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Creativity and innovation are generally understood as routine drivers of successful organizational growth. (Schumpeter, 1934, Rogers, 1962, OECD, 1995) Organizations are facing enormous pressure to innovate in order to attain competitive advantage from the global environment that is increasingly becoming intricate and competitive. Due to this, organizational management has to inculcate or reinforce culture of creativity and innovation within organization; however, much of the focus in this endeavour is on the individual level but team work is also essentially encouraged. Individuals are of vital importance in creativity and the innovation process requires a supportive well-managed atmosphere that can translate novel ideas into innovative product effectively.
In order to discuss the question of 'why' organisations need to be creative and innovative in elongated run to succeed in global sphere, I selected few accounts of scholars on creativity and innovation in global environment. After that connection between creativity and innovation is established with the help of accounts available in literature. I have discussed why they need adapt the above two in their culture to be successful and organization benefit from it. Then the vital part globalization is playing on organizations to innovate and be creative. Followed by examples of organizations which have benefited by being creativity and innovative. Finally some concluding remarks, on creativity and innovation.
Amabile (1993) confers the concepts in her work as, Creativity is defined as a product or generally a response, which is "(a) both a novel and appropriate, useful, correct or valuable response to the task at hand, and (b) the task is heuristic rather than algorithmic in nature." (Amabile, 1993: p. 33).By defining creativity a product implies it as tangible in nature; whereas considering heuristic nature can be referred that creativity is a trait inherently related to individual's or organizational thought process.
Boden (1996) explains that creativity is a puzzle or a secret as we cannot say from where does idea originates within minds of individuals. There is no single scientific theory of creativity to state its fundamentals. It is observed that scientists, artists, etc. have creative ideas unexpectedly and also we cannot state why there is creative difference between individuals.
Borden also argues that there are two types of creativity (a) Psychological [P-creativity], (b) The other Historical [H-creativity].He states that H-creative idea are 'more creative' than any merely P-creative idea, as P-Creative idea is from a person for whom the idea is unique but for others it is general whereas H-Creative idea are never known by people before. Like research by historians, it may be there for years but is proved by them for others to believe and know.
Many Researches have been conducted by scholars to measure creativity so that a devise or instrument can be developed which can help to encourage creativity within organizations. It is important to understand that since creativity is a trait - an intangible, which is related to thinking and learning capacities of individuals of organizations, so it cannot be achieved through mechanical steps. But, organizations can train their employees and initiate/develop certain practices that can serve positively towards mental growth of people in organizations. . (Coulson and Strickland, 2000)
Innovation refers to "a significant change within the organization or its line of services or products that (a) requires a subsequent adjustment in functions or structure and (b) is successfully introduced, decided upon and incorporated into the organizations." (Delbecq and Mills, 1985: p. 25)
A Delbecq's and Mills' study compares high and low-innovation organizations. Organizations that are highly innovative provide certain amount of funding to research and development department and channelize their resources towards channel innovation throughout the organization and benefit from executing it. (Delbecq and Mills, 1985: p. 24-34) Whereas, Organizations with low-innovation generally lack commitment and organization resources are just directed towards innovation but are not exploited to full extent. Based on comparison, Delbecq refers that innovation is reliant on three variables i.e., motivation to innovate, hindrances for innovation, and number of available resources, and highlights the prominence of management policies in enhancing innovation.
Tidd and Bessant suggest that innovation is basically a essential requirement of entrepreneurship. It is a skill to spot opportunities and create new process to exploit them. Innovation favours those who mobilize technological skills and knowledge along with experience to provide product or service experience success. Innovation is a process of getting new ideas and positioning them in real-world use. For example e-business retailers like Amazon have completely changed how products like books, music, etc. can be sold while E-Bay has provided auction house in so many living-rooms. (Tidd & Bessant, 2009: p. 4-16)
4 Ps of Innovation
Tidd and Bessant (2009: p.21-25) introduces 4Ps:
Product innovation: changes that arise in product/services that an organization offers. Examples: Windows 7 (improving on existing software idea), Toyata Prius (hybrid engines), etc.
Process innovation: changes in activities by which they are created and delivered. Examples: VoIP, eBay, etc.
Position innovation: changes in the situation in which the products/services are introduced to consumers and the story we tell about it. Tata Nano car (targeting the relatively poor), One Laptop per Child project, low-cost airlines, etc.
Paradigm innovation: changes in the principal mental models which frame what the organization does. Examples: Cirque du Soleil (redefining the circus experience), IBM moving from hardware to a service provider, microfinance, etc.
(4Ps of innovaton space By Tidd And Bessant)
(Tidd And Bessanat 2009)
3. CREATIVITY AND INNOVATION:
Generally the two concepts are diverse as creativity can be production of new ideas and concepts, which are applied through a process, which then becomes innovation. This states that any innovation is a process that is based on the creativity of mind(s) and creativity is reliant on innovation to become tangible. Therefore, we may recognize that innovation is the implementation of creativity. (Merill, 2008: p. 10) Creativity and innovation are often considered as behaviours that can be stimulated within an organization by pursuing a measuring process to measure results. (Coulson and Strickland, 2000)
Herbert Simon (1960) explains creativity and innovation through process outlook. He refers that creativity can be accomplished through cognitive decision-making process in which decision making body learns to be conscious about the environment, thinks and learns from past experiences and then analyses before deciding. On the other hand, innovation process is creative idea in steps starting from idea generation, then primary analysis leading to the stage of taking decision to adopt, and finally implementation of the idea.
Geol & Singh explains innovation and creativity with reference of a new durable product development. They refer that it is very significant for global economic companies to improvise and innovate regularly. The figure below shows integrated approach to process design.
(Goel And Singh 1998)
We can refer that we need to answer the questions as How, Who and When. We have to understand what customer's wants, what are the substitutes of our product, how is the competition in the market, technological attributes present in market, and the number of fiascos in market.
Goel and Singh suggest that creative individuals have the ability to innovate and the organizations must provide them prospect to back their ideas and design the structure of organization as a tool to encourage creativity and innovation. They shall also encourage group development activities as their ideas are much more debated and conclusions are made. A general process in product development can be (a) Information collection and analysis (b) Defining the scope and requirement (c) Select and develop the concepts. (d) Design detail and optimization. (e) Validation and Verification. Each process requires creativity and innovation but the third phase is crucial in developing a process.
4. Developing the Culture of Creativity and Innovation:
Scholars consider substantial importance of culture for creativity and innovation in an organization in their studies. (Tushman and O' Reilly, 2002, Flynn and Chatman, 2004: pp. 234-251) Behavioural norms and shared patterns structured by organizational culture are important factors to be emphasized in this respect. (Andriopoulos & Dawson, 2009: pp. 254-255) Continuous learning from previous experiences and external environment/surroundings are to be regulated in a way that produces originality. In this way, training employees and equipping their analytical capabilities are necessary tools to be promoted. Product design consultancies such as Astro Studios, Design Continuum and Frog Design send their staff to attend skill development seminars or workshops, exhibitions, local markets on regular basis with the purpose to make them understand and amplify their thinking process. (Andriopoulos & Dawson, 2009: p. 259)
Amabile's work on componential theory of individual creativity is widely known in which she defines three creativity breeding components i.e., expertise, creative-thinking skills and motivation. (Amabile, 1997: pp. 39-58) According to the Intrinsic Motivation Principle of Creativity, individual's superior creativity depends on the sources from which he/she obtains pleasure, satisfaction and passion, and pursue his/her personal interests. (Amabile, 1997: pp. 39-58) External environmental factors such as other organization's working and businesses also affect the level of creativity in an organization. (Amabile et. al., 1996: pp. 1154-1184)
Further, Amabile et. al. (1996) expresses the ways in which workplace influences creativity and identifies eight parameters/workplace dimensions that can either encourage or influence creativity. These eight parameters are (a) Organizational Encouragement, (b) Supervisory Encouragement, (c) Work Group Encouragement, (d) Freedom and Autonomy (e) Resources, (f) Pressures, and (f) Organizational Impediments.
According to Gryskiewicz and Epstein (2000) as advocates of creativity and innovation implies that we may face resistance from people within organization who are satisfied or used to the existing state of affairs or people who resist change. In such cases, it becomes imperative to gain legitimacy for creative ideas and innovation by attaining acceptance because this acceptance will later help in nourishing creativity drivers within an organization.
Zien and Buckler (2004) suggest 7 principles which can be used by organizations to promote and sustain culture of creativity and innovation as follows:
To Sustain faith and treasure identity as an innovative company: This principle states that faith and confidence in organizational environment is necessary for creativity and innovation as these elements boosts confidence of the chances that unusual ideas can become great products. Idealistic management always promotes novelty in organizational growth and production but with conviction as because of their belief innovation drives profitability.
Be truly experimental in all functions, especially at the front end: Exercising/experimenting new ideas and thoughts is significant for creative process to succeed. It is true that experimentation does comprise risk but it is important for creative mind to be dared through experiments. Apple's iPod music player is an example to experiment with a new concept of selling music online. (BusinessWeek, 2004)
To Structure 'real' relationships between marketing and technical people: Based on the hypothesis of constructive criticism, Zien and Buckler suggests that important communication and interaction should be promoted among technical innovators and marketing department. This interaction helps to bring stability between creative thinking and concept of feasibility of newer ideas.
Generate customer intimacy: In order to attain stability of creativity with that of market-driven desires, innovative organizations shall work on establishing customer relationship. By understanding the customer through surveys, interviews and observing customer, are important to be considered as transforming creativity into innovation. For this purpose, current organizations also employ sociologists, anthropologists and business administrators to foster meaningful creative process. Techniques such as 'beta' version used by Yahoo, Google, MSN are also key in understanding users. Google uses this technique for innovation purposes.
Engage the whole organization: Revolutionary leaders prefer to instil a sense of belongingness among the people of organization, which can be working to accomplish a common goal. With help of planned communicational activities, periodic meetings, facilities to provide feedback, celebrations, organization can work and think as a whole team, which is obligatory for creativity.
Never forget an individual: Individual shall be provided with confidence to take up experiments, there should be freedom of expression and should be compensated accordingly in order to channelize the culture of creativity and innovation. Individuals must be encouraged to work with their appetites.
Tell and embody powerful and purposeful stories: Organization's early days' stories or rich history, recollection of senior or extraordinary colleagues' contribution and their breakthrough concepts are required to be kept fresh in minds of employees. This practice helps in sustaining the creative culture.
An organization has to function in an internal and external environment. External environment is which is outside the restrictions of the enterprise. Hence an organization is not an autonomous entity but has interdependence on external factors for its success. They are the part of various transformational, technological and economic processes and if we deal with them convincingly we discharge additional profits. Organization have to deal with various aspects like infrastructure, technology, competitors, political environment, nature of buyers, trade policies, etc. when companies compete on global level so to overcome these obstacles there is pure dependence on creativity and innovation. ( Elizabeth Chell 2004)
According to (Worthington and Britton, 2006: p 368-392) argues that as each country does not have aptitude to fulfil its demand itself. As a result international trade is carried between the different nations. As some countries has more manpower than other and some have superior technology compared to others. Companies work on the resources accordingly and try to exploit the market as per best of their information by innovation and creatively designing its operation to have competitive benefit over others.
As most of the economies are opening their markets to benefit from globalization the producers which are not involved in foreign trade have to indirectly contest with global multinationals. As multinationals have the command of money and technical capability at their disposal they have most of the market share with them. So the size of the company does not matter much as for being successful in the market we have to think out of the box to be successful.
6. Examples of organizations known for their creativity and innovation:
3M is an organization which is cited to be one of the frequent examples of innovation. It originated from sandpaper and paper products to a company with 50,000 products in its range. From post-it notes to heart-lung machine it has transformed into a giant company with over $15 billion annual sales. It is still more creative and innovative than many small scale companies which reflect its suppleness to adapt. The company is in business from, just over 100 years. It trusts in creating condition for innovation to happen from any one direction amongst so many directions.
They purposefully avoid too much structure in work place as it would restraint innovation. They give acknowledgment to innovation in the organization also respect in the practice of Hall Of Fame is carried out. They stress on power of connotation, acceptance of creative people in organization who want to do something new. They convert volunteers from colleges, involvement of customers etc. to open new perspectives for business.(Tidd And Bessant p.154)
IBM is an organization which is a noteworthy technology service innovator. Over the past decades it has undertaken extensive and successful reconfiguration in corporate history. It has certainly redefined itself from a manufacturer to a class service provider. It has worked on network and external coalition. It continues to strike stability between exploration and exploitation.
IBM is constantly working on getting new ideas and developing them into business potentials by carrying brainstorming sessions amongst its research labs all over the world. In 2006 they asked its employees worldwide to post their ideas as how IBM's technology can be used in problem solving as a step to identify new business/market opportunities for the firm. In a period of 72 hours more than 150,000 people from 104 nations contributed towards the 'Innovation Jam'. Apart from its employees their family members, universities associates, business partners and clients from 67 nations suggested more than 46000 ideas. The company allocated $100 million for two years as to select ten best plans and pursue them into business opportunities. ( Dodgson M. et.nt)
TATA MOTORS came into limelight and acknowledged by world with introduction of a new car in Rs.100,000 i.e. $2200 (approx.). Chairman of TATA Sons versioned a car for middle class families in India as he saw a family of 4 travelling on two-wheeler. So he wanted common man to have luxury and safety of a car in their budget. His team worked hard to provide and fulfil his vision into reality with commitment and dedication and it is now paying off with sales volume of the company. Earlier car was a luxury and status symbol for rich but he made it a safe mode of transport and within the budgets of two-wheeler families.
Mr Ratan Tata's vision was criticised by critics as they had an opinion that it is impossible to have a car in that price which can comply with standards. Mr Ratan Tata backed his team when the employees were facing difficulties to cope up with the cost, he encouraged them and said don't feel disappointed if you don't succeed as this is never tried before and he said I believe if this task is to be completed it is only this team which can make it happen. The word acted as great motivator and in March 2009 it was launched with a fuel economy of 23.6 Km/litre which is very important for middle class families. It also surprised everyone by complying with Euro- V and BS- V with minimal modification which led no choice with its critic but to praise the product. (TATA Innovista 2010)
The most interesting amongst all is development of a brand Freitag Bags. Two graphic designer brothers Markus and Daniel Freitag were on the lookout for a messenger bag. They wanted a long-lasting, practical and water-repellent bag to carry their designs. They started designing bags from 'precious materials': old inner tubes of bicycle tires, seat belts saved from the ravaging teeth of junkyard dogs and more, many more stinking canvases. They developed bags in their home and now managing production of these special bags in Switzerland beside the same cross city highway which inspired them. They produce each bag with different designs each of their bag is unique from other..
They are selling their bags all over the globe with over 300 shops and online web shop. They also obligate that as they are swiss they are quality conscious due to the nature of material used. The bags are no longer stitched on-site, but they are outsourced to a manufacturing facility which employee disabled people. So we have got that social aspect too - apart from the eco-friendly aspect of using all recycled materials. This is serious. Words like 'innovation', 'creativity' and 'niches' and other semantic straws people use to make sense in the area of consumer products. Freitag bags are like a little inspiration in the shadowy, suggesting us that look - it is possible to just make a good product - even at times when everyone else has restricted their productivity to the buying and selling of stocks and bonds. (Freitag bags website)
From the above Research there is a taught developed with reference to different scholars that creativity and innovation are necessary for every organizations survival and success. These both can be accomplished by organizations by developing a structure and culture of creativity and innovation. In my point of view, freedom of expression, use of effective channels of ideas to communicate and increased level of patience within an organization are absolute necessity for such culture to be created and sustain. Moreover, collection of creative minds in organizations should be encouraged otherwise creativity would be difficult to induce into people minds. Managers have a great accountability to develop creative culture and they have to act neutral to different individuals and groups. They must make feel all equal so that the unity remains intact.
Brainstorming sessions along with regular meetings either formal or informal and celebrations, and strategy of punishment and reward should be implemented. In this competitive and uncertain world the way to continue in long run is creativity and innovation. It can be done by making full use of firm's collective expertise. We can say that creativity and innovation is fuel or raw material to exist and have an upper hand on competitors in this volatile business environment. They are the tools of success and prosperity.