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Creating a Climate for Innovation

"The business enterprise has two, and only two, basic functions: marketing and innovation. It is not necessary for a business to grow bigger; but it is necessary that it constantly grow better." -- Peter Drucker

An enterprise that does not innovate will not survive long. Management that does not innovate and foster creativity will not last long. Businesses and organizations have to be designed for change as the norm. They must create change rather than react to it.

Innovation is the means by which the entrepreneur creates new wealth-producing resources. It also enables existing resources to have enhanced potential for creating wealth. Innovation is the effort to create purposeful, focused change in an enterprise's economic or social potential.

Some innovations come in a flash of genius, but most result from a conscious and purposeful search for opportunities. Above all, innovation is work rather than genius. It requires knowledge, ingenuity and focus . Without diligence, persistence and commitment, all the talent, ingenuity and knowledge are to no avail.

In order to innovate, there must be a fertile atmosphere of creativity. Unleashing creativity requires more than brainstorming sessions. It is more than problem solving. People have ideas all the time. The real question is, “Which ideas are you going to use?”

Few workplaces actually encourage creativity. Management inadvertently stifles it with procedures and the status quo necessary for stability and performance. Individuals stifle it internally through their own voice of judgment.

Negativity, judgment and fear are the enemies of creativity. To the extent these exist in the work environment, there can be little creativity. In business, it isn't enough for an idea to be original; it must also be applicable to creating greater economic growth . It must improve a product or service in some way. Ideas can come from anybody, anytime, and anywhere within the organization.

Enhancing Creativity

People will be most creative when they feel motivated by the work itself. When people are engaged because of their own natural interest and satisfaction in their work, they will be challenged to be creative through their own intrinsic motivation. External pressures or rewards are never as effective as internal motivation. In order to tap into that resource, people must be matched to jobs that tap into underlying values that motivate and excite them.

In addition to intrinsic motivation, two other components are necessary within an individual for creative resourcefulness, according to Theresa Amabile.

1. Expertise: a person must have the necessary technical, procedural and intellectual knowledge.
2. Creative-thinking skills: a person must be able to use their thinking in flexible and imaginative ways.

Trying to develop someone's expertise and creative-thinking skills can be time-consuming. It is far easier to enhance and tap into someone's internal motivation .

Amabile writes about six managerial practices that enhance creativity. These categories emerged from more than two decades of research that focused on the links between environment and creativity.

1 Challenge: Matching the right person with the right job in order to play into their expertise and creative thinking skills . This can ignite the intrinsic motivation that is the key to unleashing creative potential. Making a good match requires the manager to have access to important information about employees and their preferences . This may mean using information available through assessments such as DISC, PIAV, Meyers-Briggs or any other instruments that indicate values and preferences. This also requires good listening and observing. People express what interests them and excites them all the time; are you listening?
2 Freedom: Intrinsic motivation and ownership is enhanced when people are free to approach their work the way they choose . They may not choose the mountain, but at least let them decide how they will climb it. Managers tend to mismanage freedom by changing goals frequently or failing to define them clearly. Worse, they grant freedom in name only, declaring employeess to be “empowered” and then they delineate the process to be followed and give penalties for divergence.
3 Resources: Time and money can either support or kill creativity. Some time pressures can heighten creativity . Organizations routinely kill creativity with fake deadlines or impossibly tight ones. This creates distrust, or burnout. Creativity takes time. Incubation periods have to be scheduled in. Project resources that are too limited can push people to use their creativity to finding additional resources, rather than actually developing new products or services.

Work-Group Features: Managers must create teams with a diversity of perspectives and backgrounds . When people come together with diverse intellectual foundations and approaches to work, ideas often combine in exciting and useful ways.

Managers often make the mistake of putting similar people together . This may seem desirable because the people see eye to eye and get along, thus making decisions quicker. Their very homogeneity, however, does little to enhance expertise and creative thinking.


Supervisory Encouragement: Managers neglect to praise creative successes and unsuccessful efforts and thereby inadvertently contribute to stifle creativity. To sustain passion, people need to feel their work matters and is important. A certain tolerance is required for mistakes and failures so that they can be used creatively.

Managers often look for reasons not to use a new idea. Research shows that an interesting psychological dynamic underlies this phenomenon. People believe that their bosses will perceive them as smarter if they demonstrate critical, analytical thinking.

This creates a bias that has severe consequences for the creative process . Such a culture of evaluation leads people to focus on external rewards and punishments instead of on being creative. It creates a climate of fear that undermines intrinsic motivation.

6 Organizational Support: Creativity is truly enhanced when the entire organization supports it . This is the job of the leaders of the organization who must put into place appropriate systems and procedures that emphasize that creative efforts are a top priority. Leaders can support creativity by ensuring that information sharing and collaboration is the norm . Political problems and gossip take people's attention away from work. That sense of mutual purpose and excitement that is so central to tapping into the power of intrinsic motivation must be encouraged and supported. It can be killed by cliques and political factions.

"Foremost among life's teaching is the recognition that humans possess the capability to deal with complexity and interconnection. Human creativity and commitment are our greatest resources."
-- Margaret Wheatley

Meaning is the Key to Engaging Creativity

Whenever someone has a burst of creativity, it is because they've spent time thinking over some problem or situation that has meaning for them. They have become immersed and totally engaged. If we want people to be innovative, we must discover what is important to them, and we must engage them in meaningful issues.

Robert E. Knowling, Jr. says there are three best practices for leading innovation:

1. Leaders need to deliver a clear and compelling vision and strategy to the organization
2. It is Important for the leader to live the vision and strategy and to be the teacher of the process
3. Leaders must ensure that the metrics used focus people on what is most important

Michael Ray is a Stanford professor who has led some of Silicon Valley 's most creative entrepreneurs through his class “Personal Creativity in Business” for the past 21 years. Underlying his teaching on creativity is a search for two fundamental questions:

• Who is my self?

• What is my work?

Ray says you can't know what or how you want to create until you know who you are and what you hope to do with your life. He believes that creativity exists within everyone, and that when people can't tap into their creativity it's because of an internal “voice of judgment” which is often heavily influenced by society, employers and parents.

Negativity is the true enemy of creativity. Negative self-judgment is compounded when new ideas in the workplace are systematically criticized. There is often a belief in the workplace that having a sharp critical eye is preferred by managers and leaders. Such a negative bias can kill creativity.

According to Ray, there are five qualities of creativity:

1. Intuition
2. Will
3. Joy
4. Strength
5. Compassion

Those qualities are drawn out of people by four tools:

1. Faith in your own creativity
2. Absence of judgment
3. Precise observation
4. Penetrating questions

"Everything in the world already exists; whatever seems new is only something old rearranged." -- Max de Pree

The paradox of success is that when things are going well there's no need to change. Innovation needs to begin before a need is felt. Customer or client complaints when viewed objectively and not defensively can point to areas where change is needed.

Cognitive psychologists have shown that the biggest hurdle to solving problems often isn't ignorance - it's access to the right information at the right time. Information sharing within big organizations is not easy due to geographic distances, political squabbles, internal competition and bad incentive systems that hinder the spread of ideas.

Taking the Mystery Out of Innovation

Using old ideas as raw materials for new ideas lets companies innovate continuously. However, the key is to systematize the constant generation and testing of fresh ideas. In order to foster innovation, Andrew Hargadon and Robert Sutton (HBR, May-June 2000) advocate four steps:

• Capturing good ideas

• Keep ideas alive and accessible

• Imagine new uses for old ideas

• Putting promising concepts to the test

"Social innovation and not technical innovation drives most successful companies." -- Jim Collins

Seven Sources of New Ideas

According to Peter Drucker, four areas of opportunity for innovation exist within a company or industry:

1. Unexpected occurrences

2. Incongruities

3. Process needs

4. ndustry and market changes

Three others exist outside a company in its social and intellectual environment:

5. Demographic changes

6. Changes in perception

7. New knowledge

"Innovation is the way two ideas are brought together to generate something greater than its sum." -- Robert E. Knowling, Jr.

Business leaders must change how they think about innovation. They must change how their company cultures reflect that thinking. If people are given opportunities, innovation can be bolstered anywhere if people are encouraged to use good ideas from all sources inside or outside the company. Innovation and creativity are far less mysterious than previously thought. They are a matter of taking developed ideas and applying them in new situations. If the company has the right connections and the right attitude, it works.

Creating an Idea Factory: Lessons from Edison

Perhaps the greatest creation of Thomas Edison may have been his invention factory. His Menlo Park , New Jersey , laboratory was the world's first R&D facility. He built it for the “rapid and cheap development of an invention” and delivered on his promise of “a minor invention every ten days and a big thing every six months or so.” In six years of operation, it generated more than 400 patents.

Rather than focusing on one invention, one field of expertise, or one market, Edison created a setting that enabled his inventors to move easily in and out of separate pools of knowledge, to keep learning new ideas and to use old ideas in novel situations.

They used old ideas and materials in new ways. The phonograph blended elements from past work on telegraphs, telephones, and electric motors.

In 1820, H.C. Oersted, a Dane, discovered that a wire carrying an electric current was surrounded by a magnetic field. In 1825, W. Strugeon, an Englishman, wound a live wire around an iron bar and created an electromagnet. In 1859, H. van Helmholtz, a German, discovered he could make piano strings vibrate by singing to them. Later L. Scott, a Frenchman, attached a thin stick to a membrane; when he spoke to the membrane, the other end of the stick would trace a record of his voice sounds on a piece of smoked glass. Then, in 1874, a Scotsman from Canada , working in Cambridge MA , put these elements into one instrument. The instrument was the telephone and the man was Alexander Graham Bell. The only thing Bell contributed was a fresh synthesis; there was no new discovery.

An example of a modern invention factory is IDEO. IDEO has developed thousands of products with companies in dissimilar fields such as medical instruments, furniture, toys and computers. IDEO fosters an atmosphere conducive to freely expressing ideas, breaking the rules and freeing people to design their own work environments.

In innovation there is talent, there is ingenuity, and there is knowledge. But in the end, innovation requires hard, focused and purposeful work. If diligence, persistence and commitment are lacking, then no amount of talent, ingenuity or knowledge will produce results.

(Resource: Hargadon, Andrew and Robert I. Sutton; Building an Innovation Factory, Harvard Business Review, May-June 2000)

Working Resources is a Leadership Consulting, Training and Executive Coaching Firm Helping Companies Assess, Select, Coach and Retain Emotionally Intelligent People; Emotional Intelligence-Based Interviewing and Selection; Multi-Rater 360-Degree Feedback; Career Coaching; Change Management; Corporate Culture Surveys and Executive Coaching.

Dr. Maynard Brusman
Consulting Psychologist and Executive Coach
Trusted Advisor to Senior Leadership Teams
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