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6: Facilitating Creativity and Innovation

Creativity and innovation are the driving forces behind new product development. The author defines "creativity" as the process that generates new ideas. He distinguishes between invention (creating something new) and innovation (using something that exists in a new way) - neither of which is a guarantee that a concept will be successful in a functional or commercial sense.

He describes a five-step process:

1. Trigger - A problem or opportunity is recognized
2. Learning - The problem is analyzed and information gathered
3. Incubation - The information is considered and a hypothesis formed
4. Experimentation - The hypothesis is tested by "doing"
5. Development - A successful experiment is translated into a product

(EN: These are described in greater detail - but there are better sources that describe the process of creativity a bit more accurately, and which consider commercialization to be an entirely separate process.)

While his process describes a series of steps that seem to occur in order, such that they can be followed start to finish to be creative, the process is not so neat. The learning step may discover an existing solution, aborting the rest of the process. The experiment may fail and require going back to incubation or even learning, or it may identify a bigger problem and serve as a trigger for an entirely separate process.

He also speaks of creativity as being a series of little "a-ha" moments rather than a single grand epiphany. There is seldom, almost never, a moment in which there is the sudden realization of a complete and flawless solution to a problem, but instead a number of steps in the general direction that, when taken all together, add up to something big.

He also addresses the belief that creativity is entirely "out of the blue." Very often it is making connections between things that were known or bringing in common knowledge from an unusual source (recognizing that a principle known to chemists also applies to the field of economics, where it was not previously considered). But he does concede that the incubation stage remains somewhat mysterious - there is no way to predict the amount of time it will take to recognize a connection, or to know exactly what two insights are necessary to yield a third. Even highly creative people often remark that a solution "just popped into my head" and often when they were doing something entirely unrelated to the problem.

He then addresses the stereotype of the "lonely genius" working in the vacuum of isolation, in a lab or workshop that's well removed from the rest of the world. The creative process does require long periods of solitary time to think - but it also requires a lot of interaction with others in order to gather information to think about. This is the reason scholars, inventors, and professionals in other "mental" disciplines attend conferences and symposiums, read lots of publications, and engage in other social activities to gather information and ideas from the outside world.

Factors Affecting Creativity

The author proposes a succotash of factors that seem common among creative people:

• The need for a clear goal. Most acts of creativity are driven with focus on the need to solve a very specific problem. General curiosity loads the mind with information, but problem-solving is what puts that knowledge to use.
• One-on-one socialization. Interacting in large groups is poisonous to creativity - they tend to discuss things briefly and superficially and seek consensus. Interactions between two people can be deeper, more meaningful, and more diverse.
• Teaching as Learning. Many creative people have a student or protege with whom they work closely. The process of explaining things to someone else often causes a person to pay much closer attention and question their own premises.
• Risk Tolerance. Creativity is exploring the unknown and uses a trial-and-error methodology. The creative person is not disheartened by failure, and expects to fail many times before they succeed.
• Quiet Time and Solitude. While creative people gather ideas from the world, they often retreat to a place where they can be undisturbed for long periods of time to focus on the problems.
• Rituals. While it is arguable whether rituals cause creativity, they are far too common among creative people to be ignored.
• Prototypes and Experimentation. Learning takes place by building and experimentation. This is most obvious when an invention is a physical object, but it is also true of procedures or practices: they must be tested in reality.
• Egalitarian and Meritocratic. Creative place emphasis on ideas rather than people. A person's rank, credentials, and titles are of little relevance. A person who is not a recognized expert is just as capable of making a meaningful contribution as an esteemed expert.

Disrupting Creativity

Likewise, there are many things that hinder and disrupt creative thought. The author mentions some of them that are common to the business world:

• Attempting to be creative in groups. People in groups often seek to define common ground rather than appreciating diversity, and stick to the known rather than exploring the unknown.
• Lack of solitude and quiet. The "collaborative" workspace that is presently in fashion ensures that an individual is unable to think about anything for very long without interruption.
• Lack of interaction. While solitude is necessary for thinking, interaction is necessary to gather information to think about. Completely cutting off exposure to the outside world smothers creativity.
• Time Boxing. Demanding a solution by a certain time (particularly when it's very soon) prevents creativity and encourages using known solutions. Discovery takes as long as it takes.
• Risk Aversion. Creativity is not certain to produce results and there will be many failures on the way to success. Risk aversion discourages creative thinking.
• Task Switching. Creativity requires focus on a single problem. Stretching people too thin or changing their assignments constantly prevents creative thought.
• Restrictions. Creativity cannot be constrained by restrictions - demanding an idea be profitable causes potentially good ideas to be discarded. Creating an idea and evaluating/qualifying it must be separated.
• Overwork. Creativity abhors drudgery. While many creative people will labor long hours when they are on the trail of an idea, long hours do not make people creative and often stifle creativity. Many times, the "a-ha" moment occurs when taking a break and doing something else.

Creativity Techniques

"Creativity" has become a popular topic in self-help literature, and so there is a lot of specious information from questionable sources claiming to have the solution for people to become creative. Having been exposed to a great deal of this, the author mentions some of the common techniques that are proposed - each of which seems like a plausible way to approach creative thinking, but none of which is a guarantee of success.

Challenging Assumptions

Our perception is often limited by assumptions about the way things are that prevent us from thinking about how things might be - so simply challenging assumptions can help to make connections.

For example, the popularity of fast-food restaurants often leads to the assumption that pizza delivery needs to be cheap, quick, and have basic toppings. But is this always true? By questioning that assumption, there have been many local restaurateurs who discovered there is a market who will wait longer and pay more for a pizza that is well-made and topped with gourmet ingredients. Questioning the assumption that a driver has to take their car to a shop for repairs unveiled an opportunity for mobile mechanics. Questioning whether ketchup should always come in a glass bottle and must be red has led to some innovative product ideas for condiments.

An interesting exercise in creative thinking is in considering the opposite of what everyone in the industry does. If every coffee shop serves coffee that's steaming hot, ask if there might be a market for coffee that is served ice cold. Doing things backward isn't always a good or profitable idea - but sometimes it can be.

Imitate and Adjust

Very often, "new" ideas for one firm are adjustments on the practices on other firms. There are various euphemisms for this, but it's basically copycatting. Most business practices are not given legal protection (copyrights, patents, and trademarks) and even those that are patented can be imitated if minor adjustments are made to accommodate the letter of the law.

Exact imitation only makes sense when there is an advantage to doing so. If your business operations are more efficient and you can offer the same good or service at a lower price, if your brand is more recognized you can out-market an identical product, if your supply chain is mature you can retail it in more places. A common example is when a business is geographically specific and there are gaps in the territory - and this can be done online as well, particularly when the site is only available in one language.

It's more often the case that a successful imitation makes an adaptation that provides a feature or quality that the market demands, but that the current provider is unwilling to accommodate. For example, a "low fat" version of a popular food product, or a fashion knock-off that offers similar style at a much lower price. (EN: The danger is when the established market leaders are able and willing to provide what is lacking and reclaims the market.)

Upscaling/Downscaling Products

The author separates this from the topic of imitation, but it's essentially the same: consider the feature-set of existing marketing offerings and ask two questions: Are there customers who would pay more for an upscale version? Are there customers who would accept a downscale version for a lower price? These opportunities typically arise where existing providers seek to offer a single product and neglect other market segments - they do not have a deluxe or economy version of their product.

Some examples: consider Southwest Airlines, which took a commanding position in the air travel market by offering discounted airfares on no-frills price. Consider Apple Computer, whose first breakaway product was the iPod, a more expensive alternative to existing MP3 players that was able to sell at a premium to people who wanted the technology without the hassle and learning curve to download and install music files.

Disruptive Technology

A rare but extremely profitable way to take the market is to invent a disruptive technology. This is not a better mousetrap, but a new device that makes the mousetrap useless. The invention of the automobile gave people a way to travel - and it made horses, carriages, and all the supporting products obsolete. The invention of the cell phone made telephone booths obsolete.

Coming up with a disruptive technology is very difficult, but it begins with a basic thought: how can people do something they are currently doing without using a device or service that already exists? Or better still, how can we completely eliminate the need for a person to do an annoying task?

Building a Culture of Creativity

The problem that most established firms have in becoming more creative is that their existing culture is hostile to creativity: they have been successful at doing what they are doing and do not want to change, and the business organization is designed to perpetuate existing practices and discourage new ideas.

The author talks about "power distance," a concept from sociology that considers the degree to which people who lack formal authority are able to contribute. On one extreme is the dictatorship in which all decisions are made at the top and citizens are expected to comply without objection - no-one is allowed to talk to the leader or even look him in the eye. On the other extreme is the democracy in which all decisions are made at the bottom and there is no leader who has any form of authority over others. In general, the dictatorship model is highly efficient in doing the same thing over and over while resisting change. And in general, American business is much closer to dictatorship than democracy.

In reality, few companies go to either extreme, but there are rules (written and unwritten) in the culture that determine who may speak to whom, who is permitted to propose an idea, who must authorize it, who is permitted to question authority, and so on. The more of these formal structures exist, the harder it is to suggest and implement a new idea - and the more likely it is that anyone who even suggests doing things differently will be labeled a "troublemaker" and anathemized or punished.