The Business Benefits of Creativity

If you want to be competitive you must be innovative!
"Creativity isn't the sole province of artists and musicians - it's 
the ability to find better ways to make products or to find and fill needs 
that no one noticed existed". Richard Florida PhD. author of The Flight of 
the Creative Class: The New Global Competition for Talent

Why be Innovative?

“You are now as likely to get competition from Bangalore and Shanghai as from New York or Tokyo in any area of business. The only way to survive in a highly globalised world is to innovate"
Suran Goonatilake, co-founder, Searchspace - London Innovation Conference 2003

“British businesses can no longer compete on the basis of low cost, low value added activity. To be successful, businesses and individuals need to learn new skills and use their knowledge to produce higher value added goods and services."
DTI Oppportunity for all in a world of change: summary
The Pressures on UK Business (Source: INNOVATION REPORT DECEMBER 2003 Competing in the global economy: the innovation challenge):

Today, there are three reasons why innovation is even more urgent for companies and countries:

Trade liberalisation and a rapid fall in communication and transport costs mean that the UK must increasingly compete against countries with much lower labour costs and well-educated labour forces. Wages in China are less than 5% of those in the UK. Labour costs in Korea are just over half UK levels, and the proportion of graduates in the working age population is almost identical; technology and scientific understanding are changing our world faster than ever before.

Developments in Information and Communications Technologies (ICT), new materials, biotechnology, new fuels and nanotechnology are unleashing new waves of innovation, and creating many opportunities for entrepreneurial businesses to gain competitive advantage; and global communications, the 24 hours, 7 days of the week media phenomenon of the 21st century, mean that consumer tastes are also changing faster, as new fashions, ideas and products spread across the world almost instantaneously.

These developments are occurring at a speed and on a scale never seen before. In the past, many UK-based businesses have prospered even when selling in low value markets, but today British industry faces a new challenge: how to raise its rate of innovation?
Cutting costs and wages is not a sustainable approach to being globally competitive. Continually producing innovative new products and services is the only approach that gives you a future.  To do this you need to become good at using creative thinking as a routine business tool.

What is innovation?

"An innovative business is one which lives and breathes 'outside the box'. It is not just good ideass, it is a combination of good ideas, motivated staff and an instinctive understanding of what your customer wants."
Richard Branson - DTI Innovation lecture, 1998

“Successful organisations are typically rich in ideas, embody a culture where innovation is a core capability and embrace new, unusual ways of fostering innovation"
The Innovative Company, Arthur D Little Ltd report, February 2001

Wake up UK!

Large manufacturing companies in the UK are relatively less committed to change and innovation than their EU counterparts.
The UK under performs nearly all its major competitors in terms of the number of patents granted or filed per head of the population compared with other European countries
The UK has a below average proportion of ‘novel innovating’ enterprises that produce products or services that are new to their market (Source: DTI Competitiveness Indicators as of 20 November 2003)

Innovations may be resisted Gunfire at Sea: A Case Study of Innovation How and why a 3000% improvement in gun accuracy was resisted by the US Navy (in the late 1800s)

Trying to do the same things better or cheaper is not enough. Innovation needs new ideas and new thinking. The more ideas you have, the more chance that you will find ones that become innovations. You have to get as many ideas as you can. “The main block to innovation is lack of ideas” (3M & NatWest Survey 1999)
Who knows where the problems are?

In a study designed by Sidney Yoshida, a leading Japanese consultant, it was found that only 4% of an organization's problems were known by top management, 9 % were known by middle management, 74% by supervisors and 100% by employees.

(Source: Fitness Management Magazine, Vol 12, No 9, pp 42-43)
Who has the ideas you need?

A lot of the creative ideas you need will be within your own company. The people who know the problems and the potential solutions are often not the managers but the people lower down in the company. For example; the people on the factory floor, the service engineers, the salesmen, the buyers and the secretaries. Their knowledge and perspective can help you to find the solutions to your problems and the ideas for innovative new products and services. A confident business leader will ask them and learn from them: “if the sage would guide the people, he must serve with humility” Lao Tzu, Tao Te Ching

Make finding, encouraging and using new ideas part of your business culture.

How does the UK compare with the rest of the world?

“The Global Entrepreneurship Monitor (GEM) finds relatively low levels of entrepreneurial motivation in the UK, especially when compared with the US or Canada. GEM also examines society’s wider attitudes to entrepreneurship and finds the UK scoring the lowest of all the reported countries apart from Japan” (Source: UK Competitiveness Indicators 2003)

In other words, the majority of UK management are risk averse. Innovation means risk taking and learning from failures - if you can do this then you can gain competitive advantage. If you can’t, then it’s unlikely that you will survive against global competition.

The World Competitiveness Scoreboard shows that the UK dropped from 9th to 16th place between 1997 and 2001. The UK Government is now launching it's innovation report with the objective of leading Europe in business R&D and patenting within ten years.

Do UK management understand the business value of creativity?

(The following findings are from the 2001 CIMA report Harnessing Creativity to Improve the Bottom Line) 

 Only about half of UK organisations believe that creativity is important in its own right. "far more (around 75%) organisations in Asia-Pacific, Middle East and Africa view creativity as a long-term investment, duly accepting the risk that the payoff may not be significant."

Creativity in the UK is inhibited by culture and organisational structure:

main cultural inhibitors: main structural inhibitors:
lack of a can-do mindset 'we tried it years ago and it didn't work' time pressure on managers to deliver quick results
tribalism syndrome 'that's the way we do things around here' employees not having enough time or space
risk aversion 'we'll think about that at a later date lack of a coherent vision of creativity

Konosuke Matsushita, the founder of Matsushita Electronics commented on Western management as follows: "We are going to win and the industrial West is going to lose out. There's not much you can do about it because the reasons for your failure are within yourselves.
Your firms are built on the Taylor model. Even worse, so are your heads. With your bosses during the thinking while workers wield the screwdrivers, you're convinced deep down that this is the right way to run a business. For you the essence of management is getting the ideas out of the heads of the bosses and into the hands of labour.
We are beyond the Taylor model. Business, we know, is now so complex and difficult, the survival of firms so hazardous in an environment so increasingly unpredictable, competitive and fought with danger, that their continued existence depends on the day-to-day mobilisation of every ounce of intelligence"
(Making Quality Work (Harper Business, 1993).pp 37)

Einstein's Wisdom

Three Rules of Work:
1) Out of clutter find simplicity
2) From discord find harmony
3) In the middle of difficulty lies opportunity.

Take time to reflect:

“He who can no longer pause to wonder and stand rapt in awe; is as good as dead; his eyes are closed”

Importance of happy culture

“In my experience, the best creative work is never done when one is unhappy.”

UK industry is losing the race

“The UK’s relative position remains the same as that last year: it under performs nearly all its major competitors in terms of the number of patents granted or held per head of the population.”

“In terms of entrepreneurship, the UK needs to do more to provide a supportive climate, and overall remains relatively risk averse.” (Source: UK Competitiveness Indicators: Second Edition, February 2001)
How to start becoming a creative company

Make sure that there is no doubt that you value new ideas: “Listen to anyone with an original idea, no matter how absurd it may sound at first. If you put fences round people you get sheep. Give people the room they need” William McKnight, 3M President 1948

Train people in creative thinking techniques. The basics of these can be learnt in a morning. Examples are given in my ‘thinking technique of the week’ at www.sanguma.com

Encourage experimentation and learning from failure. That’s how Edison became the most successful innovator since Leonardo da Vinci.

Squash the negative attitudes that kill creativity.

Don’t stop people trying new ideas and asking questions.

Celebrate successes and learn from failures.

Use ‘number of new ideas tried and learn from’ as a key performance indicator when assessing people or departments.

Encourage trust and help people to share ideas and information.

Accept the value of ‘gut feel’ and intuition.

Use outside help to help you get started.

Encourage diversity of thinking

Get rid of rules and routines you don’t need (do you have to work 9-5?)

Value creativity and talent over mediocraty and conformity

Get as many ideas as you can: 'Each year the federal government grants about 150,000 patents. Only about 3% become commercially viable products'

Does this happen in your company?

“ Every hour of every day someone is trying to stop someone more talented from doing something. My job is to go round, find as many of those cases as possible, and reverse them”

Alasdair Milne, BBC Director-General 1982-1987
Creative companies have:

Greater self confidence, pride and self management and motivation

Team spirit, more fun and less stress

Increased ability to sense and respond to change and thus manage the future

Better management of uncertainty

Everyone involved in producing ideas, sharing knowledge and breaking organisational barriers.

Innovative products that customers want!

A creative company will not have the attitudes below!

 

Do you want the ideas to explode out of your company? Then you need