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Success and survival of a venture capital company in today's era depends on how it invests in creative ideas of the new or existing firms and how the managers of the company evaluate the creativity and innovation in contrast of future development. This certainly depends on the managers skills and knowledge. The important theme is that venture capital companies helps creativity and innovation through finance to grow and In return they helps the finance of the company to grow.
Creativity is which an organization positions itself within its environment. In rapidly changing conditions organizations must meet the challenge of being "capable of creating tomorrow's business while maintaining today's." (Hurst et al., 1996, p.381).
Successful companies are those that consistently create new knowledge, disseminate it widely through the organization, and quickly flesh out the knowledge with new technologies and products. These activities characterize the "knowledge-creating" company whose sole business is continuous innovation (Nonaka, 1996, p. 18). This is a crucial task for the manager to take on.
Different managers have different leadership and managerial styles. Let's have a look on what literature has to say on it.
"Innovation activities and thus leadership imperatives are quite different at the 'fuzzy front end' and 'speedy back-end'of the process.(Jean-Philippe Deschamps).
While comparing front end innovation with back end innovation, the front end innovation consists of generation of new ideas, exploring the platform for it and making them turn into attractive concepts. Here organizational creativity of great deal is required. On the other hand back end innovation requires to convert the front end innovation concepts into new products and better services, to give it to market as soon as possible within the cost concerned. However both the process required different leadership concern and their nature is apart from each other.
Front end innovation leader
The leaders at the front end innovation has to sense new market thirst, the new technology to be explored and the new ideas to be generated, as in and accordance to the strategy of the business. It consists of concept to be seeded and developed for products and services plus empowering of new ventures at their early stages. The process of manager here is even divergent and non linear. Front end innovation leaders can be characterized by their unique standards or qualities: Out of the box thinking, they are extremely open and curious about the external world, they have patience and the power of tolerance to its failures, acceptance of change and risk. The focus of literature on innovators is supportive towards front end innovation leaders. They are considered and said to be visionaries that inspires people, they are great motivators to creativity and innovation, amazing coaches with human prospect. Front end innovation leaders leaves a bench mark for the followers, they lead by demonstrating and attracting by the above said skills to innovators and entrepreneurs.
Back end innovation leaders
The managers at back end innovation focuses on capturing the market as fast as possible to reap the rewards. The task involved are developing a product, testing it , engineering, producing and launching in the market a new product or services, which is indeed a critical and concrete task. One of the crucial skills of back end is to manage companies relation with the outside world such as government agencies, stake holders and suppliers. It is a convergent process which is involved in it with a single objective to capture the market before the competition. Qualities of back end managers are totally different palette: Knowledge of operations, focus on implementation, quick decision, quick action, coordination of skills, pragmatic risk management and most important, the hunger to win in the market. They lead the troop within a group and make them engaged towards product battle. Such leaders want their work to be done as in particular about time for market, as well as they are familiar to be approached and are emotionally committed. There job is not done till their product blast the market.
One side it's dollar and cent and on the other side its creativity, you must know how to balance between them.
Only people who instigate change enjoy it; other have to suffer it(Marsh 2001). In broad term, either inspiration or desperation in the face of globalization, consolidation, technology or legislation force an organization to change in order to survive (MC Naumara, 2001).
(Antonacopoulou and Gabriel,2001) argues that organizational change forces individuals to come face to face with their ignorance and vulnerability which can stimulate innovation, growth and creativity.
Creativity and innovation are a part and process of a medium by which knowledge is developed and transformed into business value (David gurteen, 1998). Knowledge management needs to fundamentally focus on creativity and innovation(Peter Drucker,1997).
For the further knowledge of how a real life manager works, what are his responsibilities and standards, I interviewed Mr Piyush Chaplot, Senior Finance Manager, Innosight Ventures Pte.Ltd. Innosight Ventures is a unique venture capital firm. They believe in creating solutions that address market. Innosight venture was founded by Prof. Christensen in 2001, since then it has grown to become leader in the field of innovation and creativity, a source for industry leaders in need of transformational change. It was qualitative research process. Qualitative research facilitate satisfying your curiosity about what your work with your data means(Bogdan)
A face to face interview was conducted on October 2, 2010 at 1800 hours. I had an opportunity to get his wealth of knowledge and experience in the interview. I interviewed him to know how creativity and innovation works in a financial sector, what is the importance of it in financial industry, and his approach towards them?
Finding and analysis
While answering my questions Mr. chaplot guided me with examples. On my question: Why is creativity and innovation in your sector important and how does finance helps it? He states that creativity and innovation is not only an important tool but it should be implemented successfully as well. To be competitive in the market, it helps you to be different. He stated that we help companies to improve their ability to create innovation driven growth. Tools facilitate them for generation of new ideas, high growth market and rapid creation of break through. They provide consulting services and customized executive training sessions. It helps companies to utilize pattern of success to be innovative and creative with less of competition and max of customer satisfaction. The process of continually renewing an organization's directions, structure and capabilities to serve the ever-changing needs of external and internal customers(Moran and Brightman,2001:111). He states that we either create a new market or reshape existing markets by delivering relatively simple, convenient, low cost innovations to a set of customers who, ignored by industry leaders. The main focus on ability of generation of ideas that are useful at a given moment. In this era of extreme competition at every level, companies innovate faster than customers, lives changes. He laid his focus on creating a platform for new growth and innovation by new strategic partnership. Value should only be extracted after value has been created. Focus is on innovative ideas that create a better product or service with financial help through identification of new generated innovative idea, market demand , its potential and evaluation and forcing it into the market as soon as possible at reasonable price. We can say that creativity is a business asset. Ideas are turned into knowledge and knowledge into value added. In short they help in generation of creativity and innovation on both the sides- in organization as well as for any product. Mr. Chaplot make me clear on the issue of environment of a business organization and leadership skills, that should be in the organization to facilitate creativity and innovation as wells as he regarded knowledge management an important tool of the managers to be facilitated in an organization through training, supporting, etc. Managers play a dual role: as a practitioners and advisors on innovation. Leading the venture and consulting role with the clients by sharing own experience and expertise with innovation and creativity. Good managers are trained to seek market demand, introduce a better product in the market to the most demanding customer and bring higher profit to the organization. Creativity is essentially an individual act, but one has to relies principally on interaction with other operating form within the same organization field (Powell and Dimaggio,1991). Talking about the environment, it should be open so that ideas can flow. When an environment is created where employees feel that ideas presented make a difference, you inspire collaboration and outside the box thinking is encouraged this will not only enhance the contribution of the employees but you will also built a loyal work force.
In reality we all know we require a set of leadership styles, healthy working environment, tools and skills, knowledge management, change prospect etc for creativity and innovation and most important finance because it helps creativity and innovation from its generation till its exemption in the form of product or services in the market by the above mentioned standards in the literature and research. "Innovation induce venture capital and venture capital stimulate innovation". Venture capital activity in an industry significantly increases its rate of patenting (attraction or performance)(Samuel kortum and Josh lerner,2000). A reasonably priced finance is important for entrepreneurial activity and innovation and creativity to take place. Here we learned, how finance is important for the innovation and creativity and innovation and creativity to the business.
The area of further research which is identified:
Innovation incentivizes investment and consumption by creating enthusiastic expectations for new products, process and market. Innovation and creativity by incentivizing investment may help recovery from the bust. Innovation drives financial market activity sometimes through booms and bust. "Finance and innovation are necessary as a fellow traveler"(Martin Fransman, 2008).
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