Creativity, Innovation and Strategy: Operational Definitions

The terms ‘creativity’, ‘innovation’ and ‘strategy’ are used these days in many ways, and can mean almost anything. Here is my attempt to supply definitions that are operational and lead to effective action.

    Creativity:   widening the range of novel, useful choices, then picking the best one.  Creative people see a wide range of options for design, features, performance, materials, when less creative ones see only what already exists.  The key here is the two words: novel and useful.  Both are essential.  The definition implies a two-stage process: Divergence, or ‘zoom out’, scanning the feasible space for options, and convergence, or ‘zoom in’, picking the best option.  This  definition highlights a key problem.  Those good at divergent thinking (“head in the clouds”) are often not very good at convergent thinking (“feet on the ground”).  There are many dreamers who achieve little. There are many pragmatists who never have an original idea.  Self-awareness is crucial for creativity; know what you’re good at, and find partners to complement what you lack.

   Innovation is producing creative ideas to meet unsatisfied wants, in a sustained manner, by intelligently breaking the rules.  This definition implies, first, the necessity to identify wants that are unmet, as the basis of innovation, and then satisfying them with some sort of organization whose existence can be sustained by an adequate supply of resources.  Innovations break the rules, by definition, but the operative word is ‘intelligently’, that is, first learning the rules (including unstated unrecognized assumptions) and then smashing ones that can be smashed in order to make people better off.

   Strategy  is  a process that  creates and sustains goods, services and processes that have strong differentiation .   Thick volumes have been published on competitive strategy. But the essence is differentiation – finding something about your innovation that is unique, highly desirable, and does not exist in other products.  Often, a single strong differentiator is sufficient.  Inventor James Dyson, who innovated the ‘cyclone’ vacuum cleaner, had many improved features on his new vacuum cleaner. But he chose to market just one: No dust bag. He knew that selling many improved features would simply confuse people. So he picked what he thought was the strongest one. It worked.

   Creativity, innovation and strategy are closely linked, but demand very different competencies.  They are three processes that all demand open,  unrestrained ideas accompanied by very structured, organized implementation.  The wolf of ideas and the lamb of discipline do not easily lie together.  Many large organizations strangle creativity and innovation through excessive operational discipline.  Many startups never succeed because their chaotic creativity is never tamed by good orderly management. 

    My conclusion here is that every organization, right from Day One, needs to define and structure three key processes.  First, creativity, or ideation – coming up with an unending stream of fresh new and useful ideas.  A single breakthrough is never enough to sustain an organization through the battles of competition.  Second, innovation.  Here, too, a disciplined process is needed, one that motivates new ideas, sifts and harvests them and implements the best.  Every competitive organization has orderly processes for production, marketing, sales, supply chain management – but many do not truly have a well-defined innovation process.  An R&D department  is not an innovation process; innovation must pervade the whole organization.  Third, a strategy process, that is mainly implementation, rather than formulation, involves everyone in the organization, and focuses single-mindedly on the key differentiator.  Find creative people,  harvest their ideas by innovation,  and organize your strategy around the unique advantages creative innovation generates – and you have a winning sustainable business. 

* Professor Shlomo Maital is a world-renowned expert in innovation management and is a senior research Fellow, at the S. Neaman Institute for National Policy Research. He was a visiting professor for 20 summers at MIT Sloan School of Management and a Professor of Economics & Management at Technion-Israel Institute of Technology.  He is the author, co-author or editor of a dozen books including the just-published second edition of Innovation Management.


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