Creativity in business

Just stumbled on this nearly three-year-old discussion in

There is much talk about the need for creativity in business. Is this lip service?

Of course it is. Creativity can be described as going outside existing protocols. The majority of business functions, however, depend on strictly following existing protocols. One obvious example is accounting; it is for a good reason that “creative accounting” has become a pejorative. Operations tend to have very little tolerance for creativity as well; how creative can (and should) one be when operating, say, an oil refinery or a nuclear power plant?

Creativity does have its place in business, but it is usually limited to strategy formulation and product development. There are businesses where creativity is a part of the production process (music, motion pictures, etc.), but those are few and far between… There are instances where creativity can help better organize a particular business function, but those quickly become best practices anyway…

Corrine Maier’s book Hello Laziness suggests that why business likes MBA’s is not that they have intrinsic knowledge, but that they are compliant

“Business” does not “like MBA’s”; rather, managers like to hire people who went to the same schools they did or, failing that, people who went to reputable schools… Education, as Nobel-winning economist Michael Spence pointed out, is merely a signal that a prospective employee sends out to prospective employers.

I recently had a conversation with a business school professor at Berkeley who teaches MBA’s. His frustration is that they just want tools to do a job that is clearly defined.

Of course. That’s why they went to get an MBA rather than a PhD in art history…

This won’t help them anticipate what is coming next,

Very few of today’s MBA students will ever be in a position where such anticipation (beyond obvious things like “if a worker quits today, we’ll need to find a replacement tomorrow”) is required.

or stimulate them to create new products and services.

And how many of those products and services will be accepted anyway? The world is filled with examples of new products and services that looked great in market tests but turned out to be major failures…

We learn from mistakes.

Yes, but we PROFIT from mistakes made by others…

A culture of fear kills creativity.

And a culture of responsibility severely limits it. Creativity is not a goal, it is a means to an end. It is also a convenient mask often worn by waste, fraud, and ineptitude.

Large corporations are political minefields.

Yes, but it’s important to understand why it is the case. Large corporations are owned by large groups of shareholders, but managed by small groups of executives. Executive creativity can be (and often is) perceived as taking undue risks with shareholders’ money. Executives, whose compensation is in many cases comes primarily from stock options, like these undue risks, since their options have no downside (the worst thing that can happen is options expiring worthless); shareholders, conversely, face quite a bit of downside, since they hold the stock, rather than options on it…

Does creativity come from the margin of the business world, or is there a place for it inside the corporate box?

In the end, it boils down to two questions: (1) whose money are you trying to gamble with? and (2) have the moneymen agreed to the gamble before you commenced it?

Wouldn’t you agree that creativity is necessary for business owners,

Only if you are trying to start a new industry… How much creativity should you expect from a person who owns a car repair place? A dry cleaning business? A bed-and-breakfast? More specifically, would you want your car mechanic to test new repair techniques on your car and your dry cleaner, to try new cleaning compounds on your dress shirts?

for sales people?

Hell no. Sales people’s creativity often takes the form of hyperbolizing, overpromising, or, in extreme cases, outright lying to prospects. Marketing people, on the other hand, do need to be creative, but not in the way artists or writers are creative; rather, they need to be creative in the way scientists and engineers can be: design experiments and interpret empirical data to identify underserved demographics, figure out cost-effective promotion strategies, etc.

The prime example of such creativity is Gary Loveman, a Harvard Business School economics professor who started out consulting for Harrah’s Entertainment, then got hired as their COO, and eventually ascended to the top spot when Harrah’s CEO Phil Satre retired in 2002.

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