It all begins with great ideas

Over the last few years, creativity and innovation have emerged as critical success factors for business. In 2001, former US Federal Reserve chairman Alan Greenspan declared that, “We are entering the era of Ideanomics”. The late management strategist Peter Drucker once said: “An established company, which in an age demanding innovation, is not capable of innovation, is doomed to decline and extinction.”
In a special edition in 2005 titled “Get Creative!”, Business Week’s Bruce Nussbaum wrote: “Increasingly, the new core competence is creativity — the right-brain stuff that smart companies are now harnessing to generate top-line growth. The game is changing. It’s about creativity, imagination, and, above all, innovation.”
The new Thinkergy blog and the new Bangkok Post column, “Creativity Un-Ltd”, aims to give readers deeper insights into the world of business creativity and innovation.

What does it mean: Business Creativity and Innovation?

Based on a working definition of 3M, one of the world’s most innovative companies, I prefer to express the relationship between the two concepts in a simple equation, the innovation formula:

Creativity + Action = Innovation

Let’s take a close-up look on the different components of the equation.

How do the different elements of the innovation formula connect?

  • In their efforts to create more value, most companies start with ”hard-wiring” their organisations for innovation. They hire an innovation manager, set up an innovation management system, define key performance indicators to measure innovation, and so on. After some time, senior management wonders why the innovative results of their investments are rather meagre. The reason is that they wrongly started at the right side of the equation.
  • Innovation always starts with creativity, which can be defined as coming up with a novel, relevant and meaningful idea. All ideas come out of the brain of an individual. Hence, a company that wants to see more innovation needs to encourage and support its employees to come up with ideas.
  • But having an idea alone is not good enough for arriving at the right side of our equation. There are many dreamers in the world who have come up with tons of great ideas in their lives but have never brought a single one to life.

In a corporate setting, there is an additional hurdle for an employee with a great idea to overcome: corporate inertia. Lee Iacooca, the former chief executive officer of Chrysler, says it well: “It is very difficult for ideas to survive in the modern corporation. They have to survive politics, lack of understanding, envy, theft, lack of funding and other resources, as well as just plain corporate inertia. The more we can make our companies a fertile breeding ground for new ideas the better.”

This means that in many firms, a creative employee with a great idea needs to have a lot of courage and be willing to take the risk to suggest an idea for implementation. As such, the corporate culture needs to encourage employees to come up with ideas and take the necessary action steps to win support for implementation.

Now it becomes clear that the ‘software’ (ideas and corporate culture) is more important than the ‘hardware’ (the innovation management system), that a company needs to focus on the left side of the equation first in order to arrive at the right side.

How to act on the innovation formula?

Many companies probably could have saved a lot of money if they had understood the dynamics between the concepts of creativity and innovation. So how can you avoid the same mistake and set your company on the right innovation track?

  1. Follow the sequence of the innovation formula and get the right ‘software” first before investing into the ‘hardware’. A great first step is to invest in a prime creativity training to motivate your employees to generate novel, original and meaningful ideas (= creativity).
  2. Next, encourage action-oriendation to transform creative into innovation. In this connection, it’s good to gain deeper insights into the innovation-friendliness or hostility of your corporate culture via an innovation capacity audit.
  3. Only after the results of your initial investments promise to bear fruit, invest in the different components of a innovation management system on the right side of the equation (innovation) and harvest your results.

 

© Dr. Detlef Reis 2007. This article was published in parallel in the Bangkok Post under the same title on 12 April 2007. It was the inaugurate article that started the Thinkergy Blog and the bi-weekly column “Creativity Un-Ltd.” that ran in the business section of the Bangkok Post for more than 10 years.