DE-S(T)IGMATISING CREATIVITY

The small and medium enterprises are generally regarded as major drivers of innovation primarily due to the unique ability of the entrepreneurs to see connections and their creative urge to challenge existing businesses with disruptive ideas. Natural advantages of smallness such as adaptability, low cost of due diligence and lean organisational structures further facilitate the process of converting the creative potential of the entrepreneurs to viable businesses.

However, after every successful commercial application of a new idea, to maximise the benefits of economies of scale and scope, the firms come under tremendous pressure to produce more with consistent quality. But with rapid expansion of production capacity the creative passions of the entrepreneurial firms start getting choked. Slowly facts become more important than intuition, norms count more than out-of-the-box thinking and planning is preferred to spontaneity.

This process worked well for many firms to achieve consistent growth in an era when disruptive innovations were much less frequent and analysis of equilibrium states could predict reasonably well stakeholders’ motivations. But in the present scenario, as constant introduction of innovations is keeping the markets in transient states for much longer period of time and further away from equilibrium, to sustain profitable growth every firm, irrespective of its size, has to mange very efficiently quality and innovation.

The former requires a high degree of discipline and normative behaviour, since it is impossible to consistently achieve a high level of quality (for example, not more than 3.4 defects per million opportunities in a Six Sigma company) without a disciplined workforce adhering strictly to benchmarks. But the latter demands a creative climate for generation of unorganised and spontaneous ideas or serendipity. Such a climate does not stigmatise individuals with non-conforming attitudes who openly question accepted norms and benchmarks.

So far as quality is concerned, since the deployment of the new quality systems by the Japanese automobile industry, the world has been witnessing explosive growth of a variety of sophisticated quality management techniques. Many small firms too are now turning to latest performance measurement systems, such as the Malcolm Baldrige Criteria, Balanced Scorecard, Six Sigma Business Scorecard and ISO 9000 quality management systems. However, many of these firms are still failing to improve performance even after making heavy investments to reengineer their business processes. That is probably due to an inability to identify the critically important processes for performance enhancement.

In this race for achieving very high quality standards together with high production targets, creativity has been somewhat relegated to the back seat in the corporate strategy maps, notwithstanding the emphasis on innovation in the value proposition of many companies. In the current environment when customers are pampered to expect delight in every transaction, for sustaining competitive advantage, the firms - as they shift to the expansion mode - have to ensure that their performance improvement efforts are not limited to only controlling process variations, and that they do not give short shrift to innovation.

Sustained bias in favour of only one aspect (quality or innovation), can significantly reduce a company’s capability to manage the other aspect. The recent developments in General Electric and 3M are good indications of this problem, though in all fairness it must be acknowledged that both these companies have been enjoying comparatively good track record of quality and cutting-edge innovations.

Jeffrey Immelt, the successor of the legendary CEO, Jack Welch credited for transforming GE to a Six Sigma company, on assuming the CEO’s position in 2001 prescribed increased levels of innovation to spur growth and create new lines of business. Two years after Welch’s retirement growth- and metric-conscious GE’s market value fell by 45%. It is not yet clear how the company is going to meet the challenges of high growth through accelerated innovation and high quality in the coming years.

On the other hand, James McNerney, another frontrunner for the top job at GE, after taking charge of one of the most innovative companies in the world, 3M, tried to convert the company to a Six Sigma machine only to end up creating confusion about 3M’s core competence as a highly innovative company. The post-McNerney management is now trying to dial back many Six Sigma initiatives.

If an entrepreneurial start-up is not conscious of the need to continuously balance the discipline needed for total quality management with the ‘anarchy’ essential for creativity from the very beginning, then with mounting pressure of growth the firm’s creative potential will be frittered away. This process ultimately leads to total dominance of the left brain over the right when crazy and absurd ideas are not entertained anymore. In such a climate tolerance to ambiguity gives way to precise planning and creativity is ‘sigmatised’.

Though our understanding of the peculiarities of the non-linear behaviour of the innovation process is still at a nascent stage, with a firm commitment to make creativity a competence but not a coincidence, businesses can still implement strategies to maximise performance by intelligently combining management of quality and creativity. In their attempts to institutionalise creativity, many big companies are now experimenting with new types of work environment and organisational boundaries.

For example, 3M and Google allow employees to have 15% to 20% free time to live in a creative fog and P&G has replaced its traditional in-house R&D with Control & Develop model wherein 50% of the ideas for new products must come from outside P&G labs - from a network of inventors, scientists and suppliers.

Industries like fashion and industrial design, video and educational games, crafts and other similar activities have huge growth potential in a knowledge- and creativity-driven economy. India has a good number of world famous designers and artists but without Infys and Sifys of their own. With conscious efforts to achieve high growth by simultaneously institutionalising creativity and quality, it may be only a matter of time when many products and services will prominently display the names of their Indian design firms, like the way world is today informed about “Intel inside” or “Powered by Google”.