This article is part of a coursework required for the ‘Hyper Island’ Digital Management Masters, and is the result of academic and professional research that led to the design of an idea management platform. A Harvard referenced version and/or complete bibliography is available on request.
Organisations today recognise that innovation and creativity can offer companies a competitive advantage. However, in those instances where companies can’t harness the potential of creativity, we will see that new ideas will be stiffed and the innovation process will be lost. Consequently, the way ideas are generated and identified is extremely important, hence companies need to design new flows that stream “good” ideas in a collaborative way to fuel innovation.
What is innovation?
Innovation is the dynamic force that drives economy, generating productivity growth and leads to increases in the standard of living. This evolution is set through activities where organisations and public institutions have to work together, collaborate and act as suppliers and customers.
The need for innovation is as necessary to small organisations as it is to large ones. Its development is the enabler for new ideas and business models that can transform over time companies to keep up with the rapidly changing economies that exist today. However, established firms frequently experience difficulties with business model transformation.
Innovation generates many benefits in organisations but mainly we can identify:
Value creation — Value for customers that expect more from products and services.
Growth — Sustainable growth and enterprise development leading to a realisation of greater profit.
Employment — New and more exciting jobs, including up-skilling and personal development.
Competitiveness — Productivity and prosperity in markets.
An inevitable dualism
Tim Brown states that creativity and innovation are two of the same pair, playing creativity a pivotal role in the process, where ideas are generated and sequently implemented into business products and services. Through creativity we can come up with ideas that are novel and useful, and these can lead teams to solve existing problems and organisations to launch new innovative solutions to the market.
“Creativity is a function of knowledge, curiosity, imagination, and evaluation.” — Daniel Burrus
The innovation and creativity process facilitates:
Analysis of the existing problem — Seek market opportunities and understanding of current problems through observable phenomena.
Creating possible solutions — Through quantitative thinking, teams can generate multiple ideas that can solve the existing problems.
Refining based on multiple feedback — Select the ideas that have a higher likelihood of delivering future performance through a viability, feasibility and desirability assessment.
What is an idea?
The dualism between creativity and innovation is reinforced by the division of the innovation process into two stages — Invention and Exploitation. Invention (in effect, creativity) is the generation of novel ideas and exploitation (innovation) is the implementation of these ideas.
In this context ideas are precursors of the innovation process. They are expressions of thoughts that follow action through development and implementation. Besides, ideas are valued when they are new and have the potential to create value for the customer as to the organisation in the short or long term run.
According to Jennifer M. George, innovation ideas can be related to expertise, creative thinking and task motivatin.
The creative process
Many innovation academics regard individuals as the key enablers of the creative process inside an organisation. Creative people are therefore necessary to innovate, and this is not something left for just a few. Encouraging cognitive problem solving and exploration can make everyone creative.
Individual creativity has 3 main components:
Expertise — Possessing skills and knowledge in the relevant area
Creative thinking — Ability to consider different perspectives and hold parallel lines of thought
Task motivation — Intrinsic motivation rather than extrinsic drivers (rewards, goals, objectives)
How have ideas been generated traditionally and how they are generated today?
Traditionally companies have nurtured innovation and idea generation in close environments relying entirely on their own. In today’s environment, this model is becoming obsolete and is being replaced by a new paradigm, “open innovation”.
The development paths of the innovation process happen in a closed environment, blocking the entrance of external creative and technological influences. Closed innovation, however, tends to highlight the importance of knowledge and technology nurtured inside each organisation and it usually requires the control and ownership of intellectual property (IP). In this model, the entire product development is integrated and controlled in a self-sufficient way.
Counter to the secrecy and silo mentality, innovation happens in a collaborative environment where people share ideas and work together through open and transparent networks. Open innovation assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.
Idea networks and the generation of knowledge
In his book “Open Innovation”, Henry Chesbrough claims that knowledge is far more distributed today. And this far greater diffusion of knowledge changes the viability and desirability of a closed Innovation approach to accessing and taking new ideas to market. In this context, we need to ensure that we use as much of the surrounding knowledge as possible and fund the creation of as little new knowledge as necessary.
Social networks have been identified as a source of knowledge and increased learning. Communities of practices and informal networks foster learning and innovation, and these free-flowing of knowledge organisations can find new ways to problem-solving.
In his study, Björk and Magnusson found that the quality of ideas generated in an organisation increase in a linear manner with increased centrality for the individuals.
The more sources available to an individual to acquire knowledge and information, the higher the proportion of high-quality ideas generated. — Björk and Magnusson
While it is clear that there is still room for disruptive innovation models inside organisations, we can also argue that companies do not need to innovate in a fully renovated way compared to how they do it today. However, horizontal innovation is still rarely seen inside companies. The lack of alignment across an enterprise produces a very “waterfall” and sequential path to innovation, lacking of consistency and purpose.
Utilising the benefits of social networks, we could fuel creativity, experimentation and learning. It has been clearly demonstrated through research that by creating the right channels where different teams to communicate and share their innovation experiences, we can leverage scale in complex enterprises and place innovation experiments easily into different areas.
To be successful, companies will need to become better at decision making and allow people to pursue opportunities that they believe are worth it. Whether projects succeed or fail, it is clear that the outcomes will always be positive, as every idea builds on one that came before it, hence the importance of the transfer of knowledge.