Creativity & Innovation: How Does An Organization Define It?

Winning in today’s highly competitive and dynamic environment requires being out front of the other organizations offering their value propositions to the same end users. If my software is better or cheaper and/or if I can get it to market before others I can enjoy premium pricing until they turn it into a commodity. But that means I have to have some advantage.

Often innovation is defined as invention… something that has never been now exists. And creativity is needed in order for invention to happen. But there are other forms of innovation. I can improve existing technology or products and that can generate value. Or I can integrate features that already exist but have not yet been combined into a single device. Jobs led the creation of the iPhone and just about everyone would credit him with innovation. But was it in the form of invention, improvement or integration? Was the magic of this product the ability to do so many things on one device? Did it actually do something that could not have been done with any device at that time? As sales skyrocketed not too many Apple folks were concerned about putting a specific label on what made the product possible. What was clear was that creative people innovated and product success was over the top.

Organizations increasingly believe that talent is their most important asset. Although machine learning and other forms of artificial intelligence can be used to solve problems or create a synthesis of existing things (features; ideas; devices) can a determination be made as to what will succeed in the marketplace using technology? Although focus groups and other forms of marketing research can discover what people think they want history has shown that the answer is evident only after the product is in the end users hand being used. So if creative people are the key to innovation will the kind of innovation needed dictate the kind of creative people needed?

Talent management is all about attracting, retaining and motivating the people required to do what the organization needs done. If what is needed is invention what type of talent is needed? If improvement is required does that suggest a different type of talent? And when integration is the objective is yet another type of person required? One way to identify talent needs is to begin with the desired end result and work backwards.

In most for-profit private sector organizations the criteria used to evaluate organizational performance can be expressed using financial, operational and customer measures. Using an instrumentation dashboard based on a balanced scorecard approach the organization can create a report card to evaluate success. So if an investment is made in research and development with the objective of creating an easier way to control software that would appeal to a broad consumer market, resulting in a large revenue stream, each R&D proposal can be evaluated by projecting its success in achieving that result. PARC (Palo Alto Research Center) did that… several times they created something unique. Creative people were innovating at a high rate. Yet because PARC was imbedded in Xerox and the broader organization was unable to commercialize any of the innovations and ended up giving them away the desired end result did not manifest. There certainly was a lot of talent doing a lot of creative things but the organization relied on people focused on innovation and not on selling something. Looking back on this failure what could the organization have done to produce a better result?

If creative people are placed in a pure R&D setting and asked to invent new things they will be motivated to do so. If invention is what is measured and rewarded it is likely to be what people focus on. But if invention is only part of what is required for meeting objectives should the talent pool also include creative people who know how to take an invention to market, whether they are imbedded in the R&D unit or become the internal customer of the invention at the corporate level? It seems so obvious that he full range of talent is needed to get the whole job done. But the Xerox/PARC case is not the only example of invention not leading to success. GM could not learn from NUMI or from Saturn, two successful innovations in the auto industry. How can sophisticated organizations not recognize that the journey from idea to sale must be completed?

Creativity and innovation are the keys to success in this competitive arena. That is not to discount the value of being able to execute strategies that remain the same. Being able to reliably execute an operational excellence strategy may not be accepted as creative by some. But competing based on price is the key to success for many organizations. And putting together a well-functioning global logistics chain can require a lot of creativity, even though it is more of the improvement and integration type. An operational excellence approach to competing needs a different talent management strategy than a product innovation approach. People are wanted who loath waste, drive out variation in processes and execute reliably. A product innovation approach needs different characteristics. So GM and Xerox probably would have realized value from their experiments if that had mapped out all the types of creativity required and ensured the talent pool contained people who could provide it all. Their staffing, development, performance management and rewards management strategies could have been customized to attract, retain and motivate all types of talent required. And the organizational culture could have been evaluated to determine whether it provided a context within which the full range of talent could have peacefully co-existed.

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