#301 from Innovative Leader Volume 6, Number 10          October 1997

Corporate Creativity: It’s Not What You Expect
by Alan G. Robinson, Ph.D. and Sam Stern, Ph.D.

Dr. Robinson is professor at the School of Management, University of Massachusetts at Amherst. Dr. Stern teaches at the School of Education, Oregon State University, Corvallis.  They wrote Corporate Creativity: How Innovation and Improvement Actually Happen, (Berrett-Koehler, San Francisco, 1997) from which this article is adapted with permission.

Managers and executives in most companies are aware that their creative potential greatly exceeds their creative performance. The problem is that they don’t know what to do about it. Most creative acts, as they now occur in companies, are not planned for, and come from where they’re least expected. It’s impossible to predict what they’ll be, who will be involved in them, and when and how they’ll happen. This is the true nature of corporate creativity, and it’s here that a company’s creative potential really lies. For corporate creativity, the real power is in the unexpected.

A good example of the power of the unexpected occurred at Japan Railways (JR) East. This company never anticipated that constructing a new bullet-train line through the mountains north of Tokyo would lead it to a new and very profitable business -- in beverages. The new train line required many tunnels. The one through Mt. Tanigawa had water problems, and JR engineers began to draw up drainage plans. But inside the tunnel, a maintenance worker thought the water tasted so good that he proposed that instead of pumping it away into runoffs, JR East should bottle and market it as premium mineral water. His idea was implemented, and soon the water appeared on the market under the brand name of “Oshimizu”. It became so popular that JR East installed Oshimizu vending machines on every one of its nearly 1,000 platforms. Advertisements for the water emphasize the purity of Mt. Tanigawa’s snow pack, the source of the water, and the slow process by which it percolates through the mountain, picking up healthful amounts of minerals. The product line has grown to include juices as well as iced and hot teas and coffees. In 1994, sales of Oshimizu beverages were $47 million.

Spectacular creative acts like this do happen in companies, but the vast majority of them are far less dramatic. An American Airlines flight attendant sent a suggestion form, with an attached plastic lid, to headquarters. This lid, she explained, was a cover for the metal coffee pots to keep the coffee warm and prevent it from spilling. Standard procedure called for the catering division to provision each aircraft with ten of these lids. However, the flight attendant noticed that, at the end of each flight, at least half of the lids were thrown away unused. She proposed that only five should be put on each flight. The airline studied her proposal, as it examines every written suggestion. At first, the potential savings seemed negligible—each lid costs only 1.5 cents—hardly worth bothering about. They then realized that saving five lids would mean 7.5 cents per flight, and with more than 2,300 flights per day on each of 365 days in the year, her idea about penny-and-a-half coffee-pot lids was worth more than $62,000 in annual savings.

Both of these ideas were initiated by individuals and were entirely unanticipated by their management. Through our investigations of creative acts in companies around the world, we have come to realize that the majority of creative acts, whether dramatic innovations or tiny improvements, occur in this way. They’re not only unplanned, but completely unexpected.

Before we met, each of us had already arrived at this realization.  For Stern, it came during a two-year study of projects that had received national awards from the government’s Science and Technology Agency and the Japan Institute of Invention and Innovation from 1986 to 1990.  It turned out that more than half of these projects had been initiated by individuals, and hadn’t been anticipated by anyone else at their companies. Furthermore, the novelty and impact of these self-initiated projects far exceeded that of the projects that had been initiated by management. He also compared approximately 200 award-winning projects with projects that were commercially successful, but not especially creative. A similar pattern emerged -- the award-winning projects were more likely to have been initiated by individuals, while the not-especially-novel ones were far more likely to have been planned for by management.

About the same time, Robinson was noticing a similar phenomenon in the area of continuous improvement. Almost all the companies I looked at used a planned approach to continuous improvement, an approach in which what to improve, by how much, and by whom was decided in advance. Sometimes even a particular problem-solving method was prescribed and followed. Yet the top performers invariably placed greater emphasis on systems designed to stimulate improvements that had not been planned for. Here, too, the more novel and far-reaching improvements tended to be the unanticipated ones.

We wondered why these unexpected origins were so difficult to unearth. Most companies don’t seem to realize the importance of unanticipated creative acts.  Perhaps a natural tendency of management is to believe it’s more in control of events than it really is, particularly when those events lead to successful improvements or innovations. Over time, corporate word-of-mouth, and even official company histories, obscure the unexpected origins of creative acts, substituting simplistic and misleading accounts of what really happened.

There’s no shortage of advice on how to promote creativity in companies, but much of it seems to assume that people will suspend their critical faculties. It’s hard to imagine how chicken yells, or rearranging the furniture and expanding the cafeteria menu to include Thai food and tofu (as one recent book suggests) could have helped the JR East maintenance worker or the American Airlines flight attendant come up with their ideas. The truth is that recommendations such as these have little, if any, connection to actual creative acts. In the course of our investigations, we were careful to connect creative acts with the actions that really contributed to them.

The Six Essential Elements of Corporate Creativity

In every unexpected creative act that we studied, six elements played a role, and we believe that these elements are key to promoting consistent corporate creativity. Although no one can predict the specific creative acts that will follow, the likelihood of their happening will significantly increase when these six elements are in place. “Managing” creativity is about raising probabilities and, in this way, is similar to operating a casino. Even though casinos don’t know how individual gamblers will fare at any given table, they do know that if enough customers come and play for long enough against the house odds, the casino will make a very predictable and stable profit. Short-term, it’s a matter of probability, but in the long-term profits are a matter of certainty. In much the same way, while companies cannot know where specific creative acts will come from or what they will be, they can act to increase the frequency with which these events occur.

1.  Alignment

Alignment ensures that the interests and actions of all employees are directed toward a company’s key goals, so that any employee will recognize and respond positively to a potentially useful idea. Companies can function with relatively poor alignment, but they cannot be consistently creative unless they are strongly aligned. Alignment is often overlooked—it’s intangible and elusive, and as far as corporate creativity is concerned, its effects are readily visible only when a company is either extraordinarily well aligned or misaligned. For example, alignment for cost-savings at American Airlines is so strong that the flight attendant with the coffee lid idea never had any doubt that her company would welcome and reward her proposal if it saved money.

2.  Self-initiated activity

The maintenance worker and the flight attendant thought their ideas might be possible, took hold of them and made them work. One reason why self-initiated activity figures so prominently in corporate creativity is that it allows employees to pick a problem they’re interested in and feel able to solve, for whatever reason. This means their intrinsic motivation is much higher than would be the case if the project had been planned or picked for them by someone else. It’s surprisingly straightforward to promote the kind of self-initiated activity that leads to creative acts.

3.  Unofficial activity

Unofficial activity occurs in the absence of direct official support, and with the intent of doing something new and useful. When an idea is new to a company, it’s often resisted and opposed. Unofficial activity gives ideas a safe haven where they have the chance to develop until they’re strong enough to overcome resistance. Furthermore, official status for a project raises all kinds of barriers to creativity, which every planned project encounters throughout its life. Unofficially, employees are free to experiment, even far outside their job descriptions (as did the maintenance worker), and it’s often during this time that they make the unexpected connections. In almost every instance we examined, the essence of the creative act was arrived at during the unofficial period.

4.  Serendipity

A serendipitous discovery is one made by fortunate accident in the presence of sagacity (keenness of insight). Creativity often involves making connections between things that may seem unconnected. The more abstruse the connection, the greater the intellectual distance that must be traversed to make it, and the greater the role for the unexpected. Whether those involved recognize it or not, serendipity is present in every creative act. Only when serendipity is truly understood can companies take action to promote it.

5.  Diverse stimuli

A stimulus either provides fresh insight into something a person has already set out to do, or it bumps that person into something entirely new. However, it’s impossible to predict how an individual will react to a particular stimulus, and what provokes one person may not even be noticed by another. While organizations should do all they can bring diverse stimuli to their employees, they should also recognize that such efforts have limited impact.  Most stimuli arise in connection with daily life or with the work itself. It’s far more important that an organization provide opportunities for its employees to tell others about the stimuli they’ve received and the possibilities these suggest to them. It’s here that the real leverage lies.

6.  Within-company communication

Every organization carries out activities that are planned, and should establish the necessary lines of communication to support these. But for corporate creativity, these official channels are of limited usefulness. Within-company communication is one of the things that seems to happen naturally at smaller companies, but not so naturally at larger ones. The larger the company, the more likely that the components of creative acts are already present somewhere in it, but the less likely they will be brought together without some help. Such communication is difficult enough between employees who work at the same location. What about communication between people who work in different divisions and might never, in the normal course of events, meet each other? We believe that a company’s creative potential increases rapidly with its size, but that without systems in place to promote unanticipated exchanges of information, this potential will never be realized. Worse, the assumption will continue to be made that creativity can only really happen in small companies.

At every company we studied, we met people who felt that their organization’s potential for creativity was far greater than its present performance would indicate. They are right. We believe this situation won’t change until the true nature of creativity becomes generally recognized. The bulk of a company’s potential creativity is virtually unreachable with the usual “plan and control” style of management, because it lies in those creative acts that cannot be specifically asked for and that no amount of planning can directly cause. The key to corporate creativity lies in these unanticipated creative acts, and our six elements offer a way to realize the tremendous potential they represent. 

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