, but being in a state of want is clarifying, and it makes you be thoughtful and, you know, helps you, helps you strategize.”
Nvidia’s founders also recognized that their business was prone to ups and downs in workload. Malachowsky shared that in the world of semiconductors, there was no success story that lasted more than a season or two. “We wanted to weather that,” he said. “And so we’d hire a rocket scientist and ask him to sweep the floor. I’d rather have him do that than somebody whose only capacity was to do that, because tomorrow, the shit is going to hit the fan, and we’re going to ask you to go back to rocket science.” In other words, Malachowsky said, “I wanted to give you credit for the fact that I’ve underutilized you for the benefit of a future that I haven’t yet seen.”
“We tell our managers, ‘You want to be the dumbest one in the room.’ That is exciting. That is motivating.” —Chris Malachowsky, Co-Founder, Nvidia
Once Nvidia recruited the right people, the emphasis focused on fulfilling obligations to those already on board and fostering a positive team climate. “You’ve got to do them justice and give them the opportunity to succeed,” Malachowsky said. “We want to hire smart people and then listen to them. You surround them with great people. We tell our managers, ‘You want to be the dumbest one in the room.’ That is exciting. That is motivating.”
Even as Nvidia grew, the org structure remained as flat as possible—a feature many credit for its extraordinary rise and sustained momentum. The three founders were comfortable with an all-hands-on-deck approach where people could be pulled from one area to another depending on where the greatest needs were at that moment. This gave Nvidia an atypical ability to pivot.
“I know it’s a little passé, but I used to tell the people who work for me, somebody comes to you and asks for your help on something that’s a priority, you go do it; tell me about it later. I don’t care. Go do the right thing; fill us in later,” Malachowsky said, explaining a process that few managers would find themselves comfortable offering. “HR was the last one to generally know how people were spending their time. You know, even your manager may not know exactly. You know whatever you’re doing. We’re not asking you to ask for permission. Let us pull you back later if you made a wrong choice, but pivot quickly. Get on things. Don’t be hung up.”
A Momentum Mentality
The ability to pivot is perhaps of greatest benefit, however, when it’s coupled with a strong intuition for noticing opportunities when they arise. The leaders of Nvidia saw the spark in OpenAI and had in place its own unique but tested approach to leadership, culture, recruitment and preparation.
Momentum, by its very definition, requires a moment. Something happens that begins moving things, preferably in your direction. We’ve chosen to call that moment your “spark.”
Sometimes the spark is obvious: the announcement of a game-changing technology that you are uniquely positioned to help grow (like ChatGPT); the fumble that you turn into a touchdown (as the Patriots did in the 2017 Super Bowl); or the unexpected endorsement in a political campaign (as happened when Representative Clyburn put his arm around a floundering Joe Biden during the 2020 Democratic presidential primary). Sometimes the spark has a slow burn to it: the hiring of the right coach or leader who makes moves that quietly add up to a changed atmosphere, or the addition of a few courageous voices to a movement that speaks out against sexual harassment.
Ultimately, the spark is the place where belief systems begin to shift. Momentum is a mentality. It’s as much about your belief system as it is about the outcomes. One of the keys to this block in the model is how leaders train their team to see the spark. You want the team to see it favorably, though that doesn’t always happen naturally. Some on a team might see a spark and react, “If this happens, it will mean so much more work for us.” But when the leader can help frame it favorably, the team should think, “Look at all the opportunities we should get!”
To do this well requires the ability to see the spark when it appears and to help fan it in a way that the flame of momentum becomes unstoppable.
Leaders can prepare their teams to recognize a spark in a variety of ways. Here are three examples of preparatory activities. First, they must strive to ensure clarity exists within the team regarding the organizational objectives and potential outcomes associated with them. There is research that concluded work performance was enhanced when process and goal clarity was high provided that team members are committed to the goal.
Second, leaders must share information effectively to prepare their teams for seizing opportunities.
Information power is one of the six power bases defined by John R. P. French and Bertram Raven in The Bases of Social Power. This type of power is focused on the ability to control the flow of information required to get things done. Information power is one of the three bases that, if utilized well, is likely to lead to greater commitment. (Altogether, there are six power bases that are likely to bring out one of three outcomes: commitment, compliance or resistance.)
Finally, leaders must teach their teams to collaborate. Numerous research studies have detailed how organizations benefit from effective collaboration. The 2007 Harvard Business Review article “Eight Ways to Build Collaborative Teams” by Lynda Gratton and Tamara J. Erickson detailed the following preparatory actions leaders should continually strengthen in order to enhance collaboration: investing in signature relationship practices (for example, securing state-of-the-art team collaboration software); senior leaders modeling collaborative behaviors; creating a “gift” culture (that is, mentoring and coaching people regularly at all levels); ensuring the requisite skills (for example, equipping employees through training to understand they can build relationships, communicate well and resolve conflicts creatively); supporting a strong sense of community; assigning team leaders that are task- and relationship-oriented; building on “heritage” relationships (that is, placing at least a few people who have worked together previously on the team); and making sure individual roles are clearly defined and the team is empowered to figure out how to accomplish its tasks.
Amplifying Sparks
“If a tree falls in the forest and nobody is there to hear it, does it make a sound?” This thought experiment raises questions about observation, reality and physics itself. From a scientific perspective, sound is a mechanical wave that results from the vibration of particles in a medium such as air, water or solids. When a tree falls, it creates vibrations in the air that propagate as sound waves. Therefore, scientifically, the tree falling must, and does, produce sound waves regardless of whether anyone is present to hear them. But to Irish philosopher George Berkeley, who posed this question in the eighteenth century, the question is really a deeper one that delves into the nature of perception and reality. To Berkeley, this musing cut to the heart of subjective idealism—the idea that reality exists only as it is perceived by the mind. Berkeley argued that for something to exist, it must be perceived. In his view, if no one is there to perceive the sound, then it does not exist. This idea emphasizes the role of the observer in the existence of phenomena: Without our consciousness, nothing exists.
In other words, objects or events don’t have objective existence outside of human perception.
In few contexts is this concept more true or important than in the existence of sparks that ignite momentum for teams: For the most part, these sparks exist only if someone sees them. The spark—the moment, the opportunity, the flash of lightning or the first faint wisp of smoke—means something only if someone is there to observe it and sees it for what it is. Some sparks, or perhaps even many, can be destructive. And sometimes, that destruction—to social norms, a competitor’s winning streak or an enemy’s advancement—is desirable to some. But for all of the various types of sparks, when it comes to the potential for initiating momentum, all share the necessity of someone to notice and act upon it. Some groundwork would have been laid for the flame to take hold—through preparation, organization and an environment readied for the change.
A great leader will amplify the spark by recognizing that true momentum is driven by an event that begins to change the minds and climate for a team that’s been preparing to take advantage of it.
Sometimes, spark is huge. And sometimes, it’s the result of honest conversations between two leaders intent on making a positive difference.
The Ford Motor Company was losing lots of money in the early 2000s. William (Bill) Clay Ford Jr. had assumed the company’s CEO role in October 2001 (in addition to holding the chairman role), and in the five years afterward, the company lost approximately $9.1 billion through July 2006. Bill Ford and the board knew change was required. So they set about finding a leader who could revive the company’s fortunes in the beginning of what held the potential to become a global economic downturn.
“Leadership is having a compelling vision, a comprehensive plan, relentless implementation and talented people working together.” —Alan Mulally, Former CEO, Ford Motor
Bill Ford was fully committed to saving the company and his family legacy. With two major U.S. automakers staring at the possibility of entering bankruptcy, the American auto industry was in dire straits. Consequently, Ford designated three board members (Irvine O. Hockaday, former CEO of Hallmark; John L. Thornton, former president and co-COO of Goldman Sachs Group, and Jorma Ollila, former chairman and CEO of Nokia) to head up the CEO search committee.
Ultimately, the search committee determined that a strong candidate would have several attributes. The ideal person must have demonstrated an exceptional track record of outstanding accomplishments at the highest levels. Additionally, it was imperative the individual possess extensive experience in complex manufacturing and operations. The ideal candidate would possess a deep understanding of technology (present and emerging) and its relevance to different types of power plants (internal combustion, electric-powered and hybrid). Finally, the ideal candidate would need to possess exceptional grit and a problem-solving orientation. Ultimately, Thornton recommended the board consider Alan Mulally (the president and CEO of Boeing Commercial Airplanes).
Mulally was a Boeing lifer. He began his career there in 1969 as an aerospace engineer. Throughout the years he had climbed the ranks while working on many of the organization’s biggest programs (for example, 727, 737, 747, 757, 767, 777), ultimately becoming commercial airplanes CEO in 2001. Yet he was passed over twice for the Boeing CEO job. Mulally had won multiple awards in the industry while fostering sustained commercial success for his business. He also had a reputation as a humble, resolute, “lead by example” type of individual. Given his track record and attributes, Mulally quickly emerged as the leading candidate for the Ford role.
Bill Ford was so convinced Mulally could be the spark Ford needed that he offered to give up the chairman role if doing so was necessary to lock up a deal. Initially, the board connected with Mulally through a mutual acquaintance (Gordon Bethune, former chairman and CEO of Continental Airlines). But multiple intimate conversations between Ford and Mulally are what cemented the latter’s ascension into the CEO role.
Finding Ford’s Focus
Mulally once said, “Leadership is having a compelling vision, a comprehensive plan, relentless implementation and talented people working together.” Creating all four of those outcomes is not easy. The Ford Motor Company lost $12.7 billion in 2006 and $30 billion total between 2006 and 2008. Yet it was profitable again by 2009 and had completely revamped its product offerings. The company was also the only major domestic automaker to decline taking the government bailout money (Troubled Asset Relief Program). Mulally’s recruitment and leadership helped to revamp the company’s culture and changed how they prepared to compete and win. So, how did he do it? Mulally utilized eleven principles to drive beliefs and create a performance culture leveraging effective communications driven by his weekly “business plan review” (BPR).
The BPR involved profit center leaders and the 12 functional area heads. The integration of the BPR into the organization’s processes was very difficult initially due to the company’s long-standing silos (borne out of a large set of diffuse brands) and reputation for infighting. Furthermore, leaders were not used to highlighting shortcomings in their communications.
Mulally’s BPR required each member of the leadership team to brief the status of their major projects (green for “on plan,” yellow for requiring attention and red for urgent situations). All BPR items were connected to operational targets that played a role in fostering profitable growth. Anything that generated, delayed or cost the company profitable growth was measured and assigned a color-coded status map. But leaders were less than forthcoming when briefing their status for several months after initiating the process. Everyone kept briefing their status as “green” despite the company’s well-known shortcomings. Mulally knew he had to build trust, and therefore he demonstrated patience as this subterfuge transpired.
Then, one leader briefed his status as yellow, and an audible gasp was exhaled by the BPR attendees. Mulally’s response was simply, “Okay, how can we address the situation?” Mulally then followed up with “I can’t fix it on my own, but the people on this call can.” That moment was the spark that got people to buy into the process, and the rest is history, as they say. Bill Ford’s belief in Alan Mulally’s competence and character made the spark possible when he took a chance on someone outside the industry whom he trusted to get the job done.
