For most people, innovation and creative thinking are processes to be conducted at select times when we need to think of ways to break new ground. In the fourth of this five-part series on preparing a business for growth, I look at how breakthrough thinking can form the cornerstone of a successful business.
Being creative in business and helping a company increase its capacity for innovation and change can make the difference between survival and death in today`s world of business; it plays a key role in ensuring ongoing competitiveness and profitability.
Creativity and innovation are often the intangible factors that enable a business to differentiate itself from all the others out there that are offering similar products and services.
Together, creativity (developing new ideas/things) and innovation (arranging existing ideas/things in new ways) result in the kind of breakthrough thinking that can transform a business and prepare it for long-term, sustainable growth. It implies the ability to imagine or invent something new; the ability to accept change and newness, a willingness to play with ideas and possibilities, a flexibility of outlook, and the ability to identify what is good while continuing to look for ways to improve it; and it is also a process - truly creative people work hard to improve ideas and solutions by making gradual alterations and refinements to everything they do.
Think back to 1994 when the first cellphones were introduced to SA; the technological breakthroughs we have witnessed in the last decade have been remarkable, and we cannot even begin to think about what the world will look like in 2014. All we know is that it is a rapidly changing place and that those who maintain old modalities will soon find that the world has no place for them: product lifecycles are shortening, new product introduction times are reducing, and consumer demands are becoming ever more specialised, varied and specific.
In terms of concrete business value, breakthrough thinking leads to differentiation, enabling companies to be first to market with their products or services. Typically, early bird companies tend to become leaders in their sector, setting the standards for their industry and becoming the dominant player in their market. Without breakthrough thinking, companies will be left behind to breathe their last.
Creating barriers
Companies often make the error of viewing breakthrough thinking as a few evenly spaced brainstorming sessions.
Ian Widdop, Director, Growth Partners
Too often organisations create barriers to breakthrough thinking. They apply the wrong mental assumptions to problems, they take the wrong approach or involve the wrong people, address problems at the wrong time, or they even address the wrong problem. Fear of thinking also plays an alarming role in stifling imagination and originality.
Companies often make the error of viewing breakthrough thinking as a few evenly spaced brainstorming sessions. The most important point to remember is that embracing innovation and creativity in an organisation is a journey that must be undertaken within the context of a sound business plan; to have a meaningful impact, consider its impact on mission and strategy, on employees, customers, partners and other stakeholders.
Breakthrough thinking starts with creating a culture of openness to change in an organisation.
One analogy is that of the beehive: a worker bee which goes in search of pollen returns to the hive and performs an elaborate dance to show the other worker bees where the pollen is located. Apiarists have calculated that on average, 85% of the worker bees follow instructions and leave to fetch the pollen, while 15% of them ignore the instructions completely and go off in search of alternative sources.
A similar willingness to promote independent thinking and to enable employees to take new ideas and turn them into concrete actions has underpinned US retailer Wal-Mart`s success. Some 90% of products stocked on its shelves come from Wal-Mart suppliers, but buyers at each store have the freedom to choose the remaining 10% in accordance with what they believe customers to their particular store want, a practice which has become the source of many new products carried by the chain.
This not only enables decision-making to be participative right at the coalface, but also empowers staff to make creative choices, and encourages them to break out of current systems and thinking.
It`s also about how much companies are prepared to incentivise and reward employees. At one stage at 3M, 20% of revenue target had to derive from factors not listed as items or concepts at the time that budgets are set.
So what are the ultimate benefits to be derived from this level of thinking? From an external point of view, companies can almost certainly bet on more volume at a higher value and higher margins. They can also count on the fact that customers will value their innovation and creativity as they feel the direct impact. Competitive advantage will be a given as concepts are taken to market.
Internally, employee morale, motivation, commitment, and an increased sense of participation will make the world of difference to how an organisation is perceived by its people, while its own ability to solve problems will increase exponentially - to the firm`s advantage.
* Ian Widdop is director at Growth Partners.
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