CHAPTER 11
Creativity, Innovation, and Leadership
The purpose of this chapter is to assist readers in developing the creative problem-solving approach
required to be an effective leader.
CHAPTER OUTLINE AND LECTURE NOTES
Creative problem solving is an important requirement for effective leadership at every organizational
level. The role of a creative leader is to bring into existence ideas and things that did not exist
previously, or that existed in a different form. Innovation refers to creating new ideas and their
implementation or commercialization.
I.
STEPS IN THE CREATIVE PROCESS
An important part of becoming more creative involves understanding the stages involved in
creativity, the production of novel and useful ideas.
Step one on creativity is opportunity or problem recognition, in which the person discovers that a
new opportunity exists or a problem needs resolution. Step two is immersion, in which the
individual concentrates on the problem and becomes immersed in it. Step three is incubation, in
which the person keeps the assembled information in the back of the mind for a while. Step four is
insight, when the problem-conquering solution flashes into the mind at an unexpected time. The
aha moment usually arrives after hours of thought and study. Step five is verification and
application, when the individual sets out to prove that the creative solution has merit.
II.
CHARACTERISTICS OF CREATIVE LEADERS
Creative leaders, like creative workers of all types, are different in many ways from their less
creative counterparts. Creative leaders challenge the status quo and are flexible enough to
overcome the traditional way of looking at problems.
A.
B.
C.
D.
Knowledge. Creative problem solving requires a broad background of information, including
facts and observations. Being creative often involves combining two or more things in a new
and different way.
Cognitive Abilities. Creative problem solvers tend to be bright rather than brilliant. They
maintain a youthful curiosity throughout their lives, within and outside their fields. Creative
people are good at divergent thinking, but also know when to narrow the choices. Creative
business persons are good at spotting opportunities others might overlook.
Personality. Creative people tend to have a positive self-image without being blindly selfconfident. They also have the ability to tolerate the isolation necessary for developing ideas.
Creative people are frequently nonconformists, not needing strong group approval.
Nonconformity can also mean being a maverick. Creative people are also intellectual thrill
seekers, they are persistent, and they enjoy dealing with ambiguity and chaos. Creative
people also tend to have an internal locus of control.
Passion for the Task and the Experience of Flow. A dominant characteristic of creative
people is a passion for their work, or high intrinsic motivation. Passion for the task and high
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Chapter 11: Creativity, Innovation, and Leadership
intrinsic motivation contribute to a total absorption in the work and intense concentration,
the experience of flow.
The formula B = f (P E) is relevant here. Certain personal characteristics may facilitate a
leader’s being creative, but the right environment is necessary to trigger creative behavior.
E.
The Componential Theory of Individual Creativity. This theory integrates the information
already presented. Creativity takes place when three components join together: expertise,
creative-thinking skills, and task motivation. The combined forces of the three factors lead to
individual creativity as follows: expertise x creative-thinking skills x task motivation =
creativity.
III. OVERCOMING TRADITIONAL THINKING AS A CREATIVITY STRATEGY
Creative problem solving requires an ability to overcome traditional thinking. The creative person
often looks at problems in a new light and transcends conventional thinking about them. The
central task in becoming creative is to break down rigid thinking that blocks new ideas. The
process of overcoming traditional thinking has been characterized in several ways. The most
familiar is that a creative person thinks outside the box. Bus tours to look at foreclosed real estate
properties are a new and amusing example of thinking outside the box.
IV. ORGANIZATIONAL METHODS TO ENHANCE CREATIVITY
Here we describe several creativity-enhancing methods, including a review of brainstorming. The
leader plays a dual role in implementing creative problem-solving techniques: facilitating group
interaction and providing a fair share of creative output.
A.
Systematically Collecting Fresh Ideas
The more ideas you try, the greater the probability of finding one that works. A notable way
of collecting fresh ideas is for employees to furnish them to a company database, so when
somebody needs a fresh idea it can be assessed through a company search engine. Google
uses an internal web site to collect and retrieve ideas. To facilitate having fresh ideas, the
leader/manager can establish idea quotas, such as asking staff members to bring one new
idea to each meeting. A major leadership accomplishment is to obtain widespread
participation in contributing innovative thinking, such as done at Procter & Gamble.
B.
Brainstorming
Brainstorming is the best-known method for creativity improvement (as well as for creative
problem solving). To encourage creativity during the idea-generating part of brainstorming
potential solutions are not criticized or evaluated in any way. One variation of brainstorming
is the 6-3-5 method in which people exchange ideas written on index cards and build on the
ideas of others. Another variation of brainstorming is to encourage extreme thinking.
Participants are asked to contribute ideas that would probably work but are so outrageous
they could get the group fired.
Brainstorming, much like other creative-problem-solving techniques works best in an
organizational culture that fosters innovation.
C.
Using the Pet-Peeve Technique
The pet-peeve technique is a group method of identifying all the possible complaints others
might have about one’s organizational unit, thus improving service. Through brainstorming,
group members develop a list of complaints from anyone who interacts with their group. No
holds are barred in throwing in imaginary and some humorous complaints. The humorous
complaints are especially important for creative problem solving. After all the complaints
have been aired, action plans are drawn to remedy the most serious problems.
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Chapter 11: Creativity, Innovation, and Leadership
D.
V.
85
Equipping a Kitchen for the Mind
A kitchen for the mind is a space designed to nurture creativity. The room contains art
supplies and perhaps toys, but what is more important is that it is a communal meeting place
where people get together to think creatively. According to Mike Vance, when people’s
resources are limited, they can still use their ingenuity to produce creative ideas.
SELF-HELP TECHNIQUES TO ENHANCE CREATIVE PROBLEM SOLVING
All creative problem-solving techniques aim to increase mental flexibility. The five strategies and
techniques reported here supplement the organizational programs described previously.
A.
Practicing Creativity-Enhancing Exercises
An established way of sharpening creative thinking is to engage regularly in activities that
encourage flexible thinking. Among such activities are creative photography, puzzles, joke
writing, and learning a second language.
B.
Staying Alert to Opportunities
The ability to spot opportunities that other people overlook characterizes creative leaders.
Opportunity seeking is associated with entrepreneurial leadership because the entrepreneur
might build an organization around an unmet consumer need.
C.
Maintaining an Enthusiastic Attitude Including Being Happy
Creative thinking calls for a positive attitude. Yet a leader must sometimes be judicial (or
judgmental) rather than imaginative. The leader is advised to attempt to think positively
even about judicial tasks. Being in the right mood facilitates creativity. An analysis of
diaries showed that workers are more likely to have a breakthrough idea if they were happy
the day before.
D.
Maintaining and Using a Systematic Place for Recording Your Ideas
Creative ideas can lead to breakthroughs for your group and your career, so they deserve the
dignity of a separate notebook, computer file, or entry on your personal digital assistant.
Sending the idea to yourself by e-mail can also be effective.
E.
Playing the Roles of Explorer, Artist, Judge, and Lawyer
Be an explorer by getting ideas from people in different fields. Be an artist by stretching
your imagination, which includes asking what-if questions. Be a judge by critically
evaluating ideas. Play the role of a lawyer by negotiating and finding ways to implement
your ideas within your field or place of work.
F.
Engage in Appropriate Physical Exercise
Engaging in physical exercise is a well-accepted method of stimulating creativity. The
surfacing of creative thoughts while exercising relates to the steps of immersion and
incubation. Also, physical exercise pumps more blood and oxygen into the brain.
VI. ESTABLISHING A CLIMATE FOR CREATIVE THINKING
In addition to being a creative individual, a leader must establish a climate conducive to creative
problem solving. A foundation step for fostering organizational creativity is to establish a vision
and mission that include creativity. The leader also needs the right organizational culture, and
extensive use of the techniques described in this chapter.
A.
Leadership Practices for Enhancing Creativity
Eight leadership and managerial practices are particularly helpful in fostering creative
thinking.
1.
Hiring creative people from the outside and identifying creative people from within. If
you want an innovative environment, hire innovative people. .
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Chapter 11: Creativity, Innovation, and Leadership
2.
Intellectual challenge. Stretch people intellectually without overwhelming them.
Moderate time pressures can sometimes bring about the right amount of challenge.
3.
B.
Freedom to choose the method. Workers tend to be more creative when they are
granted the freedom to choose which method is best for attaining a work goal.
4. Ample supply of the right resources. Time and money are the most important resources
for enhancing creativity.
5. Effective design of work groups. Work groups are most likely to be creative when they
are mutually supportive and when they have a diversity of backgrounds and
perspectives.
6. Supervisory encouragement. Developing a permissive atmosphere that encourages
people to think freely is the most important step for bringing about creative problem
solving.
7. Organizational support. The entire organization as well as the immediate manager
should support creativity, including a reward system with recognition and financial
incentives.
8. Have favorable exchanges with creative workers. A study with 191 research and
development specialists found a positive relationship between LMX ratings and
creativity of workers as measured by supervisory ratings.
Methods of Managing Creative Workers
Choosing effective methods for managing creative workers is also important. Suggestions
are as follows:
1. Give creative people tools and resources that allow their work to stand out.
2. Give creative people flexibility and a minimum amount of structure.
3. Give gentle feedback when turning down an idea.
4. Employ creative people to manage and evaluate creative workers.
VII. ADDITIONAL LEADERSHIP PRACTICES THAT ENHANCE INNOVATION
All leadership and management practices that enhance creative problem solving enhance
innovation. Consider also the following:
A.
B.
C.
D.
E.
F.
G.
Continually pursue innovation.
Take risks and encourage risk taking.
Acquire innovative companies.
Avoid innovation for its own sake.
Loose-tight leadership enhances creativity and innovation.
Integrate development and production.
Recognize the hidden opportunities when products and ideas flop. (It is inherently fun to
discuss failed products in class.)
VIII. GUIDELINES FOR ACTION AND SKILL DEVELOPMENT
Tom Freston, formerly of MTV, offers this advice for managing a creative organization: (1) Put
creative people at the top. (2) Ensure that ideas flow from the bottom up with a minimum of
hierarchy. (3) Maniacally know your audience. (4) Hire passionate, diverse people. (5) Have a lot
of fun.
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Chapter 11: Creativity, Innovation, and Leadership
87
COMMENTS ON EXPERIENTIAL EXERCISES
Leadership Self-Assessment Quiz 11-1: The Creative Personality
Test
Based on experience with thousands of students, we believe that this quiz contributes to assessing a
person’s current level of mental flexibility and creative attitudes. We doubt that a person with good
self-objectivity who scored high on this test would fail to have strong creative tendencies.
Leadership Skill-Building Exercise 11-1: Choose an Effective Domain
Name
A fascinating feature of this brainstorming exercise is that some people are making enormous sums of
money by having either developed domain names or bought the rights to others. Group leaders who
report their team’s brainstorming solutions are often disappointed to find that other class teams arrived
at many similar solutions. It is worth explaining that such normative information is helpful in
evaluating whether a solution is novel. Groups might be asked to comment on the brainstorming
process. For example, some students observe a lull in idea production after an initial outpouring. A few
minutes later another surge of ideas typically surfaces.
A variation of this brainstorming task is to choose incorrect domain names, including misspellings, that
are quite valuable. Examples include www.Wall-Mart.com for www.Wal-Mart.com, and
www.PoppaJohn.com for www.PapaJohn.com. These frequently-chosen incorrect names have high
commercial value on the Web because the searches land on the Website of the incorrect name. These
Websites with incorrect names have links that can result in revenue for the Website owner.
Leadership Skill-Building Exercise 11-2: The Pet-Peeve Technique
The pet-peeve technique is both an exercise in creative problem solving and an opportunity to use a
technique for improving customer service and quality. Students may require some prodding to come
forth with humorous or exaggerated criticisms of their organizational unit.
Leadership Skill-Building Exercise 11-3: Word Hints to Creativity
Although the original word-hints test is forty-five years old, we have updated it with a few more
modern terms. Raudsepp is an established creativity expert, which lends face validity to this test. We
think the practice in making remote associations is a valuable feature of this device, which can also be
used for self-assessment.
Leadership Diagnostic Activity 11-1: Assessing the Climate for
Innovation
Students with significant work experience will find this questionnaire the most meaningful. However,
relating the questionnaire to school experience can also be enlightening.
COMMENTS ON DISCUSSION QUESTIONS AND ACTIVITIES
1.
Give an example of creativity in business that does not relate to the development or marketing of a
product or service.
Most students will have to stretch to find a suitable answer to this question, because products
receive the most publicity. Other areas for creative thinking include manufacturing processes, cost
savings, and organization structure. The classic example described in the text about Henry Ford
and the assembly line qualifies as creativity aimed at other than product development or
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Chapter 11: Creativity, Innovation, and Leadership
marketing. Another creative idea in the auto industry was to demand that suppliers do more of the
assembling of components, leading to cost savings for the auto manufacturers.
2.
Is it important for the leader to be creative and innovative? Or, should he or she simply hire
creative an innovative group members?
The leader should be creative and innovative for several reasons. First, a leader is supposed to
make some individual contributions and not simply delegate all responsibility for creative
thinking. Second, a leader who is somewhat creative himself or herself will be able to attract a
larger number of creative people to the staff. Third, the creative leader contributes to an
atmosphere of creativity.
3.
In many companies, it is expected for managerial and professional workers to wear formal
business attire to work (such as suits and high heels). What effect do you think this dress code has
on creativity?
The opinion is frequently expressed among creativity specialists that most people are more
creative when they wear comfortable, informal clothing. If this were true, we can expect creativity
to diminish among managers and professionals during working hours. Perhaps these same people
will now do most of their creative thinking on work-at-home days, and after working hours. It is
also possible that many people can learn to be creative while wearing formal business attire.
Maybe they can remove their shoes for a little comfort.
4.
In what way does your present program of study contribute to your ability to solve problems
creatively?
Almost any program of study facilitates the student’s amassing a base of useful facts that might
later serve as the database for creative thought. In addition, some programs of study offer ample
opportunity for creative thought, such as studying the problem-solving process. Still other
programs give students a chance to solve unstructured field problems, such as analyzing live
business opportunities.
5.
The opinion has often been expressed that too much emphasis on teamwork inhibits creativity.
What do you think of this argument?
The argument that too much teamwork inhibits creativity is sometimes true. Attempting to satisfy
the demands of teammates can often mean not pushing forward with an idea of one’s own. A good
team member will often build on the ideas of others rather than push for acceptance of his or her
own idea. Another relevant point is that the Japanese emphasis on teamwork and group harmony
often results in workers who are better at imitation than at innovation. There are many
counterarguments to these two points.
6.
What is the underlying process by which creativity-building exercises, such as the pet-peeve
technique, are supposed to increase creativity?
The pet-peeve technique and the like help a person develop mental flexibility by forcing the
person to think in new and different ways. The argument is that as you engage in these mental
workouts, you will develop your ability to think more flexibly.
7.
How might a manager physically lay out an office to improve the chances that creative problem
solving will take place?
The manager might hedge here by creating the two types of physical structures associated with
improved creative thinking, as does Microsoft Corp. Open work areas would be important because
increased possibilities for physical interaction would lead to more exchange of ideas. However,
creative workers still need private space so that they may develop some ideas in solitude.
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Chapter 11: Creativity, Innovation, and Leadership
8.
89
Why do so many people believe that if you emphasize being efficient, such as using the qualityimprovement process Six Sigma, creativity and innovation are likely to suffer.
A process like Six Sigma emphasize many routines that appear in opposition to the flexible
thinking required for creativity. Among these routines are the collection of large amounts of data
and extensive record keeping, and therefore might be interpreted as rigid. The counterargument is
that participating in Six Sigma requires continuous creativity because the participant is forever
searching for ways to improve processes.
9.
Critics of Dell Computer claim that the company is not innovative, even calling Dell the WalMart of technology companies. On what way do your think Dell is innovative, or not innovative?
The position that Dell is innovative, centers on its highly efficient methods of manufacturing
assembly and distribution. Dell is also innovative in the way it constantly searches for ways to
reduce costs. The position that Dell is not innovative centers on the observation that Dell copies
the technology of other companies, and that it assembles components rather than creating its own
products.
10. Speak to the most creative person you know in any field, and find out if he or she uses any
specific creativity-enhancing technique. Be prepared to bring your findings back to class.
Brainstorming is used so frequently that most of the people polled for answers to these questions
are likely to say they use brainstorming. Mention of techniques other than brainstorming would be
particularly valuable. For the majority of creative thinkers, their ideas stem from a highly focused
method of searching for alternatives.
PLAUSIBLE RESPONSES TO CASE QUESTIONS
Leadership Case Problem A: Hitting Paydirt
The DirtMaker case is of major significance because the major path to successful entrepreneurship is to
identify an opportunity that others have failed to identify and or exploit.
1.
In what way have Rossi and Matheson shown an ability to identify an opportunity?
The couple has shown acute ability to identify an opportunity. We have loads of people looking
for ways to get rid of dirt, and many other people looking to acquire dirt. The opportunity is in
matching these groups of people.
2.
In what way have the operators of DirtMarket overcome traditional mental sets, or thought outside
the box?
The case demonstrates two examples of thinking outside the box. The traditional approach to
finding or getting rid of dirt was for contractors to make dozens of telephone calls. DirtMarket
become a broker between builders wanting to get rid of dirt, and those wanting to purchase the
dirt. The company therefore overcame the traditional mental set about buying and selling dirt. The
engineering contracting division of DirtMarket also overcame a traditional way of getting rid of
dirt after excavation. DirtMarket now hires the engineering firm. “We always thought the process
was backwards,” says Rossi in reference to the usual way of getting rid of the dirt.
3.
To what extent do you think that Matheson having a PhD in computer science and an MBA help
her become a leader in the dirt business?
The degrees in computer science and business administration are a fortunate mix here. Matheson
had to develop the software to match dirt sellers and buyers. At the same time she needed to keep
an eye on the business implications of the software. The knowledge about human behavior and
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Chapter 11: Creativity, Innovation, and Leadership
marketing contained in an MBA would also be quite helpful in running a small business
enterprise.
4.
What might be a threat from the external environment that could hurt the business model of
DirtMarket?
With all the concern about the physical environment, large contractors might develop their own
capability for getting rid of dirt safely. As a result, these companies would have no need to hire
DirtMarket. Another potential threat is that local governments might place so many regulations on
dirt removal that only large contractors could qualify to handle the job.
5.
To try out your creative thinking today, make up a joke about DirtMarket. (In this case, dirty jokes
are welcome.)
a.
Dave Rossi and Lesley Matheson are standing onsite at the excavation for a skyscraper.
Suddenly a large crane dumps about a ton of dirt into a dump truck. The dirt lands with a
large thud. Lesley says to Dave, “Honey, have you heard the latest dirt?”
b.
Dave comes home for dinner, and Lesley is already home. Lesley looks at Dave and says,
“Dave you must have had a bad day. I don’t see any dirt underneath your finger nails.”
Leadership Case Problem B: Sparking Innovation at Gap
This case illustrates the idea that even a company with a world-leading brand might struggle to find the
right type of creativity and innovation.
1.
What steps do you think CEO Murphy should take to enhance innovation at Gap?
Gap seeks innovation but within the framework of maintaining its identity and image. Murphy
might enhance innovation by involving more front-line store associates and management in the
innovation process. All workers might be encouraged to submit ideas for clothing, accessories,
and store displays. Perhaps store teams could brainstorm product ideas. Awards might be given
for ideas that result in profits, perhaps on the basis of small commissions.
2.
Is Fischer thinking too narrowly by insisting that Gap should stick to being grounded in khaki and
denim? Explain your reasoning.
Thinking outside the box is welcome in any business. At the same time, a company that loses its
identity might disappear. Without khaki and denim, Gap would lose its focus and would become a
general clothing merchant in the same manner as the clothing departments of Macy’s, J.C.
Penney, and Target. The counter-opinion is that if Gap doesn’t do something radical it might
become extinct.
3.
What is your opinion of the wisdom of hiring a non-fashion expert to revitalize Gap?
Here is a tough call. In Murphy’s favor, he has had considerable success at revitalizing other
retailers. He is therefore a legitimate retail executive. However, Murphy is not a fashion specialist
which could work in his disfavor. A probable key role for Murphy is to continue with the plan of
having major fashion decisions made at the three company divisions (Gap, Old Navy, and Banana
Republic), yet maintain oversight.
4.
What is your opinion of the statement that being too analytical and bureaucratic might have
interfered with creativity at the Gap?
Theory, research, and practice about creativity suggest that being too analytical and bureaucratic
stifles creativity. The heavy reliance Gasp leadership placed on market research and focus groups
probably worked against store executives relying more heavily on their intuition.
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Chapter 11: Creativity, Innovation, and Leadership
5.
91
How is Gap doing these days? Does the financial performance of the firm justify having brought
Murphy on board? Or is Murphy still around?
Current data are required to answer these questions. By mid-2008 it appeared that various
operating efficiencies had contributed to profitability of Gap, but revenue growth was stalled. The
year 2008, however, was highly challenging for most retailers so we need more recent evidence to
answer these questions accurately.
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