Creativity and Innovation Are the Keys to Organisational Success - Coursework Example

Running Head: Creativity and Innovation Creativity and Innovation (Name) (Course) (University) Date of presentation: Lecturer: Question: Creativity and innovation are the keys to organizational success. Discuss? Introduction Innovation and creativity are two interrelated concepts that are invoked frequently in the fields of organizational management. Although the words ‘creativity’ and ‘innovation’ are often used interchangeably, they actually refer to two different activities or processes that take place in organizations. Creativity refers to the process of generating and sharing new ideas while innovation refers to the process of implementing new ideas. According to Meisinger (2007) innovation is the successful exploitation of new ideas for organizational growth and success. This implies that the process involves successful application of new knowledge and techniques in new ways and for new purposes. It also entails attempts to organize a business to take advantage of new opportunities profitably. Both creativity and innovation are necessary for organizational success. In the modern world of business where competition is the order of the day, organizations are increasingly getting interested in creativity and innovation to cope with changes in economic factors, technological advancements and market dynamics (West, 2002). Creativity in organizations is fundamental to the process of innovation. Innovation is merely part of the system and processes that produce it. Therefore, the ability of an organization to implement creative ideas is a pre-condition for successful utilization of creative resources, new technologies and processes. In the converse, the introduction of new technologies often present immense opportunities for organizations, leading to changes in management practices and production processes (Chesbrough & Teece, 2002). Importance of Creativity and Innovation to Organizational Success Many business organizations see creativity and innovation as opportunities to create and maintain competitive advantages over their rivals. Therefore, many organizations have created processes and strategies that encourage an atmosphere of creativity and innovation. For many of these organizations, the real challenge is not in getting staff to come up with new ideas but finding the most effective and practical ways of implementing new ideas. Essentially, there is an imperative need for an effective innovation process that can be relied upon to produce a steady stream of sustainable and breakthrough ideas as well as new products and services. Such an innovation process can enable organizations and their people to create and capture data in new ways, eventually leading to organizational growth (Mumford & Licuanan, 2004). With the ever increasing dynamics of competition, the key to organizational growth no longer lies in relying on past processes, technologies and ideas. As such, the business case for innovative and creative is firmly accepted as the norm in organizational management. Creative ideas, technologies and processes translate into innovative business practices only when implemented, managed and evaluated carefully. Mumford and Licuanan (2004) have noted that organizations that are capable of innovating and differentiating their products and services are on average twice as more profitable as other organizations. Moreover, engaging employees in generation of new ideas fosters loyalty and a strong sense of organizational commitment. Creativity and innovation play a fundamental role in the development of new and successful products and services. Essentially, the lifeblood of any business is to be able to create new products from the resources they have at hand and then turn them into something that is of commercial viability. According to Cafolla (2007), innovation and creativity are high cross-functional activities, which if implemented well can create constructive tension between competing strategic objectives. These objectives can be about product creation, minimization of development costs, performance enhancement, time management or distribution of product to the market. As such, innovation and creation touch on every aspect of an organization. Important function such as strategic planning, purchasing, customer support as well as finance are heavily dependent on sustained creativity and innovation. How well these functions work harmoniously depends greatly on how effectively the management will be in developing creative and innovative support activities. Atkins, Dykes, Hagerty and Hoye (2002) have reported that the overall efficiency of an organization’s creativity and innovation programs can be directly linked to the organization’s ability to generate sustained value and growth. Therefore, companies with healthy innovative and creative cultures report stronger financial performance than those with unhealthy programs. The root of these differences in performance can be traced to how the different organization types deliver on certain fundamental requirements necessary for successful innovation and creativity. There are various organizational characteristics that are necessary to create and sustain a successful atmosphere of innovation. The most important of these are: speed, accountability and transparency. Speed refers to how fast new innovations are learned and implemented. In the modern competitive world of business, the increasing pace of innovation requires companies to innovate faster than their competitors. Speedy decision-making process enables companies to mobilize available resources against new opportunities. This way, they can easily capture first-to-market opportunities and also to respond quickly to any changes in customer preferences or actions of competitors. It is normally the case that poorly managed organizations tend to find themselves in analysis paralysis and have difficulties implementing innovative decisions (Chesbrough & Teece, 2002). Transparency is an essential factor in creativity and innovation because it allows action and direction to be made visible in an organization. The ability of organizations to create an atmosphere of transparency in research and development programs is particularly important because it is through it that creative ideas can be developed. For any effective innovation program, transparency ensures that development efforts and priorities can be aligned with the company’s strategic objectives. It also provides for uninterrupted exchange of information between different functional areas, which is critical to cross-functional processes such as innovation. Transparency is also the means by which the performance of innovative ideas can be made visible to all stakeholders in an organization including senior management (Shapiro, 2002). In fostering an atmosphere of innovation and creativity, accountability acts as the glue which holds stakeholders together. Accountability is the mechanism which ensures that cross-functional aspects of innovation and creativity are taken seriously and that they establish personal ownership for performance and associated outcomes (Edwards, 2001). In over-managed organizations, there are often multiple layers of organizational management. In this type of organizations, accountabilities can be quite unclear and it is often difficulty to foster an atmosphere of creative and innovative ideas. A state of unclear authority within and across functional levels can blur accountability for actions and decisions, which can in turn result in widespread abdication of responsibilities. It is therefore imperative that organizations instill a sense of accountability as this can help enhance development of creative and innovative ideas (Edwards, 2001). Creating a Culture of Innovation and Creativity Many organizations are neither creative nor innovative not because they lack the necessary resources but because they lack a culture, environment and people that provide a foundation for innovation and creativity to take place. Organizations that are creative and innovative often struggle to sustain their competitive advantages over time. However, there are some simple cost-effective strategies that can be used to create and sustain a culture of creativity and innovation. According to Meisinger, S. (2007) recruiting and developing the right people can help organizations to build an innovative culture. More often than not, organizations recruit the same type of people who have similar skills and experience. But to build an innovative workforce, managers should look to recruiting people with diverse skills and experience. This means that the recruitment process should be designed to give opportunities to people from different backgrounds, ages and levels of experience. It is also imperative to consider people with different personality experiences as this is an important aspect of creativity and innovation (Cafolla, 2007). Another important way in which organizations can create a culture of innovation and creativity is by being able to provide opportunities for people to be innovative. Organization should encourage their work teams to question how things are done. They should also remind their workforces that there could be no ramifications if employees attempt something new. Moreover, the management should remain open minded and appreciative of any new ideas that their work teams bring forward even though some of these ideas may not be viable. Although some ideas may not work in the present, they could be a very viable option in the future (Chesbrough & Teece, 2002). If organizations reach a point where previously innovative teams are no longer turning out any new ideas, it is advisable to change the approach. While new ideas may not have any viable potential initially, it is essential to give each idea a period of grace, during which members learn about it and understand it. After some time, a new idea may start to make some sense as it sinks into employees’ minds. If possible, it could be a good idea to designate a specific innovation team. This allows members to effectively dedicate their time and efforts on achieving results for business as well as developing innovative ideas (Atkins, Dykes, Hagerty & Hoye, 2002). For many organizations, it is not difficult to encourage employees to be creative or innovative. The only thing that prohibits creativity is lack of opportunities to get away from day to day’s work to discuss possibilities with other members. Therefore, managers need to implement formal techniques for spurring creativity from team members. It is also imperative that managers promote regular brainstorming sessions. Brainstorming gives employees a chance to produce a plethora of creative ideas. Once a large store of creative ideas is built up, teams can easily choose the best of the bunch, leading to higher quality of ideas as well. When brainstorming, employees should be allowed to take short breaks. Psychological researches have shown that such short breaks can increase productivity and hence lead to greater innovation and creativity (Shapiro, 2002). According to Cafolla (2007) creativity and innovation can thrive in a positive and encouraging work environment. When employees feel encouraged and comfortable, they will not be afraid to express their ideas to the work team. In addition, a positive and encouraging work environment reduces stress, which is a major inhibitor to creativity and innovation. If necessary, managers or supervisors should consider adding new members to the work team if it seems that creativity and innovation are not working as expected. New members can bring fresh and inspiring perspectives to the table. The kinds of leadership structures that exist in an organization are critical to the development of new business ideas. Positive, future-focused leadership can help enhance sensitive ideas at various stages of organizational growth and product development. According to Meisinger (2007), some leadership qualities are desirable and contribute positively to product innovation and development. These leadership qualities include having full confidence in employees and transformational leadership styles. According Atkins, Dykes, Hagerty and Hoye (2002) innovative leadership behavior entails all actions directed at generating, introducing and applying novelty in product development and organizational management. As such, the perspective of innovative leadership behavior is an integral element in the principles of organizational management. Conclusion Creativity and innovation are necessary for meaningful organizational success and growth. Creativity involves generating new ideas while innovation means implementing the new ideas to enhance a certain business process. In the modern business world, organizations are faced with stiff competition, technological changes and shifts in market dynamics. To circumvent the adverse impacts of phenomenon, organizations are turning to creativity and innovation as strategic tools for organizational management. Accordingly organizations encourage their staffs to be creative and innovative. Organizations that are creative enjoy more competitive advantages than their less innovative competitors. Some of the areas where innovation is felt include financial management, human resource management, product production and delivery as well as in mitigating risks. In order to enjoy the benefits of creativity and innovation, organizations should foster enabling atmospheres in their workforces. Such an atmosphere should be able to encourage and inspire employees to think and act creatively. Researches have shown that poorly motivated employees are less likely to think and act creatively. Managers can encourage creativity and innovation by working closely with employees and by providing appropriate resources and technologies. References Atkins, C. R., Dykes, P., Hagerty, J., and Hoye, J. (2002). How customer performance partnerships can sharpen your competitive edge. The Journal for Quality and Participation, 25(3), p. 22-54. Cafolla, L. (2007). Championing change from the bottom up. China Staff, 13(7), p. 2-32. Chesbrough, H. and Teece, D. (2002). ‘Organizing for Innovation. When is Virtual Virtuous?’ Harvard Business Review. Vol. 80, No.8 (August), pp. 127-134. Edwards, J. R. (2001). Multidimensional constructs in organizational behavior research: An integrated analytical framework. Organizational Research Methods, 4(2), p. 144-192. Hornstein, H. A., and Guerre, D. W. (2006). Bureaucratic organizations are bad for our health. Ivey Business Journal Online, 1-4. Meisinger, S. (2007). Creativity and innovation: Key drivers for success. HR Magazine: on human resource management, 52(5), p. 10-42. Mumford, M. D., and Licuanan, B. (2004). Leading for innovation: Conclusions, issues, and directions. Leadership Quarterly, 15(1), p. 163-171. Shapiro, S. M. (2002). 24/7 innovation: A blueprint for surviving and thriving in an age of change. New York: McGraw Hill. West, M.A. (2002). ‘Sparkling fountains or stagnant ponds: An integrative model of creativity and innovation implementation in work groups’, Applied Psychology: An International Review, 1(3), p. 355-387. Read More