Herding cats: managing creativity

As is well known, managing creative employees is rather like shepherding herds of cats. By 'creative', I mean those men and women who are at the core of innovative processes, whether they are working in the R&D departments of pharmaceutical companies, the makers of TV films or those working on campaigns in advertising agencies. Essentially, it is their ideas that are converted into the saleable products and services upon which the survival and growth of organisations depend. If their ideas dry up, so, too, does the lifeblood of their businesses.

Creative employees value their personal autonomy and, therefore, expect to enjoy the working freedom within which this can be exercised. Management, on the other hand, derived as a set of supervision and monitoring practices created for the predictable work processes of the old manufacturing corporations of the 20th century, likes to impose controls to measure both quantity and quality of output. Hence, the tensions between 'creatives' and accountants and project leaders in so many organisations.

One of the major forces of these changes is the 'iPod generation' – the growing band of highly talented young people who are IT savvy, very creative and demand very different conditions under which to work if they are to exercise their personal skills for the good of their employing organisations.

GOOD IDEAS CAN COME FROM ANYWHERE

In the past, 'workplace' meant just that: a place where work was done, and little else. Today, it's a place where ideas are exchanged and problems solved. While many valuable ideas are generated inside offices, factories, and laboratories, an equal number are exchanged in bars, cafes and bathtubs.

This is why executives shouldn't delude themselves into thinking they can foist creativity onto their employees like some kind of dressdown directive. Yes, idea generation is becoming ever more important to companies the world over. But it's not a business function in itself. Generally, it's the side-effect of a certain type of corporate culture. You can't legislate for it, per se. What you can and should do is ensure that your staff have their imagination stimulated, acknowledged and rewarded.

In bioscience, many companies already offer their staff a stakeholder interest in any ideas they generate that become successfully commercialised. This not only helps them to develop new products and services but also to prevent staff from leaving to become entrepreneurs, taking their best ideas with them. By contrast, in the entertainment industry, recognition is the principal spur to innovation and is becoming available in an increasing number of flavours.

FUTURE COMPANIES THAT NEED A VERY PARTICULAR KIND OF CREATIVITY

A culture is needed that creates platforms from which they can continuously develop new products and services for changing market needs. They need to be able to build scenarios – gathering high-quality information about customer tastes, then subjecting it to intelligent interpretation.

Nokia

The Finnish mobile phone manufacturer began life in 1865 as a wood-pulp mill. During the 1990s, it envisaged a world characterised by mobility, in which people regarded boundless communication as essential to their social life as well as their professional life. Since then, it has take on some of the world's giant electronics companies and won itself a 40 per cent share of the mobile market, while doing more than any other company to accessorise the mobile phone.

Apple

Similarly, when Apple Computers launched the iPod in 2001, it seemed an unnatural step for a company with no experience of producing portable music players. In fact, it was a runaway success that catalysed an entirely new industry – the retailing of music and other entertainment content online.

Organisations don't have to operate at the cutting edge of science or entertainment to benefit or suffer from these trends. Many companies already have initiatives in place to reward employees, no matter what their rank, for generating ideas that have an impact on the bottom line.

Indeed, good ideas are likely to flow more often from front-line members of staff because they are more likely to deal with customers, get their hands dirty with processes handed down from on high and learn more than anybody else in their organisations about local markets.

Equally, a variety of companies are benefiting from the desire for recognition via weblogs. Blogging enables individuals who would previously have been invisible to raise their profile throughout their organisations or industries.

The benefits for employers who permit employees to blog using their systems include the improved dissemination of best-practice information and, in some cases, a safeguard against duplication of research and development.

The drawbacks include an increased vulnerability to headhunting and quandaries over censorship.

INNOVATION IS EVERYONE'S RESPONSIBILITY

The essential point for company bosses to remember, particularly if they are based in the West, is that they must make innovation the business of every employee. In the coming years, it will have the same status that quality assurance had in the 1990s – a distributed process and a collective responsibility.

At the same time, the creative corporation can't innovate in all directions. It must focus on ideas that generate genuine value.

True, western companies will have to reinvent themselves more frequently in future, with a shifting portfolio that responds to consumer needs, but to endure, they must also consolidate what they do best.

WHAT KEEPS A COMPANY THRIVING CREATIVELY?

Most companies have a lifespan of only a few years. Many others have internal processes that are insufficient to keep up with external trends. For most of them, positive change is likely to take the form of a merger or an acquisition – indicators that one of the parties lacks vision or strategic foresight, employs the wrong performance indicators and benchmarks, or has left it too late to unravel its culture of complacency.

Companies with more longevity have a very clear understanding of their core markets, while also having the ability to imagine new ones. The Beatles have en-dured not because they became a different band with each album but because they push-ed their creativity as far as possible while remaining recognisable as John, Paul, George and Ringo. The same principle applies to Madonna – she has succeeded through continuous reinvention while most other music business celebrities pass through like ships in the night.

TRYING TOO HARD

Many large organisations try so hard to read their customers they become reactive rather than proactive in the ways they innovate. Consider Sony in the years between the peak of the Walkman's success and the launch of its PlayStation games console – it knew lots about the people who bought its products but nothing about the people who did not.

The same was the case with British retailer, Marks & Spencer. M&S had great information management systems in place but what it needed was a culture that placed employee imagination over the supposed infallibility of technology. Lest we forget, it is the 'software culture', still widespread in many industries today, that has created rigid processes of the sort we all suffer from when dealing with call centres.

To thrive and survive, you need to be close enough to your customer to sense incipient trends, but detached enough to marshal your R&D, marketing and sales operations accordingly. You also need to collaborate with your business partners to collect and share data, and to ensure your supply chain is ready to handle new sources of demand as they are identified. Customer intelligence, as opposed to mere customer knowledge, is now an essential corporate capability.

YOUR IDEAL EMPLOYEE: WEIRD, EXTROVERT AND NON-CONFORMIST

As the value of brainpower continues to outstrip that of fixed assets, so organisations all over the world, and especially in the West, must spend more time fostering positive and stimulating personal relationships between employees.

Staff may come to work because they love the vision and brand created by the corporate celebrities, but they won't stay unless they get along with their colleagues in the kind of informal, flexible and playful environment that the best innovations require (or unless you bribe them, which is a more expensive and less effective basis for innovation).

The problem with most corporate bonding or culture-building events is that they encourage compliance and conformity, creating superficial relationships and linear thinking.

Even the sexiest brand will see its creative streak wither and die if its staff are constantly told to follow 'the corporate way of doing things'. This is what IBM did in the early 1990s.

What an ideas-based business needs are employees who are individualist, non-conformist, challenging and questioning, as well as willing to accept and deliver positive criticism. More importantly, the organisation needs to be tolerant of such a human melting pot and prepared to make the extra effort to manage its inevitable clashes.

Creating such a culture often demands a change in recruitment practices.

Too many businesses hire people on the basis that they will 'fit in' (who will, in other words, conform to and comply with the status quo). Many reject CVs that indicate numerous career changes, fearing this indicates personal 'instability'.

Yet we know that today's young professionals, especially the young iPod generation, value personal freedoms above all else, and aspire to experiences as much as material goods.

In such a context, frequent job shifts could suggest valuable traits: their independence, for example, could be the result of a high-quality education and diligent study, while they will undoubtedly have benefited from the experience of a wide range of work environments.

The problem for many companies is that they want to have creative, innovate corporate cultures but are reluctant to take the self-confident risks and recruit people who have exactly the personal attributes needed to bring this about.

JOB DESCRIPTIONS NEED TO CHANGE RADICALLY

In the past, they were defined clearly in terms of pay and responsibility – indeed, the principle of 'instrumental compliance', under which manufacturers use pay as their primary source of motivation. Such an arrangement is totally irrelevant for the knowledge-based businesses of today, where flexibility is more important than stability.

Yet its passing creates problems: for example, if the most creative employees are also the most independent, how is it possible to get them cooperating with others and aligning them with the goals of the corporation, rather than regarding the company simply as a resource pool for personal gain? There is no definitive answer to this question; it's a reality that certain industries such as the media have simply learned to ameliorate or accommodate.

A related issue is that when creatives develop an affinity to a team, it is often because they believe they can use the skills of their colleagues to their own ends or because they enjoy working with others with similar personalities. This is a core feature of highly successful soccer teams such as Arsenal and Manchester United.

But often this can also create counter-cultures within organisations that breed cynicism or resentment, because allegiance is to immediate teams or bosses and not to the ultimate employer.

Taken to the extreme, it leads to corporate fragmentation. Many media companies are held together solely by a few positive brand values and the monthly salary cheque, but it's also often a feature of universities, hospitals and other knowledge-based businesses where intellectual capital is the operating core.

The loosening of management processes thus raises difficult questions. Where does the responsibility of one individual or team begin and end? How much authority can a middle manager exercise without referral to higher levels? And, most fundamental of all, does strategy necessarily need to permeate from the top down if the business is based on imagination and foresight?

NEEDED: NEW TYPES OF CEO

To resolve these issues, a company needs a strong brand and a strong corporate CEO 'celebrity', capable of communication an aspiring and unifying vision. It needs to develop a trust culture and discretionary management practices, so that staff have greater operational autonomy, authority and responsibility, with concomitant performance-appraisal schemes and reward systems. It also needs to expose teams and individuals to greater target setting, benchmarking and accountability.

A paradox of the knowledge-based business is that with greater freedom come tighter controls. Clearly, this creates new problems – witness the resentment among teachers, academics, medics, social workers and many others whose outputs are now subject to performance reviews, and the constant protest over the reliability and validity of these measures being used to assess performance and apportion rewards – but it is absolutely essential if resources are not to be wasted.

By 2020, the best-practice management model will resemble a professional practice such as a university, but it won't permit the same lack of direction and focus.

NEW TYPES OF COLLEGIATE BUSINESS STRUCTURES

Leading companies in industries such as pharmaceuticals, the media and software are already building collegiate structures in which processes are structured around time and cost budgets, and negotiated between team leaders and senior management, with interference from above occurring only at progress reviews.

To have a pervasive culture of trust in which bosses are willing to delegate projects readily to their subordinates, leaders are needed at every level who are inspirational, not simply hands on, with the emotional, social and technical skills to take self-confident decisions within parameters set by their colleagues and higher team leaders.

In short, intrapreneurial vassals are needed, willing to swear allegiance to monarchical CEOs, while getting the best out of their own territories.

The transition to such a structure is going to be much harder for public companies than it is for private ones – another reason why small entrepreneurial businesses are usually more attractive to young creative talents than big corporate elephants.