Dialogue Classic – EXCLUSIVE: The winner of London School of Economics’ Masters in Management: Capstone Blog Award 2015

 

“There are two major barriers to creativity in business: one is a shortage of the skills required to think creatively, the other is the risk-averse culture of most organizations that stifles creativity as soon as it appears. As this article expertly highlights, putting more creativity into business requires solutions to both problems. It is highly encouraging to see LSE students addressing this head-on.” 

Jim Prior, chief executive, The Partners 

We need more creativity in business, write Kelvin Tang, Lara Burg, Mustafa Cem Okay, Konstantinos Giannopoulos and Alice Guizol. This blog is the winner of the London School of Economics and Political Science, Masters in Management, Capstone: Management in Action Blog Award, 2015.

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Creativity is what brings mankind forward: it produced the wheel, the internet, and even sent people to the moon. It is creativity that drives progress in organizations. And it is creativity that can determine whether a company succeeds or fails. An IBM study in 2010 showed that majority of organisations sampled are aware of the importance of creativity in business, yet most corporations focus very little on creative thinking. Why?

Fundamentally, people have been trained or taught to think in a certain way, especially in organisations where creativity is often suppressed – whether intentionally or not. But this negligence of creativity in business cannot be continued in this era: we live in a world where corporations are more likely to experience fiercer competition and more disruptive technological innovations in the next 20 years. Therefore, creativity is the modern day competitive advantage.

Jim Prior, chief executive of The Partners and Lambie-Nairn, as well as author of Preserved Thoughts, has recently given a talk at the LSE on how businesspeople should take control of creativity in five simple steps:

1) Have an idea – simple and galvanizing
2) See things differently – look at things from different perspectives
3) Keep going – have a plan and stick to it
4) Be human – business is no different from people; business is people
5) Make yourself heard

Empirically, the field of organizational behaviour is very helpful in this domain. One of the most prevalent frameworks is the Creativity Conceptual Model, which suggests that both individual antecedents (e.g. personality and skills) and situational antecedents (e.g. autonomy, appropriate leadership styles and work climate) have an effect on individual innovation behaviour. As a manager, it is therefore crucial to promote a contextual environment that will encourage and support creativity in business intensively. This can be done by providing psychological safety, organizational and supervisory encouragement to employees. Here are two possible ways of doing so:

1) Demonstrate leadership. Encourage employees from the top-down to contribute ideas freely and challenge the status quo – as “doubt is the crucial first step toward creativity and liberation”, a quote from Thinking in New Boxes: A New Paradigm for Business Creativity written by two BCG consultants.

2) Create a diverse work environment. In McKinsey’s 2014 Diversity Matters, it said: “diversity fosters innovation and creativity through a greater variety of problem-solving approaches, perspectives, and ideas”. This diversity could be achieved in terms of age, tenure, gender, culture, academic disciplines, religion, etc.

Managers can also reward their employees for taking reasonable risks (i.e. for a creative side-project), avoid harsh criticisms when dealing with new ideas, and offer recognition when the ideas have borne fruit.

Creativity in business ultimately is about altering people’s perceptions and satisfying their needs effectively. A real-life example is Ford. “If I asked people what they wanted, they would’ve said a faster horse.” Henry Ford may not have said these words himself, but the sentence definitely reflects his ideology. His vision was to reshape the idea of how people perceived cars – not as a privilege of the elite, but as a mass-produced commodity. Although the assembly line may be considered his greatest contribution, it was his creative vision that drove him towards making Ford one of the biggest automakers in the world.

Such creative ideas, however, need not be as ambitious as Ford’s. Cardboard Technologies, based in Israel, developed a fireproof, waterproof and recyclable bicycle that could last for 10 years at the price of US$20. Hon Lik invented, manufactured and sold the electronic cigarette to offer a less harmful smoking experience. Coin is developing a device that could replace all the banking cards in your wallet. These innovators may not revolutionise the market as Henry Ford did, but at least they try to have a positive impact on peoples’ lives.

Business schools also have a vital role in education by guiding young leaders to become more innovative. Speculatively, one of the main reasons why the 2010 IBM study showed that managers are risk averse when it comes to creativity in organisations could be due to the lack of focus on creativity in B-schools than traditionally important areas such as finance or strategy. In order to improve on this inherent attitude, it is imperative for course organisers to extend their current curriculum to provide students with more opportunities of applying creativity in business. Some brilliant entrepreneurial ideas might bud off from these little projects; or to help kick-start a successful career for those managers-to-be at more creative companies such as Uber and Transferwise. Coming back to the situational antecedents point, many top B-schools are on the right track, in that they take in cohorts of extremely diverse talents from all over the world with a range of backgrounds. After all, as Steve Jobs explained in 1982: “If you are going to make connections which are innovative, you have to not have the same bag of experiences everyone else does.”

Of course, not everyone needs to be creative – a surgeon during a surgery, for example. But in tomorrow’s business landscape, creativity of businesspeople is undoubtedly one of the most competitively advantageous strategic capabilities a firm could possess. What the relevant leaders should do now, is to create a diverse work environment that nurtures creativity, and to experiment with innovative new ways to truly understand customer’s needs (e.g. neuromarketing). In the future, we will undoubtedly experience more and more disruptive innovations that will continue to bring mankind forward.

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