Innovation and Creativity in Organisations - Essay Example

Innovation and Creativity in Organisations Name: Lecturer: Course: Date: Introduction While the term creativity and innovation are used interchangeably, there is a clear-cut difference between the two. Creativity is the generation of ideas while innovation is the implementation of the ideas. In this era of competition and globalization, innovation and creativity are considered key factors for organizational success, excellence and survival (Gumusluoglu & Ilsev 2009). They enhance an organization’s competitive excellence. Factors that affect creativity in an organization include resource and skill, leadership style, organizational culture, structure and systems and organizational climate. Organizational innovation is also affected by five factors including structure, middle management support, innovation friendly business strategy, effective ways of managing innovation and top management style (Bhattacharyya 2007). Creativity Creativity is considered by organizations as a constituent of competitive advantage (Bhattacharyya 2007). It is termed as the process by which there is a change in the symbolic domain of a culture. According to Mihaly (1997), new machines, new songs and new ideas are what creativity is all about. It is the ability to bring into existence something new, whether a new device or method, a new solution to a problem or a new form or artistic object (Cropley et. al. 2011). Creativity is also defined as the act of viewing things that everyone within us sees while making connections that nobody has made. It is actually moving from a known to an unknown place (Okpara 2007). Enhancing the creative performance of employees in an organization is a critical success factor for attaining competitive advantage. When workers perform creatively they propose new and useful processes, ideas or products that give an organization essential material for possible implementation and later development. For instance, new ideas can directly benefit the organization by resulting into business areas or process improvements that are more cost-effective or profitable. An organization may indirectly benefit from looking at the feedback from the front, as a worthy source of ideas concerning what may be changing and what is happening in the market. However, organizations need to consider the kind of creativity that is to be instilled, as this will rely on their business strategy (Drewery 2003). Creativity brings success to an organization when employees feel motivated, mainly through the satisfaction, challenge of the situation and interest and not through outside pressures. External pressures include an employee’s interest and passion to do something unique to show himself or a drive to solve a problem that no one has ever solved. Creativity is a function of three elements namely expertise, motivation and creative thinking skills (Parjanen 2012). Expertise includes everything that an employee knows and can do within the wide field of his technical capacity and knowledge. Creative thinking denotes how one approaches problems and solutions - the ability to put together existing ideas in new collections. The skills rely on personality and the way an employee works and thinks. Creative thinking and expertise are an organizations’ natural resource or raw material. Motivation is the desire and drive to carry out something, an inside passion and interest. When employees are intrinsically motivated, they do their work for the enjoyment and challenge of it (Okpara 2007). Obstacles to Creativity According to Jalan and Kleiner (1995), there are obstacles that hinder the entire development of the creative potential of an organization. Brain skill management program, establishing a reward for creativity, game playing in small groups and use of fisher association lists are the new popular developments for developing creativity. It is equally essential to implement suggested solutions to establish its effectiveness in solving problems within an organisation. TEAMS (team evaluation and management system) model is also essential in measuring the contribution of members within an organization. Managers and leaders in any organization should set it as their goal to permit the creative urge to take place in their organizations for success purposes. For an organization to attain competitive advantage, a product innovation matrix must be made to help technology and marketing staff think innovatively for the customer. Risks should be managed from the start by recognizing them, assessing their possible impact and likelihood and putting together a general action plan to handle them. Projects that exceed time scales and budget cost, that overrun the budget by over 100-percent and those that had been a major failure should be dealt with. At times unsuitable projects should be discouraged to minimize further damage (Bhattacharyya 2007). Determinants of Creativity Five factors affect creativity in an organization. They include resources and skills, leadership style, structure and systems of an organization, organizational culture and organizational climate (Černe & Škerlavaj 2011). A key challenge that leaders encounter is how to gain profit from personal potential and then leverage it to produce organizational excellence and innovation. For organizations to remain competitive, they need to develop, attract and retain creative talents. Leadership styles that bring about creativity in an organization include participative leadership, ability to create effective groups and leader’s vision for creativity. Leaders should effectively communicate a vision that brings about creativity via any available informal or formal channel of communication and encourage employees constantly. In addition, leaders should be in a position to balance employee’s responsibility and freedom. Employees with strong leadership will see themselves to have more creative potential than those with weak leadership potential and employees with strong potential for creativity will have a good chance of practicing it when they perceive firm support from their place of work than weak support. An organization should encourage self-leadership among members in order to support creativity (Bhattacharyya 2007). Climate, Context, and Culture for Creativity Organisational climate can be determined by measuring performance standards, freedom of expression, level of participation, large number of stimuli, interaction with small barriers and building on earlier thoughts. Creativity is a key component to organizational success. When the context is correct, the techniques of creativity can play their role in increasing the level and kind of creativity in an organization. The corporate research foundation names six major drivers for future success. They include quality of management, human resources, structural flexibility, international orientation, growth markets and innovative power. According to Peter Cook (1998), creativity is 20 percent techniques and 80 percent context. An organizational culture needs to be developed to encourage teamwork, an open flow of communication, self-initiated activity and risk taking. Innovation Growth and development in an organization cannot be maintained without additional innovations within the services, products or in its marketing. With additional innovations, companies become “glamorous”. Bringing in new products is normally seen as part of the innovation process, which is itself viewed as the engine driving continued development and growth. Innovation involves adding something new to a process or product that exists (Razavi & Attarnezhad 2013). This means that the process or product has already been developed from the beginning and has worked very well. When it is altered so that it performs better or fulfils a different requirement, then there is innovation on something that already exists. Innovation is also the successful use of new ideas. Each innovation starts with creative ideas, which means that creativity precedes innovation (Garcia 1998). However, creativity is necessary though not a sufficient consideration for innovation. Implantation of creative inspiration is innovation. Without innovation, an organization together with what it provides rapidly becomes obsolete (Okpara, 2007). Innovation is the foundation of all competitive advantages, the means of expecting and meeting the needs of the customer and the method of using technology. It is fostered by collecting information from new connections, from active, collegial networks, from insights acquired by journeys into other places or disciplines and fluid open boundaries. Organisational innovation develops from planning circles of exchange, where information is created and not merely stored or accumulated. New knowledge is generated from connections that were not initially there (Sahlberg 2009). Innovation needs a fresh way of viewing things, an understanding of employees and a willingness by the entrepreneur to take risks and work hard. An idea does not turn into an innovation until it is broadly adopted and incorporated into the daily lives of people. Majority of the people resist change, therefore a fundamental part of innovating is convincing other individuals that your idea is a great one. This can be done by asking for their assistance and in so doing, helping them realize the usefulness of the idea (Sahlberg 2009. The instigation of fresh development is the organization’s responsibility, which through experience are cognizant of the difficulties made when attempting innovative investments within a period of large uncertainty. Innovation needs special management and entrepreneur skills, finance, the cooperation of a workforce that is committed and a climate that will create overall optimum conditions to promote success (Okpara, 2007). Elements of innovation in organisations Innovation in an organization is the successful development of competitive advantage, therefore it is the key to organizational success. Entrepreneurs are “dreamers” who take on hands-on responsibility for making innovation. It is the existence of innovation that distinguishes an entrepreneur from others. Therefore, innovation must raise competitiveness through efforts directed towards the renewal, redefinition and rejuvenation of organizations, their industries or markets, if businesses are to be viewed as entrepreneurial. The major elements of innovation include creativity, challenge, communication, customer focus, completion, culture, collaboration and contemplation (Damanpour & Schneider 2009). Determinants of Innovation In order to prosper and survive in the huge pressure of globalization, organizations should redesign themselves for corporate creativity, for example, for high rate of successful and sustained innovation. For this, an organization needs middle management practices, innovation friendly business strategy, organizational structure, effective ways of managing innovation and top management style (Greenhalgh et al. 2004). Forms of innovations The entrepreneur is considered as a critical factor for creating a business idea, mobilizing resources and producing an enterprise to bring a new service or product into the market. In a business environment that is competitive, the enterprises and entrepreneur must continue to seek new opportunities and make necessary arrangement to turn them into new services and goods. Therefore, innovation should impregnate the whole enterprise for the invention and creation of competitive edge and relevancy within the market. Innovation can assume several forms. The first includes innovation in processes including improvement and changes to methods. These lead to increased productivity, which brings down the cost and helps to raise demand. The second form entails innovation in services or products. Although progressive innovation prevails, radical innovation opens new markets. These result in an increase in effective demand, which encourages raises in employment and investment. The third form of innovation includes innovation in work organization and management and human resource exploitation together with the capability to anticipate techniques. Conclusion For organizations to succeed, creativity and innovation are essential (Darre 2011). Innovation and creativity are the centres of the spirit of enterprise. This means that striving to carry out activities differently to enable the entrepreneur pass down a radically distinctive mix of value. Therefore, the value of innovation and creativity is to give a gateway for shrewd entrepreneurship, actively looking for opportunities to perform new things, do existing things in an unusual manner (Sousa 2011). 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