Creativity @ Risk

We presume with the world singing paeans of Steve Jobs, Mack Zuckerberg and Larry Page, people appreciate individuals with creative ideas. CEOs who made it big through their creative thinking are glamorized.  Hence, a perception has formed that organizations reward innovative thinkers.

This myth broke in a study conducted by Jennifer S. Mueller, Jack A. Goncalo and Dishan Kamdar. Their research paper titled – “Recognizing creative leadership: Can creative idea expression negatively relate to perceptions of leadership potential?” states, “the expression of creative ideas may diminish judgments of leadership potential unless the charismatic leadership prototype is activated in the minds of social perceivers”. This indicates that people prefer leaders who follow the status quo and provide useful solutions. People choose a creative thinker as a leader only when they asked to select a charismatic leader.

Hence, creativity is at risk unless organizations specially focus on valuing innovative thinkers as leadership potential. Business Week article reports that due to increasing complexity in business and globalization CEOs want creative thinkers. “According to a new survey of 1,500 chief executives conducted by IBM’s Institute for Business Value, CEOs identify “creativity” as the most important leadership competency for the successful enterprise of the future.” CEOs value employees who disrupt status quo, existing business models and organizational paralysis. However, according to the Jennifer Mueller’s study creative thinkers may not be considered as good leadership potential as employees view them as quirky, weird, non-conformists.

Therefore, in the current economic environment the organization risk is huge if organization culture doesn’t promote creative thinkers into leadership roles. For example, the Business Week article mentions “CEOs say one-fifth of the revenues will have to come from new sources.” Hence, loss of revenue due to lack of creative thinkers in an organization can be significant. In my view, most of the risk managers haven’t considered this risk. Interestingly, this is an upside risk, if addressed can yield significant benefits to the organization. So the question is how does a risk manager check creativity levels in the organization?

Before risk managers collectively say that I am being weird and it is not a risk manager’s job to check creative thinking in the organization, here are some of my CREATIVE ideas on ways to do it.

1.   Culture

With management rhetoric on innovation on public platforms, one can mistakenly believe that the organization culture supports creative thinking. However, as Jennifer Mueller points out – “By definition, people will say creativity is positive. It is almost impossible to get people to say they don’t want creativity. But when someone actually voices a creative idea, there is a response of, ‘Wow — What is that?’ This issue really comes to life at the moment the idea is voiced. There is discomfort when people encounter creativity.”

Hence, DNA of the organization should encompass creative thinking. As Jack Anderson and his team states in the paper, “Developing Systemic Innovation in an IT Organization” state- “The systemic innovation initiative allows us to manage innovation as a culture in the same way that we manage quality and safety.”

Therefore, risk managers should check whether the organization culture is giving lip service to creativity or is it ingrained in the psychology and attitudes of the employees.

2.   Reward

The key point brought out by Jennifer Mueller is that people do not perceive creative thinkers to have leadership potential. Therefore, they miss the career path. She mentions – “The fact is, some people are selected for a leadership [track], while others are not. So companies need to think about this issue, and their performance appraisal systems should be changed accordingly. Managers need help in understanding what stereotypes they might have in their minds and how to overcome them.

Hence, the performance appraisal system should be built to recognize the creative thinkers and reward them appropriately. For example, when I was working in Intel, the organization recognized employees who contributed to innovation, even if the business idea or product was not viable or usable by Intel.

Risk managers need to do a quick assessment on the performance appraisal system to evaluate whether the organization has a process for rewarding creative thinkers. Secondly, conduct an analysis of the number of promotions of creative thinkers to the total. The ratios will reflect whether any bias exists against promoting creative thinkers to leadership positions.

3.   Engagement

The tone at the top matters for ensuring commitment to creative thinking. Jack Anderson mentions that at Intel –“Managers play a key role in enabling an environment that supports innovative behavior. We engaged senior managers and employees as innovation champions, allocated adequate budget for the initiative, and set up a management-based steering committee for innovation and research” I remember in my business group at Intel senior management allocated 1 hour every month of their weekly meetings for juniors to present new ideas. They would evaluate the idea, and if it was useful give the go ahead to the team to submit a concept note.

Risk managers can check the existence and working of management committees dedicated to the task of nurturing creative thinking within the organization. Secondly, analyze the time committed by senior managers for mentoring creative thinkers.

4.    Agents

Management appoints agents or champions to transmit the creative thinking message across the organization. Agents are responsible for the transformation. Agents develop strategy, implement, monitor and measure creative thinking initiative within their business unit. At Intel in a business unit, there were innovation sponsors and agents who acted as contact points for the business unit staff. They aligned the global process with the business unit and provided regular guidance to the team.

Risk managers must check the process of delivering creative thinking message to employees lower down the ladder. If agents are appointed, risk managers need to check their role, performance and effectiveness.

5.    Training

Sometimes we believe that creative thinkers are born or it is a mindset. However, creative thinking can be taught to all. Organizations have commenced creative thinking classes that provide basic training on how to do it and merge it in daily working environment. For example, in a recent article of Businessweek Chief Technology Officer Ananth Krishnan of Tata Consulting Services (TCS) says – “TCS has made innovation a component of training programs, from its leadership institute, to which 50 senior managers are sent every year, to its four-day “Technovator” workshop, at which its programmers are taught to think creatively.”

Risk managers should review the training strategy for creative thinking. Then check the delivery, coverage and content of the training. Review training feedback forms and performance evaluation forms if available. This will facilitate in measuring effectiveness of training.

6.    Investment

Investment means budgets allocated for tools, technology, training and processes to make creative thinking mainstream in the organization. As TCS Chief Technology Officer Ananth Krishnan says – “If I come up with an innovation, whether it’s an incremental or a disruptive idea, I need to know whom to go to with it, and there needs to be an organizational process for moving it forward.” TCS launched IdeaMax, a Digg-like social network that allows employees to submit, comment and vote on ideas. They are applying collective intelligence techniques for harnessing creative ideas.

Risk managers must review the budgets to ensure that organization allocates appropriate amounts and uses them correctly.

7.    Value

Organizations invest in creative thinking to get business value. Business value can be assessed by calculating the amount of cost savings and revenue generated from creative ideas. New ideas, innovations and process changes result in new/modified products, patents and business models, which add to the profitability of the organization.

A cost-benefit analysis of investing in creative thinking helps to determine success of the initiative. Risk managers can either prepare or review the cost-benefit analysis of creative thinking to assess business value derived from the program.

8.    Evaluation

A periodic evaluation of the program is a must to measure its effectiveness otherwise one is moving without a compass. The creative thinking initiative evaluation can be done by conducting an organization survey to take employee feedback. The purpose is to measure change in behaviors. Another aspect to look at is the key performance indicators. Some key performance indicators are number of rewards and recognitions,  number of people trained in creative thinking, number of new ideas etc.

Risk managers need to verify the results of the organization survey and review key performance indicators to evaluate the success of the program.

Conclusion

In my view, neither size nor good reputation ensures success unless the organization has a competitive edge. Innovation is the key component for ongoing prosperity of a company. Hence, most organizations need creative thinkers. To hire and retain creative thinkers’ organizations must promote them to visible leadership positions. In short, organizations require a culture that encourages creative thinking. Risk managers can contribute by periodically assessing organization commitment to creative thinking and value received from the investment.   To end:

“Go round asking a lot of dam fool questions and taking chances, only through curiosity can we discover opportunities, and only by gambling can we take advantage of them” – Clarence Birdseye

References:

  1. Recognizing creative leadership: Can creative idea expression negatively relate to perceptions of leadership potential? By Jennifer S. Mueller, Jack A. Goncalo and Dishan Kamdar
  2. What Chief Executives Really Want- IBM Study
  3. How to Build a Culture of Innovation- TCS- Bloomberg Businessweek
  4. Developing Systemic Innovation in an IT Organization – by Jack Anderson, Luis Gimenez, Deanna Nunley, and Esther Baldwin, Intel Corporation
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8 comments on “Creativity @ Risk

  1. Most relevant is #1: Culture. As I heard somewhere, “Culture eats process for lunch”. Tone at the top (referred to in #3) is the factor which decides the fate of creative ideas. Once you have these two (one?) things in place, the other steps/measure would start to show some results.

    • Debashis,

      True, culture is most improtant. If that is right, quite a few problems go away. I am reading the book “Good to great” by Collins and he has articulated this point well. He says the difference between good and great companies is that in good companies the “management attitude towards employees say that you can have you say” whereas in great companies “management attitude is we heard you.” In all the examples he has given of great companies, the one common factor was that everybody argued, debated on every aspect of business. I think that is the basic test for creativity. If employees do not have the option of disagreeing they will not share their creative ideas.

      Sonia

  2. Not weird at all, Sonia.

    From a systems perspective, I’d say creativity is important for two reasons.

    Partly because of disruptive change. We need new ways to look upon ourselves and our business when change is upon us. These new ways can’t be looked up in a school book.

    Partly because of complexity. Even if our environment was perfectly stable, we need better ways to frame existing complexity, making things more understandable and – to some extent – controllable.

    So, yes – creativity is key. That said, any organization will need a balance between ‘thinkers’ and ‘doers’. Someone will still have to be implementing all these new ideas…

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