Creativity, Innovation, and the Three Rules of Innovation

Introduction to Creativity

Creativity refers to the act of converting new ideas into reality. It is characterized by the ability to understand the world in new ways — to identify hidden patterns, to make connections between apparently unrelated phenomena, and to generate solutions. Creativity encompasses two core processes: thinking and generating. Anyone who has ideas but does not act on them may be considered creative, but not innovative. Creativity is about releasing the potential of the mind to conceive new concepts. Those ideas can manifest in any number of ways, but most often they become something that can be touched, smelled, seen, heard, or tasted. Creative ideas can also exist as thought experiments within a single individual's mind. Creativity is highly subjective, making it challenging to evaluate the innovative capacity of any given person (Hunter & Bedell-Avers, 2008).

Innovation is the execution of a new or considerably improved product, service, or process that creates value for a company, government, or community. Unlike creativity, innovation is measurable. It is about introducing change into relatively stable systems and involves the work required to make a concept practically viable. By identifying unknown and unmet needs, a company can use innovation to deploy its inventive resources and design appropriate products that realize a return on investment.

Understanding Innovation

Companies often pursue creativity when they are expected to focus on innovation. What is frequently missing is not creativity in the sense of generating ideas, but innovation in the sense of producing action — that is, putting concepts to work (Hunter & Bedell-Avers, 2008). Square is a strong example of this distinction in practice: its plug-in payment system helped an enormous number of mobile providers and small business owners break free from the constraints of cash-only transactions or expensive credit card terminals. Square recognized that the economic system was rapidly becoming digital and offered clients a practical way to keep up.

In the business world, three key rules of innovation guide effective practice. The first is managing creative friction. The wrong kind of friction within teams can cause individuals to work against one another and suppress good ideas. However, the right kind of friction often fosters the realization of meaningful results. Organizations can encourage productive creative friction by eliminating barriers to communication. Because people communicate differently, social style studies can help team members understand how their colleagues typically connect and collaborate. Once diversity among individuals is appreciated, it becomes easier to manage and direct their efforts toward shared goals. Ultimately, this becomes a source of team cohesion rather than a cause of breakdown (Vaitheeswaran, 2012).

Rule One: Manage Creative Friction

Strong leadership from top management is essential to achieving success in innovation. Apple's Steve Jobs, Bill Gates of Microsoft, and A.G. Lafley of Procter & Gamble are all examples of leaders who drove their management teams and organizations to the highest levels of innovation performance. In a recent Financial Times study, the key factors in evaluating new investments were the strength of the leadership team and the demonstrated strength of the business structure. Technology ranked only third on that list (Vaitheeswaran, 2012). This underscores the point that innovation leadership is not primarily a technical challenge but a human and organizational one.