Managing Employee Creativity and Innovation for Bus iness Growth [604214]

Managing Employee Creativity and Innovation for Bus iness Growth
Dr. KSS Kanhaiya
BE, DCPA, MBA, MA (App. Psy.), PhD (Mgmt.)
C.Eng. (I), FIE (I), MIMA, LMCSI, LMISCA, LMIIMM
[anonimizat]

Introduction:
Today, newer technology platforms and business mode ls are created faster than testing
by practitioners. Organizations running on fossiliz ed ideas either die out or are gobbled up,
unless the environment is overly protective of them for strategic, jingoistic or ulterior
considerations.
Quest for competitive advantage is essential for lo ng-term survival of any business
organization. As every organization is in continuou s pursuit of creating or acquiring
competitive advantage, many of specialties once con sidered competitive advantage have –
with time – turned into entry barriers today for co mpanies trying to compete globally. One
familiar example is the ISO 9000 Quality Management System Certification.
Because each firm is unique as regards the possessi on and use of resources and
capabilities; it is the heterogeneity of resources that can contribute to competitive advantage.
In today’s business scenario tectonic shifts are ta king place at lightning speed. The
benchmarks of performance excellence are continuall y shifting and the competition is getting
fiercer. Competitors mirror rival activities very q uickly. Existing economic conditions and
fierce competition prevalent presently are forcing organizations to seek new ways to reduce
costs and to enhance profitability. If a firm expec ts to survive and grow, it constantly needs
creativity to differentiate, add value and create c ompetitive advantage.
Therefore, to thrive and excel, business organizati ons need continued innovation,
expeditious response, excellence and creative human talent. Employees need to do things
differently through the robust process of innovatio n and change. Creativity breeds new ideas
and Innovation brings those new ideas to life. As s aid Tom Hopkins , “The profit of great
ideas comes when you turn them into reality.”
Creativity and Innovation unveiled:
There are many myths about creativity. There is the belief that creativity is a
mysterious talent that some people have and others can only envy. But, in reality, anyone can
learn and practice the thinking skill of creativity . Some people might be better than others, as
is the case with any skill – such as driving, cooki ng, tennis or soccer. Creativity consists of
coming up with many ideas, not just that one great idea. An essential aspect of creativity is

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not being afraid to fail and to have the courage fo r generating new ideas. The stone-age didn’t
end because they ran out of stones. It can be argue d that creative idea generation, rather than
necessity, is the mother of invention.
Innovation is the introduction of something new for an organization. You might do this
by copying someone else, by systematic logical desi gn or through direct and deliberate
creativity. However, there must be a readiness to e xplore and implement new ideas. So
'innovation' is often used as a term to mean progre ssion and adapting to changed conditions.
Unfortunately, this is often not the case with many organizations.
Innovation is novelty. The newness can be in the id ea, its implementation, adaptation or
refinement. Creativity may lie in seeing or creatin g an opportunity where others can’t.
Creativity in business can be described as problem solving. By inducing the creative
state, the individual and group creative capacity i s optimized in order to solve business issues.
This involves more than brainstorming, which in man y organizations simply involves setting
up a flipchart, herding staff into a room and calli ng it a brainstorming session.
Creative people are intrinsically motivated. This m eans that they see inherent value in
what they are doing – as opposed to extrinsic motiv ation, which causes them to engage in an
activity to fulfill ulterior goals. Some extrinsic motivation is useful but there is a significant
positive correlation between creativity and intrins ic motivation and by managing creativity, it
is possible also to enhance motivation.
Creativity and Innovation – Importance:
The highly competitive nature of today’s business n eeds creative and innovative ideas
for dominant success. Although good service is the essence of a successful business, novel
ideas are jumping advancements; thus, a company has no chance to win this competitive
game in the absence of creativity and innovation.
Scientific analysis and mathematical skills alone c annot endeavor to define problems or
seek alternative solutions. Or, in the business wor ld, cost-benefit analysis and spreadsheet
skills alone cannot endeavor to define problems or seek alternative solutions. They are merely
tools for understanding what a problem looks and fe els like. Only creative and imaginative
thought, when applied with personal knowledge of a problem, can produce solution
alternatives, what-if scenarios and the exploration of additional problem causes.
Creativity and Innovation Challenges:
From idea to reality is an important metamorphosis. In a subtle transition, the innovator
becomes a manager. The challenge shrinks from makin g the idea work to completing

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assignments. Adventure makes way for task monitorin g and the organization becomes an
unevolving, risk-averse entity. Bureaucracy is a go od example of dysfunctional fixation on
procedures and precedents. Ironically, the compulsi ons of survival fuel both innovation and
conservatism.
A readiness to do something new is required for inn ovation. But anything new is
viewed as a risk and also as a distraction from the normal routine. Resources need to be
committed to anything new. There are lots of organi zations who do not like to try new things,
for obvious reasons. Managers reach senior position s by being good at continuity and
problem-solving. You do what you are meant to do an d solve problems that interfere with
that doing. The readiness to try new things is hard ly ever a factor in an executive’s success
and promotion.
Fear of failure also plays a part. Something new th at does not work is seen as a failure
or an error. Language does not have a word that mea ns a “fully justified venture which, for
reasons beyond one’s control, did not work”. So som ething that does not work is simply
labeled a failure. It makes sense for executives to avoid “failures”.
Creativity and Innovation – Sources and Enablers:
A variety of theorists attempted to better understa nd the sources of creativity and
innovation in individuals. Still there is disagreem ent between theorists. Broad, complex and
multi-faceted, creativity can take many forms and c an be found within a variety of contexts.
It is embodied by individuals with a broad range of personal characteristics and backgrounds.
Cognitive psychology provides the perspective on th e sources of individual creativity.
Psychological research on creativity expanded signi ficantly after the 1950 presidential
address of J.P. Guilford at the American Psychologi cal Association underlining need for
greater attention to the topic of creativity.
As per the framework provided by Teresa Amabile of the Harvard Business School,
creativity arises through the confluence of Knowled ge, Creative Thinking and Motivation.
Environment and individual’s personal decision also play their role.
Knowledge
It consists of all the relevant information that an individual brings to bear on a problem.
There are two types of knowledge that may be requir ed for creativity. People build the
technical expertise and in-depth experience through long-term focus in one specific area. This
expertise serves as a foundation for creativity wit hin a domain. At the same time, creativity

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rests on the ability to combine previously disparat e elements in new ways, which implies a
need for a broader focus and varied interests.
Thus, the best profile for creativity is T-shaped, with a breadth of understanding across
multiple disciplines and one or two areas of in-dep th expertise. Frans Johansson explains that
“we must strike a balance between depth and breadth of knowledge in order to maximize our
creative potential”. He suggests that one way to im prove breadth is to team up with people
with different knowledge bases. The implications of this recommendation are in the realm of
greater focus on interdisciplinary study and having cross-functional group projects with team
members from varied functional areas.
Studies by Simonton support the idea that individua ls must develop in-depth domain
expertise to be creative. He explains that creative output is linked to the amount of time a
person is actively engaged in a creative domain. Th e relationship tends to be a curvilinear,
inverted backwards J function of career age. Creati vity production increases with years in the
field until reaching a maximum at which point it be gins to taper off. Howard Gardner’s
research into the sources of creativity supports th is idea and further extends it to a “10-year
rule” – ten years is the approximate time required to build the domain knowledge and
expertise needed to spur creative successes. The im plications of this recommendation are in
the realm of greater focus on planned job rotations at intervals sufficient for development of
domain knowledge and not earlier or too late.
Creative Thinking
Thinking is a key aspect of the creative process. C reative Thinking relates to how
people approach problems and depends on personality and thinking/working style. Important
determinants of creative thinking are:
• Comfort in disagreeing with others and trying solut ions that depart from status quo.
• Combining knowledge from previously disparate field s.
• Ability to persevere through difficult problems and dry spells.
• Ability to step away from an effort and return late r with a fresh perspective. (Incubation).
Sternberg’s triarchic theory asserts that the three main aspects of intelligence essential
for creativity are – synthetic, analytical and prac tical:
• Synthetic: It is the ability to generate novel and task appropriate high quality ideas. One
aspect of this is the ability to redefine problems effectively and to think insightfully.
Insightful thinking involves knowledge acquisition in three forms – Selective encoding
i.e. distinguishing relevant from irrelevant inform ation; Selective combination i.e.

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combining bits of relevant information in novel way s; and Selective comparison i.e.
relating new and old information in novel ways.
• Analytical: It is involved in creativity as the abi lity to objectively judge the value of one’s
own ideas, to evaluate their strengths and weakness es and identify ways to improve them.
• Practical: It is the ability to apply intellectual skills in routine contexts and to “sell”
creative ideas.
The cognitive processes suggested within Sternberg’ s synthetic thinking category
appear repeatedly in literature. It is clear that t he central component of creative thinking is the
ability to combine existing elements of knowledge o r understanding in new ways. Simonton’s
research on Creative Darwinism asserts that creativ ity is a stochastic combinatorial process
under which multiple ideational variations emerge i n an individual’s mind, and then a subset
of them are selected for preservation and execution .
As per this concept, creativity requires the capaci ty to generate blind variations in the
same sense that genes generate random mutations whi ch is not linked to the probability of
success of any given variation. The implication is that, creative performance may be
increased by any technique that might break the str anglehold of conventional expectations
and simply increase the number of randomly generate d variations.
This supports the idea that “if the variation proce ss is truly blind, then good and bad
ideas should appear more or less randomly across ca reers, just as happens for genetic
mutations and recombinations.
Thus it implies that the creative mind can be enhan ced by environments or efforts that
encourage the individual to generate new variations and combinations of ideas.
Quality of creative output is closely connected to sheer quantity. The more an
individual produces, the more likely (s)he is to st umble upon success. Also, the best creative
product tends to appear at the point in a creator’s career when (s)he is most prolific. Thus, to
encourage creativity, risk tolerance at organizatio nal level is a must.
Motivation
Motivation is generally accepted as key to creative production, and the most important
motivators are intrinsic passion and interest in th e work itself. Even more than particular
cognitive abilities, a set of motivational attribut es – childlike curiosity, intrinsic interest,
obsessive perseverance – differentiate change intro ducers from others. Many theorists see
motivation as the most important component of creat ivity.
Amabile’s Intrinsic Motivation Principle of Creativ ity asserts that people are most

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creative when they feel motivated primarily by the interest, satisfaction, and challenge of the
work itself – and not by external pressures [i.e., extrinsic motivation].
Numerous studies document how intrinsic motivation enhances creativity and extrinsic
rewards hamper it due to the negative feelings resu lting from external control. The principle
is best illustrated by Amabile’s maze analogy. The extrinsically motivated person will take
the shortest, most obvious path to get to the rewar d at the finish line. The intrinsically
motivated person will explore various pathways and alternatives, taking time and enjoying
the process along the way. The exploration will lea d to novel, alternative solutions, some of
which may turn out as more appropriate and successf ul than the original, obvious path.
Environment
However, there are probably two types of extrinsic motivation: synergistic
(informational or enabling motivations) and non-syn ergistic (controlling motivations).
Synergistic extrinsic motivators support and enhanc e intrinsic motivation. Non-synergistic
ones hinder it. Nonetheless, the types of extrinsic motivations most likely found in the
workplace are non-synergistic and are not easily av oided.
Different types of motivation play a role in differ ent parts of the creative process.
Intrinsic motivation is particularly important when the emphasis is on novelty. If greater
emphasis is on persistence, synergistic extrinsic m otivators may play a role. Additional roles
for extrinsic motivators are that they can help an individual sustain energy through the
difficult times necessary to gain domain skills. Ex trinsic motivators may also serve to bring
people in contact with a topic to engage their intr insic interest.
The implication of this is that business must revie w the reward mechanism and the
output monitoring systems in light of the impact of promotions, raises or praises as reward for
routine fulfilments on creativity. If assessment is used as a tool for improvement, rather than
as a judgment; it may reduce the feeling of externa l control.
Personal Decision
On one hand, a creative effort can be viewed as a d efense against personal inadequacy
and feelings that the self is flawed and destined t o failure. On the other hand, a meaningful
purpose can also serve as a motivation for creativi ty. For some persons, the exercise of some
skills can be a source of joy.
Thus creativity is the outcome of the interaction b etween the innovating individual, that
individual’s domain of knowledge and the social fie ld that judges the individual’s
contribution to the domain. Lack of affirmation of work from the social field might

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discourage persistence. The innovator may use the s ocial field as a source of information
about work, but also give equal or greater weight t o signs of progress and success in the
activity itself.
Potential implications of this viewpoint are that t he system should provide greater focus
on helping employees identify areas of interest and passion – areas where they can achieve
the state of flow which leads to growth of skill an d confidence.
HRD interventions should attempt to enhance creativ ity, but should also help
employees identify the field of creativity itself s o they gain an explicit awareness of their own
creative potential, as well as and understanding of methods of enhancement. With this
knowledge, they can make an informed decision to pu rsue creative activities and at the same
time, can control and direct the development of the ir abilities.
There is considerable evidence to support the belie f that most people have potential
they never realize and that persistent effort to de velop that potential is likely to be successful.
Furthermore, meta-cognition of the creative process should involve managing one’s
emotions, cognitive resources, learning one’s stren gths and weaknesses and managing time
allocation to creative pursuits.
Creativity and Innovation Management:
Innovation can happen if there is a readiness to tr y new things and if a habit of
exploring new possibilities is developed. Creating a climate of acceptance for every new
possibility is very difficult. Perhaps there is a n eed for a specific Innovation Manager whose
role should be to develop innovation readiness.
Many businesses work on the basis of osmosis. If a new idea has been around for a long
time and has been taken up by other businesses, the n it becomes natural and low risk
proposition to adopt that innovation. Hence, employ ees need to be sensitive to what is
happening elsewhere in the same field and to what i s happening in the world around. Such
opportunity scan helps in obtaining management supp ort for innovative ideas.
It is important to incorporate innovation and creat ivity into the core values of the
organization, have a Knowledge Management system, l et people try their ideas for
improvement, and keep the structure flat. Cross-fun ctional teams must be encouraged and
members should be rotated intermittently. It is equ ally important to have ambiguity-tolerance,
train people to unlearn and to expose them to reali ties beyond the organizational boundaries.

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Such culture can be created through dynamic, proact ive style where CEO is a change agent,
with the highest possible mandate.
Initially, innovation management was formed to prov ide an efficient managing system
for Research & Development, but it has now spread b eyond this area due to its importance in
various fields of business. In general, innovation management has main duties to manage
both input and output of innovative ideas.
In the former case, innovation management must cond uct the flow of innovative ideas
such as new discoveries, into the organization for subsequent uses. In other words, it should
collect relevant external innovations to serve the internal innovative system.
Secondly, the internal innovation should be managed properly. An organization should
always have new products and services to satisfy th e customer-needs. Internal innovative
system is responsible for analyzing the external ne eds, estimating the internal possibilities,
and proposing new innovative ideas.
Distinguishing Creative People in Organization
Due to the importance of creativity and innovation for an organization, in a modern
management, it is necessary to distinguish creative people. In general, people in technical
positions, associated with leading the organization strategy, are divided to two groups:
creative people and their assistants.
This creative group is divided in two groups namely initiators and problem solvers. The
initiators are creative people who have that additi onal mental ability that enables them to
recognize previously unrealized problems and to eva luate their importance. It is one thing to
have an idea about specific problem; it is quite an other to have an idea about what it is that is
worth having an idea about.
Although problem solvers are key persons in an orga nization – particularly in critical
situations, the problems need to be introduced to t hem, as they are not problem finders. The
problem solvers should follow the initiators – alth ough it may not exactly be construed as the
relationship between creative people and their assi stants.
The initiators are also divided to two groups viz. discoverers and inventors. Although
these two groups are usually considered identical, they are significantly different. Discoverers
work on a higher creative position of the organizat ion by dealing with the question “why?”
for analyzing a phenomenon or a problem; but invent ors serve the routine performance of the

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organization by struggling with the question “how t hings work and can be made to work
better”.
It is obvious that distinguishing these creativity- based groups is an important duty of
the management system, and is only possible in the light of modern aspects of creativity and
innovation management.
Risk Management
Creativity and Innovation management is somehow ris k management. When dealing
with novel creative ideas, the results are not guar anteed. Thus, not only it is needed to find,
propose, and perform novel creative ideas, but also an essential requirement is to forecast the
future performance in action. In general, such mana ger should be risk taker, multidimensional
analyzer, prospector, futurist, and somehow discree t.
Promoting Innovation and Creativity
Several programs, courses, workshops and techniques have been developed to promote
creativity and to enhance the cognitive functions t hat support it. The key question is, can
creativity be enhanced, and if so, how? Nickerson b elieves the answer to the first question is
yes, but that the how is not well understood, altho ugh there is some speculation that is worth
exploring. His research indicates that classroom in struction can have a positive impact on
creative abilities.
Theorists mention multiple idea-getting techniques, including brainstorming and
divergent thinking methods and other instructional approaches to increase creativity and
Brainstorming is one of the most popular techniques to induce creativity. It was originally
suggested by Alex Osborn in his 1957 book, Applied Imagination.
However, the technique is often implemented incorre ctly. Studies show that due to
evaluation apprehension and blocking, fewer ideas a re generated in brainstorming groups
than would be generated if participants thought alo ne and wrote ideas down. Brainstorming
sessions should first involve 15-20 minutes for peo ple to think individually and write their
ideas on an anonymous piece of paper which is then handed over to the facilitator. All ideas
are then discussed openly with a view to first cons idering how each one could be feasible
rather than the more common approach of criticizing to find why it wouldn’t work.
In an attempt to assess the effects of creativity t raining, 156 creativity training
programs were reviewed and categorized into cluster s. Four themes emerged in the training
programs: 1) idea production training, 2) imagery t raining, 3) cognitive training and 4)

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thinking skills training.
Idea Production training is the most common and tra ditional method. However, in
terms of effectiveness, it is less effective than c ognitive training like Creative Process
Training, Conceptual Combination Training and Criti cal/Creative Thinking Training.
Conceptual emphasizes conceptual combination, conve rgent thinking and techniques to
stimulate new combinations such as analogies and me taphors. Creative Process Training
develops creative thinking through convergent and d ivergent thinking. It’s typically lengthy
and involves practice on realistic exercises accomp anied by lecture and discussion.
Critical/Creative Thinking stresses problem finding , idea evaluation, idea generation,
brainstorming and meta-cognition.
Most creativity programs, such as brainstorming and other idea-getting techniques,
address only one or a few of the sources of creativ ity, and show modest positive outcomes.
Cropley suggests a more holistic alternative approa ch: a program should be tailored to
address an individual’s creative potential, psychol ogical aspects of creativity, thought
processes, such as divergent thinking, environment and special characteristics of the task and
desired solutions.
Assessment of and its Impact on Creativity
In order for creativity to become a priority in the classroom, it must be assessed at par
with the testing of more traditional skills and abi lities. However, measuring creativity is more
complex. While tests of creativity and creative thi nking exist, most of these measure only
certain aspects of creativity. It appears that crea tive products today are the best predictor of
future creative products. Thus, the best method of assessing creativity would involve the
review of actual creative output.
Nonetheless, tests have been designed to measure cr eative potential and creative
thinking processes. Many of these aim to measure co nvergent and divergent thinking. They
consist of open-ended questions to measure the flue ncy, originality, flexibility, elaboration or
effectiveness. Some tests assess cognitive function s as well as personality traits and
motivation associated with creativity.
Researchers suggest that Torrence tests of creative thinking are the best known and
most widely used tests. The test-retest reliabiliti es and the predictive validity of these tests
vary, but a many studies seem to indicate that the scores on this test do differentiate between
those who attain creative success and those who do not.

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Techniques to Stimulate Creativity and Innovation i n the Workplace
Most literature on creativity and innovation in the workplace targets an audience of
managers and business leaders and focuses on method s to foster organizational climates
conducive to innovation. Companies generally approa ch creative climate in different ways.
One essential element, however, is that top managem ent holds the power to set the tone and
thus plays a key role in whether a company will be innovative or not. Management must not
only ask for technical innovation but also encourag e, stimulate, fund and reward it.
Management must be committed to creativity and be w illing to sacrifice short term results for
innovation.
In designing a workplace environment conducive to innovation, management must
consider the same elements that are key to creativi ty in individuals: knowledge and creative
motivation. In the workplace, it is easier to influ ence intrinsic motivation than to influence
knowledge or creative thinking styles which are lon ger term pursuits. Management can bolster
intrinsic motivation through focus on the following six areas:
Challenge : Match people to jobs where challenge is optimized : not so little that they
feel bored but not so much they feel overwhelmed an d threatened by a loss of control.
Freedom : Employees need to be given optimum autonomy conce rning the process, not
necessarily the result. Clearly specified goals oft en enhance people’s creativity, but freedom in
process enhances sense of ownership. At the same ti me, programs that allow employees to
choose their goals have also been known to enhance creativity.
Resources : Resources in both time and money are important. U nder some
circumstances, time pressure can enhance creativity by increasing urgency and sense of
challenge, but fake or impossibly tight deadlines c reate distrust and cause burnout. In a study it
was discovered that people are less creative under time pressure, though they think they are
more so.
Work-Group Features : when teams include people of varied perspectives, ideas
combine. Teams must share excitement and recognize the value that each member brings to
the table. Creating such teams requires managers to have excellent knowledge of their people.
Supervisory encouragement : Supervisors should recognize creative work genero usly
even before finding the commercial impact of that w ork. In general, people react to new ideas
with a criticism bias. Such bias creates a climate of negativity and fear. An organization’s
culture and attitude toward failure are important t o promote innovation. Organizations that
tolerate failure and encourage risk-taking are more likely to see successful innovation.

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Organizational support : Intrinsic motivation increases when people are aw are that
those around them are excited and where there is in formation sharing and collaboration. Bad
politics is to be avoided.
In addition to motivational approaches, collective knowledge and thinking processes are
also important. Just as creative individuals must b e capable of breaking down barriers between
disciplines and combining knowledge in new ways, or ganizational creativity also results from
both breaking and making of new corporate connectio ns. The key to this process lies in
encouraging conflict and risk taking, and in encour aging the flow of information through the
organization. Promoting diversity and flexibility a mong team members involved in such
discussion is important.
Many managers equate creative ability with position within the organization – assuming
that only the higher ups have the best ideas and de cision making abilities. To install systemic
creativity, leaders must engage the other employees and lead as a guide rather than manage
with command and control.
Information flow is a crucial aspect of promoting c reativity throughout the organization.
When high volume of diverse information flows freel y throughout the organization, the
likelihood of collision among beliefs, presumptions , and possibilities increases. Applying this
concept even to the flow of unrelated pieces of inf ormation is important. Designing the
physical workspace to create opportunities for inte raction among otherwise separate workers
may also help improve the flow of unrelated informa tion to spark new connections leading to
creativity. Company structure also plays a role in information flow. Ideas tend to move more
easily in companies with less structured roles and authority than bureaucratic organizations. A
rigid environment that adheres too strictly to proc edure does not foster creativity. An
environment where there is comfort with ambiguity a nd a focus on ideas rather than careers, is
favorable to innovation. Job rotation and creating space for employee autonomy can help with
this problem. Management must also build diverse te ams and create mechanisms by which
individuals with different perspectives can interac t productively.
Leonard and Straus explain that the successful mana ger figures out how to get different
ideas and approaches to collide in a productive pro cess called “creative abrasion”. By
deliberately creating diverse organizations and exp licitly helping team members appreciate
thinking-styles different than their own, creative abrasion can result in successful innovation.
Managers can actively manage the process of bringin g various cognitive preferences together

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to create heterogeneous teams. Through the use of e stablished diagnostic instruments
revealing an individual’s cognitive preferences – s uch as the Myers-Briggs Type Indicator
(MTBI) or the Herrmann Brain Dominance Instrument ( HBDI) – employees and managers
can better understand themselves and their colleagu es. Joint discussion of the results of these
tests can help employees with differing styles to c ome to agreement on how to work together,
respect differences and leverage them in the proces s of creative abrasion. Understanding these
differences diffuses tension as people realize that alternate approaches are not wrong-headed,
but merely different.
Echoing the importance of information flow and flex ible interaction among diverse
employees, Johansson explains that creative success es best occur at what he terms “The
Intersection” – a place where wildly different idea s bump into each other and build upon each
other.
Breaking down associative barriers is fundamental t o reaching the Intersection.
Associative barriers are the chains of associations we cluster around a concept in order to
categorize and structure the stimuli in our environ ment. Building such barriers is the mind’s
way of creating order in a chaotic world. Researche rs suspect that these barriers inhibit
creativity. People with low associative barriers ca n make unusual connections which lead to
creativity. These include individuals that have bee n exposed to various cultures, are self-
taught and have less traditional backgrounds. They are less welded to one way of doing things
and more likely to arrive at unique Intersections. Management should consider these
characteristics in hiring practices and employees i n their professional development endeavors.
In addition to designing a workplace environment co nducive to creativity, the literature
suggests multiple strategic and tactical techniques that both management and innovative staff
can employ to guide the creative process. One of th ese is Kim and Mauborgne’s concept of
“value innovation ”. These researchers found that the only significan t differentiator between
high-growth companies and their less successful com petitors was management’s approach to
strategy. Average or unsuccessful competitors follo wed the conventional strategic logic of
attempting to beat the competition while high-growt h companies rendered their competition
irrelevant by breaking established industry boundar ies to create new sources of value for
customers while often lowering costs at the same ti me. They re-shape the industry. They focus
on what the mass of customers have in common rather than the differences between customer
segments. This value innovation approach represents a simple and appealing model for

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companies to consider. The authors explain that the strategic logic of value innovators differs
from conventional logic along five dimensions, as o utlined on next page:

Strategy Dimensions Conventional Logic Value Innovation Logic
Industry Assumptions
An industry’s conditions are
given. An industry’s conditions can be
shaped.
Strategic Focus
A company should build
competitive advantages. Competition is not the
benchmark. A company should
pursue a quantum leap in value
to dominate the market.
Customers
A company should retain and
expand its customer base
through segmentation and
customization, focusing on
the differences in what
customers value. A value innovator targets the
mass of buyers and willingly
lets some existing customers
go. It focuses on the key
commonalities in what
customers value.
Assets and Capabilities
A company should leverage
its existing assets and
capabilities An industry’s
traditional boundaries
determine the product and
services a company offers. A company must not be
constrained by what it already
has. It must ask, what could we
do if we were starting anew?
Product & Service
Offerings The goal is to maximize the
value of those offerings. A value innovator thinks in
terms of the total solution
customers seek, even if that
takes the company beyond its
industry’s traditional offerings.
Through the process of value innovation, companies create new solutions that bring
unprecedented value to the mass of customers by giv ing them more of what they want and less
of what they can live without. Under the value inno vation approach, companies review
customer value and ask themselves four main questio ns:
1) Which of the factors that our industry takes for granted should be eliminated?

Managing Employee Creativity and Innovation for Bus iness Growth
Dr. KSS Kanhaiya
Page 15 of 15

2) Which factors should be reduced well below the i ndustry’s standard?
3) Which factors should be raised well above the in dustry’s standard?
4) Which factors should be created that the industr y has never offered?
These questions should be applied to the platforms on which innovation can take place:
product, service and delivery. While many companies focus on only the product dimension,
successful companies address all three.
Similar to value innovation concept, Drucker explai ns that “most innovations, however,
especially the successful ones, result from a conscious, purpo seful search for innovation
opportunities. In other words, management’s purpose ful search for new sources of value
innovation is fundamental to success. Drucker argue s that management must purposefully
analyze all these sources of new opportunities. In this sense, the practice and discipline of
innovation can be somewhat systematic, guided by di ligence, persistence and purposeful,
focused exploration.
Concluding Remarks
Business growth can be sustained through continuous creativity and innovation as part
of culture. Employees are fountainheads of capabili ties of any business. Businesses must
employ creative people and create proper environmen t so as to stimulate creativity and
innovation within their functions.
Creative people enjoy what they are doing; they ten d to describe themselves as
passionate. As a result they tend to behave more po sitively towards their colleagues,
customers, and people they come into contact with. Thus a business reaps benefits in
organizational culture and customer service. Busine ss relationships and the network in
general are strengthened. Links are created in the value chain, staff turnover decreases and
consistency and sustainability – both requirements for success – increase. Businesses have to
note that the philosophy is not about seeing people as a fixed cost, but of harnessing and
maximizing human creative potential to add value an d create new revenue streams.
And employees have to keep in mind that their creat ivity and innovation in their roles is
important for their business. As Ray Bradbury said “Life is trying things to see if they work.”
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