Craig Tapper

Executives, policy makers and commentators across the globe suggest that the capacity to generate significant and sustainable growth or gain major competitive advantage via efficiency and productivity, is reaching its limits, if it hasn’t already passed them.  

In the recent book The Future of Management, author Gary Hamel expresses the point that: “While most executives would willingly attest to the value of initiative, creativity, and passion, they face a worrying conundrum.  They are by temperament, managers.  They are paid to oversee, control, and administer. Yet today the most valuable human capabilities are precisely those that are least manageable.  Whilst the tools of management can compel people to be obedient and diligent, they can’t make the creative and committed.”

Once every business is doing the same things, using the same equipment and systems, and every process that can be outsourced or off-shored to a country or provider with lower costs, then the potential for competitive advantage or bottom line growth gets more and more minimal. 

So the growth challenge for executive leaders today is not just to get more efficient at doing the same things as everyone else, nor simply extracting more productive output from our assets, but to find new things to do and better ways to satisfy customers and deliver value for stakeholders. 

In IBM’s March 2010 survey of 1,500 CEO’s from around the world, over 70% said that their number one challenge in growing their business in the 21^st century was creative leadership.

So what’s the solution? 

Whilst it can be complex to implement, achieving growth via creativity has a few simple but different rules to achieving growth through productivity. 

Firstly, creativity is non-hierarchical.  Existing managers can often feel threatened when transformational ideas come from relatively junior and often relatively new people. 

Secondly, creativity is unpredictable. It tends to happen when our brains are at rest and our thinking is allowed to be unconstrained rather than when they are narrowly focused on tasks and outcomes. 

Thirdly, creative growth is risky.  It relies on a pipeline of lots and lots of ideas, most of which will turn out to be false trails, but some of which will turn out to be spectacularly successful and repay the investments of time and capital many times over. 

Finally, creative growth is more achievable through collaboration than specialisation.  It fails in the silos and regimented structures and processes that produce productivity and efficiency.  Rather, it thrives when we take the restrictions of structure away.

Creative growth is more likely to come when we cross boundaries and forget hierarchies, when we encourage and reward people based on challenging the traditional and existing views rather than conforming to them, when we allow people freedom and time just to think rather than constraining them to be busy and productive, and in cultures where risk is tolerated and there is an appetite to see and do things in sometimes radically different ways. 

As you can imagine, the rules and practices of management that lead to the massive gains in productivity we saw in the 20^th century are unlikely to generate growth via creativity. 

But it’s not an either/or issue, creative growth is about having both. 

It’s about unleashing creativity and then applying discipline and the lenses of efficiency to extract the maximum value from whatever the creativity unleashes. 

The organisations that will be spectacularly successful in the next century will still use resources efficiently and produce the maximum outputs and outcomes from efficient processes; they will just be different processes and more creative outcomes.     

Craig Tapper is an adjunct lecturer in strategy and management at AGSM Executive Programs at the Australian School of Business