Leadership: A Gateway to Organizational Innovation.

Author:Nodoushani, Omid
 
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CORPORATE CREATIVITY AND INNOVATION

"Creativity is the raw material of innovation. Put another way, innovation is creativity implemented" (Lombardo & Roddy, 2010). Throughout the years, creativity has been defined in several ways: "experts have suggested that the essence of what we consider creative is the elements of freshness, originality, and novelty that is also appropriate to the corporate context" (Khandwalla, 2003). Robinson and Stern (1997) argue that "a company is creative when its employees do something new and potentially useful without being directly shown or taught." In other words, the real power of corporate creativity is in the unexpected.

Finding ways to promote corporate creativity has become crucial in management, because in a competitive and volatile environment companies cannot wait until someone in the organization has an innovative and unexpected idea. Managers and executives in most companies are aware of their creative potential, but this greatly exceeds their creative performance (Robinson & Stern, 1997). Essentially, the potential for creativity does exist in organizations; the problem is finding the best way to inspire creativity so it becomes part of the corporate culture.

According to Robinson and Stern (1997), "few organizations would need a formal study to convince them that creativity and management of creativity are very important to their long-term survival." Even though managers recognize that creative potential is usually greater than the creative performance, "the problem is that they don't know what to do about it." The tangible results of corporate creativity are improvements, changes to what is already done, and innovations, entirely new activities for the company. Yet, in order to generate these results, management must nourish creativity, hence, long-term survival and success can be achieved. Team work and shared vision channels creativity toward achieving the organization's long term goals.

While most people interested in the creative process have focused on what makes individuals creative, a growing number of thinkers, such as Andrew Hargadon at the University of California, Davis, and John Seely Brown, former chief scientist of Xerox, are unlocking the social and managerial contexts in which creativity is most effectively nurtured, harnessed, and mobilized (Florida & Goodnight, 2005).

Certainly, innovation has become a central topic of discussion and thought in the business world. Experts in managing creativity assure innovation has emerged as the only way to sustain competitive advantage over time. "Success is not to be found in a technology, in a market position, or in a business model; success resides in an organization's ability to innovate and be ahead of its competitors" (Shelton, Epstein, & Davila, 1997). Once the nature of creativity and innovation is recognized, companies can enhance their creative performance by learning how to actively promote such improvements and innovations.

The Nature of Corporate Creativity

Globalization and technologic developments have driven companies to find techniques to become better, either by innovating in their business models, introducing new features in their products and services, or modifying their processes to create a more efficient organization. In one way or the other, creativity and innovation can be initiated in organizations when executives, managers, and employees are not just focused on becoming better but becoming different. "Being different, whether it is through market positioning or execution is critical to creating and capturing value. In the past, competitive advantage came from being better. Now it is also a question of being different" (Shelton et al., 2007).

In addition, significant investment of resources -financial capital and human capital-should be designated toward innovation. Shelton, Epstein and Davila (2007) explain that in the management research field, for instance, "research on strategy, specifically on product, process, and business model innovation can be a critical source of competing advantage." In the marketing research field, researchers are also looking "to unravel the mysteries of consumer behavior and the evolution of their needs." Researchers in operations management are looking into "innovating supply, production, and distribution processes to make them more effective and efficient for all the players involved."

Creativity and innovation can also be initiated in organizations using outside sources. Eric von Hippel of MIT and Henry Chesbrough of the University of California, Berkeley, have called attention to the critical role played by users and customers in the creative process and to a new model of "open innovation." Duke University's Wesley Cohen has shown that corporate creativity depends upon a firm's "absorptive capacity," the ability of its research and development units not just to create innovations but to absorb them from outside sources (Florida & Goodnight, 2005). Customers and outside sources can directly or indirectly provide important information about how the firm can introduce and enhance innovation.

Despite several insights and advances, some businesses have been unable to unite the applications of creativity into a coherent management structure, while others have failed in finding the nature of creativity within the organization. Therefore, the question now would be whether creativity is enough when an organization is searching for sustained innovation.

Is Creativity Enough?

Theodore Levitt, one of the most incisive commentators on innovation, argues that creativity can actually harm businesses. According to Levitt (2002), "by failing to take into account practical matters of implementation, big thinkers can inspire organizational cultures dedicated to abstract chatter rather than purposeful action. In such cultures, innovation never happens because people are always talking about it but never doing it." One reason for creativity to fail can be the confusion between "the getting of ideas with the implementation of it" (Levitt, 2002), meaning it can be difficult to distinguish between the concept of creativity and innovative ideas with the more complex process of implementation of those ideas.

According to Levitt (2002), there is the peculiar underlying assumption that creativity automatically leads to actual innovation. Many people who are full of great ideas might not even understand the process of implementation and development. A potential error would be judging the ideas more by their novelty than by their potential usefulness, either to consumers or to the company. Hence, for innovation to take place, creative ideas must be realistic and fall within the business context. Understanding the concepts of creativity and innovation and how they can be initiated in organizations is not enough if the process of effective implementation is still implausible. Appropriate methods to encourage both creativity and its implementation should be recognized.

How to Encourage Creativity

A company's most important asset is its creative capital (Florida & Goodnight, 2005). Creative employees can become a competitive advantage difficult to surpass. However, creative environments are the result not only of individual knowledge and skills, but also leadership, resources, capabilities, and structure (Birou, Christensen, & Wall, 2011). Thus, in order to pioneer new technologies or create new industries it is necessary to establish an organizational culture that supports and, more importantly, encourages...

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