Neelima Mahajan Authors

The Importance of Creativity in Business

August 13, 2014

NYU-Stern professor Kim Corfman on the importance of creativity in business and the role of culture in spurring or constraining creativity.

Creativity is important for organizations. Period. It’s a simple correlation: higher creativity leads to greater innovation within the organization and thus, greater success over the long run. Having said that, creativity is also becoming a very important skill for leaders. A 2010 IBM survey of more than 1,500 CEOs from across the world rated creativity as the most important factor for future success.

Kim Corfman, Professor of Marketing at NYU Stern School of Business, also believes that the happiest people are those who lead more creative lives. “I think [people] will have better lives if they are more creative problem solvers,” she says.

In this interview, Corfman talks about the importance of creativity in business and our lives, the role of culture in spurring or constraining creativity, overcoming various barriers to creativity and more.

Q. You say that creativity is the single most important leadership quality. What has catapulted creativity to the very top?

A. There are two things going on. One is changes in the environment, and the other is the recognition of something that has always been true. The rate of change in the world has been accelerating in terms of in developing economies, how easy it is to start a business, the rapidity with which commercial ventures are growing and changing, the recognition of really serious global problems that need more creative solutions to be solved, everything is moving more quickly and the standards are getting higher. So [there is a] much more competitive environment, much more rapidly moving environment, we need new ways to do things.

The other is it’s always been critical and important. It’s been the key to successful enterprise forever. The word “creativity” is what people now want to talk about. But it’s always been true both for business and for individual fulfillment.

The happiest people are those who live creative lives. I think [people] will have better lives if they are more creative problem solvers.

Q. Some people believe that creativity is something that you are born with and it is not something that can be taught. You obviously believe that creativity can be taught. Where are you coming from and why?

A. I do think that there is something that you are born with that can make it easier for you to be creative, but when we are being creative, we are using all of our natural selves, our thought processes, our experiences, associative thinking of a variety of kinds. There is no reason in the world why everybody can’t get better at it. There are things you can do to change your mindset, either because you do it intentionally or by practice. And there are tools you can use that help you take advantage of your natural abilities and help you structure your thinking in ways that will make you more creative and help you get into the right mindset.

Q. What is the role of education systems and cultural backgrounds in spurring creativity? Do you think that in some cultures, people are inherently more creative than in others? Nordic countries, for instance, routinely rank high on innovation surveys.

A. You need to feel safe and that requires a certain amount of open-mindedness, willingness to take risks, tolerance for ambiguity, uncertainty in order to be truly creative. [Regarding] tolerance for failure, I don’t mean “going out there and risking millions or billions of dollars”, but trying things with smaller cost and taking chances. There is a big cultural element to that.

There is another thing, which is, people tend to exaggerate the negative consequences of taking risks. There are some things that would be foolish to do even if there is a reasonably high probability of success but the cost is so great and you don’t want to try it. But most of the times the risks are not as great as we think they are. We exaggerate those. So, partly cultural, partly just having a clear view of what consequences will pay.

[Watch the video below]

Q. It’s also interesting that you mention the fear of failure because if you look at some of the most innovative places like Silicon Valley, failures are celebrated, but not so much in cultures like in China where it would be a big barrier. What would it really take to change the perception towards something like failure, especially when people have inherited attitudes towards it?

A. It is about understanding what you are talking about when you are considering failure. Failure can occur at many different stages in the innovation process. You can use tools that help free you up to think of goofy crazy things, many of which may be ridiculous and wouldn’t work, but they may lead you to something that actually has a merit.

People are even afraid in a group discussion suggesting something that isn’t a complete perfect idea that’s going to succeed. If you can create an environment in which people are willing to put those ideas out there and help them understand that the costs are non-existent, then you can walk your way up to taking chances that may have slightly bigger consequences. Failure doesn’t have to mean huge amount of money. Most of the failure we fear is the judgment of our peers or employers.

Q. You often talk of both internal and external barriers to creativity. While the internal barriers are about our own biases and fears, the external barriers are about our environment and external constraints. In your opinion, which ones are tougher to overcome and why?

A. I think our internal barriers, simply because we won’t push against the external barriers unless we overcome the internal ones. If I know what makes me intrinsically motivated, then I would be able to look for environments in which I can be those things. If I’m a manager, I would create an environment in which people who work for me can to do that as well. So if I had to start at one place, it would be there. Because if you start with the understanding of what’s required for you and other people, then [you have] better chances to get rid of the external barriers.

Q. Talking about the internal barriers themselves, these are sometimes things we are born with or we’ve been conditioned to behave in certain way. Those are not things that you can suddenly get over. So how does one overcome these internal barriers?

A. There’s a big debate on whether we are born with those. Whether we are or not, from the moment we come from this world, we are creating patterns or finding categories so that when we look at something, we know what it is.

But one of the negative consequences of that is we categorize very quickly. One of the things we can do is to practice questioning our categories and assumptions. You can do that by doing mental exercises, but also by intentionally identifying the constraint you are assuming you are operating under in solving this problem. You may find that some of them are invalid that you don’t really need to operate under them. There is scientific evidence to show that people who put themselves in different environments suddenly realize: “Oh, I’ve been making assumptions about this! I’ve been looking at this in a certain way and I don’t need to. Maybe it makes sense in some situations and maybe not in all of them.”

Q. So far we have talked about creativity at the individual’s level. When we talk about creativity at an organizational level, we often find that creativity is the responsibility of one department–e.g., the R&D team–and it is not something that is seen as an organization-wide responsibility.

A. I think it’s mostly limited. You have a group of people who are supposed to be product innovators. If they have all the information they need, they have an environment that promotes that kind of creativity. That can work. If everybody else is just simply an executor, that’s okay. But in organizations you need creativity in every part of the organization to take full advantage of the organization’s knowledge and be as responsible as possible to the demands that the market has been placing on you.

So, your sales people have knowledge that this group over here is supposed to be creative, can possibly have an impact on the consumer. Taking advantage of the knowledge of everybody in an organization is something that can be done in a separate process.

Q. What’s your view on taking creativity outside an organization?

A. This has become a hard way of referring to the kind of knowledge that leads to the most creativity shaped knowledge. Adapt that knowledge in the domain in which you are solving problems or doing your job, but you also need a very broad exposure that can be relatively superficial to many different domains because some of the most interesting innovations come from making connections between where I am and something very remote.

There is a classic example of George de Mestral and the Velcro. He was walking his dog and got burrs caught into his coat. He put one of them under the microscope and saw there were those little hooks. That led to the invention of Velcro. Both in your field and many different areas, you can draw analogies and you can see metaphors. In the case of de Mestral, don’t categorize this as a walk with the dog, categorize this as noticing an interesting question and then pursue it.

Q. We’ve been seeing a lot of things related to creativity. Design thinking is in vogue. Then someone else came along and said that it doesn’t work anymore, and the right thing to do is creative intelligence. What’s your take on these concepts? How efficient are they in spurring innovation and creativity?

A. So design thinking came along because we were neglecting a couple of things. We were neglecting something that marketing faculty have been saying forever, which is understand the consumer, find out what’s important to them and develop empathy. The other thing that design thinking emphasizes that makes a difference from other approaches is prototyping, rapid prototyping in every stage in the process.

None of these is new. But they come along and say, this is being neglected. I have been talking to innovation consultancies and hear them complaining about one approach or another. Usually it’s because there is an overemphasis on certain phases and some under-emphasis on others. Fahrenheit 212 is a company that has been growing phenomenally in the past several years and thinks design thinking is an absolute failure. It is if you don’t make sure there is a business model behind the things that you’ve decided to introduce. In some cases, design thinking has been applied in a way that neglected the fact that you need to make money at the end of the day. But it doesn’t mean that the process itself is flawed. Any tool needs to be used intelligently.

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