EDITORIAL
1
Editorial
B
efore you lies the first issue of the 15th volume of Creativity and Innovation Management. The fact that our journal is already in its third lustrum for us is a reason to celebrate and also look back a bit at the past 15 years. We are proud to present to you in this issue a set of articles coming out of the First Creativity and Innovation Management Community Workshop, held last year on the premises of our publisher Blackwells, in Oxford, as a prelude to the celebration of 15 years of CIM. Creativity and Innovation Management as a journal was founded by Tudor Rickards and Susan Moger of the Creativity Research Unit, Manchester Business School, in 1992. The vision for the Journal was for an international community of practitioners and academics sharing and extending their understanding of creativity and innovation management through the pages of the journal. The journal was rooted in the European Assocation of Creativity and Innovation, in which the founding editors were actively involved. Throughout 14 volumes the journal has grown, and its community has diversified. When we took over the editorship in 2003 (in the 12th volume), first and foremost we continued the editorial philosophy of challenging and facilitating the creative potential of individals as well as teams and of organizations as a whole. This creative potential then should be imbedded into result-oriented business developments. However, we were also faced with some new challenges for the journal, and had our own complementary aims and ambitions. We installed a double blind review process in order to further assure the quality of publications from both an academic and a practitioner’s point of view. To date, the number of submissions has grown to more than 100 per year and the number of articles published went from five per issue to ten per issue (and the pipeline is ever growing). We also liaised with other research and practitioner communities such as the EIASM International Product Development Conference (see the special in our December 2005 issue), EGOS (resulting in a special on Creative Industries in one of the next 2006 issues), and last but not least, the Product Development Management Association, which brings together thousands of NPD and Innovation practitioners and
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
researchers, with whom we have now become formally affiliated. Additionally, we set out early in 2003 to stimulate the active involvement of not only the (guest) editors and the editorial board, but also our readership and contributors as a community. One of the ways to achieve this has been the initiative to organize the First Creativity and Innovation Management Community Workshop. On 23 and 24 March 2005 we welcomed over 40 participants from the UK, The Netherlands, Germany, Sweden, Finland, Spain, France, Malta, Canada, Portugal and the USA, including wellcited authors from past volumes of our journal such as Min Basadur and Pier Abetti. For the organization of the meeting we received a great deal of support from the editorial team at Blackwells, who put in effort as local organizers and also gave substantial financial support to make this happen. The workshop was designed to be a meeting place for academics and practitioners related to the journal, to network and meet again, exchange experiences and research findings, start up new (joint) efforts. One example of this is the mini-special on Space and Creativity which you may expect in a future issue; it began life in Oxford and is now under review for publication. It is only fitting that the first contribution in this issue is by our founding editors, Susan Moger and Tudor Rickards. They presented in Oxford a overview of articles published in Creativity and Innovation Management volumes 1–9, examined for their contributions to understanding of leadership as a process contributing to creativity and innovation. Their article discussings nine overlapping themes resulting from the study, showing the richness of ideas to be found in our journal. The article should also be seen as an invitation to us all to contribute to the leadership and creativity debate in the next decades, and through the pages of our journal! We plan to publish a leadership special in the near future; submissions are being welcomed! Next, Gerard Puccio, Roger Firestien, Christina Coyle and Cristina Masucci give an extensive review of the effectiveness of creative problem-solving training with a focus on workplace issues. This article, presented by Gerard Puccio in Oxford, synthesizes the research literature that reports on the impact
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00377.x
2
CREATIVITY AND INNOVATION MANAGEMENT
of CPS training carried out within organizational contexts. The positive benefits of CPS are further examined through reports that cite the outcomes of applying CPS to business challenges. This contribution may well serve as a catalyst for future work in organizational settings! The third article in this issue presents the advantages to businesses of using the Creative Product Semantic Scale (CPSS), a reliable, valid instrument that measures novelty, resolution and style. Karen O’Quin and Susan Besemer show that the CPSS has helped businesses in testing for marketability, new product design, product improvement and enhancement of advertisements. Also among the participants in Oxford, Min Basadur and Garry Gelade, in their article, ‘The Role of Knowledge Management in the Innovation Process’, argue that current concepts of knowledge management and organizational learning are, by themselves limited in their ability to improve organizational effectiveness. The article shows how these concepts may be usefully integrated with organizational creativity and innovation within a single framework. Min vividly illustrated the use and benefits of the framework in practice in Oxford, and his article is a worthwhile read for academics and practitioners alike! A relatively new member of our editorial board, Rosa Chun, wrote the fifth article of this issue, taking an ethical character perspective on innovation and reputation. Linking creativity and innovation in a business setting to ethics and social responsibility in our view is an important complementary view to the aims and scope of our journal. One of the implications for managers from her study involving a survey among 407 managers from three service organizations is that ‘innovation-based reputation’ is sustainable only if it is linked positively to both integrety and courage. The seventh article is also the last one in this issue that was also presented in Oxford, by one of our longest-standing members of the editorial board, Pier Abetti. Drawing a parallel between the French revolution and the development of General electrics according to three waves of transformation, Abetti discusses the revolutionary leadership and driving force of GE’s Jack Welch as an historical study. Not only an interesting comparison and a good read, but this article might also serve as case material in MBA classes or programmes. Indeed, Welch’s accomplishments are unique in the history of business and worth studying. Next follow three additionally contributions, which were not presented in Oxford. Bjorge Laugen, Nuran Acur and Harry Boer discuss the New product development improvement motives and practices of Miles
Volume 15
Number 1
2006
and Snow’s prospectors, analysers and defenders, presenting the intriguing finding that the NPD improvement motives and practices of these three types of strategies are less different than expected. Their explanation for this finding is that the three strategic types are growing towards each other, forced by changes in competition and enabled by new technologies and management concepts. It will be interesting to follow their further research guided with regard to the changes in and developments of the roles of prospectors and defenders. Jan Kratzer, Roger Leenders and Jo van Engelen address the impact of team polarity on creative performance in innovation teams, picking up from their 2004 publication in our journal (13(1)), which is one of the most downloaded articles from Creativity and Innovation Management. The results from their new study indicate the managerial challenge to realize certain degrees of team polarity at the conceptualization phase and to minimize these degrees at the commercialization phase. Since polarity is inherently part of systematic variations of problem solutions, systematic design methods should be adapted to the requirements of creative performance. One of the newest members of our editorial board, and representing the journal together with Jon-Chao Hong in the organization of the R&D Management conference on Creativity and R&D in Taiwan (see our December issue for the call for papers), Ming-Huei Chen authored the closing article of this issue on understanding the benefits and detriments of conflict on team creativity processes. The degree of conflict that different types of project teams experience is examined. Results show among others that the project life cycle is a significant moderator of the conflict-creativity relationship in different project teams. This issue concludes with two book reviews, in which Jorge Gomes discusses Tudor Rickards latest book with Murray Clark, Dilemmas of Leadership, and Eric Harkink summarises the highlights of Charmianne Lemmens’ Innovation in Technology Alliance Networks, and there is also conference report on the ninth European Conference on Creativity and Innovation. Also we would like to draw your attention to the call for the 16th European Summer School in Technology Management included in this issue, and other relevent events posted on our website http://www. blackwellpublishing.com/caim and those of our affiliate networks http://www.pdma.org and http://www.eaci.net. We wish you an inspiring read! As we are writing this editorial we are already looking forward to your reactions on this issue, and © 2006 The Author Journal compilation © 2006 Blackwell Publishing
EDITORIAL
on our June issue, which includes a special entitled ‘Explorations of the New’. Guest editors Alf Rehn and Christian de Cock have brought together a set of inspiring, novel contributions related to our aism and scope but
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
3
tapping into other than usual schools of thought. Enschede, Olaf Fisscher and Petra de Weerd-Nederhof
Volume 15
Number 1
2006
4
CREATIVITY AND INNOVATION MANAGEMENT
Creative Leaders: A Decade of Contributions from Creativity and Innovation Management Journal Tudor Rickards and Susan Moger Articles published in Creativity and Innovation Management volumes 1–9 (1991–2000) have been examined for their contributions to understanding of leadership as a process contributing to creativity and innovation. The study reveals nine overlapping themes, within each of which leadership plays a part in the production of creative insights or innovative productivity. However, for many authors, leadership remains an implicit factor within their models of change. We suggest that leadership, creativity and innovation are knowledge systems which can be more closely integrated for improved theory and practice within communities of practice.
Exploring a Community of Practice he retrospective evidence presented here shows how well the journal has served to promote learning within a community of practice (Brown & Dugaid, 1996; Constant, 1984). We use this term to imply that learning about creativity and innovation has occurred through social practice. That is to say, the journal acts as a forum for discussion of how practitioners act and how these actions are explained. The community includes organisational leaders, individuals engaged in creativity production, consultants, mentors, facilitators, financiers of change, communicators of change, and researchers of such processes. As founding editors of Creativity and Innovation Management (CAIM) we are proud to have been part of such a community throughout the decade 1991–2000. Many distinguished contributors gave freely of their time and knowledge, as will be indicated in the following review. To examine their contributions we have carried out a thematic analysis of the decade of publications 1991–2000. The approach represents the kind of theory elaboration considered suited to the study of dynamic and interactive processes (Lee, 1999). Elsbach & Kramar, (2003), and Lee, Mitchell, & Sablinski (1999), provide recent applications of the theory elaboration approach.
T
Volume 15
Number 1
doi:10.1111/j.1467-8691.2006.00365.x
2006
We took the concept of leadership as a focussing or sensitising device. This decision was reached prior to the study reported here. However, it emerged after various discussions over the decade by ourselves as editors, seeking integrative constructs for the richness of materials submitted. We tentatively explored the idea of leadership as an integrative construct in various workshops (e.g., Rickards, Moger & Chen, 2002), and in publications (e.g. Rickards & Moger, 1999b). During the handover stage of the journal, discussions with publishers and in-coming editors gave closure to the decision. The decision is open to criticism for its analytical looseness, but has the merits of strong face-validity. We further decided to make the actual set of papers set the boundaries of our examination. In this way, although the themes or categories identified are likely to be influenced by our tacit models of leadership, creativity and innovation, we were able to remain reasonably grounded in the empirical and conceptual concerns of the papers examined (Strauss and Corbin, 1998). The process was one of revisiting ‘old friends’: articles we had looked at in the past. Some were clearly remembered; others were much harder to recall. We tried to combine a judgement on what the authors were communicating with our inferences on what this implied for leadership. At times we were attracted to related themes, and this contrib© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
uted to our view that we could only offer a speculating starting point in this paper for leadership as a valuable integrating concept for creativity studies. Our work continued over several iterations (vol 1 through 9) as the conference deadline approached. We eventually were confident we were moving towards a ‘saturation of the construct set’. However, given more time, we would probably have identified other articles which could have been added to the themes but are not included in Table 1. We apologise to authors whose work deserves to be there, but does not appear. We welcome future amendments aimed at making the report a more comprehensive one.
The Nine Themes The nine themes identified show considerable overlap conceptually, and contributions by an article to more than one theme are common. The themes are: Leadership learning and knowledge systems Empowerment and distributed leadership for innovation and change Creative problem-solving Innovation leadership and entrepreneurship Leadership in turbulent environments Change-centred leadership Structural supports and hindrances to creativity (amended to Creating the conditions for creativity) Strategic planning and leadership The social construction of creativity (creativity evaluation). In the next sections of the report we examine the major contributions we associated with each of the themes.
Leadership Learning and Knowledge Systems The link between leadership and tacit knowledge cropped up early in the decade in a study of the nature of tacit knowledge (Sternberg & Wagner, 1992). The article anticipated growth of interest in two areas of research interest in the 1990s, tacit knowledge as a process through which innovation emerges (Nonaka and Takeuchi, 1995); and social intelligence (popularised in modified form as emotional intelligence by Goleman, 1995). Schön and Wiggins (1992) summarised Schön’s classic work on the reflective practitioner, and design as a ‘reflective conversa© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
5
tion’. These articles added an experiential dimension to the more cognitive models dominating research into the conceptualising of strategies for change (Hodgkinson, & Sparrow, 2002). Learning within cross-cultural dimensions was examined in Teramoto, Richter & Iwasaki, (1993). Power accrues to firms with a greater capacity to enhance learning systematically. Grønhaug and Huakedal (1995) provide empirical evidence supporting the view that leaders have to draw on highly specific and experience-based knowledge when facing innovative and unstructured challenges. Experienced leaders are able to generate more action-oriented plans. Less experienced leaders tend to rely of more general and diffuse plans. They argue powerfully that successful strategic teams ‘include members both with deep declarative knowledge, i.e. people who really know the industry and people with superb procedural knowledge’ (Grønhaug & Huakedal, 1995: 11). Johannessen and Hauan (1994) take the theme of organisational learning and creatively invert it. ‘How about considering the need for unlearning?’ They ask. Their case is a rich account of a technological leader who accepted a challenge to change a rather overstable shipyard in Norway. The study shows how the formation of alliances required unlearning as well as learning as communicative practices were changed. The researchers point to the supportive view that ‘action defines cognition’ (Weick, 1979: 165). The study includes evidence that the leadership approach is creative and highly symbolic. Paper and Johnson (1997) present an integration of creativity, empowerment and organizational memory from an Information Technology perspective. Their model points to the tensions between empowerment, more localized freedom and creativity on one hand, and potential costs through the absence of (or reduction of) traditional top-down controls over costs, production reliability and deadlines. Their introduction of organisational memory into the model suggests that information systems may support the kind of integrative team-based working required for innovation and creativity. Such structures should be concerned with encouraging the open sharing of experiences and in particular sharing of unexpected outcomes (mistakes) and challenges to prior assumptions. Fairhead (1998) explores learning in a merger using a sense-making approach (Weick, 1992). From a ten-year programme studying product innovation and organisational learning, the author considers that process learning at a deep level may be widely
Volume 15
Number 1
2006
6
CREATIVITY AND INNOVATION MANAGEMENT
distributed (leveraged) into paradigmatic changes. George Huber (1998) asks ‘in what specific way does organizational learning lead to creativity and innovation? Or . . . in what ways do creativity and innovation lead to organizational learning?’ (Huber, 1998: 3). He explores three modes in which such learning occurs: through sensing (passive and active), experiential learning and vicarious learning. He gives examples how each form helps creative individuals to support innovative change. A subsequent issue of CAIM was devoted to knowledge management (Volume 8 no 2, 1999) Huber (1999) further developed his proposals for institutionalising the creative learning gains from project-based activities. Tidd & Taurins (1999) argue that in diversifications the choice may be between leverage or learning. In the same issue, Sparrow (1999) examines the concept of knowledge as a new leadership competency, the importance of cognitive intertia and information overload. Smart et al. (1999) argue for designing in a knowledge capture stage in process innovations.
Empowerment and Distributed Leadership for Innovation and Change Empowerment and Distributed Leadership At the start of the 1990s, leadership research was turning its attention to how leaders achieved transformation. It was a decade of new leadership studies (Sims & Lorenzi, 1992; Bryman, 1996). The shift from transactional leadership models had concentrated attention on leaders as change agents through providing empowerment, and a vision of the proposed change. All teams are not created equal (Ketchum and Trist, 1992) was reviewed (Rickards 1992) as powerful evidence that the transformational leader achieved change though enabling others to have ownership in the change. Banner (1993), extended in Banner & Gagne, (1993), gave a coherent analysis of how such changes required self-managing work teams. The study suggested that the new demands of knowledge management and innovation require a new form of leadership liberating others for transformation to occur. Cynthia Wagner (1995) argued that topdown leadership models in hierarchical organisations are becoming less appropriate than more participative ones. Her argument is again for empowering and facilitative leadership. She also suggests that the top-down style
Volume 15
Number 1
2006
is more open to manipulative and coercive practices. Her warning anticipates the wave of corporate mismanagement events at the turn of the 20th century. An indirect contribution to the debate may be found in Rubenson & Runco (1995) who show how a psychoeconomic treatment of group behaviours provides a new perspective into diversity and collaboration. The treatment also offers ideas on the tensions between consensus, conflict, and change. Ollila, (2000) suggests a way in which leaders can become more reflective of their own behaviours (through feedback) and thus more able to support and enhance project performance in followers. This is a theme reworked in Rickards (2000b). Based on studies of the work of animal behaviourists and especially Monty Roberts (the original horse whisperer), the paper drew many parallels between the approach for trust-based leadership, and creative leadership. An integrating concept (originally suggested in Rickards and Moger, 1999b) was that of an invitational leadership style, through which the leader provides both direction and space for ‘followers’ to make self-selected decisions to mutual satisfaction. Although not directly concerned with empowerment, Abetti’s rationale (1995) for cross-functional teams also indicates motivational and empowering benefits through the inter-dependencies thus addressed. RuraPolley & Clegg (1999); and Marceau (1999) examine processes permitting collaboration and trust at the level of organisational networks.
Creative Problem-Solving Unsurprisingly, creative problem-solving has occurred as a recurrent theme throughout the decade. One noteworthy contribution was the first article in English introducing TRIZ as a structure for supporting innovative discovery processes (Dung, 1995). Since that article TRIZ has become one of the most widely diffused approaches for stimulating innovation. Various workers take the well-known stage processes of creative problem-solving (Parnes, 1992) and propose radical rethinking of the rationale for applying the techniques. Isaksen (1995) reviewed the conceptual grounds for creative problem-solving structures (CPS) with particular reference to the Parnes/Osborn model and subsequent developments. He proposes a refinement to earlier models which emphasise a stage-based structure. The approach is more process-oriented permitting a deliberate matching of creative problem-solving structure to features identi© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
fied of the task and environment. McFadzean (1998), and Puccio (1999) also suggest that individuals (leaders and team members) conducting creative problem-solving will have preferences influencing their behaviours. The preferences may be contingent on environmental and task requirements (McFadzean) or on cognitive preferences (Puccio). Further examples of creative problemsolving approaches were provided from the work of Dan Couger and associates in a special edition of Creativity and Innovation Management in 1996 (Volume 5 No 4). Snow and Couger (1996) reported innovative benefits from creativity training and application of creative problem-solving techniques using creative facilitators following the Synectics approach (Prince, 1970). Wilson, (1997) introduced Basadur’s Simplex model), summarised also in Basadur, Pringle, Speranzini, & Bacot, (2000). This article provides a specific contextual application unusual within creative problem-solving literature, namely that of conflict resolution (Thomas, 1976). Structured (‘targeted’) creativity seems an excellent approach for enlarging the cake to win/win outcomes. Unsurprisingly, the one residual issue was the most contentious, namely that of monetary rewards. Chee & Phuong, (1996) also described a creative problem-solving approach applied for conflict resolution. Under classroom situations (with medical students), ideas are generated that overlook the possibilities for win/win outcomes. With creative facilitation of groups, more collaborative and feasible ideas emerged. In another study, the Simplex system was applied to technology management (Basadur, Potworoski, Pollice, & Fedorowicz, 2000). The authors argue that techniques for group creativity (such as those found in Simplex) can play a significant role, addressing the new challenges of distributed teams, and project uncertainties.
Innovation Leadership and Entrepreneurship Manimala (1992) appropriately introduced the theme of entrepreneurialism to the new journal with an article examining the creative destruction model of entrepreneurship (Schumpeter, 1934) proposing a wider range of entrepreneurs to meet changing economic conditions. In contrast, Bessant (1992) points to the adaptive processes occurring in organizations where technological change leadership is based on continuous and incremental change © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
7
processes. Davies (1992) offers an analysis of innovations in marketing. De Cock (1993) presents a creativity model for the analysis of continuous improvement programmes suggesting ways of ensuring that such change processes ‘keep going’. Smart et al. (1999) report on such adaption processes during technological change processes, and the likelihood of successful implementation being found within learning environments. Bowander & Miyake (1994) examined Hitachi Ltd as a case of global innovation. They revealed a plethora of innovation initiatives covering Schumpeter’s categories and others more easily explained as efforts to strengthen core technological capabilities. The case could also be read as a complex example of a learning organization. Abetti (1995) looks closely at the concept of entrepreneurial leadership under varied international conditions. His analysis demonstrates how simple models of leadership ignore contextual pressures. He suggests a taxonomy of ‘readiness to accept technological entrepreneurship within a free-market economy’ (Abetti, 1995: 46) placing East Germany, Hungary and Poland at the top of the readiness list, and Belarus, Russia and Bulgaria at its base. These professional assets from a resourcebased perspective are seriously weakened by a lack of managerial expertise, limited funding opportunities and institutional support. Under such circumstances, the common policy of releasing state-owned technological assets into private hands may turn out to have been ill-judged and premature. Intermediate mechanisms such as business incubators would have helped focus and target technological entrepreneurs, thus providing a more enabling culture of support for technological leadership. Abetti (1997) examined the possibilities for the creative corporate entrepreneur as technological change leader. He suggests that innovations only happen rarely in this fashion (estimating them from an earlier study as around one in thirty recorded cases). He suggests that one interesting route is through the ‘underground innovator’ as technology leader who conceived new products and nurtured them in the early stages of commercialisation without corporate support. The project will require covert support which may come from among a range of sources within and external to the organisation. Tetsuya Mizoguchi was one such intrapreneur who was the engineering force behind Toshiba’s original lap top product. Abetti’s account is worth studying by students of entrepreneurship, creativity, and team leadership. The model proposed by Abetti for such
Volume 15
Number 1
2006
8
CREATIVITY AND INNOVATION MANAGEMENT
underground projects is of a process with many parallels to legitimate corporate projects. However, the leadership has to be open to possibly transient opportunities or precipitating events that have to be seized to secure legitimacy for the project. This often amounts to a ‘stay of grace’ or temporary acceptance of the project with a defined makeor-break point such as the results of a market trial. The creative intrapreneur (Pinchott, 1986) succeeds in holding both the team project and the wider corporation to ransom in what is believed to be their mutual best interests. Such precipitating events have been more recently written about as tipping points for change which are exploited expertly by transformational leaders (Kim & Mauborgne, 2003). Peter Augsdorfer (1994) provides supporting case evidence for underground or revolutionary leaders of innovative change. He makes the interesting suggestion that ‘. . . more sophisticated managers understand the chaotic nature of the decision-processes [for innovation] and are better able to accept bootlegging, recognising its benfits to the company. Less sophisticated managers are unable to reconcile bootlegging with their linear model of decision-making’ (Augsdorfer, 1994). Using a case study approach, Abetti (2000) suggested that the critical success factors for radical technological innovation were less technological than might be presumed (c.f. Basadur et al., 2000). He identified a range of factors requiring expertise which existed in differing organisational functions (marketing, technical, strategic, financial and organisational). His proposal is that innovation should be directed through ‘a multifunctional team of technical, production, marketing, financial and strategy experts in an open discussion. This will avoid functional bias, “NIH attitudes” [Not Invented here] and myopic vision’ (Abetti, 2000: 220). Abetti was making the case again for multi-functional teams; technological innovation is implied to benefit from distributed leadership. A similar conclusion was reached by Manz and Sims (1987, 1989) who argued that such teams were superleaders – that is to say innovation leadership could be effectively distributed around members of a cross-functional team.
Leadership in Turbulent Environments Articles often indicate the current conditions of uncertainty and turbulence facing organizations seeking to remain competitive. The theme of empowerment and new (distributed)
Volume 15
Number 1
2006
leadership is generally argued as more appropriate for such conditions. As will be covered in the next theme (change-centred leadership) a new form of leadership concerned with change has been identified, and associated with greater uncertainity facing leaders within contemporary business environments (Ekvall & Arvonen (1993). Augsdorfer (1994) suggested that for organisations to react constructively to uncertainties, informal ‘bootlegging’ approaches should be seen as potentially valuable rather than diversive. Purser and Kumar (1994) studied the stories reported of chief executives. According to such reports they acted to encourage employees to treat information as ‘a resource to action rather than for the control of action’ (Purser & Kumar, 1994: 37). This has the effect of generating flexibility for action in the organisation. An additional factor is a skill at supporting promising ideas in their early stages of development, producing a concentrating or swarming of resources around change in a way that may be seen to deal effectively with organisational turbulence. Denton (1998) summarises the emerging ideas of chaos theory and the implications for organisational creativity and leadership. He points out that in turbulent environmental conditions, leadership has to find ways to encourage adaptability, the capability to engage constructively with changes arising from the environment. Denton advocates cross-functional training; acceptance of apparent mavericks and their ideas; rapid decisionmaking without desired information; and awareness of the benefits from (perhaps necessity of) inter-dependencies within networked communication systems. The leadership is enabling rather than directive. He suggests this requires a revisiting of the much-lauded leadership concern for vision. Traditionally a visionary leader was expected to provide clarity of purpose and action. In most turbulent environments ‘leaders need to define broadly both who we are and where we are going . . . the only things that have any resemblance to a sense of permanence’ (Denton, 1980: 84). Implicit in Denton’s treatment is the argument we have come across above (e.g. Wagner, 1995) in favour of more distributed leadership actions necessary to deal with environmental uncertainties. The book Positive Turbulence (Gryskiewicz, 1999) was reviewed (Rickards, 2000a) as a proposal for an approach that faces turbulence head on and that actively seeks out ways of using turbulence constructively. Gryskiewicz believes that innovation occurs at the periph© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
ery of knowledge boundaries. By bringing together people who use different maps of their world, it becomes easier to challenge assumptions. Central to his approach is the belief that the chaotic conditions at the interfaces of two organisations can be constructively harnessed.
Change-Centred Leadership We report a specific and operational concept of change centred leadership. Göran Ekvall (1994) introduced a significant concept and measure of change-centred leadership. We suggest that the article offers considerable promise, and at present has received inadequate attention within the field of leadership studies (an exception is Yukl, 2002). The work suggested the appearance of a new leadership behaviour dimension, one which did not accord with earlier two-dimensional models, often simplified as task-oriented and relationsoriented styles. His interpretation is that the style arises from more turbulent, faster-changing environments.1 The more general sense of change-oriented leaders is a fundamental characteristic of transformational leaders and the new leadership paradigm (Bryman, 1996). Case examples of such leaders were described in Johannessen & Hauan (1994), and Abetti (1997). Volume 3 No 2 was a special issue on leadership and creativity, with contributions from leaders and academic scholars. Peter Frost (1994) focused on the ways leadership actions and activities influence the chances of implementation of change. The paper highlights ways in which leaders communicate change in order to permit organisational or cultural reframing. To avoid the potential coercive effects of imposed visions the leader is advised to ensure the network of stakeholders has adequate involvement, so that negotiated outcomes are achieved. The paper contributed to a growing interest in distributed leadership, and the leader as management of meaning (Bryman, 1996) and ‘leading leaders to lead themselves’ (Sims & Lorenzi, 1992). As a political scientist, Peter Frost observed that innovations are not necessarily ‘good’, a gentle reminder of the dangers of a proinnovation bias in much of the technologically oriented literature. 1
Ekvall suggests that creative leadership is likely to be found within the change-centred leadership dimension, although not to the exclusion of some change-oriented leaders who are less obviously associated with creative processes (personal correspondence, August 2004). © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
9
Structural Supports and Hindrances to the Creative Process A related theme to that of change centred leadership is that of structural supports and hindrances to the creative process. Here the emphasis is on the contrasting factors studied as relevant for creativity, itself a component within change processes. Talbot, Cooper & Barrow, (1992) examine the surprisingly neglected relationship between stress and creativity. Ekvall (1993) reports on of the few substantial longitudinal studies applying a creative climate inventory. Ekvall’s climate inventory assesses primarily the factors supporting a creative climate and incorporates one barrier in the form of a conflict scale. Turnipseed (1994) showed a correlation between the factors of an Ekvall-type creative climate scale and measures of the wider social environment. Rubenson & Runco (1995) examine the consequences of diversity in groups, challenging what they claim to be an assumption than more homogeneous groups will achieve more creativity because there are fewer sources of potential conflict than in more heterogenous groups. They apply psychoeconomic theory, which postulates that motivation to act arises through an economic calculus grounded in how outcomes would impact on perceived personal ‘investments’. This is the basis of valence models of motivation, as found in path-goal theory of leadership. The theory can be applied to explore issues of flexibility and rigidity in individuals and groups. Couger (1994, 1996) working with software design teams used a form of force field analysis to identify helps and hindrances to change, and applying the Work Environment Inventory, a climate scale of the kind pioneered by Ekvall (2003) and anticipating other scales (Amabile & Gryskiewicz, 1989; Rickards, Chen M W., & Moger, 2001). The evidence suggested that information systems environments are less conducive to individual creativity than other environments when a comparison is made of data-base averages. Ekvall (2000) argues that many practices advocated for leaders in project-management cut across our understanding of how creativity can be stimulated. His study of Swedish engineers found that project teamwork and creative methods were widely reported as supportive of creativity (70% to 90%). In some contrast, a considerable proportion (up to 50%) reported negatively on consequences of approaches such as lean production and total quality management. The impact of constraining approaches such as ISO 9000 was consid-
Volume 15
Number 1
2006
10
CREATIVITY AND INNOVATION MANAGEMENT
ered a constraint on creativity by a greater proportion of R&D technologists than production engineers. Radnor & Robinson (2000) applied a ‘helps and hindrances’ approach to evaluate the innovative potential of a range of UK manufacturing companies. Resources and activity coordination were identified as the major internal barriers to creativity and innovation. Pressures and changing demands of customers, and squeezed margins were the major external barriers.
Strategic Planning and Leadership The innovation materials have made contributions within several themes already. Some are more directly concerned with the strategic aspects of innovation And others are concerned with project-level innovation. Teramoto, Richter & Iwasaki (1993) studied the strategies of Japanese-European joint ventures. The authors suggest that Japanese firms have considerable experience of inter-firm cooperation which gives them an advantage. They further suggest that the Japanese style is more systemic, concerned with acquisition of higher-order knowledge (meta-knowledge or interpretative knowledge) with more focus on processes rather than structures. Boyander & Miyake (1994) illustrated how Hitachi’s strategic goals were achieved through a large number of innovation initiatives of various kinds. Tidd & Taurins (1999) examine internal corporate venturing as a corporate strategy that may achieve incremental corporate development (leverage) or radical discovery-based strategies (which the authors associate with knowledge management and learning processes). Goodman (2000) also explores strategic leadership. He distinguishes classical leadership approaches as contributing to corporate decline in companies such as ICI and Marks & Spencer. His case analysis suggests that in commercially good times there had been an unnoticed leadership misalignment in the two organisations between strategic, middle managerial, and operational levels. Under more difficult (turbulent) conditions the misalignment required addressing (Goodman, 1995). ‘Inquiries had revealed that both companies had attempted “quick fixes” only to remain disappointed with their lack of success [which they desired without wanting to change their culture] . . . Teamwork, empowerment, quality, activity based costing, business process reengineering had all been tried [unsuccessfully]’ (Goodman, 2000: 50). Interview evidence suggested a denial at a strategic level of
Volume 15
Number 1
2006
the need for radical change and a belief in a corporate culture of team-work. At lower levels in the same organisation, this view was largely rejected. For Goodman, the culture was stifling talented employees. Contextual changes called for more attention strategically to ‘holistic skills . . . on internal real team working and external attention to market developments’ (Goodman, 2000: 52). Kodama (2000) outlines a strategy realizing an electronically networked community of practice of veterinary professionals, medical service companies, customers, and IT specialists. The approach is highly appropriate for contemporary turbulent conditions, and supports continuous improvement (Bessant, 1992), new product generation, and collaborative socio-technical systems (Rura-Polley & Clegg, 1999). Riquelme (2000) looks at the issue of strategic leadership from a cognitive perspective. In a laboratory study (with MBA cohorts) he assessed the impact of creativity techniques on strategic planning, using a rigidity measure (Rokeach, 1960) to differentiate relatively open-minded and rigid individuals. He found that creative problem-solving support has a marginal impact on the assessed creativity of strategic plans. The assessment approach draws on Amabile, (1996), and was deeply discussed in this journal as indicated in the final theme below, on the social construction of creativity. Riquelme also suggested that the more closed-minded individuals (and thus teams with an excess of such individuals) would be particularly supported by provision of creative problem-solving approaches such as morphological analysis, brainstorming, and lateral thinking.
The Social Construction of Creativity (Creativity Evaluation) One function of journals is to promote dialogue and debate among members of a community of practice. A good example was initiated through a note from Magyari-Beck (1994). His concern was that creativity lacked scientific grounding. Among his illustrations were the subjectivity of assessment methods such as the consensual assessment approach creativity advocated by Teresa Amabile (1982), and the unchallenged acceptance of the basic elements of divergence and convergence within the so-called creative problem-solving techniques. These points had, incidentally, been touched on in Runco & Basadur (1993 which indicated how training in divergent and convergent tasks could enhance evaluative skills. The debate continued in the journal with © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
responses from Amabile (1994); Isaksen (1995); and De Cock (1996), leaving Magyari-Beck (1997) with the concluding comments). The issue pursued by Magyari-Beck was the implications of Amabile’s methodology for assessing creativity, which is based on evaluation of products within a domain by the consensus of experts within that domain. Such an approach disturbed Magyari-Beck as removing creativity from the ultimate truth-testing procedures established for the natural sciences. Amabile (1994) argued that the consensual assessment technique provides estimates of a product’s creativity that are reliable, using anything from three to fourteen expert assessors according to domain. She acknowledges that the approach is an attempt to capture the subjective beliefs at a point in time of an acknowledged group of experts, and that these views may well change over time. However, she strongly disputes that such an approach leaves the experts doing the work that should be reserved for creativity scholars. She also considers this approach limited to well-established fields. The argument is consistent with Amabile’s rich treatments of creativity and the significance of context (Amabile, 1982, 1994, 1996; Amabile et al., 1989, 1996, 1999). Isaksen (1995) rejects the view that creative problem-solving may be summarised as a technique critically concerned with an unsubstantiated grounding in divergence and convergence. He argues that the assessment can not be made as if the technique was one unchanging structure fixed in time. Rather, he points out the even within the group of workers that worked with and developed the Parnes-Osborn model, the practice involved large numbers of procedural changes. The processes or stages vary, although the divergence/convergence issue remains. Although a theoretical grounding remains elusive, he considers the fifty years of testing has demonstrated that the approach has great potential for understanding creativity. De Cock (1996) argued that the discussions had revealed that an old orthodoxy of scientific theory building was inadequate for dealing with the ultimate nature of social scientific concepts such as creativity. The issue, far from being confined to creativity, was one pervading social science research and indeed exercised those concerned with ‘what is knowable (ontology) and how might it be known (epistemology)’ (De Cock, 1996: 205, citing Marsden, 1993: 101).
Making Sense of the Richness The contents of Creativity and Innovation Management over the period reveal a richness © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
11
that requires some further examination. Our first classification of the materials revealed several recurring themes as shown in Table 1. Unsurprisingly, most articles offer insights into more than one theme and have been coded accordingly. The orienting theme of leadership does crop up regularly within the articles studied. Its connection with creativity is largely through articles which consider leadership styles which support and stimulate creativity. The work owes much to the early efforts of Amabile and Ekvall. For Ekvall’s work in particular, Creativity and Innovation Management makes an invaluable reference source for researchers. The articles touch on some of the extensive changes that have been taking place in leadership research (Bryman, 1996, Rickards & Clark, 2005) where attention has shifted away from the behaviours of leaders towards the processes of leadership. An influential model is that of transformational leadership (Bass, 1999), which is thus attempts to provide an empowering environment, where autonomy, job satisfaction and commitment flourish under challenging and motivating work conditions. The work is opening the way to considerations of the link between leadership and creative team performance (Rickards, Chen, & Moger, 2001). Associated with new leadership is more emphasis on interpretational views of leadership. Such views explain leadership is based on perceptions and beliefs of those engaged with the leader’s actions, rather than on essential objective qualities of leaders (Grint, 1997). This view echoes the changes in emphasis in creativity research that have increasingly acknowledged the relativistic and contextual nature of the creative product (Amabile, 1996). The studies raise older questions regarding the similarities and differences between creativity and innovation. They also introduce a further set of questions about leadership and management. It is interesting to note that the second set of questions have attracted considerable debate following a much-cited article by Zaleznik (1972). Since that article, one argument has been that leaders and managers are different, with the distinction being that leaders appear to be concerned with creating change, and managers concerned with executing change. This has not remained the only view, and has been criticised as risking ‘simplistic theories about effective leadership’ (Yukl, 2001: 6). In contrast to the debate on managers and leaders, the debate concerning creativity and innovation has been relatively muted. Kirton (1976) has introduced an important treatment that considers innovation and adaption as two
Volume 15
Number 1
2006
12
CREATIVITY AND INNOVATION MANAGEMENT
Table 1. Leadership and Creativity Themes in Creativity and Innovation Management (1991–2000) Themes
CAIM references
Notes
Leadership, learning and knowledge systems
Sternberg & Wagner, (1992); Teramoto, Richter & Iwasaki, (1993); Schon, & Wiggins (1992); Johannessen & Hauan (1994); Grønhaug & Haukedal (1995); Paper & Johnson, (1997); Fairhead, (1998); Huber, (1998, 1999); Smart et al. (1999); Sparrow (1999); Tidd & Taurins (1999) Book of the quarter (Rickards, 1992) is Ketchum and Trist, (1992); Banner (1993); Banner & Gagne, (1993); Paper & Johnson, (1997); Rickards (2000b). Wagner (1995); Rura-Polley & Clegg (1999); Marceau (1999), Olilla, (2000)
Absorptive capacity (Cohen and Levinthal, 1990) resource-based models, and cognitive framing are promising ways of integrating knowledge and leadership studies
Empowerment and distributed leadership
Creative problem-solving leadership
Runco & Basadur, (1993); Dung (1995); Isaksen (1995); Snow and Couger (1996); Basadur, Pringle, Speranzini, & Bacot, (2000); Chee & Phuong, (1996); McFadzean (1998); Puccio (1999); Riquelme (2000)
Innovation leadership and entrepreneurship
Manimala, (1992); Bessant (1992); de Cock (1993); Boyander & Miyake (1994; 1999); Augsdorfer, (1994); Abetti (1995, 1997, 2000); Basadur, Potworoski, Pollice, & Fedorowicz, (2000) Ekvall & Arvonen (1993); Augsdorfer, (1994); Purser & Kumar, (1994); Wagner, (1995); Denton (1998); Book of the quarter (Rickards, 2000a) is Gryskiewicz, (1999); Goodman, (2000); Ekvall & Arvonen (1993); Ekvall (1994); Johannessen & Hauan (1994); Frost, (1994); Couger (1994); Abetti (1997); Ekvall & Ryhammar (1998); Radnor & Robertson (2000)
Turbulence and leadership
Change-centred leadership
Volume 15
Number 1
2006
Self-managed teams (Banner, 2003) and distributed leadership systems are based on a facilitative or empowering leadership style (Manz & Sims 1987, 1989). Cross-functional teams necessary for required integration within projects (Pinto et al., 1993). The collaborative paradigm within firms and networks is also relevant. Creative leadership (in and beyond formalized structures to stimulate creativity) is widely associated with a facilitative or process-oriented style (Manz & Sims, 1987, 1989; Parnes, 1992; Schein, 1969). Personenvironment fit (contingency) theories seem relevant also. Roles in technological innovation generally assumed to operate within a rational model of strategic change (Tidd, Bessant, & Pavitt, 2001). Schumpeter (1934) offers an alternative and more radical model. The theme introduces the concept of managing/leading in uncertain or turbulent environments (Eisenhardt, 1989). Complexity theory also seems relevant (Stacy, 1995). Change-centred leadership differentiates older and new leadership thinking (Bryman 1996).
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
13
Table 1. continued Themes
CAIM references
Notes
Creating the conditions for creativity (Original title: Structural supports and hindrances to the creative process)
Talbot, Cooper, & Barrow (1992); Ekvall (1993); Frost (1994); Turnipseed; (1994); Isaksen (1994); Rubenson & Runco (1976); Moger & Rickards, (1999); Rickards & Moger, (1999)
Strategic planning and leadership
Teramoto, Richter & Iwasaki, (1993); Boyander & Miyake (1994, 1999); Purser & Kumar, (1994); Fairhead (1998); Tidd & Taurins (1999); Sparrow (1999); Goodman, (2000); Kodama, (2000); Riquelme (2000) Runco & Basadur (1993); Magyari-Beck (1994, 1997); Amabile (1994); Isaksen (1995); De Cock (1996)
Ekvall and Amabile with coworkers are regarded as key sources to work on climate and environment studies. (Ekvall, 1993; 2000; Amabile 1996; Amabile et al. 1996; Amabile & Conti, 1999). Action research, (e.g. Benne et al., 1975) often seeks change by surveyfeedback of perceived blocks or barriers to change. Resource-base theories help model global innovation (Teece, Pisano, & Shuen, 1997). Another promising model is that of population ecology (Hannan & Freeman, 1982)
Creativity evaluation
Other possible theme: Globalization
Clarke (1999)
Debates the validity of Amabile’s interpretive or social constructivist approach to creative evaluation. Elsbach & Kramar (2003) takes an interpretive approach to understand creative evaluations in Hollywood. (See also the management of meaning shift in leadership studies, Bryman, 1996) A special issue on globalization contains a range of articles indicating a possible additional theme.
Note: We are grateful to Professor Teresa Amabile for suggesting the revision to the title of the theme ‘Creating the conditions for creativity’.
cognitive styles leading to two differing forms of creative product. His view helps us escape from the trap of locating creativity in a special group of people. Inevitably, the resolution of the issue is likely to require considerable debate. As in the earlier debate regarding the assessment of creativity, initiated by MagyariBeck, (1997), contributors to Creativity and Innovation Management have begun the process of constructive critique of Adaption-Innovation theory (Kaufman, 2005). In the process of review, we became aware of a possible useful way of considering creativ© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
ity, innovation, leadership and management (Figure 1). The four labels refer to bodies of work concerned with theory and practice. They have been studied in a variety of ways which have to take into account the uncertainties of the world of practice. The study of creativity stretches back to pre-modern times where creative individuals were considered to be inspired by superhuman forces. Leadership also has a pre-scientific tradition, through its acknowledgement of charisma. Both creativity and leadership studies reveal their pre-
Volume 15
Number 1
2006
14
CREATIVITY AND INNOVATION MANAGEMENT
Ambiguity in interpretation
X
X X X
Creativity
Leadership
Innovation
Management
Representation of the ambiguities associated with the constructs of creativity, leadership, innovation and management. Creativity and leadership remain highly ambiguous in definitional and operational terms. Innovation is somewhat ambiguous with no universally agreed definition, although mostly within a rationalistic (‘modernist’) context. Management has acquired acceptance as a non-contentious term associated with delivery of organised work tasks according to principles of rationalistic principles.
Figure 1. Creativity, Innovation, Leadership and Management: Interpretive Ambiguities modern foundations. Both bodies of knowledge were subsequently and significantly influenced by modern scientific methods of analysis (for example, through the contributions of cognitive psychologists). Interestingly, both sets of studies remained open to the interpretational views associated with post-modern and late modern treatments. Although Teresa Amabile and co-workers (e.g. Amabile et al., 1996) appear to be exploring creativity from a modern (objective, truth-seeking) perspective, the impact of such work has been to introduce the ambiguities of an interpretational approach into the assessment of creativity production. Creativity is what groups perceive to be creative within some context of interpretation. We see something similar happening to leadership studies, where increasingly, leadership is seen as interpretive, and a property of the perceptual relationship between leaders and others within a context, or community of practice. In short, creativity and leadership have begun the processes of engagement with the ambiguities of definition and sensemaking earlier introduced into theories of social science (Berger, & Luckmann, 1967, Weick, 1979). In some contrast, innovation (and in an even stronger sense, management) have retained what might be considered a thorough-going modern perspective (Giddens, 1990). The ambiguities of the innovation process have been dealt with by reallocating them to a
Volume 15
Number 1
2006
‘fuzzy-front end’ where all the creativity is assumed to occur. Thereafter, the process is managed smoothly through structures and plans. We consider that the bulk of innovation studies to be seeking ways of dealing with ambiguities, in the hope that the modernist and rational models may be rescued. If innovation is engaging (in a somewhat hesitant fashion) with a work of turbulence and uncertainty, management remains desperately locked into a world of managers and executives playing out their roles within rational economic business organisations. This mode is reinforced by the conventions of management and ‘what they teach you at Harvard’ (McCormack, 1984) and other Business institutions. Little wonder that management ideas were found not to address the critical issues for contemporary leaders. From this viewpoint, we see creativity and leadership as more complex and more contested areas of study; management as a construct rigidly constrained by modernistic beliefs, and innovation living uneasily with considerable tensions between those practitioners and researchers who wish to explore innovation as a process for change in complex environments, and those whose preference is for a classical scientific management approach. We hope we have shown the richness of ideas to be found in Creativity and Innovation which we feel sure will continue to contribute to the debate in the decades ahead. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
References Abetti, P. (1995) ‘Planning for entrepreneurial innovation: Field studies in Poland and Ukraine and lessons learned’, Creativity and Innovation Management, 4(1), 45–51. Abetti, P. (1997) ‘Underground innovation in Japan: The development of Toshiba’s word processor and laptop computer’, Creativity and Innovation Management, 6(3), 127–39. Abetti, P. (2000) ‘Critical success factors for radical technological innovation: A five case study’, Creativity and Innovation Management, 9(4), 208–21. Amabile, T.M. (1982) ‘Social psychology of creativity: A consensual assessment technique’, Journal of Personality and Social Psychology, 43, 997–1013. Amabile, T.M. (1994) ‘Recognizing creativity: a reply to Magyari-Beck’, Creativity and Innovation Management, 3(4), 244–5. Amabile, T.M. (1996) Creativity in context, Boulder, Colorado: Westview. Amabile, T.M. and Conti, R. (1999) ‘Changes in the work environment for creativity during downsizing’, Academy of Management Journal, 42, 630–40. Amabile, T.M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996) ‘Assessing the work environment for creativity’, Academy of management journal, 39(5), 1154–84. Amabile, T.M. and Gryskiewicz, N.D. (1989) ‘The creative environment scales: work environment inventory’, Creativity Research Journal, 2, 231–53. Augsdorfer, P. (1994) ‘The manager as pirate: An inspection of the gentle art of bootlegging’, Creativity and Innovation Management, 3(2), 91–5. Banner, D.K. (1993) ‘Self-managed work teams: An idea whose time has come?’ Creativity and Innovation Management, 2(1), 27–36. Banner, D.K. and Gagne, T.E. (1993) Designing effective organizations: Traditional and transformational views, Thousand Oaks, Ca: Sage. Basadur, M.S., Potworoski, J.A., Pollice, N. and Fedorowicz, J. (2000) ‘Increasing understanding of technology management through challenge mapping’, Creativity and Innovation Management, 9(4), 245–58. Basadur, M.S., Pringle, P.S., Speranzini, G.W. and Bacot, M. (2000) ‘Collaborative problem-solving through creativity in problem-definition’, Creativity and Innovation Management, 9(1), 54–76. Bass, B.M. (1999) ‘Two decades of research and development in transformational leadership’, European Journal of Work & Organizational Psychology, 8(1), 9–32. Benne, K.D., Bradford, L.P., Gibb, J.R. and Lippitt, R.O. (1975) The Laboratory method of Changing and Learning: Theory and Application, Palo Alto, Ca: Science and Behavior Books Inc. Bessant, J. (1992) ‘Big bang or continuous evolution: Why incremental innovation is gaining attention in successful organisations’, Creativity and Innovation Management, 1(2), 59–62. Berger, P. and Luckmann, T. (1996) The social construction of reality, NY: Anchor Books. Brown, J.S. and Duguid, P. (1996) ‘Organizational learning and communities of practice: Towards a unified view of working, learning and innovation’, Organizational Science 2, 40–57. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
15
Bryman, A. (1996) Leadership in organizations. In Clegg, S.R., Hardy, C. and Nord, W.A. (eds.), Handbook of organization studies, London: Sage, 276–92. Bowonder, B. and Miyake, T. (1994) ‘Globalization, alliances, diversification and innovation: A case study from Hitachi Ltd’, Creativity and Innovation Management, 3(1), 11–28. Bowonder, B. and Miyake, T. (1999) ‘Japanese LCD industry: Competing through knowledge management’, Creativity and Innovation Management, 8(2), 77–99. Cohen, W.M. and Levinthal, D.A. (1990) ‘Absorptive capacity: A new perspective on learning and innovation’, Administrative Science Quarterly, 35, 128–52. Constant, E.W. (1984) ‘Communities and hierarchies: Structure in the practice of science and technology’. In Laudan R. (ed.), The nature of technological knowledge: Are models of scientific change relevant? Dordrecht: Reiter. Couger, D. (1994) ‘Enhancing the climate for creativity for software designers’, Creativity and Innovation Management, 3(1), 54–9. Couger, D. ‘Press: Measurement of the climate for creativity in IS organizations’, Creativity and Innovation Management, 5(4), 273–9. Chee L.S. and Phuong, T.H. (1996) ‘Managing diverse groups for creativity’, Creativity and Innovation Management, 5(2), 93–6. Davies, G. (1992) ‘Innovation in retailing’, Creativity and Innovation Management, 1(4), 230–9. De Cock, C. (1993) ‘A creativity model for the analysis of continuous improvement programmes: A suggestion to make continuous improvement continuous’, Creativity and Innovation Management, 2(3), 156–65. De Cock, C. (1996) ‘Thinking creatively about creativity: What we can learn from recent developments in the philosophy of science’, Creativity and Innovation Management, 5(3), 204–11. Denton, D.K. (1998) ‘Viewpoint: Blueprint for the adaptive organisation’, Creativity and Innovation Management, 7(2), 83–91. Eisenhardt, K.M. (1989) ‘Making fast strategic decisions’, Academy of management Journal, 32, 543–76. Ekvall, G. (1993) ‘Creativity in project work: a longitudinal study of a product development project’, Creativity and Innovation Management, 2(1), 17–26. Ekvall, G. (2000) ‘Management and organizational philosophies and practices as stimulants or blocks to creative behavior: a study of engineers’, Creativity and Innovation Management, 9(2), 94–9. Ekvall, G. and Arvonen, J. (1994) ‘Leadership profiles, situation and effectiveness’, Creativity and Innovation Management, 3(3), 139–61. Elsbach, K.D. and Kramar, R.M. (2003) ‘Assessing creativity in Hollywood pitch meetings: Evidence for a dual-process model of creativity judgements’, Academy of management journal, 46(3), 283– 302. Ekvall, G. and Ryhammar, L. (1998) ‘Leadership style, social climate and organizational outcomes: A study of a Swedish university college’, Creativity and Innovation Management, 7(3), 126–30. Fairhead, J. (1998) ‘Paradigm change and leveraged learning during the Rover-Honda collaboration’,
Volume 15
Number 1
2006
16
CREATIVITY AND INNOVATION MANAGEMENT
Creativity and Innovation Management, 7(2), 93– 106. Frost, P.J. (1994) ‘Leading with innovation in mind’, Creativity and innovation management, 3(2), 79–84. Giddens, A. (1990) The consequences of modernity, Cambridge: Polity Press. Goleman, D. (1995) Emotional intelligence, NY: The Free Press. Goodman, M. (2000) ‘The frustration of talent: A study in scarlet’, Creativity and innovation management 9(1), 46–53. Goodman, M. (1995) Creative management, London: Prentice Hall. Grint, K. (1997) Leadership: Classic, contemporary and critical approaches, Oxford: Oxford University Press. Grønhaug, K. and Haukedal, W. (1995) ‘Experts and novices in innovative, unstructured tasks: The case of strategy formation’, Creativity and Innovation management, 4(1), 4–13. Gryskiewicz, S.S. (1999) Positive Turbulence: Developing climates for creativity, innovation and renewal, Jossey-Bass Publishers, San Francisco. Hannan, M.Y. and Freeman, T. (1982) ‘The population ecology model of organizations’, American Journal of Sociology, 5, 929–64. Hodgkinson, G.P. and Sparrow, P.R. (2002) The competent organization: A psychological analysis of the strategic management process, Buckingham, UK: OU Press. Isaksen, S.G. (1995) ‘On the conceptual foundations of creative problem-solving: A response to Magyari-Beck’, Creativity and Innovation management, 4(1), 52–63. Isaksen, S.G. and Treffinger, D.J. (1985) Creative problem-solving: The basic course, Buffalo, NY: Bearly Ltd. Huber, G.P. (1998) ‘Synergies between organizational learning and creativity & innovation’, Creativity and Innovation management, 7(1), 3–8. Huber, G.P. (1999) ‘Facilitating project team learning and contributions to knowledge management’, Creativity and Innovation Management, 8(2), 70–6. Johannessen, J.-A. and Hauan, A. (1994) ‘Organisational unlearning’, Creativity and Innovation Management, 3(1), 43–53. Kaufmann, G. (2005) ‘Two kinds of creativity – but which ones?’ Creativity and Innovation Management, 13(3), 154–65. Ketchum, L.D. and Trist, E. (1992) All teams are not created equal, Newbury Park, CA: Sage. Kim, W.C. and Mauborgne, R. (2003) ‘Tipping point leadership’, Harvard Business Review April, 60–9. Kirton, M.J. (1976) ‘Adaptors and innovators: a description and a measure’, Journal of Applied Psychology, 61, 622–9. Kirton, M.J. (2003) Adaption-Innovation in the context of diversity and change, London: Routledge. Kodama. M. (2000) ‘Creating new services based on the formation of a strategic community with customers: A case study of innovation involving IT and multi-media Technology in the field of veterinary medicine’, Creativity and Innovation Management, 9(3), 171–84.
Volume 15
Number 1
2006
Lee, T.W. (1999) Using qualitative methods in organizational research, Thousand oaks, CA: Sage. Lee, T.W., Mitchell, T.R. and Sablinski, C.J. (1999) ‘Qualitative research in organizational and vocational psychology: 1979–1999’, Journal of vocational behavior, 55, 161–87. McCormack, M.H. (1984) What they don’t teach you at Harvard Business School, London: Collins. McFadzean, E. (1998) ‘The creativity continuum: Towards a classification of creative problemsolving techniques’, Creativity and Innovation Management, 7(3), 131–9. Magyari-Beck, I. (1994) ‘Creativity studies and their paradigmatic background’, Creativity and Innovation Management, 3(2), 104–9. Magyari-Beck, I. (1997) ‘Should the studies in creativity be a serious scholarly enterprise: A continuation of a friendly discussion with Teresa Amabile and Scott G. Isaksen’, Creativity and Innovation Management, 6(1), 61–4. Manimala, M. (1992) ‘Entrepreneural innovation: Beyond Schumpeter’, Creativity and Innovation Management, 1(1), 46–55. Manz, C.C. and Sims, H.P. Jr (1987) ‘Leading workers to lead themselves: The external leadership of self-managing work teams’, Administrative Science Quarterly, 32, 106–28. Manz, C.C. and Sims, H.P. Jr (1989) Superleadership: Leading others to lead themselves, Englewood Cliffs, NJ: Prentice Hall. Marceau, J. (1999) ‘Networks of innovation, networks of production and networks of marketing: Collaboration and competition in the biochemical and toolmaking industries in Australia’, Creativity and Innovation Management, 8(1), 20–7. Marsden, R. (1993) ‘The politics of organizational analysis’ Organisation Studies, 14(1), 93–124. Moger, S.T. and Rickards, T. (1999) ‘How benign structures can support and retain creative performance in teams’ Creativity and Innovation Management, 8(3), 165–70. Nonaka, I. and Takeuchi, H. (1995) The knowledge creating company: How Japanese companies create the dynamics of innovation, Oxford: Oxford University Press. Ollila, S. (2000) ‘Creativity and innovativeness through reflective project-leadership’, Creativity and Innovation Management, 9(3), 195–200. Paper D.J. and Johnson, J.J. (1997) ‘A theoretical framework linking creativity, empowerment and organizational memory’, Creativity and Innovation Management, 6(1), 32–44. Parnes, S.J., Ed. (1992) Sourcebook for creative problem-solving, Buffalo, NY: Creative Education Foundation Press. Parnes, S.F., Noller, R.B. and Biondi, A.M. (1977) Guide to creative action (revised edition of creative behavior guidebook), NY: Charles Scribner & Sons. Pinchott, G. (1986) Intrepreneuring: Why You Don’t Have to Leave the Organization to Become an Entrepreneur, New York: Harper Collins. Pinto, M.B., Pinto, J.K. and Prescott, J.E. (1993) ‘Antecedents and consequences of project team cross-functional cooperation’, Management Science, 39(10), 1281–97. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE LEADERS
Prince, G.M. (1970) The practice of creativity, NY: Harper & Row. Puccio, G.J. (1999) ‘Creative problem-solving preferences: their identification and implications’, Creativity and Innovation management, 8(3), 171–8. Purser, R.E. and Kumar, N. (1994) ‘The reported advantage: What journalists say chief executives do to foster innovation in their firms’, Creativity and Innovation Management, 3(1), 33–42. Radnor, Z. and Robinson, J (2000) ‘Benchmarking innovation: A short report’, Creativity and Innovation Management, 9(1), 3–13. Rickards, T. (1974) Problem-Solving through Creative Analysis, Epping, Essex: Gower. Rickards, T., Chen M.-W. and Moger, S.T. (2001) Development of a self-report instrument for exploring team factor, leadership and performance relationships, British Journal of Management, 12(3), 243–50. Rickards, T., Moger, S. and Chen, M-H (2002) ‘What can we learn about leadership from creative problem-solving team practices?’. In Buijs, J., van der Lugt, R. and van der Meer (eds.), Idea Safari: Proceedings of the Seventh European Conference on Creativity and Innovation, 9–12 Dec 2001, Twente: University of Twente Press, 307–24. Rickards, T. and Clark, M.C. (2005) Dilemmas of leadership: Maps, myths and mandrills, Oxford: Routledge. Rickards, T. and De Cock, C. (1999) ‘Sociological Paradigms and Organizational Creativity’. In Montuori A. and Purser R.E. (eds.), Social Creativity: Vol 2 Cresskill, NJ: Hampton Press, pp 235– 56. Rickards, T. and Moger, S. (1999a) ‘The development of benign structures: Towards a framework for understanding exceptional performance in project teams’, Journal of New Product Development and Innovation Management, 1(2), 115–28. Rickards, T. and Moger, S.T. (1999b) Handbook for creative team leaders, Aldershot, Hants: Gower. Rickards, T. (2000a) ‘Positive Turbulence: Developing climates for creativity, innovation and renewal, Book of the Quarter’, Creativity and Innovation management, 9(3), 205–6. Rickards, T. (2000b) ‘Trust-based leadership: Creative lessons from intelligent horsemanship’, Creativity and Innovation management, 9(4), 259– 66. Riquelme, H. (2000) ‘How to develop more creative strategic plans’, Creativity and Innovation Management, 9(1), 14–20. Rokeach, M. (1960) The open and closed mind: Investigations into the nature of belief systems and personality systems, NY: Basic Books. Rubenson, D.L. and Runco, M.A. (1995) The psychoeconomic view of creative work in groups and organizations’, Creativity and Innovation Management, 4(3), 232–41. Runco, M.A. and Basadur, M. (1993) ‘Assessing ideational and evaluative skills and creative styles and attitudes’, Creativity and Innovation Management, 2(3), 166–73. Rura-Polley and Clegg, S.R. (1999) ‘Managing collaborative quality: A challenging innovation’,
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
17
Creativity and Innovation Management, 8(1), 37– 47. Schein, E.H. (1969) Process consultation, Reading, Mass: Addison-Wesley. Schön, D.A. and Wiggins, G. (1992) ‘Kinds of seeing in designing’, Creativity and Innovation Management, 1(2), 68–74. Schumpeter, J.A. (1934) The theory of economic development, Cambridge, Mass: Harvard University Press (English Trans). Smart, A.U., McCosh, M., Barrar, P. and Lloyd, A.D., ‘The management of knowledge during design and implementation of process technologies’, Creativity and Innovation Management, 8(2), 100–11. Stacy, R.D. (1995) ‘The science of complexity: An alternative perspective for strategic change processes’, Strategic management journal, 16, 477–95. Sternberg, R.J. and Wagner, R.K. (1992) ‘Tacit knowledge: An unspoken key to managerial success’, Creativity and Innovation Management, 1(1), 5–13. Sims, H.P. and Lorenzi, P. (1992) The new leadership paradigm, Newbury Park, Ca: Sage. Smart, A.U., McCosh, A.M., Barrar, P. and Lloyd, A.D. (1999) ‘The management of knowledge during design and implementation of process technologies’, Creativity and Innovation Management, 1(1), 100–11. Strauss, A. and Corbin, J. (1998) Basics of qualitative research: techniques and procedures for developing grounded theory, 2nd edn, Thousand Oaks, CA: Sage. Talbot, R.J., Cooper, C. and Barrow, S. (1992) ‘Creativity and stress’, Creativity and Innovation Management, 1(4), 183–93. Teece, D.J., Pisano, G. and Shuen, A. (1997) ‘Dynamic capabilities and strategic management’, Strategic Management Journal, 18, 509–34. Teramoto, Y., Richter, F.-J. and Iwasaki, N. (1993) ‘Learning to succeed: What European firms can learn from Japanese approaches to strategic alliances’, Creativity and Innovation Management, 2(2), 114–21. Thomas, K. (1976) ‘Conflict and conflict management’. In Dunnette M.D. (ed.), The Handbook of Industrial Psychology, Chicago Il: Rand McNally. Tidd, J., Bessant, J. and Pavitt, K. (2001) Managing Innovation: Integrating technological, market, and organizational change, 2nd Edn, Chichester, Wiley. Tidd, J. and Taurins, S., ‘Learn or leverage? Strategic diversification and organizational learning through corporate ventures’, Creativity and Innovation Management, 8(2), 122–9. Turnipseed, D. (1994) ‘The relationship between the social environment of organizations and the climate for innovation and creativity’, Creativity and Innovation Management, 3(3), 184–95. Weick, K.E. (1979) The social psychology of organizing, Reading, MA: Addison-Wesley. Wilson, P. (1997) ‘Simplex creative problem-solving’, Creativity and Innovation management, 6(3), 161–7. Yukl, G.A. (2002) Leadership in organizations, 3rd Edn., Englewood Cliffs, NJ: Prentice-Hall. Zaleznik, A. (1977) ‘Managers and leaders: are they different?’, Harvard Business Review, 55, 67–78.
Volume 15
Number 1
2006
18
CREATIVITY AND INNOVATION MANAGEMENT
Tudor Rickards (
[email protected]) is Professor of Creativity and Organisational Change, at the Manchester Business School, University of Manchester, UK. He was co-founder of CIM, and of The European Association for Creativity and Innovation. He has published numerous books and academic articles on creativity, innovation and related sjubjects. His most recent book is Dilemmas of Leadership, Routledge, Oxford, ISBN 0415355850, 2005, (with Murray Clark). Susan Moger (
[email protected]) is Associate Director of Management Development at the Manchester Business School, University of Manchester, UK. She was co-founder of CIM, and a former editor of Leadership and Organisational Change Journal. She has published books and articles on leadership, marketing, innovation and creativity. She is currently conducting research into learning and teaching methologies, and innovation networking processes.
Volume 15
Number 1
2006
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
19
A Review of the Effectiveness of CPS Training: A Focus on Workplace Issues Gerard J. Puccio, Roger L. Firestien, Christina Coyle and Cristina Masucci A major focus within the field of creativity has been on the development of methodologies aimed at deliberately nurturing creative thinking. These methodologies have attempted to mirror the creative process in ways that allow individuals and groups to explicitly call on and employ their creative faculties. In an attempt to uplift employees’ creative capabilities many of these methodologies have been introduced into organizations through training programs, as well as through application to business challenges. Do these methods work? What is the empirical evidence that these deliberate creative process methods enhance employees’ creativity? Though there are a handful of creative process methods, few have married the concern for application with an interest in demonstrating the benefits of these applied efforts through systematic research. Creative Problem Solving (CPS), one of the more popular creative process models, has been one of the rare exceptions. The purpose of this paper is to synthesize the research literature that reports on the impact of CPS training carried out within organizational contexts, that is training programs that involved professionals or students working on real business challenges. Additionally, the positive benefits of CPS are further examined through reports that cite the outcomes of applying CPS to business challenges. In a field replete with methods that have been commercialized, it is imperative to strike a balance between research and practice as an imbalance towards practice may foster a field dominated by individuals who offer untested products and services.
Introduction he study of creativity is an applied science. The most widely accepted definition of creativity, the production of novel ideas that are made useful (Ford, 1995; Kaufmann, 1988; MacKinnon, 1978; Stein, 1974), underscores the applied nature of the creative act. For many creativity scholars, the purpose of their research is to foster a better understanding of creativity so that these insights might be used to deliberately facilitate creative thinking. Given the applied nature of creativity, it is not surprising that individuals have created models of the creative process that are intended to bring about creative solutions to problems. Indeed, a good number of consultants now earn their living training and facilitating members of organizations in creative processes and techniques. Four of the more widely known creative process models are Creative Problem Solving (Osborn, 1953), Synectics (Gordon, 1961), TRIZ (Altshuller, 1979; Terninko,
T
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
Zusman and Zlotin, 1998), and Six Thinking Hats (de Bono, 1985). It may well be that the preponderance of creativity books and workshops aimed at helping people to be more creative have contributed to the view that the field of creativity is imbalanced towards application and lacks scientific rigor. For some, the field of creativity probably appears to be a noisy and crowded bazaar in which merchants compete to sell their ‘creativity wares’. This has led some creativity scholars to question the validity of methods that claim to enhance creative thinking. Sternberg and Lubart (1999) best captured this sentiment when they said: These approaches lack any basis in serious psychological theory, as well as serious empirical attempts to validate them. Of course, techniques can work in the absence of psychological theory or validation. But the effects of such approaches is often to leave people associating the phenomenon with commercialization and to see it as less
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00366.x
20
CREATIVITY AND INNOVATION MANAGEMENT
than a serious endeavor for psychological study. (p. 6) Sternberg and Lubart raise an important criticism; specifically they draw attention to the need to maintain a balance between research and practice. Research that is not guided by insights gained through practice may be unrealistic and of little practical value to organizations. While practice without research may result in products and educational experiences that are well-packaged but have no true substance; it may be that such creativity programs and methods act as nothing more than placebos that create the illusion of enhanced creativity. The purpose of this paper is to explicitly examine one applied creativity model, Creative Problem Solving (CPS), and to summarize the research evidence that demonstrates the positive effects of CPS training. One of the major applications of CPS has been in organizational settings. Many writers have argued that employees’ creativity is critically important to organizational innovation (e.g. Amabile, Burnside and Gryskiewicz, 1999; Amabile, Conti, Coon, Lazenby, and Herron, 1996; Basadur, 1995; VanGundy, 1987; West, 1997), and that innovation is essential to organizational success (Janszen, 2000). Ekvall (2000) reported that among various organizational philosophies and practices, creativity methods were believed by employees to have the second most positive impact on their creativity. Specifically, eighty-five percent of the engineers surveyed by Ekvall reported that creativity methods, like CPS, had a clearly positive influence on their creativity. Given the level of interest in promoting creativity in organizations, this review of CPS research is focused primarily on the benefits of CPS training for individuals in the workplace.
Creative Problem Solving: A Brief Overview CPS is a model designed to capture the essence of the creative process. Using this approach, creative thinking can be deliberately applied to resolve open-ended problems. CPS is a structured methodology that is used to enhance creative thinking in individuals and teams. Given the applied orientation of the model, it is not surprising that it was a businessman who originally developed the CPS model. Alex Osborn (1953), introduced CPS in his seminal book Applied Imagination. Though the model and its guiding principles were first published in 1953, Osborn had applied creative problem-solving procedures, such as the
Volume 15
Number 1
2006
tool Brainstorming, in his advertising firm for many years prior to the release of his book. In the third and final version of his book, Osborn (1963) described CPS as a process comprised of three procedures: Fact-Finding, Idea-Finding, and Solution Finding. It is important to make a distinction between CPS and Brainstorming. CPS is a model designed to make explicit the steps involved in the creative process. Brainstorming is a specific tool designed to enhance divergent thinking in groups. Brainstorming is one of many tools that are incorporated into the CPS process. In this sense the CPS model provides a framework for organizing tools that are used to carryout a range of activities associated with the creative process. Brainstorming has been primarily used to help groups engage in effective idea generation; however, many other tools are used in relationship to the various steps found within CPS. Through his leadership Osborn established a creativity foundation (i.e., Creative Education Foundation) and an academic program (the International Center for Studies in Creativity at Buffalo State College) in Buffalo, New York, USA. Though Osborn passed away in the mid-1960s developments of the CPS process continued through his colleagues at the creativity foundation and faculty within the academic program. Osborn’s chief collaborator was Parnes. The changes to the CPS model that have taken place over the years can be seen in the work of Noller, Parnes, and Biondi (1976), Isaksen and Treffinger (1985), Isaksen, Dorval, and Treffinger (1994), Basadur (1995), Miller, Vehar, and Firestien (2001), and Isaksen and Treffinger (2004). Although different authors have variously expressed CPS, there are two basic characteristics that exist across all approaches. First, the CPS process is comprised of multiple steps that capture the basic operations associated with the creative act, namely the need to define problems, generate ideas, transform ideas into solutions, and construct action plans. Second, all CPS models show a balance between divergent (i.e., generating a diverse set of alternatives) and convergent thinking (i.e., screening, selecting and evaluating alternatives) in every step of the process. This dynamic balance between divergent and convergent thinking is the hallmark of CPS.
The Creative Studies Project: The Landmark Study The most comprehensive examination of the efficacy of CPS was the Creative Studies © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
Project conducted by Parnes and Noller (Parnes, 1987; Parnes and Noller, 1972a; Parnes and Noller, 1972b; Parnes and Noller, 1973). Participants in this study, freshman college students, were randomly assigned either to an experimental or control condition. The experimental group participated in four college-level creativity courses over a two-year period; CPS was the main process model taught as part of this curriculum. To assess the effects of this training, Parnes and Noller administered a battery of paper-and-pencil tests before, during and after the sequence of creativity courses. These measures included tests of cognitive ability drawn from Guilford’s Structure-of-the-Intellect (SOI) model, personality measures, tests of problem solving and decision making skills, and college English tests. Students who participated in the creativity courses showed significantly higher levels of performance across a large number of the measures. In regard to cognitive abilities, for instance, the students from the creativity courses showed significant gains on tests of cognition, divergent production, and convergent production. Those in the experimental group also outperformed the control group on creativity-related tests given as part of their English courses and showed greater levels of coping and problem-solving skills. Many studies have examined the impact of CPS in educational settings. For more information on these studies see Torrance (1972), Torrance and Presbury (1984), Rose and Lin (1984), and Parnes and Brunelle (1967). A series of articles reporting on the meta-analytic evaluation of creativity training is also an excellent source for information on the impact of CPS (Scott, Leritz and Mumford, 2004a, 2004b). Scott et al. (2004a, 2004b) conducted their quantitative review of creativity training to examine whether such training indeed had positive effects. After evaluating a wide range of studies, that included investigations both in organizational and school settings, these authors (Scott et al., 2004a) concluded that among the various training programs CPS proved to be one of the most successful. Since we know of no other paper that has provided a review of CPS training in organizational settings, and given the fact that many have argued that creativity is critical to organizational and professional success, this review paper highlights the impact of CPS training and application in the workplace. This review also includes studies carried out with university students who are employed in full-time jobs, as well as with students who worked on business related tasks. The criteria used to identify the literature to be included in © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
21
this paper were as follows: (1) training had to involve the full CPS process, not merely a tool or two; (2) for uniformity the CPS framework used for the purposes of training had to be based on the Buffalo, New York, tradition (see Basadur, 1995; Isaksen and Treffinger, 2004; Osborn, 1953); (3) the research participants had to be drawn from organizational settings or involve students working on real-business challenges; and (4) the impact of training had to be either empirically examined or explicitly documented. With these criteria in mind, an exhaustive literature search was conducted on a number of databases including Academic Search Premier, ERIC, PsychARTICLES, PsychINFO, and Educational Abstracts. An overall search for creativity-related literature yielded 42,537 hits. The search term Creative Problem Solving produced 1,366 hits. The number of published studies that met all four criteria cited previously was 17. This paper provides a review of these studies, as well as commentary on documented applications of CPS in organizational contexts. Table 1 provides an at-a-glance summary of these 17 published works, as well as two unpublished studies (Keller-Mathers, 1990; Puccio and Lehrberger, 1999).
Creative Problem Solving Training and Its Impact in the Workplace Studies of the impact of CPS in the workplace can be broadly sorted into three categories; the influence on individuals’ attitudes, the impact on individuals’ behavior, and the effects on groups. Some researchers have focused their efforts on examining whether CPS training can alter employees’ attitudes. The main question of interest in these studies is to what degree does CPS training develop attitudes that are likely to foster creative behavior? For example, this research has examined the impact of CPS training on employees’ openness to divergent thinking; that is the production of many diverse and original possibilities. A second area of CPS research has focused on a change in observable behaviors. Here, for example, researchers have assessed whether CPS training improves employees’ cognitive abilities, particularly those thinking skills deemed to be critical to the production of creative ideas, while others have examined whether CPS training improves behaviors related to job performance. Finally, some researchers have explored the impact of CPS training within the context of group work. These three areas of impact are reviewed in turn.
Volume 15
Number 1
2006
22
CREATIVITY AND INNOVATION MANAGEMENT
Table 1. Summary of the Sources Cited in this Review
Volume 15
Author (date)
Duration of Training Program or Nature of Application
Participants
Key Outcomes (when DV measured)
Basadur, Graen and Green (1982)
Trained group received two days of CPS training. Study involved placebo and control groups.
45 engineers, engineering managers and technicians
Basadur, Graen and Scandura (1986)
24 hours
112 manufacturing engineers (65 from diverse locations and 47 from intact work groups)
Basadur and Hausdorf (1996)
3 days
Basadur, Pringle and Kirkland (2002)
Experimental group received half-day training in CPS. Placebo group received half-day training. Control group received no training.
Basadur, Pringle, Speranzini and Bacot (2000)
12 days
Business students (n = 522), Middle and lower management (n = 218) Spanish-speaking South American managers. Experimental group (n = 149). Placebo group (n = 19). Notraining control group (n = 68). Union-management bargaining team (7 management representatives and 7 union representatives).
Trained participants showed significant improvement in regard to preference for ideation, practice of ideation and performance in problem finding. (Dependent variables measured two weeks after training.) Training improved participants’ attitudes towards divergent thinking. Impact higher for participants from intact groups. (DV measured 5 and 10 weeks after training.) Training significantly enhanced preference for ideation. (DV measured before and after training.)
Basadur, Runco and Vega (2000)
20 hours
Number 1
2006
112 managers from a large international consumer goods manufacturer
Training participants showed a significant increase in preference for ideation and decrease in tendency toward premature critical evaluation. (DV assessed before and after training.) Before and after training measures showed positive shift in attitude towards divergence. Case study approach showed the application of CPS to the negotiation process enhanced trust and collaboration. Skill in generating options was shown to contribute to generating higher quality options and evaluating options. (DV measured before and after training.)
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
23
Table 1. continued Author (date)
Duration of Training Program or Nature of Application
Participants
Key Outcomes (when DV measured)
Basadur, Taggar and Pringle (1999)
Experimental group participated in a two-day CPS workshop. Placebo groups participated in experiences of similar length.
Experimental group (36 managers). Two placebo control groups (11 managers, 35 business students).
Basadur, Wakabayashi and Graen (1990)
3 days
90 managers and 66 nonmanagers
Basadur, Wakabayashi and Takai (1992)
CPS training conducted over 4 hours. Placebo groups participated in experiences of the same duration.
Firestien (1990), Firestien and McCowan (1988)
Approximately 40 hours
Experimental group (60 Japanese managers). Two placebo groups (47 Japanese managers; 15 faculty members and university students). Undergraduate students. Trained group consisted of 22 five-member teams. Untrained group comprised of 18 five-member teams.
Training significantly enhanced attitudes towards openness to new ideas, the value of creativity, and not feeling too busy for new ideas. (DV measured before and after training.) The ‘Optimizer’ style of problem solving demonstrated strongest positive change with respect to attitudes towards divergent thinking. (DV measured before and after training.) Training significantly increased preference for active divergence and decreased preference for premature convergence. (DV measured before and after training.)
Firestien and Lunken (1993)
Master of Science in Creativity, which involved approximately 160 hours of CPS training.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
38 graduate program alumni
Analysis of communication behaviors within teams showed that trained participants smiled more, criticized others’ ideas less, supported others’ ideas more, and laughed more often during a group problem-solving activity. (DV measured at end of course.) Graduates of the master’s degree program reported greater levels of flexibility in how they approached challenges, greater willingness to take risks, and an ability to integrate creative thinking into their personal and professional lives. (Likely range from several months to more than a decade.)
Volume 15
Number 1
2006
24
CREATIVITY AND INNOVATION MANAGEMENT
Table 1. continued
Volume 15
Author (date)
Duration of Training Program or Nature of Application
Participants
Key Outcomes (when DV measured)
Fontenot (1993)
8 hours
Kabanoff and Bottger (1991)
Two 80 minute session per week over a period of 10 weeks.
Business people whose jobs required creative thinking and problem solving (34 participants in experimental group and 28 participants in control group) MBA students (32 in trained group and 44 in control group)
Keller-Mathers (1990)
Graduate course in CPS, approximately 40 hours of instruction
35 graduate students, most held professional positions
Puccio and Lehrberger (1999)
One to one half-day workshop imbedded in a week long leadership development program.
92 managers from a large newspaper and magazine publisher
Runco and Basadur (1993)
20 hours
35 managers
Thompson (2001)
Case study report on the application of CPS to three different plant maintenance challenges.
Cross-disciplinary teams from three different manufacturing organizations.
Trained participants generated a significantly larger set of data when they examined a problem situation. They also generated significantly better problem statements. (DV measured before and after training.) Trained participants experienced significant gains in originality. (DV measured before and after training.) Pre and post-instruction assessment showed that students applied the CPS tools up to one-year after training. (DV measured at 3 months, 6 months and 1 year after training.) Among the topics covered during the week long leadership program, CPS was viewed as one of the most valuable. Participants cited numerous examples of how they had applied CPS. (Data collected between 5 and 18 months after training.) Post-training gains showed significant increases in fluency and originality in producing solutions, as well as improved ability in judgments about original ideas. (DV measured before and after training.) Application of CPS successful in resolving three different maintenance problems. Seven maintenance managers successful in establishing CPS groups in a variety of industries (e.g., food, automotive, defense, etc.).
Number 1
2006
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
25
Table 1. continued Author (date)
Duration of Training Program or Nature of Application
Participants
Key Outcomes (when DV measured)
Wang and Horng (2002)
18 hours of CPS training spread over a year-long period
R&D workers (106 in experimental group; 35 in control group)
The training groups’ fluency and flexibility increased significantly, as well as the number of co-authored service projects. (DV measured between 6 and 11 months after training.)
Changing Attitudes Basadur has led the way in investigations focused on evaluating the effect CPS training has on employees’ attitudes. Basadur’s program of research spans more than two decades and a number of continents. To carry out his investigations, Basadur developed and tested scales useful in assessing employees’ attitudes towards divergent thinking (Basadur and Finkbeiner, 1985; Basadur and Hausdorf, 1996). Over the years Basadur has examined five specific attitudes. The two original scales were Preference for Active Divergence and Preference for Avoiding Premature Convergence (Basadur and Finkbeiner, 1985; Basadur, Runco and Vega, 2000). More recently, Basadur developed three new attitude scales: Valuing New Ideas, Creative Individual Stereotypes, and Too Busy for New Ideas (Basadur and Hausdorf, 1996). Why the interest in changing employees’ attitudes? According to Basadur, Taggar and Pringle (1999) ‘unless attitudes toward divergent thinking are positive or become positive, training in creative problem solving involving divergent thinking is not likely to result in changes in behavior back on the job’ (p. 78). Basadur, Runco and Vega (2000) empirically tested the hypothesized relationship between divergent thinking attitudes and development of creative-thinking skills. Using a casual model, these researchers found that changes in individuals’ Preferences for Avoiding Premature Convergence was particularly effective in predicting gains in ideational and evaluation skills. For a similar study see Runco and Basadur (1993). Basadur has carried out a series of studies in which he has experimentally tested the degree to which training in CPS changes employees’ © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
attitudes (e.g., Basadur, Graen and Green, 1982; Basadur, Graen and Scandura, 1986; Basadur and Hausdorf, 1996). In his original study, Basadur worked with members of an engineering department within a large manufacturing company. The employees were placed in one of three study groups: trained (i.e., participants received two-days of CPS training); placebo (i.e., participants watched a film on creativity and afterwards took part in a 20 minute discussion); and control group (i.e., participants received no creativity training whatsoever). Post-study measures administered two-weeks after training showed that employees who received CPS training had a significantly higher preference for active divergence. In a subsequent study with engineers from a large consumer goods manufacturing company, Basadur, Graen and Scandura (1986) found once again that CPS training significantly enhanced employees’ attitudes towards active divergence, as well as a tendency to avoid premature convergence. Employees’ bosses also reported witnessing these positive changes in attitude. Analysis revealed stronger training effects among those employees who attended the program with colleagues from the same work site. In a more recent study, Basadur, Taggar and Pringle (1999) demonstrated, through a quasi-field experiment, that managers who participated in a two-day CPS training program expressed greater appreciation for new ideas, believed that creativity was not limited to a rare few, and valued the time required to develop new ideas. Basadur expanded his research on CPS training and attitudes by replicating his work in other cultures and by investigating whether individuals with certain creative problem-
Volume 15
Number 1
2006
26
CREATIVITY AND INNOVATION MANAGEMENT
solving styles were more likely to shift their attitudes towards divergent thinking after training. Basadur showed that significant changes in attitude after CPS training could be achieved among managers in Japan (Basadur, Wakabayashi and Takai, 1992) and South America (Basadur, Pringle and Kirkland, 2002). In regard to creative problem-solving styles Basadur suggested that individuals whose natural inclinations were furthest from the nature of the CPS training would experience the greatest shift in attitude. Specifically, Basadur, Wakabayashi and Graen (1990) hypothesized and found that individuals whose natural preference was to develop solutions, as opposed to spending time discovering problems and playing with ideas, experienced significantly greater gains in preference for active divergence after CPS training.
Changing Behavior Studies focused on changing behavior have examined how effective CPS training has been in enhancing creativity-related abilities, such as those skills associated with divergent thinking (i.e., fluency, originality and flexibility in thought) or with the creative process (i.e., problem finding, evaluating ideas, etc). Other studies within this area of focus have looked at how CPS enhances behaviors related to performance at work. As with research into attitudes, Basadur has also been one of the chief investigators of the effects of CPS training on skills. In fact, a number of his studies on attitude also included variables related to skill acquisition (e.g., Basadur, Graen and Green, 1982; Bassadur, Runco and Vega, 2000; Runco and Basadur, 1993). Using before and after training designs, Basadur has shown that CPS training significantly improves such skills as generating many original solutions to problems (Basadur, Runco and Vega, 2000), accuracy in evaluating original ideas (Basadur, Runco and Vega, 2000; Runco and Basadur, 1993), fluency in generating solutions to problems (Runco and Basadur, 1993), enhanced ideation in problem finding (Basadur, Graen and Green, 1982), and improved problemfinding performance (Basadur, Graen and Green, 1982). Kabanoff and Bottger (1991) tested the extent to which CPS training (i.e., a ten-week elective course) increased ideational fluency, flexibility and originality among MBA students with at least five years of work experience. Though there were gains in relationship to all three divergent-thinking abilities, these researchers found that the CPS training had its most profound effect on students’ ability to
Volume 15
Number 1
2006
generate original ideas. Kabanoff and Bottger interpreted the training effects in the following way, ‘The main difference between trained and untrained persons is the formers’ willingness and capacity to defer judgment and not to exclude apparently strange, but original and potentially valuable ideas’ (p. 143). Kabanoff and Bottger’s study also included a personality measure. Analysis of this data showed that students enrolled in the creativity course differed significantly on several personality dimensions when compared to students in the control group. Specifically, individuals in the creativity course expressed higher scores for deference and lower scores on preference for achievement and dominance. Analysis showed that personality did not affect training outcomes. Wang and Horng (2002) studied the impact of a 12-hour CPS course on R&D scientists and technicians. As with previous impact studies, these researchers found that training significantly improved divergent-thinking skills, specifically fluency and flexibility. Wang and Horng’s investigation, however, went beyond divergent thinking and included an examination of the impact of CPS training on workrelated performance. These researchers assessed three main indicators of R&D performance: number of papers published, number of technical reports written, and the number of service projects completed. R&D performance was measured 6 to 11 months after the employees completed the CPS course. Results showed a significant increase in the number of service projects completed by those who participated in the CPS training. Service projects, which are responses to customer complaints and technical problems, are one of the main job responsibilities of employees in this study. This study also yielded a curious result in regard to personality type. Though it is generally held that personality type is a stable trait (Myers & McCaulley, 1985), these authors found that pre and posttest comparisons of scores on the Myers-Briggs Type Indicator showed a significant shift from introversion to extraversion and from the thinking to feeling type among those who received CPS training. Keller-Mathers (1990) conducted a study that assessed the degree to which participants in an introductory graduate course in CPS adopted creativity tools into their personal and professional lives. Keller-Mathers surveyed participants to determine their level of use of 13 different creativity tools prior to training and then at 3, 6 and 12 months intervals after training. Participants reported using a large number of tools both in their personal and professional lives up to one year after training. The tools that showed the greatest © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
level of transfer were Brainstorming, Idea Systems, Why/What’s Stopping Me (i.e., a problem analysis tool), and the use of Invitational Stems for problem clarification (e.g., How to . . . , In what ways might . . . , etc). Many of the studies reviewed thus far tended to focus on CPS training programs that lasted for no more than 30 hours and primarily looked at training effects immediately at the conclusion of the participants’ CPS experience. The International Center for Studies in Creativity offers a Master of Science in Creativity and Change Leadership. This graduatelevel program includes four courses with an explicit focus on CPS, which equates to approximately 160 hours of CPS training. Firestien and Lunken (1993) surveyed graduates of the program and used this information to report on the long-term effects of the training they received. Some of the key skill areas identified by graduates were improved sensitivity to problems, ability to make dramatic changes in their lives, and greater levels of flexibility in the ways they approached family, community and work problems. A number of other unpublished impact studies have been carried out on the courses and programs delivered through this Center, including the study carried out by Keller-Mathers described above (De Schryver, 1992; Hurley, 1993; Neilson, 1990; Pinker, 2003; Vehar, 1994).
Impact on Groups The previous two sections of this paper focused on the impact of CPS training at an individual level of analysis; that is how CPS training changed a specific individual’s attitudes and behaviors. CPS, however, is often applied in groups. The CPS model provides a framework through which group members can productively work together to resolve a complex problem. In fact, one of the primary ways in which CPS is deliberately and formally applied is in groups. The CPS framework provides a process that guides group members towards successful resolution of a challenge that requires creative thinking. Many creativity consultants offer facilitation services to clients that are based on the application of CPS. These consultants employ CPS to assist groups in developing new products, solving problems, creating strategic plans, developing vision statements, managing projects, etc. Though CPS is often applied in groups, few studies have measured the impact of CPS training at a group level. We will report on three studies that examined how CPS training has a positive effect on group work. Fontenot (1993) conducted a study of the impact of CPS training on divergent-thinking © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
27
skills; especially as these skills are applied within groups engaged in the problem-finding aspect of the creative process. Fontenot set out to specifically test the degree to which an 8hour CPS training program would significantly impact fluency in data finding, fluency in problem finding, flexibility in problem finding, and quality of the proposed problem statement. The business people in this study were randomly assigned to either a trained or an untrained condition. Working in small groups of three or four people, the participants were presented with a business case study and were asked to identify and define the problem associated with the case. Analysis showed that those trained in CPS significantly outperformed the untrained participants on all four problem-solving skills. In a study designed to measure the effects of CPS training on the communication behaviors that occur in small groups, Firestien and McCowan (1988) and Firestien (1990) found that groups trained in a semester-long course in CPS (approximately 33 hours of instruction) responded more, i.e. got more involved in the group problem-solving process; criticized ideas less; supported ideas more; laughed more; smiled more; and produced significantly more ideas than the groups that did not receive training. Table 2 presents the communication behaviors analyzed in this study. All comparisons between trained and untrained groups were statistically significant. Though the study involved students as participants, the problem they worked on was a real challenge provided by a local business. To undertake a cursory examination of the quality of the ideas created by the trained and untrained groups, two representatives from the organization that provided the business problem used a 100-point rating scale (0 = no value to 100 = maximum possible value) to evaluate the quality of the ideas generated by the students in the trained and untrained groups. These individuals worked independently to rate the ideas and did not know whether the ideas originated from trained or untrained groups. The expert raters’ evaluation of the ideas were grouped together and the ideas were then sorted into five quality categories as follows: category 1 = 0–19 points; category 2 = 20–39 points; category 3 = 40–59 points; category 4 = 60–79 points; and category 5 = 80–100 points. Table 3 shows the distribution of the ideas across the five quality categories. As this table clearly indicates the trained groups generated many more ideas that were rated as holding the greatest possible value. Indeed, because the trained groups generated many more ideas in the allotted time period, they had more ideas along each point on the
Volume 15
Number 1
2006
28
CREATIVITY AND INNOVATION MANAGEMENT
Table 2. Effects of Creative Problem Solving Training on Communication Behaviors in Groups Communication Behaviors
Mean Score for Untrained Groups (n = 18)
Mean Score for Trained Groups (n = 22)
Total Responses Verbal Criticism Verbal Support Laughter Smiles Ideas Generated
38.36 3.22 2.00 4.50 6.06 14.00
56.84 0.11 5.21 12.64 14.36 27.32
Table 3. Comparison of Quality of Ideas Generated by Trained and Untrained Groups Quality Category 5 4 3 2 1
Untrained Groups
Trained Groups
281 500 352 253 29
618 1342 917 648 140
rating scale. As a consequence of generating so many more ideas, the trained groups out performed the untrained groups in terms of the number of good and bad ideas generated. It would be useful for future research to build on this initial examination of quality output and incorporate more systematic methods for evaluating this potential positive effect of CPS training. Basadur, Pringle, Speranzini and Bacot (2000) provided a case report on the application of CPS training to union-management bargaining. Before union-management negotiations proceeded, the 14-member negotiations team (i.e., 7 members representing the union and 7 representing management) participated in a 12-day CPS training program. During the negotiations the team deliberately employed aspects of their training to successfully resolve many issues, with the exception of those that related to monetary concerns. Basadur et al. reported: For each non-monetary issue, emphasis on creating an expanded problem definition which incorporated high concern for satisfaction for both parties led to creative, integrative solutions. However, on the monetary issue, there was no effort devoted
Volume 15
Number 1
2006
F-Values
24.16 (p < 0.001) 17.56 (p < 0.001) 14.34 (p < 0.001) 19.37 (p < 0.001) 22.47 (p < 0.001) 40.72 (p < 0.001)
to creative problem definition. The team reverted to zero-sum thinking and there was no opportunity to create a bigger pie. (p. 73) These authors concluded that when Basadur’s CPS model, called SIMPLEX, was explicitly used to guide negotiations, the process led to greater levels of trust, cooperation, and more creative solutions. However, when the process was abandoned, as was the case for the monetary bargaining issue, trust evaporated, no creative solutions were considered, and negotiations deteriorated into a lose-lose approach.
Real-World Applications of CPS Another way of examining the efficacy of CPS is to demonstrate the successful application of this approach in organizational settings. The empirical investigations reported thus far provide evidence of the impact of CPS training through research investigations, many of which involved experimental designs. The value of such studies is that they are designed to inject scientific rigor into the study of the impact of CPS training – to go beyond mere testimonials and global commentary by participants involved in CPS training. As a result, many of these studies provide evidence intended to demonstrate cause-andeffect relationships between CPS training and various training outcomes. What these studies often lack is information that addresses the broader value-added benefits to organizations. For example, does the CPS process help teams successfully resolve real business challenges? Does the application of CPS increase profits or reduce costs? Do individuals trained in CPS use the principles and procedures in a way that directly benefits the organization? Answers to such questions can be found in examples of CPS applications in organizations. What follows are brief case examples © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
of the application of CPS in a variety of organizations. Thompson (2001) documented the successful application of CPS in reducing plant maintenance costs. Thompson provided a detailed description of three case examples in which CPS was used to help teams identify specific ways in which costs might be reduced in a plant setting. For example, the CPS process was applied within Alcan Limited to resolve a machine problem. Through a facilitated application of CPS, a small team explored how they might reduce the regular maintenance required to operate a machine that delivered aluminium drink cans from one machine to another in the manufacturing process. Through the problem clarification stage of the process the group explored many potential causes that led to three specific topics worthy of further investigation. After further application of the CPS process, the group decided to focus their problem solving efforts on the redesign of the machine. It was during the exploration of ideas for a redesign of the machine that the group discovered the principal problem. The group realized that the movement of the can on a pin used to carry the product was the primary cause of the maintenance problems. By focusing their idea-generation efforts on the pin, the group was able to come up with a cost effective solution to a persistent problem. Thompson (2001) also reported the successful application of CPS to a problem within Quaker Oats. This CPS session began by examining the problem of why there were syrup blockages in a heat exchanger unit. Problem clarification resulted in a more refined statement of the problem that led the team to focus on the predissolver, the machine that passes the product onto the heat exchanger. A number of potential solutions were examined and as a result of the application of an itemized evaluation tool (e.g., breaking a potential solution down into its advantages, limitations, and unique features) the team decided the most feasible solution was to introduce an intermediate heat exchanger between the predissolver and the heat exchanger. The costs of annual maintenance associated with this problem was estimated to be £17,000 and with lost production taken into consideration £42,500. According to Thompson, ‘No solution to the problem had been forthcoming that met with general acceptance until the CPS exercise. Therefore, the outcome of the CPS study was significant’ (p. 193). Similar to Thompson’s positive experiences in industrial settings, Firestien (1996) reported that the application of CPS to a persistent maintenance problem within a US forge plant © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
29
resulted in cost reduction of $40,000 per week. During a CPS training session, employees at an automotive forge plant focused their problem-solving efforts on finding a way to prevent the steel gears made at their plant from sticking in the die and as a consequence breaking the dies. During an idea generating session, participants were asked by the facilitator, ‘How can we use something that does not relate to this problem to help find a solution?’ One of the participants made an association between sticking gears and food sticking on pans while cooking. The participant suggested using PAM, the aerosol cooking oil spray, to prevent the sticking. Through group discussion this initial idea was transformed into a workable solution. As a result, plant operators began to use a $1.00 spray bottle and $0.50 worth of soap and oil solutions to spray the dies before making the gears. This solution rectified the situation and saved the plant thousands of dollars. Beyond the specific case examples, such as the three described above, Thompson (2001) provided an overview of the positive outcomes and benefits derived from his observations of maintenance managers who had been trained to lead groups through the CPS process. After their training, these managers conducted CPS sessions in such areas as overall plant maintenance, machine level problems, and new maintenance software design. According to Thompson, ‘No CPS session was a failure’ (p. 194). Some of the general outcomes and benefits associated with these sessions were: CPS was accepted by every group; groups valued the balance between divergent and convergent thinking; teams accepted ownership of the outcomes of the sessions; the experience created a high degree of job satisfaction; and departmental morale and individual self-esteem improved. According to Firestien (1996) a CPS session produced a solution that brought in millions of dollars to a hospital in the United States. When Janet DiClaudio, Director of Medical Records, joined Candler Hospital in Savannah Georgia, 300 medical records were backlogged, and doctors were not coming to the Medical Records office to sign them. As a result, the hospital was unable to bill millions of dollars worth of services. To overcome this challenge, a CPS session was conducted. The challenge was defined initially as ‘It would be great if we could get doctors to sign off on their records regularly and consistently’. As the group gathered data about the problem, they observed that the Medical Records office was some distance from where doctors typically congregated – the doctor’s lounge. Some of the potential solutions generated during the
Volume 15
Number 1
2006
30
CREATIVITY AND INNOVATION MANAGEMENT
idea generation stage of the process focused on the location of medical records in relation to the doctors’ lounge. Another set of ideas focused on ways to reward doctors for completing their records. The final solution involved a synthesis of these two ideas – that is, the group decided the best solution was to put a desk outside the doctors’ lounge and reward doctors with graham cracker cookies for signing their records. As a result of moving a desk staffed with one Medical Records employee outside the doctors’ lounge, the hospital billed $4.5 million in backlogged records and has regularly reduced monthly accounts receivables by $3.5 million. Puccio and Lehrberger (1999) conducted an impact study of leadership development program within a large media company in the United States. CPS was one of six areas covered during this week-long training program. Surveys were distributed to 348 managers who had attended the training program; responses were received from 92 individuals. The range in time since the respondents had attended the training program was between 5 and 18 months. One question in the survey asked respondents to rate the degree to which they applied what they learned during the training program. The response scale ranged from 1 (not at all) to 5 (very often). CPS received the highest mean rating of 3.70. Respondents were asked to provide examples of how they applied aspects of the course. Numerous stories were offered, from the use of CPS to increase employee morale to the creation of new product ideas. For example, one participant reported the following: I led a session at work on how we might improve our paper based on the results of a readers’ survey. We used brainstorming to incorporate input. Several features of the paper were instituted as a result. I also use CPS to come up with new ideas for cover stories that are scheduled months in advance. The process creates a more positive environment because no one has to worry about getting shot down. (p. 67) We shared the case examples of the application of CPS to provide a richer description of the benefits of this process. These brief case descriptions provide only a glimmer into the broad range of positive consequences associated with the application of CPS in real settings. There are numerous CPS practitioners, trainers, facilitators, and consultants. These individuals apply their skills in an ever increasing range of organizations, from schools to manufacturing sites, from hospitals to police departments, from museums to advertising firms. Given the extensive reach
Volume 15
Number 1
2006
and use of CPS, it would be highly beneficial if greater, more systematic, effort were focused on distilling and documenting the benefits of applying CPS in organizational contexts. A study that provides an excellent example of how these broader, more contextual, investigations might be conducted is found in Sutton and Hargadon’s (1996) ethnographic study of the American design firm IDEO. The purpose of the study was to discover how this design firm could maintain such high levels of creativity for so many years (i.e., consistently produce innovative products). After a year-long study, these researchers concluded that IDEO’s use of Brainstorming created a culture and ethos that inspired innovative design concepts. Studies that assess Brainstorming within laboratory settings do so within artificial environments and thus information derived from such settings cannot fully capture the value of this tool as it is applied in real groups and organizations. The results of Sutton and Hargadon’s research, for example, revealed numerous beneficial outcomes of Brainstorming beyond the classic focus on whether Brainstorming groups generate more and better ideas than groups following other strategies (e.g., Nominal Brainstorming). Some of the broader implications of the use of Brainstorming in IDEO included: enhanced organizational memory of design solutions, improved acquisition of skill variety among designers, the positive climate found in Brainstorming sessions made a positive impression on clients, etc. Researchers interested in the impact and value of CPS would do well to pursue investigations of CPS as it is applied within organizational contexts, much like Sutton and Hargadon’s ethnographic study of Brainstorming.
Conclusion Creativity is a concept that is not well bounded. It is so ubiquitous that it is easy to relate creativity to all fields of endeavor. Many view creativity as a soft, fuzzy concept that is not easily understood. The word itself is often misapplied or used simply as a marketing ploy. To be a creativity expert one merely has to profess oneself as such. Given the air of mysticism often associated with creativity, it becomes critically important for those interested in teaching or training creativity to provide evidence that such programs attain their intended results. In a young field which has precious few oversight bodies or governance systems, it is imperative for research and practice to complement and guide one another. The purpose of this paper © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
was to demonstrate how one applied model, CPS, has endeavored to balance application with research. Though CPS may be one of the applied creative process models that has received clear attention from researchers, there is still much work to be done. For instance, there would appear to be many more people who are applying CPS than those who are investigating or documenting the impact of CPS in organizational settings. It would be beneficial if greater effort were devoted to the dissemination of the various ways in which CPS is being applied in organizations, along with the outcomes of such efforts. Thompson’s (2001) case study approach serves as an excellent example of how this type of work might be reported. Thompson’s case examples provide detailed descriptions of how the CPS process was applied to plant maintenance problems. In these ‘real-life’ examples Thompson described precisely how the CPS process helped the participants successfully resolve these maintenance issues. Thompson also offered his observations about how the CPS process was received by those who worked in the plant environment. Additionally, it would also be useful for investigators to compare training effects across different creative process models. Do they all produce similar effects? Do some models work best under certain conditions, on particular kinds of tasks or with certain types of people? Do particular process models yield unique outcomes? Finally, since most studies were limited to examining effects immediately at the conclusion of training (see last column in Table 1), there is a need to look at the longer-term outcomes of CPS training. How long do training effects last? What aspects of training have longer-term effects? It would also be valuable to broaden the scope of attitudes, behaviors and other outcomes that might be directly impacted by CPS training. Such studies should go beyond the impact of CPS training on the individual and should consider how CPS training affects a team or unit within an organization. For instance, does CPS training improve work group climate, communication, interpersonal relationships, problem-solving outcomes, etc.? We hope that our review and synthesis of the CPS literature will serve as a catalyst for future work in organizational settings.
Note Early drafts of this work were presented by the first author at the Creativity in the Workplace © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
31
– Summer School, hosted by the Ministère de l’Education Nationale and Institut de Psychologie, Universit é René Descartes – Paris 5, Paris, France in 2003 and by Firestien, Coyle and Masucci at the 50th Creative Problem Solving Institute in 2004. A more recent draft was presented at the 1st Creativity and Innovation Management Community Workshop, Oxford, United Kingdom, March 2005.
References Altshuller, G. (1979) Creativity as an exact science. New York: Gordon & Breach. Amabile, T.M., Burnside, R.M. and Gryskiewicz, S.S. (1999) User’s manual for KEYS: Assessing the climate for creativity. Greensboro, NC: Center for Creative Leadership. Amabile, T.M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996) Academy of Management Journal, 39, 1154–84. Basadur, M. (1995) The power of innovation: How to make innovation a way of life and put creative solutions to work. London: FT Pitman Publishing. Basadur, M. and Finkbeiner, C.T. (1985) Measuring preference for ideation in creative problem solving training. Journal of Applied Behavioral Science, 21, 37–49. Basadur, M., Graen, G.B. and Green, S.G. (1982) Training in creative problem solving: Effects on ideation and problem finding and solving in an industrial research organization. Organizational Behavior and Human Performance, 30, 41–70. Basadur, M., Graen, G.B. and Scandura, T.A. (1986) Training effects on attitudes toward divergent thinking among manufacturing engineers. Journal of Applied Psychology, 71, 612–7. Basadur, M. and Hausdorf, P.A. (1996) Measuring divergent thinking attitudes related to creative problem solving and innovation management. Creativity Research Journal, 9, 21–32. Basadur, M., Pringle, P. and Kirkland, D. (2002) Crossing cultures: Training effects on the divergent thinking attitudes of Spanish-speaking South American managers. Creativity Research Journal, 14, 395–408. Basadur, M., Pringle, P., Speranzini, G. and Bacot, M. (2000) Collaborative problem solving through creativity in problem definition: Expanding the pie. Creativity and Innovation Management, 9, 54– 76. Basadur, M., Runco, M.A. and Vega, L.A. (2000) Understanding how creative thinking skills, attitudes and behaviors work together: A causal process model. The Journal of Creative Behavior, 34, 77–100. Basadur, M., Taggar, S. and Pringle, P. (1999) Improving the measurement of divergent thinking attitudes in organizations. The Journal of Creative Behavior, 33, 75–111. Basadur, M., Wakabayashi, M. and Graen, G.B. (1990) Individual problem-solving styles and attitudes toward divergent thinking before and after training. Creativity Research Journal, 3, 22–32.
Volume 15
Number 1
2006
32
CREATIVITY AND INNOVATION MANAGEMENT
Basadur, M., Wakabayashi, M. and Takai, J. (1992) Training effects on the divergent thinking attitudes of Japanese managers. International Journal of Intercultural Relations, 16, 329–45. de Bono, E. (1985) Six thinking hats. Boston: Little, Brown. De Schyver, L. (1992) An impact study of creative problem solving facilitation training in an organizational setting. Unpublished master’s thesis, Buffalo State, State University of New York. Ekvall, G. (2000) Management and organizational philosophies and practices as stimulants or blocks to creative behavior: A study of engineers. Creativity and Innovation Management, 9, 94–9. Firestien, R.L. (1990) Effects of creative problem solving on communication behaviors in small groups. Small Group Research, 21, 507–21. Firestien, R.L. (1996) Leading on the creative edge: Gaining competitive advantage through the power of creative problem solving. Colorado Springs, CO: Pinon Press. Firestien, R.L. and Lunken, H.P. (1993) Assessment of the long-term effects of the Master of Science Degree in Creative Studies on its graduates. The Journal of Creative Behavior, 27, 188–99. Firestien, R.L. and McCowan, R.J. (1988) Creative problem solving and communication behaviors in small groups. Creativity Research Journal, 1, 106– 14. Fontenot, N.A. (1993) Effects of training in creativity and creative problem finding upon business people. Journal of Social Psychology, 133, 11–22. Ford, C.M. (1995) Creativity is a mystery: Clues from the investigators’ notebook. In Ford, C.M. and Gioia, D.A. (eds.), Creative action in organizations: Ivory tower visions & real world voices (pp. 12– 49). Thousand Oaks, CA: Sage. Gordon, W.J.J. (1961) Synectics: The development of creative capacity. New York: Harper & Row. Hurley, C.A. (1993) The relationship between the Kirton adaption-innovation style and the use of creative problem solving. Unpublished master’s thesis, Buffalo State, State University of New York. Isaksen, S.G., Dorval, K.B. and Treffinger, D.J. (1994) Creative approaches to problem solving. Dubuque, IA: Kendall/Hunt. Isaksen, S.G. and Treffinger, D.J. (1985) Creative Problem Solving: The basic course. Buffalo, NY: Bearly Limited. Isaksen, S.G. and Treffinger, D.J. (2004) Celebrating 50 years of reflective practice: Versions of Creative Problem Solving. The Journal of Creative Behavior, 38, 75–101. Janszen, F. (2000) The age of innovation: Making business creativity a competence, not a coincidence. London: Prentice Hall. Kabanoff, B., and Bottger, P. (1991) Effectiveness of creativity training and its relation to selected personality factors. Journal of Organizational Behavior, 12, 235–48. Kaufmann, G. (1988) Problem solving and creativity. In Grønhaug, K. and Kaufmann, G. (eds.), Innovation: A cross-disciplinary perspective (pp. 87–137). Oslo, Norway: Norwegian University Press.
Volume 15
Number 1
2006
MacKinnon, D.W. (1978) In search of human effectiveness: Identifying and developing creativity. Buffalo, NY: Bearly Limited. Miller, B., Vehar, J. and Firestien, R. (2001) Creativity unbound: An introduction to creative process (3rd ed.). Evanston, IL: THinc Communications. Myers, I.B. and McCaulley, M.H. (1985) A guide to the development and use of the Myers-Briggs Type Indicator. Palo Alto, CA: Consulting Psychologists Press. Neilson, L. (1990) Impact of creative problem solving training: An in-depth evaluation of a six-day course in creative problem solving. Unpublished master’s thesis, Buffalo State, State University of New York. Noller, R.B., Parnes, S.J. and Biondi, A.M. (1976) Creative actionbook. New York: Charles Scribner’s Sons. Osborn, A.F. (1953) Applied imagination: Principles and procedures of creative problem-solving. New York: Scribner’s Sons. Parnes, S.J. (1987) The creative studies project. In S.G. Isaksen (ed.), Frontiers of creativity research (pp. 156–88). Buffalo, NY: Bearly Limited. Parnes, S.J. and Brunelle, E.A. (1967) The literature of creativity (part I). The Journal of Creative Behavior, 1, 52–109. Parnes, S.J. and Noller, R.B. (1972a) Applied creativity: The creative studies project: Part I – The Development. The Journal of Creative Behavior, 6, 11–22. Parnes, S.J. and Noller, R.B. (1972b) Applied creativity: The creative studies project: Part II – Results of the two-year program. The Journal of Creative Behavior, 6, 164–86. Parnes, S.J. and Noller, R.B. (1973) Applied creativity: The creative studies project: Part IV – Personality findings and conclusions. The Journal of Creative Behavior, 7, 15–36. Pinker, K.D. (2002) The effects of a master of science in creative studies on graduates. Unpublished master’s thesis, Buffalo State, State University of New York. Puccio, G.J. and Lehrberger, R. (1999) Leadership Institute for Managers: Impact Study (research report prepared for the Times-Mirror Corporation). Rose, L.H. and Lin, H.T. (1984) A meta-analysis of long-term creativity training programs. The Journal of Creative Behavior, 18, 11–22. Runco, M.A. and Basadur, M. (1993) Assessing ideational and evaluative skills and creative styles and attitudes. Creativity and Innovation Management, 2, 166–73. Scott, G.M., Leritz, L.E. and Mumford, M.D. (2004a) The effectiveness of creativity training: A metaanalysis. Creativity Research Journal, 16, 361–88. Scott, G.M., Leritz, L.E. and Mumford, M.D. (2004b) Types of creativity training: Approaches and their effectiveness. The Journal of Creative Behavior, 38, 149–79. Stein, M.I. (1974) Stimulating creativity: Volume 1 Individual Procedures. New York: Academic Press. Sternberg, R.J. and Lubart, T.I. (1999) The concept of creativity: Prospects and paradigms. In Sternberg, R.J. (Ed.), Handbook of creativity (pp. 16–31). Cambridge, UK: Cambridge University Press. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
EFFECTIVENESS OF CREATIVE PROBLEM SOLVING TRAINING
Sutton, R.I. and Hargadon, A. (1996) Brainstorming groups in context: Effectiveness in a product design firm. Administrative Science Quarterly, 41, 685–718. Terninko, J., Zusman, A. and Zlotin, B. (1998) Systematic innovation: An introduction to TRIZ. Boca Raton, FL: St. Lucie Press. Thompson, G. (2001) The reduction in plant maintenance costs using creative problem-solving principles. Journal of Process Mechanical Engineering, 215, 185–95. Torrance, E.P. (1972) Can we teach children to think creatively? The Journal of Creative Behavior, 6, 114– 43. Torrance, E.P. and Presbury, J. (1984) The criteria of success used in 242 recent experimental studies of creativity. The Creative Child and Adult Quarterly, 9, 38–243. VanGundy, A. (1987) Organizational creativity and innovation. In Isaksen, S.G. (Ed.) Frontiers of Creativity Research: Beyond the basics (pp. 358–79). Buffalo, NY: Bearly Limited. Vehar, J.R. (1994) An impact study to improve a five-day course in facilitating creative problem solving. Unpublished master’s thesis, Buffalo State, State University of New York. Wang, C.W. and Horng, R.Y. (2002) The effects of creative problem solving training on creativity, cognitive type and R&D performance. R&D Management, 32, 35–45. West, M.A. (1997) Developing creativity in organizations. Leicester, UK: The British Psychological Society.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
33
Dr. Gerard Puccio is the Department Chair of the International Center for Studies in Creativity at Buffalo State. Professor Puccio has written more than 40 articles, chapters and books. In 2005, he received the State University of New York Chancellor’s Recognition Award for Research Excellence. Dr. Puccio is an accomplished speaker. He has delivered creativity workshops and presentations around the world, in such countries as France, England, Spain, Italy, Tanzania, Hong Kong, Singapore, the Dominican Republic, and Canada. Dr. Roger L. Firestien is Associate Professor at the International Center for Studies in Creativity at Buffalo State and President of Innovation Resources, Inc. He has written extensively on creativity and Creative Problem Solving and has designed and presented programs in Creative Problem Solving to thousands of people in audiences throughout the United States, Europe and South America. Christina Coyle is a trainer, facilitator and consultant specializing in organizational and business-based creativity applications. Ms. Coyle holds an MBA from the University at Buffalo, School of Management, and an MSc in Creative Studies from the International Center for Studies in Creativity at Buffalo State. Cristina Masucci is a Human Resources Manager specializing in Training and Development for an international hospitality organization. Ms. Masucci holds an MSc in Creativity and Change Leadership from the International Center for Studies in Creativity and serves on the Boards of the Buffalo Niagara American Creativity Association and the Buffalo Niagara American Society for Training and Development.
Volume 15
Number 1
2006
34
CREATIVITY AND INNOVATION MANAGEMENT
Using the Creative Product Semantic Scale as a Metric for Results-Oriented Business Karen O’Quin and Susan P. Besemer The advantages to businesses of using the Creative Product Semantic Scale (CPSS), a reliable, valid instrument that measures novelty, resolution, and style, are presented. The word ‘product’ is broadly defined to include an idea, proposal, process, prototype, or tangible product. Research shows that the CPSS has helped businesses in testing for marketability, new product design, product improvement and enhancement of advertisements. Future applications of the CPSS include improving the screening of ideas, diagnosis of brand problems, competition analysis, and team processes. A new on-line version of the CPSS provides a convenient method of administration.
ur purpose is to examine how businesses have benefitted in the past and can benefit in the future from a careful analysis of creative products. We begin with a broad overview of the ways in which organizations have typically approached creativity, innovation and new product development. Next, we define creative product analysis, explain the development of the Creative Product Semantic Scale (CPSS), and examine how its use has already helped a wide variety of businesses. We then look toward new applications that can improve products and processes in the future.
O
Overview of Creative Product Development Banks, Calvey, Owen and Russell (2002) pointed out that few managers differentiated among the concepts of creativity, innovation and problem-solving, instead seeing these concepts as being inextricably linked. In the same vein, Vissers and Dankbaar (2002) criticized the way in which many organizations have approached innovation, particularly the relationship between creativity (often perceived to be an individual characteristic) and innovation (typically perceived to be an organizational outcome). A common managerial assumption is that creative and uncreative ideas or products can be easily differentiated, which then leads to the problem that ‘organi-
Volume 15
Number 1
doi:10.1111/j.1467-8691.2006.00367.x
2006
zational assessment of creative ideas or products tends to be ignored, and little is known about the dynamics of “newness reception” in organizations’ (Vissers & Dankbaar, 2002, p. 31). Brethauer (2002) noted that new product releases into the market (defined as those launched within the past 5 years) accounted for approximately 45% of a typical company’s annual revenues. Unfortunately, he also stated that only a small percentage of launched products are successful in the marketplace. Research-based estimates of the percentage of new product failures vary widely, although the most common estimates range from 35–45% (e.g., Dahl, Chattopadhyay, & Gorn, 1999). Brethauer (2002) indicated that robust design of the product was a critical part of the entire process, and emphasized that it was critical for project teams to check out as many alternative solutions as possible. Andrews (1975) offered a thorough overview of how creative product development occurs. He discussed many of the problems facing corporations engaged in new product development: high risk, the long lead time from idea to commercialization, the high costs of development, marketing, and advertising, etc. Feldman and Page (1989) noted that the most widely-accepted model of the newproduct-planning process had seven stages: 1) exploration 2) screening of ideas 3) business © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE PRODUCT SEMANTIC SCALE
analysis 4) concept testing, 5) development, 6) testing to determine marketability, 7) commercialization. Feldman and Page compared the new-product planning practices of nine major companies, finding that these firms in general did not follow good planning practices. However, Johne (1989), specifically referring to product innovation firms, disagreed, finding that product innovation firms planned carefully. Gruenwald (1992) argued for the broadest possible definition of ‘new product,’ saying it also means a new service or package of services or of products and services. Meyer (2002) also advocated for a wider definition of the word ‘product:’ To the new market, your product is more than the item or service that you deliver. Your product includes everything that your customers experience in their relationship with you, every contact with your customers. When your business advertises, sells, issues an invoice, handles complaints, and offers support, you are delivering your product. (p. 165) We agree that taking a broad view of the term ‘product’ can provide businesses with a useful method of improvement, particularly when combined with creative product analysis.
What is Creative Product Analysis? The creativity literature contains many techniques that may be used during the exploration (idea generation) stage of the newproduct-planning process (e.g., Goldenberg & Mazursky, 2002; Hattori & Wycoff, 2002; McMahon & Lane, 2002). However, the literature offers far less guidance for how businesses should select the most promising ideas or products after the ideas have been generated. Our own research has attempted to fill this gap by focusing on the creative product. Susan P. Besemer developed the Creative Product Analysis Model (CPAM; Besemer & Treffinger, 1981). The model is composed of three dimensions or factors that relate to the three most important indicators of creativity in products. Each factor is then divided into categories or facets that further describe the product. The model has been developed and validated with many different types of products over the course of more than 20 years (e.g., Besemer, 1998, 2000a; Besemer & O’Quin, 1999). The first factor or dimension is novelty. This factor includes consideration of new materials, new processes, new concepts and other © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
35
elements of newness in the product or the idea. Novelty is typically the first criterion that people mention when they try to describe creativity, but novelty alone is usually not sufficient – considering novelty alone may lead to a product that is just weird or bizarre. For example, Veryzer (1998) found that although novelty was needed, the highest product evaluations by consumers were for those products that had some newness, but were not dramatically different from existing product lines. Radically new products are sometimes too far outside the customer’s comfort zone. Gruenwald (1992) pointed out that one of the reasons for product failure was that the product was too innovative and ahead of the market. The second important factor to consider is called resolution, which refers to how well the product does what it is supposed to do (Besemer, 2000a). A product that functions well, that people can understand how to use, that is logical, and that has usefulness and value, is considered to be high in resolution. For example, Frand (1989), who had worked in product development at 3M, emphasized the importance of form and function. He stated that ‘we think creativity is at its best when it does not have to follow any set rules and is free to roam, but precisely the opposite is true . . . the successful new business developer is not the one who runs willy-nilly exploring a myriad of opportunities, but one who can find the solution to the problem’ (p. 120). Johne (1989) agreed that an important issue in productinnovation firms seemed to be how to channel the creativity of high-ability team members into useable ideas that fit with a particular organizational strategy. The third and final CPAM factor was originally called elaboration and synthesis. This factor describes how the product presents itself to the customer. Since many readers and CPSS users have had difficulty understanding the somewhat unwieldy term ‘elaboration and synthesis,’ we began the new millenium by renaming this factor ‘style.’ This term, however, should not be interpreted merely as denoting a product’s being ‘stylish’ in a fashion-related sense – rather, the style dimension considers the product’s ‘presentation style.’ Such presentation values are important in every product area, from consumer goods to highly technical industrial products sold business-tobusiness. Being able to use the style dimension to enhance perceptions of novelty is one of the ‘secret weapons’ of the power of Creative Product Analysis. In Creating Products in an Age of Style (in press), Besemer tells the story of a client who works for a company manufacturing automo-
Volume 15
Number 1
2006
36
CREATIVITY AND INNOVATION MANAGEMENT
bile components. These are assemblies that are never seen by consumers, unless they know what to look for under the hood. Because the company was trying to produce a product that was of the highest quality at the lowest price, and because the component was not a consumer item, they invested their energies into the engineering of the part to make it work perfectly and be able to be sold at the lowest price possible. In a routine visit to a wholesale distributor, the client was questioned about the unpolished metal surface of the component. ‘Your competitor’s product looks a lot better,’ he was told. ‘It might cost a few cents more, but we think the extra quality is worth it.’ The engineer was surprised, since he knew that the finish on the components had no bearing on the product’s performance, as did the wholesaler. Yet this one factor could affect the success of his product in the marketplace. Examples like this can be found in many businesses. Another example is in the increasing popularity of highly designed coffee shops such as Starbucks. In her recent book, The Substance of Style (2003), Postrel describes how Starbucks Coffee Company has been able to build a business empire by providing this ubiquitous commodity in an atmosphere that suggests hip modernity and comfort. The ability of the customer to customize his or her coffee by selecting different blends, different added flavorings, and varieties of milk, cream and other enhancements can create that exciting plethora of options that is so characteristic of modern life. In order to operationalize Creative Product Analysis, to make it more usable, O’Quin and Besemer (1989) have further developed a measurement scale, the Creative Product Semantic Scale (CPSS), that contains 55 adjective pairs, each answered on a 7-point response scale. Unlike traditional new-product surveys that are related very closely to the specifics of the product under consideration, the CPSS asks raters to evaluate ideas and products more broadly. The model and the CPSS can be used with any idea or product, because they are aimed at a level of abstraction that is generally higher than that of other consumer surveys that may be used at a particular company. The purpose of the CPSS is to improve judgments made by raters or evaluators, so that they carefully consider all elements of the product (broadly defined as an idea, proposal, process, prototype or actual product). It is not intended to replace existing, more specific instruments, but rather to supplement other forms of product evaluation. The CPSS offers a ‘big-picture’ look at product characteristics that is portable across prod-
Volume 15
Number 1
2006
ucts and businesses. It allows products from different locations or times (or even products from different industries) to be compared to each other. Even more important, the CPSS provides those in the company with a common language to discuss new product designs. The quantitative nature of the rating process helps managers meet their needs for accountability. At the same time, it can help designers understand that their concerns are being recognized. Overall, snap judgments are reduced, and decision-making about new ideas or new products becomes more solid than the ‘gutfeeling’ basis that is sometimes used (Feldman & Page, 1989, p. 11). In order to constantly improve and fine tune the CPSS itself, we’ve moved away from the unwieldy paper forms and hand scoring that typified the early days of our product research to a more up-to-date approach to collecting data. Now authenticated users can access the CPSS online from the ideafusion.biz website. When a product’s ratings are completed online, the data are automatically analysed and web charts with graphic representations of the values of each of the nine subscales are created from dynamic data. The chart, or product profile, along with standard descriptive statistics, can be saved to the desktop for future reference. The application provides options for single users (who might want to evaluate the designs of an employee, for example) or multiple users (for consumer research). Now that we have described the CPSS and summarized the careful methods by which it was developed, we turn to the research literature. The CPSS, and variations of this assessment tool, have been used successfully in numerous studies in marketing, design, product improvement, and advertising.
How Has Creative Product Analysis Helped Businesses? Testing for Marketability Andrews (1975) noted that different market segments may evaluate products differently. Andrews and Smith (1996) indicated that, despite the importance of creative marketing programs, relatively little is known about factors that promote or inhibit the production of such programs. These authors studied product managers chosen from the American Marketing Association’s membership; respondents were asked to concentrate on a single product for which they had been highly involved in developing the most recent marketing program. Andrews and Smith (1996) used the © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE PRODUCT SEMANTIC SCALE
CPSS as the starting point for their measure of marketing program creativity. They used seven items from novelty as one measure of creativity, but chose to use a 3-item measure they called ‘meaningfulness,’ of which 2 items were from the germinal subscale of the CPSS. Respondents were asked to describe their company’s most recent marketing program using the adjectives. Andrews and Smith (1996) also collected additional data from consumers, by providing brief written descriptions of the marketing programs. The written statements described the actions that would be taken in the coming year to market the product in question (e.g., changing the product itself, changing the packaging, changing the distribution, using coupons and other promotions, etc.). After reading the description of the marketing program, consumers rated its novelty and meaningfulness using almost the same format as did the product managers themselves. Results showed that marketing program creativity was affected by individual variables (both intrinsic motivation and willingness to take risks had a positive impact on marketing program creativity) and by external variables (working under time pressure had a negative effect). Their study showed that the CPSS (even its portions) could be helpful in identifying factors that promote or inhibit the effectiveness of creative marketing programs. In another study related to marketing success, Besemer (2000b) used the CPSS to examine its ability to predict willingness to buy. Students rated four different chairs using the CPSS, and also completed questionnaires indicating their willingness to purchase each chair. Results showed that the participants chose comfort and familiar style over novelty. Dimensions of the CPSS varied in their relationship to purchase intention. Raters who evaluated three novel chairs and one traditional chair strongly preferred the traditional one. Participants’ scores showed that they could differentiate among the four options, and that they preferred the more familiar one. This sample, which was composed of students in state colleges in the SUNY system, seemed to mirror findings offered by Veryzer (1998) and others. ‘Don’t surprise me or I’ll run the other way,’ the participants seemed to say. This is an ironic twist to creativity researchers who often hold personal biases in favor of novelty. Of the nine facets of the CPAM, the elegant facet of the style factor was an important predictor for two of the three novel chairs, but resolution variables also contributed to the variance in all of the novel chairs. Besemer concluded that novelty alone does not provide sufficient motivation for the average con© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
37
sumer to buy a product. Instead, perceived value and demonstrated elegance are more important than novelty in predicting purchase decisions. Im and Workman (2004) examined creativity as a mediating factor between market orientation and new product success. Their model proposed that market orientation was an antecedent of creativity. They studied both new product creativity and marketing program creativity. Their contention was that ‘a creative firm that provides unique and meaningful products and programs will meet the changing needs of consumers by generating highly innovative and superior products and programs in the market’ (p. 118). Im and Workman (2004) used a variation of the CPSS to develop and validate measures of new product creativity and marketing program creativity. For example, their ‘novelty’ scale contained items very similar to the CPSS novelty dimension (with words or phrases including out of the ordinary, revolutionary, unconventional, and radical), and their ‘meaningfulness’ scale contained items very similar to the CPSS resolution dimension (including relevant, suitable, appropriate, and useful). Im and Workman (2004) found a negative impact of customer orientation on new product novelty – that is, enhancing customer orientation is less likely to help a firm create novel products, perhaps because current customers may not approve more radical newness, or may prefer products they are familiar with. The researchers suggested that new product success was driven more by the valuable and meaningful attributes (resolution) of the products themselves and their marketing programs, and not by novelty. Im and Workman (2004) concluded that the creativity of new products themselves is more likely to influence their success than the creativity of their marketing programs, perhaps because consumers tend to recognize novel and meaningful ideas for new products more saliently than they recognize those for marketing programs.
Product Design Andrews (1975) emphasized the importance of design, which is most relevant to the style dimension of the CPSS. He noted that both function and good looks are often important for product design. Parsons (1989) said that product design involves a combination of functional, structural and aesthetic characteristics (p. 51); note the relationship to the CPSS dimensions of resolution and style. Deschamps and Nayak (1995) emphasized the importance
Volume 15
Number 1
2006
38
CREATIVITY AND INNOVATION MANAGEMENT
of design as a product strategy, including the look, feel, touch and ergonomic qualities of the product. These characteristics are part of both the resolution and the style dimensions of the CPSS. Dahl, Chattopadhyay, and Gorn (1999; 2001) used the CPSS in a creative way in a study of visualization in the design of concepts and new ideas. They focused on originality and usefulness as variables that would serve to drive customer appeal. They asked engineering students to design a car jack for senior citizens; some of the designers were asked to visualize the customer (an elderly person using the car jack) during the design process. The resulting designs were evaluated using a variation of the CPSS: 3-item subscales intended to measure originality (novelty), usefulness (resolution) and customer appeal. They found that designers who were asked to use imagination-based visualization and images of the end user during the design process produced designs that were significantly more appealing and more useful to the end user. In a second study, they asked their designers (engineering students) to design an umbrella for young women. Separate samples of judges, who were all young women, were asked to evaluate the designs for originality, usefulness, and customer appeal. Results were similar, in that imagining the customer led to designs that were significantly more useful. Dahl et al. (1999) pointed out that is difficult for designers to implement a customer focus, and their research showed that the CPSS helped them offer a strategy for doing so.
Product Improvement Goldenberg and Mazursky (2002) made an analogy to Darwin’s theory of evolution by suggesting that the best products succeed in the market because products that fail to fulfill the needs and desires of customers disappear while products that satisfy them survive. These authors argued that analyzing the product itself can help identify market trends and predict the basic characteristics of new products. A novel use of the CPSS was introduced by Kristensson, Gustafsson, and Archer (2004). They investigated user involvement in the development of new products. Three groups were used: advanced users, ordinary users, and professional product developers. All three groups were given the task of creating ideas for future mobile telephone services. Their ideas were evaluated on scales similar to the CPSS: original, valuable, and realizable merit. Results showed that ordinary users created
Volume 15
Number 1
2006
significantly more original and valuable ideas than either of the other two groups. Besemer (2000a) presented the case study of a manufacturer of high-end stereo amplifiers and other audio components. The audio company began by asking employees in the company’s administration and in the plant to assess new product concepts using the CPSS. Next, prospective users of the newly-proposed equipment were assessed. Audiophiles at several major electronics and stereo shows evaluated proposed designs for a new amplifier. The results were fed back to the project team in the form of product profiles that revealed customers’ ratings of the three dimensions and nine categories of the CPSS. Designers then used creativity techniques to redesign the amplifier and to test the revised designs again with users in an iterative process. Thus, feedback from the CPSS was used to to improve and fine-tune the concept drawings. Designers commented that the CPSS product profiles helped them develop a language for discussing alternative designs, as well as a structure that allowed them to experiment more freely. It is interesting to note that designers in Besemer’s (2000a) study were able to present some highly unusual ideas in their concept drawings, and some customers appreciated the high levels of innovation. However, as ratings of surprise increased, consumers’ ratings of logical and useful decreased. The designers decided to be a little less original, by taking an element they liked from one of the extremely novel designs and bringing it back into the more useful realm. On the next iteration, the modified innovation was not perceived to be as shockingly new, but it was still seen as having freshness. Thus, use of the CPSS allowed designers to refine, but not discard, their highly original ideas. Besemer (2000a) also noticed that the product designers became increasingly confident as the project continued. The regular feedback provided by the CPSS allowed them to experiment with new ideas while actively controlling the levels of novelty in their products. Figure 1 shows the profile scores for the nine facets of the CPSS over time. Mean profile scores rose consistently over the months of the project, indicating that designers were continually getting better at managing the levels of novelty and resolution in their products. In the future, it might be possible for companies to compare ratings of products known to be successful and unsuccessful in particular markets. The product profiles that result could offer guidance to designers aiming for the same prospective customers. In this way, the CPSS may offer a method to identify potential market targets. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE PRODUCT SEMANTIC SCALE
39
Figure 1.
Advertising In the literature on new product development, advertisements themselves are seldom thought of as being creative products. However, the CPSS may be effectively used to compare different types of advertising. White and Smith (2001) used the CPSS to assess the effectiveness of 15 advertisements from 12 different magazine sources that promoted a variety of products (food, beverage, health/personal care, garden, pet, and automobile). They found some consistencies among ratings of different groups of raters, particularly for novelty. However, advertising professionals consistently rated the advertisements as being less well-crafted (a facet of style) than either students or the general public. White and Smith (2001) noted that advertising professionals could take from their study a greater understanding of the ways in which their judgments were similar to those of the general public, as well as the ways in which they were different. White, Shen and Smith (2002) used a similar design, comparing a sample of advertising professionals with samples of students and of the general public. Advertisements were chosen from a variety of magazine sources, including Better Homes & Gardens, Hunting, People, and Time. A 15-item version of the CPSS was used (the subscales original, logical, and well-crafted, one from each of the three CPSS dimensions). They found that the inclusion of well-crafted (from the style dimension) was the key for capturing the subtle differences in ratings of advertisements by the different © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
groups. Their study showed that the CPSS provided valuable information for decisionmaking about advertising effectiveness.
Team Processes Sethi, Smith and Park (2001) stated that although there exists a large body of literature on the determinants of organizational-level innovation, there is relatively little research examining factors that affect new product innovativeness. They indicated that most of the existing research focused on macro-level or firm-level independent variables, which provide little guidance for how to improve product-development projects at the level of functioning of the group or team that needs to work together to generate ideas, choose the best ideas, design the product based on the best ideas, and follow its development through the extensive testing and production process. Deschamps and Nayak (1995) emphasized that innovation in process as well as product was important. Clark and Fujimoto (1994) indicated that ‘the process of developing new products depends as much on the flow of information as it does on the flow of materials’ (p. 286). However, the idea of evaluating processes in the same way as products has seldom been examined. For example, Rickards and Moger (2000) took an interesting look at team processes in organizations. They pointed out that what has been largely ignored both in research on project teams and in studies of the
Volume 15
Number 1
2006
40
CREATIVITY AND INNOVATION MANAGEMENT
creative process, is the task outcome of the team structure. Specifically, ‘The outcome or product has aspects that are novel and valued to the context of the team task. These are the characteristics of the creative process and the creative product’ (p. 274). Although it has seldom been done, it is possible to use the CPSS to evaluate processes as well as concrete products. Puccio, Treffinger and Talbot (1995) used the model of the CPSS to develop another measure, the Survey of Creative and Innovative Performance, in which respondents describe the products of their work (in general, rather than referring to specific products) on novelty, resolution, and style dimensions. These researchers found a relationship with cognitive style, in that adaptors said that their work-related products were more logical, well-crafted, and useful (higher in resolution), whereas the innovators described their workrelated products as being more original, attractive, transformational and expressive. Sethi, Smith and Park (2001) pointed out that there can be considerable variation in outcomes of new product development efforts even within a single company. They suggested that what is needed are clear recommendations that are directly related to enhancing new product innovativeness (an important predictor of new product success or failure). They used a variation of the CPSS as their primary measure of new product innovativeness. However, their 10-item measure of innovativeness tapped only novelty and what they called ‘appropriateness’ of the new product (items from the CPSS resolution dimension). Their respondents were project managers who had recently coordinated new product development projects in several different industries, including appliances, lawn care equipment, office supplies, toys, processed food products, health and beauty aids, and household products. Sethi et al. (2001) found that new product innovativeness was positively related to such variables as encouragement to take risk, taking customer’s needs into account, and monitoring of the project by senior management. Social cohesion had a negative relationship to new product innovativeness, perhaps because of fostering a kind of groupthink. Understanding the factors that promote the development of meaningfully unique ideas is critical in new-product development (Andrews & Smith, 1996, p. 185). Because new-product development projects often involve cross-functional teams (Sethi, Smith & Park, 2001), the literature dealing with creative problem-solving in groups could be helpful, particularly when combined with the excellent criterion measures provided by the CPSS.
Volume 15
Number 1
2006
We have summarized the research literature showing how the CPSS has benefitted businesses in many ways. In the next section, we turn our attention to the future, examining areas in which the CPSS has a great deal of potential to spur research and improve business practices.
How Can Creative Product Analysis Help Businesses in the Future? There are many popular tools and techniques intended to help in the generation of ideas for new products. The CPSS is not intended to be used for this activity. Where the CPSS offers its unique contribution is in the analysis, strengthening, and development of these new ideas to make them market-ready. The CPSS is also valuable for tracking consumer perceptions of products in all stages of development from concept to finished products available on the shelves of retail outlets. When working on an emerging product concept, the CPSS can help product developers (product managers, designers, engineers, and marketers) refine and strengthen fragile new ideas, fine-tuning them in a way impossible with simplistic winlose evaluation methods. These are just a few of several ways that the CPSS can be used for results-oriented business. Innovation managers in research and development departments can see the most immediate applications, and when businesses use Gruenwald’s (1992) and Meyer’s (2002) broad definitions of product, other applications become evident.
Screening of Ideas Screening of ideas refers to winnowing new product ideas to sort out the potential winners into a small number of manageable ideas. While academic studies have often used the CPSS to distinguish ‘winners from losers’ (e.g., Dahl, Chattopadhyay, & Gorn, 1999; Sethi, Smith & Park, 2001; Im & Workman, 2004), in real business applications of the CPSS more sophisticated use of the measurement instrument is possible. Academic studies are often designed using the creativity of products as a dependent variable to measure the effect of a training course or a management technique, rather than to better understand the products’ own characteristics. Innovation managers who use the CPSS as a metric to understand, strengthen, and develop their product concepts can tap into the real strength of the process. Kristensson, Magnusson and Matthing (2002) stated that one critical phase in product © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE PRODUCT SEMANTIC SCALE
and service development, but one of the least understood, is the early idea phase. This is where many interesting, highly novel ideas are lost. They noted that launching a novel product will increase the chances of gaining market share, thus leading to financial advantage for a company. Reilly (1999) emphasized the importance of considering user needs during all phases of new product development, including pre-planning stages such as idea screening. Deschamps and Nayak (1995) argued that idea management was important, and that companies should ‘generate, collect, evaluate, screen and rank ideas continually’ (p. 14). Andrews (1975) noted that the degree of innovation (we would say novelty) is influenced by several factors, including country and market, so it is necessary to determine how much originality is appropriate. While we would not argue that this is an important concern, real world applications are much more complex than that. Although measuring novelty is important, product analysis is more than simply trying to apply some kind of ‘novo-meter’ to the new product concepts. Novelty is just one of the product characteristics related to success, so it is important to look at the product concepts in a more holistic way, as can be done with creative product analysis. Feldman and Page (1989) discussed a range of new-product screening processes used by different corporations. As an extreme example, in one corporation, a single individual screened ideas against a criterion based on a subjective 3-point scale: ‘whether the idea was “ludicrous, viable, or dynamite”’ (p. 11). It is disappointing to realize that important business decisions have been made using such weak criteria, but these results are not really surprising. In fact, in small companies where the owner makes each important decision, his or her intuition is often the only guidepost for deciding the fate of new product concepts. Pessemier (1982) presented a new productscreening checklist that included relative product effectiveness as one of nine major categories. Pessemier (1982) noted, ‘the screening activity by its nature tends to focus on potential flaws and problem areas’ (p. 345). He suggested that steps needed to be taken to prevent the unnecessary loss of fundamentally sound ideas. We agree. The CPSS can actually ‘protect’ concepts and prevent the unnecessary loss of potentially valuable ideas by showing the strengths as well as the weaknesses of a nascent idea. The CPSS functions to slow down snap judgments by raters, so that they carefully consider all of the important elements of the idea or the product concept. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
41
Thus, the CPSS provides an easily-used metric to improve idea screening.
Diagnosis of Brand Problems We’ve all heard that if you can create a better mousetrap, the world will beat a path to your door. Unfortunately, this is easier said than done, even with a good product. Product failures are rampant, notwithstanding the extensive business literature available to guide the new product developer. Andrews (1975) noted, ‘there is no viable market for a brilliant idea if it does not fulfill a need’ (p. 76). Frand (1989) also emphasized that ‘in product development, the greatest need is a need . . . you need someone who needs something’ (p. 49). Hendon (1989) presented an entire book of examples of product failures; some of the problems that he discussed were that the product was neither new nor different enough, delivered no real benefit, solved an unimportant or non-existent problem, was of poor quality, etc. Gruenwald (1992) discussed many reasons for product failure; some of them related to the product itself. For example, the product did not offer a unique benefit, or it was too innovative and ahead of the market, or the product message was too complicated. These issues may point to something other than functional problems in the product. The product may work well, but its market doesn’t appreciate it, or doesn’t understand how it can be of benefit. Such issues may be related to problems with the brand’s reputation or the consumer’s expectations of the products of that brand. Brand equity, which involves all the intangibles associated with a brand or trademark by consumers and the company, is often perceived to be the territory of marketers. But brand managers and product managers are also involved in the need to understand and position their products so as to take advantage of positive associations of the brand and to differentiate their brands from those of competitors. Product teams create brand ‘personalities’ for their products that fine-tune the products’ features and attributes to meet the needs of the target market. One company may have several brands, and may further differentiate even within models in their own brands. The CPSS produces a ‘product profile’ with scores for nine different product attributes. These profiles help product teams understand ratings by customers of a particular product to determine to what degree it is perceived as new (novelty), how it is perceived as being valuable or useful to the customer (resolution), and how highly it is judged to be organic, well-crafted and elegant (style).
Volume 15
Number 1
2006
42
CREATIVITY AND INNOVATION MANAGEMENT
Brand equity changes with time, and occasionally it may be necessary to retire a brand, as has recently been seen with General Motors terminating the once-strong Oldsmobile brand. Apparently, this brand was perceived by the company to require more than a superficial face-lift. It is likely that the decision was made to cease production in order to devote resources to other more profitable brands and to innovate with new ones. Using creative product analysis and the CPSS to maintain benchmark product ratings on all of a company’s brands or models can help in matching the brand or the model to the target customers’ expectations, or to help stretch their expectation with gently appropriate levels of novelty. Doing longitudinal CPSS studies of a brand or a model over time can show how perceptions change about the product. The nine facet subscales give rich information for tracking changes and diagnosing problem issues, for example, perceptions of too much novelty in a mainline product. Armed with diagnostic knowledge provided by the CPSS, the product development team can locate the problems and begin to resolve them.
Competition Analysis Gruenwald (1992) said that it was important to ‘look hard at the competition, for they make the market you are considering’ (p. 125). Deschamps and Nayak (1995) made an important point that can be related to the CPSS, specifically value as a product criterion. They pointed to Ikea as an example of a company that has successfully changed the way furniture is designed, stocked, sold and delivered; Ikea provides maximum value to customers by combining design quality, product quality, and design utility with low prices. Banks, et al. (2002) reported the view of many managers working in advertising or marketing firms, that ‘the customer requirement is not about fantastic, whizzy stuff but it’s actually looking at the functionality’ (p. 258). The CPSS has especially strong value when following Gruenwald’s advice about looking hard at the competition. Besides running benchmark studies on a company’s own production models and those in development, doing studies of competitors’ products can yield beneficial information about the perceptions by customers of your own products and those of competitors. The nine subscales of the CPSS provide much more detailed information than other methods of consumer research, yielding results that are comparable across models, brands, and even industries, about the qualities of the benchmarked products.
Volume 15
Number 1
2006
Using the CPSS can help companies in evaluating the products of their competitors as well as their own products, and can highlight the difference between the ‘fantastic, whizzy stuff’ (novelty) and the functionality (resolution). Such comparisons can provide constructive fodder for future product development. In fact, Im and Workman (2004) suggested that firms that carefully monitor competitors’ activities may focus too much on novelty and not enough on resolution. Using the CPSS can help firms strike the right balance of not only novelty and resolution, but also of style. The style dimension of the CPSS is perhaps the most useful for gaining insight into perceptions of competitors’ products. Measuring and comparing aesthetic qualities of your own and your competitors’ products allows innovation managers to finally get an understanding these important aesthetic variables. For example, the Apple computer company has tenaciously defended its small but important market niche (and branched out with the iPod) by emphasizing style as well as novelty and resolution. Although novelty is the most widely-recognized criterion and is the easiest attribute to measure, it is only the beginning. A more rigorous assessment, such as that provided with the CPSS, is needed.
Summary and Conclusions Using the broadest definition of the term ‘product,’ we have described how the CPSS has been used to examine the creativity of marketing programs and to predict willingness to buy. It is becoming clear that novelty is not the only characteristic of creative products that is likely to determine market success – both resolution and style play important roles as well. In other applications, the CPSS has helped designers improve products as diverse as car jacks, umbrellas, and stereo equipment. The CPSS has been used a criterion variable to examine the effectiveness of advertisements and the processes used by project managers. The CPSS has also been used to create product profiles to assist in identifying both weaknesses and strengths. We indicated that analysis of competitors’ products could improve identification of strategies for customer focus. Thus, we have summarized the literature on applications of the CPSS in a wide variety of organizations, and have suggested new avenues for the future. We have shown how the CPSS can provide a tool for product development teams to use to improve idea selection by highlighting characteristics of the best ideas, to improve their communication by utilizing a similar vocabulary, to improve their product © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
CREATIVE PRODUCT SEMANTIC SCALE
designs, and to improve their advertising and marketing. In developing the CPSS over the past two decades, we have moved from the theoretical to the practical; from the ivory tower to the shop floor. We began our work because of an interesting question, ‘What makes something creative?’ and have spent many years looking at data that try to answer that question. More recently, we have focused on the more application-oriented research, in very practical settings. With each step we have sought to offer a quality product that could offer new insights to researchers, whether they are academic scholars or busy practitioners. It is interesting to note that the concept of assessing, strengthening, and developing products remains novel after twenty years. Happily, because of ongoing efforts that kept the focus on the usefulness, validity, and reliability of the CPSS measure, it has been possible to improve the measuring instrument as a product itself. The new electronic application gives results-oriented businesses an easier and more flexible metric to better understanding and improving their products.
References Andrews, B. (1975) Creative Product Development: A Marketing Approach to New Product Innovation and Revitalisation. Longman Group Limited, London, UK. Andrews, J. and Smith, D.C. (1996) In search of the marketing imagination: factors affecting the creativity of marketing programs for mature products. Journal of Marketing Research, 33, 174– 87. Banks, M., Calvey, D., Owen, J. and Russell, D. (2002) Where the art is: defining and managing creativity in new media SMEs. Creativity and Innovation Management, 11, 255–64. Besemer, S.P. and O’Quin, K. (1986) Analyzing creative products: refinement and test of a judging instrument. Journal of Creative Behavior, 20, 115– 26. Besemer, S.P. and O’Quin, K. (1999) Confirming the three-factor creative product analysis matrix model in an American sample. Creativity Research Journal, 12, 287–96. Besemer, S.P. (1998) Creative product analysis matrix: testing the model structure and a comparison among products – Three novel chairs. Creativity Research Journal, 11, 333–46. Besemer, S.P. (2000a) Creative product analysis to foster innovation. Design Management Journal, Fall, 59–64. Besemer, S.P. (2000b) To buy or not to buy: predicting the willingness to buy from creative product variables. Korean Journal of Thinking and ProblemSolving, 10(2), 5–18. Besemer, S.P. (in press) Creating Products in an Age of Style. Morpa Kültür Yayinlari, Istanbul, Turkey. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
43
Besemer, S.P. and Treffinger, D.J. (1981) Analysis of creative products: review and synthesis. Journal of Creative Behavior, 15, 158–78. Brethauer, D. (2002) New Product Development and Delivery: Ensuring Successful Products Through Integrated Process Management. AMACOM, New York, USA. Clark, K.B. and Fujimoto, T. (1994) The power of product integrity. In Clark, K.B. and Wheelwright, S.C. (eds.), The Product Development Challenge: Competing Through Speed, Quality, and Creativity. Harvard Business Review Books, Boston, USA, pp. 277–96. Dahl, D.W., Chattopadhyay, A. and Gorn, G.J. (2001) The importance of visualization in concept design. Design Studies 22, 5–26. Dahl, D.W., Chattopadhyay, A. and Gorn, G.J. (1999) The use of visual mental imagery in new product design. Journal of Marketing Research, 36, 18–28. Deschamps, J.P. and Nayak, P.R. (1995) Product Juggernauts: How Companies Mobilize to Generate a Stream of Market Winners. Harvard Business School Press, Boston USA. Frand, E.A. (1989) The Art of Product Development: From Concept to Market. Dow Jones-Irwin, Homewood Illinois, USA. Feldman, L.P. and Page, A.L. (1989) Principles versus practice in new-product planning. In Henry, W., Menasco, M. and Takada, H. (eds.), NewProduct Development and Testing, Lexington Books, Lexington Massachusetts, USA, pp. 5–26. Goldenberg, J. and Mazursky, D. (2002) Creativity in Product Innovation. Cambridge University Press, Cambridge, UK. Gruenwald, G. (1992) New Product Development: Responding to Market Demand. NTC Business Books, Lincolnwood Illinois, USA. Hattori, R.A. and Wycoff, J. (2002) Innovation DNA: A good idea isn’t enough: it has to create value. T&D 56(1), 25–32. Hendon, D.W. (1989) Classic Failures in Product Marketing: Marketing Principles Violations and How to Avoid Them. Quorum Books, New York, USA. Im, S. and Workman, J.P. (2004) Market orientation, creativity and new product performance in hightechnology firms. Journal of Marketing, 68, 114–32. Johne, F.A. (1989) How experienced product innovators organize. In Henry, W., Menasco, M. and Takada, H. (eds.), New-Product Development and Testing, Lexington Books, Lexington Massachusetts, USA, pp. 27–48. Kristensson, P., Gustafsson, A. and Archer, T. (2004) Harnessing the creative potential among users. Journal of Product Innovation Management, 21, 4–14. Kristensson, P., Magnusson, P. and Matthing, J. (2002) Users as a hidden resource for creativity. findings from an experimental study on user involvement. Creativity and Innovation Management, 11, 55–61. McMahon, P. and Lane, J.D. (2002) Quality tools produce desired results: use these proven techniques throughout all job phases as you manage your teams. Hydrocarbon Processing, 81(1), 63–8. Meyer, P. (2002) Creating and dominating new markets. AMACOM, New York, USA.
Volume 15
Number 1
2006
44
CREATIVITY AND INNOVATION MANAGEMENT
O’Quin, K. and Besemer, S.P. (1989) The development, reliability and validity of the Revised Creative Product Semantic Scale. Creativity Research Journal, 2, 268–79. Parsons, L.J. (1989) Product design. In Henry, W., Menasco, M. and Takada, H. (eds.), New-Product Development and Testing, Lexington Books, Lexington Massachusetts, USA, pp. 51–75. Pessemier, E.A. (1986) Product Management: Strategy and Organization. Robert E. Krieger Publishing, Malabar Florida, USA. Postrel, V. (2003) The Substance of Style: How the Rise of Aesthetic Value is Remaking Commerce, Culture, and Consciousness. HarperCollins, New York, USA. Puccio, G.J., Treffinger, D.J. and Talbot, R.J. (1995) Exploratory examination of relationships between creativity styles and creative products. Creativity Research Journal, 8, 157–72. Reilly, N.B. (1999) The Team Based Product Development Guidebook. ASQ Quality Press, Milwaukee Wisconsin, USA. Rickards, T. and Moger, S. (2000) Creative leadership processes in project team development: An alternative to Tuckman’s stage model. British Journal of Management, 11, 273–83. Sethi, R., Smith, D.C. and Park, C.W. (2001) Crossfunctional product development teams, creativity, and the innovativeness of new consumer products. Journal of Marketing Research, 38, 73–85. Veryzer, R.W. (1998) Key factors affecting customer evaluation of discontinuous new products. Journal of Product Innovation Management, 15, 136–50. Vissers, G. and Dankbaar, B. (2002) Creativity in multidisciplinary new product development teams. Creativity and Innovation Management, 11, 31–42. White, A., Shen, F. and Smith, B.L. (2002) Judging advertising creativity using the Creative Product
Volume 15
Number 1
2006
Semantic Scale. Journal of Creative Behavior, 36, 241–53. White, A. and Smith, B.L. (2001) Assessing advertising creativity using the Creative Product Semantic Scale. Journal of Advertising Research 41(6), 27–34.
Karen O’Quin (
[email protected]) is Professor of Psychology and Associate Dean of the School of Natural and Social Sciences at Buffalo State College. Her interests include the psychology of humor, organizational behavior, research methods, and studying creative products. She has published articles in such diverse journals as Reading Research Quarterly, Social Justice Research, Computers in Human Behavior, Journal of Personality and Social Psychology, and Creativity Research Journal. Susan Besemer has a passion for products. She earned a BA at SUNY Albany, a master’s degree from Indiana University and another in Creative Studies from Buffalo State College, as well as a doctorate in cognitive psychology from the University of Bergen, Norway. Since leaving from her first career as a librarian and library manager in SUNY, Dr. Besemer has done consulting with organizations to help them increase their creative idea power using Creative Product Analysis, the process of understanding, assessing, strengthening and developing new products with the Creative Product Semantic Scale (CPSS). Susan may be reached at
[email protected].
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
45
The Role of Knowledge Management in the Innovation Process Min Basadur and Garry A. Gelade We argue that current concepts of knowledge management and organizational learning are, by themselves, limited in their ability to improve organizational effectiveness. We show how these concepts may be usefully integrated with organizational creativity and innovation within a single framework that combines the apprehension of knowledge with the creative utilization of such knowledge. Field research and experience are described showing how this framework has been applied to achieve measurable improvements in effectiveness in a wide range of organizations.
Introduction rganizations around the world today face a common challenge: the need to improve their performance in order to capitalize on rapid change, and to establish or regain competitive edge. In North America, restructuring and downsizing have become a way of life as organizations struggle to regain market share from global competitors producing higher-quality products. Companies try to become more quality-conscious and customer service-oriented overnight. In Eastern Europe, managers and employees struggle to establish new behaviors and procedures that will allow their companies to compete in the free market. Third World countries hungry for economic development look for growth markets around the world. Manufacturing and information technology jobs are outsourced in massive numbers from developed countries to the emerging low-wage economies of China and India. In Japan, organizations that once had a clear target – to match and surpass North American quality and customer service – now lack a blueprint for further progress.
O
Organizational Effectiveness Organizational research suggests that effective organizations display a high degree of three specific characteristics: efficiency, adaptability and flexibility (Mott, 1972). Efficiency allows an organization to implement and follow routines. The efficient organization follows © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
well-structured, stable routines for delivering its core products (goods or services) in high quantities, with high quality and at low cost. In a stable world, efficiency alone would guarantee success. If we still bought buggy whips, the organization’s sole concern would be simply to produce lots of high-quality, low-cost buggy whips. But in a changing world, efficiency alone is not enough. Adaptability is the other side of the coin. While efficiency implies mastering a routine, adaptability means mastering the process of changing a routine. Adaptability is a proactive process: it allows the organization to deliberately and continually change its routines to increase quality, productivity and costeffectiveness, and also to introduce new products, services, and routines. Adaptable organizations anticipate problems and opportunities, and develop timely solutions and new routines, such as higher-quality buggy whips or, say, automobile self-starters. Adaptability requires looking outside the organization for new technologies, ideas and methods that may improve or completely change its routines. Adaptable organizations are willing to accept new solutions quickly rather than reject them as disruptive. The most effective organizations are both efficient and highly adaptable. Flexibility allows the organization to react quickly and effectively to unexpected situations. While adaptability is a continual, proactive process, flexibility is intermittent and reactive. It allows the efficient organization to
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00368.x
46
CREATIVITY AND INNOVATION MANAGEMENT
deal with unforeseen disruptions while maintaining its routines.
Various Concepts of Knowledge and Innovation Management Organizational Effectiveness Comes from Superior Thinking Superior organizational performance – whether based on efficiency, adaptability or flexibility – is becoming increasingly dependant on superior thinking. While assets such as labor, capital, processes, and technology continue to be important, the organization’s ability to think is now widely recognised as crucial. Terms such as knowledge management, organizational learning, and intellectual capital are now common in the management literature. Academics discuss, and practitioners attend seminars on, concepts such as the ‘Learning Organization’. Major consulting companies are offering sophisticated information systems for knowledge management, and many organizations have established knowledge management or learning systems departments headed up by a ‘Chief Knowledge Officer’. However, these topics are usually seen as different and separate from organizational creativity and innovation. Some companies struggle with innovation, wondering why their continuous improvement programs seem to work smoothly, while they are unable to sustain meaningful innovation programs. Some researchers and practitioners focus on topics such as ‘management of technology’, viewing information technology as the main source of innovation. Others focus on non-technology methods and tools for helping employees think more creatively (e.g., deBono, 1976). Some consultants provide idea-generation services to help companies create new product concepts, while others help companies evaluate existing ideas and move them through to commercialization (e.g., Cooper, 1993). The purpose of this paper is to show how knowledge management, and creativity and innovation, fit together. We differentiate between the apprehension of knowledge and knowledge utilization and unite them into a single framework. We argue that this framework allows organizations to do three things: (1) detect errors and implement changes to restore or improve routines; (2) make sense of sudden unexpected events and crises and convert them into opportunities for innovation; and (3) anticipate and seek out new information, and emerging opportunities to develop new products, services, and routines.
Volume 15
Number 1
2006
Knowledge Management as Knowledge Sharing Among consulting companies, knowledge management is largely synonymous with knowledge sharing. Here, knowledge management consists of converting tacit knowledge (knowledge in individuals’ heads) into explicit knowledge (codeable information suitable for electronic storage and transmission) and developing IT systems to spread this knowledge organization-wide so everyone has access to it. Such knowledge sharing systems require organizations to abandon the ‘command and control’ method of managing, in which knowledge is the cherished and jealously guarded property of managers, and where employees are told exactly what to do, and are provided with the minimum amount of information they need to do it. However, although knowledge sharing makes more knowledge available to more people, the mere availability of information is not sufficient. If efficiency, flexibility, and adaptability are to be increased, that information must be put to use, and additional information beyond what is coded in the IT system may be required. We suggest that this requires the adoption of a shared thinking process for using knowledge innovatively. This approach is consistent with Weick and Roberts’ (1993) concept of ‘collective mind’ in which members of an organizational system correlate their actions with those of all the others in the system to achieve optimal results.
Knowledge Management as Organizational Learning Levitt and March’s (1988) review of the literature shows that organizational learning is widely viewed as routine-based. Routines include the procedures and technologies around which organizations are constructed and through which they operate. Argyris and Schon (1978) define two levels of organizational learning, both of which involve detecting and correcting errors in routine. Single-loop learning occurs when the error is corrected without changing the organization’s existing norms, policies, or objectives. Doubleloop learning occurs when the error is corrected by modifying an organization’s norms, policies, or objectives. Thus, both single- and double-loop organizational learning are concerned with organizational efficiency – the maintenance, improvement, and mastery of routine. Single-loop learning restores routine (efficiency), while double loop learning improves or modifies it. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
Some organizations derive competitive edge by being superior in efficiency – in continuously restoring and improving routines. Toyota for example employs total quality management tools such as six-sigma and lean manufacturing to find root causes of errors and reduce waste. Others have their own methods; Procter and Gamble is famous for its willingness to devote years of painstaking analysis to understand what went wrong with company routine procedures when failures occur (albeit rarely) (Swasy, 1993). Rely Tampons, which were removed from the market for health safety reasons and Pringles potato chips which did not meet sales expectations are recent examples of such analyses and attempts at organizational learning. The methodology we propose offers the opportunity to operationalize organizational learning, to make it more than just an academic concept. That is, one might ask, ‘just how do you do double-loop learning?’ We suggest people can learn how by becoming skilled in the innovative thinking process and tools we describe.
Adaptability and Flexibility Depend on Innovative Thinking Adaptability and flexibility are not primarily based on either efficient knowledge sharing (making information widely available) or organizational learning (detecting and correcting error to restore or modify routine). Adaptability depends on deliberately seeking out new problems, trends, technologies, and information and using them to create new routines, products and services. Toshiba, for example, deliberately develops adaptability in its employees. Newly hired R&D scientists and engineers start their careers in the sales department to learn that innovation begins by discovering ‘the problems of the customer’ and to develop their problem finding skills (Basadur, 1992). The 3M Corporation establishes strategic goals for inducing adaptability; for example, one goal is that 30% of the company’s products must be new every five years. Flexibility depends on turning unexpected events, including crises, into opportunities or at least restoring equilibrium quickly. Such opportunities may simply consist of achieving goodwill from the public or even inventing new ways to avoid such a crisis in the future. An excellent example is the Tylenol tragedy in Chicago a few years ago, when several people suddenly died after consuming Tylenol pain relieving capsules. Johnson & Johnson, the manufacturer, quickly removed all Tylenol products from store shelves, reassured the © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
47
public, confined the danger to the local area, and discovered the root of the problem. Someone had deliberately injected a lethal poison into Tylenol capsules in some stores. The company proceeded to pioneer new innovative tamper-proof packaging that the rest of the industry has since adopted. The public was left with a very favorable image of Johnson & Johnson. The company demonstrated it was both expert about the products it manufactures, and highly skilled in using its knowledge for innovative problem solving.
Putting Knowledge to Use Creatively Innovative organizations do more than spread knowledge, they make a habit of using knowledge creatively. In a crisis, having the necessary knowledge is important, but not knowing how to use it innovatively can render it useless. A major North American Airline discovered this when a snow storm paralyzed their home base airport on a Friday night. The snow had been expected all week, arrived on schedule, and continued through Monday. All but ten of the airline’s two hundred scheduled flights were ultimately cancelled as the weekend dragged on. Almost 20,000 increasingly angry customers spent a frustrating weekend in a survival mode: waiting to get more information; trying to find alternative flights; deciding whether to switch to renting a car or taking the train; and wondering if they should try to find a hotel room, sleep on the floor or wait a little longer before deciding anything. All of the airline’s hundreds of ground employees knew everything there was to know about the planes, the de-icing plans, the weather and the cancellations, but none of them knew what to do with the information, beyond regurgitating what they did and did not know (mostly from their computers) when asked. None knew how to turn this crisis into an opportunity. None knew how to seize the moment and make their customers feel cared for and important. The airline’s ground employees acted as if they believed that the important challenges for the airline were how to clear the snow as soon as possible, and how to get a few more planes flying in spite of the weather. While important, these challenges are very limiting, and other even more important challenges seemed to be outside their awareness. For example; ‘how might we keep our customers feeling wellcared for?’; ‘how might we provide our customers with plenty of donuts and coffee?’; ‘how might we keep everyone’s spirits up?’; ‘how might we find sleeping cots for everyone?’; ‘how might we make everyone feel as comfortable as possible while they wait?’; and
Volume 15
Number 1
2006
48
CREATIVITY AND INNOVATION MANAGEMENT
‘how might we get our president in here to shake hands all around, help out and show everyone his concern?’ Seeing the big picture and thinking up such innovative challenges converts mere information into creative action, and is one of the most important parts of the innovative thinking process. Instead, the entire airline ‘froze’ in its tracks. The next week, the senior executives issued a formal public apology, the government suggested an inquiry into the airline’s competency and the airline offered a costly seat sale to try to win back their customers’ loyalty. In this example, all the knowledge that was needed was available but a lack of innovative thinking skill on the part of the entire airline, top to bottom, made the knowledge useless. Nobody knew a common procedure for turning a crisis into an opportunity. What if the airline’s employees had known how to think innovatively together? What if they knew how to tell each other what they were thinking in a way that the others understood quickly? What if they were skilled in a common problem solving language that permitted quick communication of uncertainties, facts, opportunities, ideas and action steps? What if they had a common thinking process for recognizing opportunities and problems and converting them into positive innovative action? In this paper, we describe such a thinking process. This process recognizes that unused knowledge has little value, and that in organizations, knowledge becomes valuable
only when it is used to improve efficiency, flexibility or adaptability.
Learning and Inventing: Two Parts of a Continuous Process The distinction between the availability and the use of knowledge was recognized by Gordon (1956; 1971). In Gordon’s conception of learning and inventing, learning (gaining knowledge or understanding) and inventing (using knowledge or understanding) are regarded as two parts of one continuous process. Gordon suggested that learning and inventing may be regarded as opposite forces which feed each other in turn. Inventing is characterized as a process of breaking old connections. Learning is characterized as a process of making new connections. When we learn, we ‘make the strange familiar’ (by making new connections between new (and thus strange) phenomena and our current understanding). This permits us to view new phenomena more comfortably. In contrast, when we invent, we ‘make the familiar strange’ (by breaking old connections which compromise current understanding). This permits us to view old phenomena in new ways, although this can be uncomfortable at first. Thus the processes of inventing and learning follow one another in a continuous cycle. (see Figure 1) On the left hand side of Figure 1 new ‘paradigms’ (ways of thinking and doing) become established. New processes are learned and
Familiar Making connections
Breaking connections
Making the familiar strange
Making the strange familiar
Strange Figure 1. Two Halves of a Continuous Process of Learning and Inventing
Volume 15
Number 1
2006
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
become well-known and comfortable habits. On the right hand side such old established paradigms are broken. New processes that produce better quality or new goods or services are invented to replace previous processes. When an old familiar paradigm such as a well-established business process is broken, the new one replacing it feels very strange and uncomfortable to everyone affected. They are experiencing a process of unlearning, breaking connections with past understanding and letting go of old habits and beliefs. As time goes on, the new process becomes less strange, and more familiar. This is a learning process – making new connections and adopting new habits and beliefs.
Unlearning A well-known example of unlearning, that is, the breaking of old patterns, and the adoption of new beliefs, is the demise of the phlogiston theory, first propounded in the 17th century by scientists such as Johann Becher (1625–1682), Georg Stahl (1660–1734) and later by Joseph Priestley (1733–1804). Phlogiston theory, which lasted for about 100 years, maintained that the reason some things burned and others did not was that the some, like wood, contained lots of phlogiston and the others, like metal, did not. Although phlogiston theory made sense and fitted many of the known facts, quantitative experiments gradually convinced chemists that it was incorrect. According to phlogiston theory, when magnesium is burnt, the residue (magnesium oxide or calx) should weigh less than the original magnesium because phlogiston is lost. In fact the residue actually weighs more than the original magnesium, implying the unlikely possibility that phlogiston has negative weight. Antoine Lavoisier (1743–1794) however showed that the increase in weight of the residue was exactly equal to the weight of air used up, thus removing the need to invoke phlogiston at all. The phlogiston theory officially died on September 5 1775, the day Lavoisier presented his paper ‘Memoir on Combustion in General’ to the French Academy of Science: ‘The existence . . . of phlogiston in metals, sulphur, etc., is then actually nothing but a hypothesis, a supposition which, once admitted, explains, it is true, some of the phenomena of calcination and combustion; but if I am able to show that these phenomena may be explained in just as natural a manner . . . without supposing that . . . phlogiston exists in combustible materials, the system . . . will be found to be shaken to its foundations.’ © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
49
The birth of modern chemistry can be said to begin with the breaking of the familiar phlogiston paradigm, and the adoption of the strange new oxidation paradigm of Lavoisier. Should a better explanation for combustion ever be discovered in the future, scientists will have to break the old familiar paradigm of oxidation, and begin making a new strange paradigm more familiar by making new connections once again.
The Thinking Organization We can define a thinking organization as one that a) recognizes the value of breaking old and out-dated paradigms and replacing them with new and better ones, and b) knows how to do so. A thinking organization can both unlearn and invent. It is proficient in efficiency thinking (perfecting current routines), adaptability thinking (breaking old routines and creating brand new ones) and flexibility thinking (operating effectively when there are no routines to follow in ambiguous, unexpected circumstances). Thinking organizations engage the innovative abilities and creative aptitudes of all of their employees. Few organizations however have the skills or expertise to do this, and in particular, they lack a framework for sustained and disciplined creative thinking. In this paper, we describe a structured innovation process that allows organizations to think creatively in a collective, synchronized way, not only to improve routine work (efficiency) but also for the non-routine work of adaptability and flexibility. This process combines the apprehension of knowledge (understanding) with the creative utilization of such knowledge, thus integrating the concepts of knowledge management and organizational creativity into a single framework. Our proposed process consists of four stages (Figure 2). Stage 1 is the proactive acquisition and generation of new information, and the sensing of trends, opportunities and problems. This is what Simon (1977) called ‘opportunistic surveillance’. Stage 2 is the conceptualization of new challenges and ideas, Stage 3 is the development and optimization of new solutions, and Stage 4 is the implementation of the new solutions.
The Two Dimensions of the Innovation Process: Knowledge Apprehension and Knowledge Utilization As shown in Figure 3, the innovation process can be considered in terms of two orthogonal
Volume 15
Number 1
2006
50
CREATIVITY AND INNOVATION MANAGEMENT
Quadrant IV IMPLEMENTING Creating options in the form of actions that get results and gaining acceptance for implementing a change or a new idea
Quadrant III OPTIMIZING Creating options in the form of ways to get an idea to work in practice and uncovering all the factors that go into a successful plan for implementation.
Quadrant I GENERATING Creating options in the form of new possibilities – new problems that might be solved and new opportunities that might be capitalized upon.
Quadrant II CONCEPTUALIZING Creating options in the form of alternative ways to understand and define a problem or opportunity and good ideas that help solve it.
Figure 2. The Four Stages of the Innovative Thinking Process Apprehension by Concrete Experience
Quadrant IV
Quadrant I
Utilization for Evaluating Options
Utilization for Creating Options Quadrant III
Quadrant II
Apprehension by Abstract Thinking
Figure 3. The Two Dimensions of the Innovation Process: Apprehension and Knowledge Utilization dimensions. The first dimension, shown on the vertical axis, represents the Apprehension of knowledge, and the second dimension, shown on the horizontal axis, represents the Utilization of knowledge. Both dimensions are bipolar, giving rise to four different combinations representing the four successive stages of the innovation process. As shown in Figure 3, one mode of knowledge Apprehension is via direct, concrete experiencing (doing). Some people gain
Volume 15
Number 1
2006
knowledge by such ‘physical processing’. (They do not understand something until they have experienced it.) The contrasting way of gaining knowledge is through detached, abstract thinking (pondering). Some people gain knowledge by such ‘mental processing’. (They are reluctant to experience something until they first understand it.) All individuals and organizations gain knowledge in both ways but the relative amounts (ratios) differ from those of others. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
Also shown in Figure 3 are the two modes of knowledge Utilization. One way to use knowledge is to create options (such as alternative opportunities to pursue, possible solutions to investigate etc.). The contrasting way to use knowledge is for evaluating options. Again, all individuals and organizations use their knowledge in both ways but the relative amounts (ratios) differ from those of others. The operations axis of Guilford’s (1967) three-dimensional Structure of Intellect (SOI) model can also be understood in terms of bipolar Apprehension and bipolar Utilization. Guilford identified five different mental operations labeled as memory, cognition, convergent production, divergent production, and evaluation. Memory is defined as ‘the retention or storage of information in the same form it was committed to storage and in response to the same cues in connection with which it was learned.’ Cognition is defined as ‘the immediate discovery, awareness, rediscovery or recognition of information in various forms; comprehension or understanding.’ Convergent production is defined as ‘the generation of information from given information where the emphasis is upon achieving unique or conventionally accepted best outcomes and the given information (cue) often fully determines the response.’ Divergent production is defined as ‘the generation of information from given information where the emphasis is upon variety and quality of output from the same source.’ Evaluation is defined as ‘reaching decisions or making judgments concerning criterion satisfaction of information.’ Setting memory aside, the other four SOI mental operations can be organized as follows. Convergent production and cognition represent two contrasting methods of information (knowledge) Apprehension, and divergent production and evaluation represent two contrasting methods of information (knowledge) Utilization. First, let us consider two contrasting modes of Apprehension. Convergent production can be equated with Apprehension by rigorous theoretical thinking – ‘finding the answer’ where ‘finding’ is something more than mere retrieval and ‘the answer’ suggests that the domain is so systematic, ordered, rational and deterministic that there are rules or principles for converging on the solution. Convergent production dominates learning in formal education and is almost synonymous with curriculum assimilation (Meeker, 1969). However, cognition represents a different method of Apprehension: more open; less restrictive; focused on pure knowledge acquisition by non-directed, non-deterministic, non-rational experiencing and absorption © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
51
through the senses. Similarly, Thorndike (1931) distinguished between ‘learning by trial and error’ and ‘learning by ideas,’ the former being characterized by association and the latter being characterized by analysis. Thus, the first dimension in our model, Apprehension, concerns acquiring knowledge or understanding in two different ways. One (cognition) is relatively more open, nonrational, non-analytical, and experiential and the other (convergent production) is relatively closed, rational, analytical, and theoretical. Some educators advocate learning approaches that emphasize both ends of this bipolar spectrum of knowledge apprehension (eg., Flavell, 1963; Bruner, 1960; 1966; Harvey, Hunt & Shroeder, 1961). Kolb (1976) emphasized the importance of using experiential learning to complement theoretical learning. Kolb suggested a four-phase learning cycle with two concrete, experiential learning phases and two analytical, theoretical learning phases. The Kolb cycle begins (concrete experience) and ends (active experimentation) experientially. Between these two experiential phases are two theoretical/analytical (non-experiential) phases (reflective observation and abstract conceptualization). The second dimension in our model, Utilization, concerns applying knowledge or understanding, however apprehended, in two different ways – non-judgmentally creating new information to increase the variety of options (divergent production) and making judgments and reaching decisions about new information to reduce the variety of options (evaluation). There is ample support from the literature for this second bipolar dimension which concerns applying understanding (however acquired) in two different ways – creating new information and options (as in divergent production) and judging new information and options (as in evaluation). For example, Osborn (1953) advocated ‘deferring judgment,’ which means separating the process of non-judgmentally creating options from the process of judgmentally evaluating options. Other researchers have also bipolarized option-producing and option-judging thinking processes (Joyner & Tunstall, 1970; Maier, 1967; Simon, 1960; Simon, Newell & Shaw, 1962; Parnes, Noller & Biondi, 1977). Kirton (1976) dichotomized creative thinkers into two polar opposite types – adaptors, who tend to use disciplined thinking and rely on evaluation to stay within rules and boundaries; and innovators, who tend to divergently break rules and boundaries. Basadur, Graen and Green (1982) identified a separated, sequenced two-step thinking process called ‘ideationevaluation.’ They defined ideation as the gen-
Volume 15
Number 1
2006
52
CREATIVITY AND INNOVATION MANAGEMENT
eration of options without judgment and evaluation as the application of judgment to those options. During ideation, all judgmental, rational, convergent thinking is deliberately deferred in favor of non-judgmental, imaginative, divergent thinking. During evaluation, the reverse takes place. Basadur and Finkbeiner (1985) identified and created measures for attitudinal factors related to one’s preferences for non-judgmental (diverging) and judgmental (evaluating) modes of knowledge Utilization. Meeker (1969) suggested that creativity includes flexibility, individuality, and an ability to break away from the conventional, but that it also includes evaluation to ensure quality, relevance, and discipline. Similarly, Jackson and Messick (1964) balanced ‘unusualness’ with ‘appropriateness’ as two opposing criteria for judging the creativity of a product. We suggest that thinking organizations are those which build strengths in each of the bipolar dimensions and each of the four stages of the process in Figure 2. They realize that both dimensions in Figure 3 are vital, nurture the dynamic tension between the polar opposites on each dimension, and acknowledge the importance of each stage of the innovation process. Following is a description of each stage.
The Four Stage Innovation Process Stage 1: Generating Generating involves getting the innovation process rolling. Generative thinking involves imagining possibilities, questioning, sensing new problems and opportunities, viewing situations from different perspectives and gathering information through direct experience. People strong in generating skills prefer to come up with options, or diverge, than to evaluate and select, or converge. They see relevance in almost everything and think of good and bad sides to almost any fact, idea, or issue. They dislike becoming too organized or delegating the complete problem, but are willing to let others take care of the details. They enjoy ambiguity and are hard to pin down. They delight in juggling many new projects simultaneously. Every solution they explore suggests several new problems to be solved. Thinking in this quadrant includes problem finding and fact finding. Stage 2: Conceptualizing Conceptualizing keeps the innovation process going. Like generating, it involves divergence.
Volume 15
Number 1
2006
But rather than gaining understanding by direct experience, it favors gaining understanding by abstract thinking. It results in putting new ideas together, discovering insights that help define problems, and creating theoretical models to explain things. People strong in conceptualizing skills enjoy taking diverse, often disconnected, information emerging from the generator stage and making sense of it. Dervin (1992) emphasizes the importance of the study of sense-making, that is, how information is conceptualized. Conceptualizers need to ‘understand’: to them, a theory or explanation must be logically sound and precise. They prefer to proceed only when they have a clear grasp of a situation or when the problem or idea is well-defined. They dislike having to choose a single option, if it means discarding others, preferring to incorporate as many ideas as possible into a single conceptual scheme, which for them provides closure. They like to play with ideas and are not overly concerned with moving to action. Thinking in this stage focuses problem defining and idea finding. Stage 3: Optimizing Optimizing moves the innovation process further. Like conceptualizing, it favors gaining understanding by abstract thinking. But rather than diverge, an individual with this thinking style prefers to converge (evaluate or select). This results in developing practical solutions and plans from abstract ideas and alternatives. People who favor the optimizing style rely on mentally testing ideas rather than on trying things, and like to create optimal solutions. Given a well-defined problem, they are able to sort through large amounts of information to pinpoint the critical factors. They are usually confident in their ability to make a sound, logical evaluation and to select the best option or solution to a problem. They often lack patience with ambiguity, and are unwilling to consider more then one problem at a time. They see little value in ‘dreaming’ about overly radical ideas. Once they have decided they know what a problem is, they are eager to drive towards the solution as quickly as possible. Thinking in this stage focuses on idea evaluation and selection, and planning the implementation process. Stage 4: Implementing Implementing completes the innovation process. Like optimizing, it favors convergence, but unlike optimizing it favors learning by direct experience rather than by abstract thinking. Implementers rely on trying things out © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
rather than mentally testing them; they like to get things done. People strong in implementing excel in situations in which they must somehow make things work. They do not need complete understanding in order to proceed, and adapt quickly to changing circumstances. When a theory does not appear to fit the facts, they will readily discard it. Some perceive them as enthusiastic about getting the job done, but others as impatient or even pushy. As they try to turn plans and ideas into action, implementers will try as many different approaches as necessary; they will try to bring others on board and follow up or ‘bird dog’ as needed to ensure that the new procedure will stick. Thinking in this stage focuses on gaining acceptance and implementing.
Toward More Complete Thinking in Organizations: All Four Stages are Necessary Individuals, teams, and organizations can be characterized by their relative preferences for operating in these four stages. However, effective innovation requires strength in all four stages. In teams for example, the members must learn to combine their individual preferences and skills in complementary ways. Basadur and Head (2001) showed that heterogeneous teams composed of people with different preferences outperformed homogeneous teams whose members had similar preferences. A lack of completeness in thinking is evident in many organizations. Some organizations display excellent skills in one or two stages of the innovation process while being weak in the others. This can lead for example to decisions which appear attractive in the short run, but which have negative consequences in the longer term. Figuring out, for example, how many jobs a new piece of equipment can eliminate is relatively easy. Much harder is convincing head office not to lay people off but to reassign them into other important positions to build future business or improve operations and quality. Recognizing that such a situation requires more than mere mathematical calculations is a sign that the organization is engaging all four of the stages of the innovation process, that is, operating as a complete thinking organization. Following are some real world examples of the application or misapplication of the four stages of the innovative process described above. Try to step into the minds of the individuals in these examples. Can you identify with their puzzlement, success, frustration or © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
53
elation? Do their experiences remind you of examples from your personal or business life?
Stage 1 Example: Trusting Myself and My Colleagues One recurring pattern in organizations is the inability to trust oneself and one’s colleagues. People are reluctant to raise interdepartmental problems and to involve others in solving problems in their own area of responsibility. As a result many problems fall ‘between the cracks’ and remain unidentified and unresolved. Some thoughts that run through employee’s heads are: • ‘I fear asking for help as it might be seen as incompetence.’ • ‘I don’t dare mention my real problem before my fellow managers. That would be displaying weakness.’ • ‘I don’t think the group’s members trust one another enough to share what is really going on.’ • ‘This isn’t really my problem, so why risk bringing it up?’ A manufacturer’s top management team once asked the senior author (MB) to demonstrate how the four stage innovative thinking process (Figure 2) works. They agreed to apply the process to their own team’s problems. The first stage in the process – generating – requires surfacing problems and anticipating, seeking and sharing opportunities for improvement. However, the team members were reluctant to venture any of their problems. It soon became obvious that each individual feared that one of their own problems might be selected and that they risked exposing themselves to negative judgments about their handling of the problem to date. So it was better to not say anything. Obviously surfacing organizational problems was frowned upon in this top team, and quite likely, throughout the company.
Stage 1 Example: Discovering a New Problem Woody Allen, the famous American comedian, once remarked that ‘80% of anything is just showing up’. The notion is that if you show up, you never know what new opportunities might come your way, often totally unexpectedly. Being on the lookout for and proactively sensing new problems and opportunities is the first stage of the innovation process. Edwin Land (1972), in a Life Magazine cover story told the tale of his invention of the Polaroid camera, which can be seen as a remarkable example of what can transpire by just ‘being there’. Having snapped the last exposure on
Volume 15
Number 1
2006
54
CREATIVITY AND INNOVATION MANAGEMENT
his film, he suggested to his three-year-old daughter that they take the film for processing so they could see the pictures in about a week’s time. Her frustrated response was, ‘why do I have to wait a week to see my picture?’ Like a flash bulb going off in his mind, her simple question sparked a challenge that had never occurred to him: ‘How to make a device that yields instantaneous pictures?’ Within about an hour, he had formulated several directions toward a solution. And within about four years he had commercialized a product that has changed our lives. Looking back, the then-chairman of Polaroid said the most important part of the process was not finding the solution itself – the camera – but finding the problem – how to get instantaneous pictures. If Land had not experienced the chance encounter he might never have created the problem to be solved. Land thus demonstrated the generation stage of the creative process – the initiating of problems to solve instead of waiting for problems to be provided.
Stage 2 Example: Working on the Wrong Problem Procter & Gamble’s fledgling Industrial Division had decided to go after a developing market for automatic car wash products in the early 1970s. In their product development department, a small team of chemists and engineers was rushing to fill out our existing product line. MB was asked to take over the car wash section to speed up their product development efforts, especially in a floundering ‘hot wax’ project. Fortunately for MB, he could hardly spell hot wax, let alone profess to be an expert on the product. As a young engineer MB rarely took his own car through an automatic wash, saving money by washing his car by hand. Why ‘fortunately’? Because he knew nothing about hot wax, and was free to display his ignorance, keeping an open mind, and asking lots of questions to try to get a handle on what needed to be done and why the project had bogged down. Thus, the first question for the team was a very simple one: ‘What’s hot wax?’ The team explained that hot wax was a relatively new but potentially profitable idea. It was a liquid spray applied as an optional service at the end of an automatic car wash. Automatic washes dispense all their products in water-soluble form and, of course, wax doesn’t dissolve in water. However, a small competing company had found a way to combine wax from the South American carnauba tree with certain solubilizing ingredients and
Volume 15
Number 1
2006
water, yielding a stable fluid that could be sprayed onto cars. (Carnauba wax already had gained a reputation as the best wax for polishing shoes.) The competitor had received a patent for its product. When asked why the team had been bogged down for 18 months, the members explained that they couldn’t come up with a combination of carnauba wax, solubilizers and water sufficiently different from the competitor’s to avoid violating its patent. The team had tried countless combinations, and had even recruited a carnauba wax supplier to help, without success. What gradually became evident was that the team had focused its efforts on a specific challenge: ‘How might we develop a carnauba wax formula that does not violate the existing patent?’ Continuing fact finding, the team was asked how well the competitor’s product performed. To the response that it performed very well, they were asked how they knew. They said that, since the product was a hot seller, it was obviously doing a good job. When asked what their test methods showed about the product’s performance, they replied, ‘What test methods?’ It turned out that, because the team had been in such a headlong rush to enter the market, it had neglected to develop test methods. The team’s understanding of the competing product’s performance consisted of a single fact: a lot of people were buying it. The team agreed that they needed to broaden their understanding. Testing the competitor’s product during lab simulations showed that it did not adhere to car bodies at all. Testing the product in a commercial automatic car wash confirmed the lab results. A new fact had been discovered: the team had been trying for 18 months to duplicate a product that didn’t work! Inadequate fact finding had led the team to define its problem too narrowly. The problem was redefined: ‘How might we develop a hot wax product for a spray-on water system that will adhere to car bodies and provide a worthwhile benefit?’ This new challenge opened up the search for a new, water-soluble, active ingredient that eventually led to the discovery of a totally different hot-wax formula that provided protection to car surfaces.
Stage 2 Example: Redefining the Problem Again at Procter & Gamble, MB was asked for help by a product development team formed at short notice to respond to a competitor’s new product. Colgate’s green-striped Irish Spring had been the first striped soap bar introduced to North America. With its aggressive advertising campaign emphasizing © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
‘refreshment,’ Colgate’s new product was finding ready consumer acceptance. Procter & Gamble worked by the rule that, when it was the second entrant into a new market, it had to demonstrate a product’s competitive advantage before carrying out a market test. However, the team explained that it had been unable to produce a green-striped bar that was preferred to Irish Spring in a consumer blind test. The team had experimented with several green-striped bars, all of which merely equaled Irish Spring in blind testing. It became evident that the team had chosen, probably unconsciously, to define its challenge as, ‘How might we make a greenstriped bar that consumers will prefer over Irish Spring?’ During a creative problem solving meeting, a problem definition technique called the ‘Why – what’s stopping? analysis’ was applied (Basadur, Ellspermann, & Evans, 1994). This technique helped develop alternative ways to conceptualize the team’s challenge. Repeatedly asking why? and why else? (did we want to make a green-striped bar that consumers would prefer over Irish Spring) and what? and what else? (was stopping us) yielded many alternative challenges. The flash of inspiration came from an answer posed from a consumer’s point of view: ‘We want to make a bar that makes people feel more refreshed.’ This led us to the new challenge: ‘How might we better connote refreshment in a soap bar?’ This less restrictive challenge, which included no mention of green stripes, gave more room for creative solutions. The team members visualized scenes, images and situations that suggested refreshment. One pictured himself at the sea coast. Another imagined sitting on a beach and looking at a blue sky and white clouds. Later, when the team sat back to evaluate its many solutions, these two ideas were selected and combined. The result was a blue- and white-swirled bar, which quickly achieved market success under the brand name Coast. Solving this problem once it had been properly defined took the team mere hours. By leaping prematurely into solutions, the team had wasted almost six months before coming up with that problem definition. Successful teams and individuals are not necessarily the ‘smartest’ or most ‘gifted’ or the ‘best’ problem solvers. More often, they’re the ones that take the time to ask good questions and find exciting ways to define their problem before looking for solutions. They invest sufficient time and energy in creating fresh, creative definitions of the problem on which they can agree. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
55
Stage 3 Example: Breaking through Patent Barriers After solving the refreshment bar problem, the team still was not finished, and needed to conduct another round of innovative problem solving. Before it could sell the new soap formula, the company had to overcome a patent problem in the machinery design. There were already no fewer than six worldwide patents restricting how you could blend soap pastes of different colors. The team had to find a machine design to make their new product without infringing on anybody else’s technique. Diverse points of view were assembled in a small technical team consisting of engineers, technicians, lawyers and even a few people who were unfamiliar with soap technology. After this team had spent some time in fact finding, including discussing sketches of the patented processes, a breakthrough solution soon came from a simple observation by the team member with the least technical knowledge and education. This person noted a small detail that the others had completely overlooked in their search for more complicated solutions. The lesson: it’s important to value the input of each member of a team, no matter their level of experience. Sometimes the best ideas come from people unencumbered by ‘too much’ knowledge, people who can ask the simple questions that the so-called experts overlook.
Stage 3 Example: Evaluating with an Open Mind A grocery products company was looking for a way to help consumers better handle their household trash. The company felt it could improve upon the polyethylene bags that most people used. A product development team was assigned to the challenge: ‘How might we improve the handling of household trash?’ One of several interesting and imaginative solutions that the team had developed was a cardboard product that resembled a pizza box. Pushing its top made the box telescope into a free-standing trash container with several polyethylene bags nested inside it. This stand-alone device eliminated many of the disadvantages of single polyethylene bags. It hid the trash beneath a hinged cardboard top, and was convenient and decorative to boot. When one of the bags was filled, you simply pulled a cord to tie its top and took it out of the box, leaving the next bag ready to use. The team members appeared excited about the possibilities of this idea, and were eager to move into evaluation. Even though this
Volume 15
Number 1
2006
56
CREATIVITY AND INNOVATION MANAGEMENT
was a very unusual idea, the evaluation was performed using a standard company screening technique for new product ideas: the market research department had written a single-paragraph description of the idea and presented it along with several others to a group of consumers. The department had included in its description the fact that the new product would add about 10 cents to the cost of each bag. Asked for comments, consumers said the product sounded like a good idea but that they would probably balk at paying the 10-cent premium for it. Without further consideration, the group abandoned the idea. After putting considerable effort into generating ideas, the group had devoted little time to an appropriate evaluation process. For example, they could have stopped to consider that in the past when paper grocery bags cost nothing, if consumers were simply asked whether they would buy a new kind of bag for 10 cents each, most would probably have said no. Under that scenario, we might never have seen polyethylene bags at all. However, given the chance to experience the advantages of polyethylene bags rather than just read about them, consumers might have given a very different answer. If the market researchers had been as creative in evaluating this radical idea as the team had been in developing it, they might have discovered that people were willing to pay the extra cost and perhaps more. This story demonstrates the importance of keeping an open mind not only when conceptualizing new ideas but also when evaluating them. Here, the first stages of the innovation process had been successfully executed to produce a unique product idea; however because the latter stages were poorly executed, the overall thinking process was still incomplete. Possibly, the team members had been almost afraid of their own idea, and were relieved to find a reason not to proceed with it.
Stage 4 Example: Getting Bogged down in Implementation and Overcoming Fears Teams often get bogged down in the implementation stage, and fail to put good solutions into action. A team in a manufacturing company gathered several years’ worth of test results on a new, less costly, shipping method. It was clear the new method would save large amounts of money, and the purpose of the testing was to ensure that the new method was as good as the old one in every other respect. However, the tests continued to be inconclusive, with minor differences from tests to test. Even after it became obvious that the team
Volume 15
Number 1
2006
would never pin down all of the method’s pros and cons, it continued to run more tests. The team finally defined its main problem not as how to collect more information, but as how to overcome its fear of making a recommendation for implementation with less than conclusive data. Some thoughts running through this team’s heads might include: • ‘My manager talks a good game about not killing ideas, but he challenges almost everything I say as soon as I’ve said it. I find myself choosing my words carefully every time we speak and getting ready to defend myself.’ • ‘We have taken the problem as far as we can, but will senior management be happy with our results?’ • ‘Good ideas and projects languish in this system because people fear they have to perfect their idea before they will share their project.’ • ‘I don’t want to be told I didn’t do my homework.’ The team finally faced up to their fears and expanded their thinking to define their problem as ‘How might we make our recommendation to senior management explaining the risk and asking them to share the risk with us?’ In a matter of hours the team created just such a recommendation, which was approved the next day.
Stage 4 Example: Wanting a New Management Style, but . . . In the first Stage 1 example above, the manufacturer’s top management team finally owned up to about one problem apiece. Eventually, they were willing to select an important recurring problem that everyone shared responsibility for. With the tension now reduced, the fact finding and problem definition steps went very well and an excellent solution emerged after very careful evaluation. This solution was simple, novel and something the team had never tried. But as the team tried to develop a plan to implement this solution, some members began to back away from it. Under this new solution, nonmanagement employees would have a chance to participate in developing the final specific method of implementing the solution. This worried some of the team members, even though they had often stated a desire to ‘push down decision-making’ to lower levels. After some discussion, they realized they were actually afraid of straying into unfamiliar territory. Some thoughts that probably were running through these managers’ heads were: © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
• ‘I want employee involvement. But if I allow too much leeway for selfmanagement and creativity, I don’t know where employees will take it.’ • ‘Deep down, we fear getting involved. We fear the unknown. We might not be ready for more innovation.’ • ‘I’d rather stick with the unacceptable solution we’ve accepted for the last five years than take the risk of trying a new idea even though it looks good.’ The team preferred the relative safety of their customary, but incomplete thinking. They would rather leave an admittedly important problem unresolved than to implement an admittedly good but risky solution.
Discussion The above examples illustrate both competent and incompetent execution of the four stages of the innovation process of Figure 2. Thinking organizations execute all four stages competently. Non-thinking organizations do not. In these organizations, people wait for problems to be identified for them rather than actively seeking them out. Even when a problem has been identified, they fail to ask good fact finding questions, to properly define the problem. They often tackle the wrong problems, dealing instead with mere symptoms or with the first version of the problem that occurs to them or that is presented to them. They won’t risk trying new solutions because they can’t be guaranteed success. Thinking organizations are aware of these deficiencies in thinking and find ways to overcome them. They go beyond simply sharing knowledge, and put their knowledge to use. They solve immediate problems quickly, before they turn into crises. They continuously seek out new opportunities to use their knowledge, improving their existing products and services, developing new ones, and creating new customers. They continuously improve their internal processes and create new processes to better achieve their objectives. In other words, thinking organizations understand the importance of all stages of the innovation process; they know that innovation is not something you can turn on and off; they make innovative thinking routine.
How Do Organizations Become Thinking Organizations? In order to make continuous, deliberate change for the better, organizations need to overcome shortcomings in thinking skills that affect individuals and teams. For many indi© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
57
viduals, problem finding is a foreign concept. For example, people usually wait for others to find problems to solve rather than actively seek out problems or avoid important problems that cross departmental lines (‘That’s not our problem’). Even after finding and defining problems, they find it difficult to solve them creatively and imaginatively. Individuals are critical of new ideas, for example, and thus prevent productive thinking. While many people may be able to implement routine solutions to routine problems, few can implement creative solutions to new, unprogrammed problems. Teamwork is also often uncreative. Group members are unable to communicate clearly in simple terms, for example. Unaware of variations in individual thinking styles, groups fail to synchronize these differences, jump into ‘solving the problem’ without first considering what the real problem is, and then flounder. Interfunctional teams get stalled arguing about territorial issues. Meeting leaders steer toward their own points of view rather than facilitating the group to work open-mindedly and cohesively. Some organizations publicly display slogans such as ‘Innovation is our most important goal’ but when asked ‘what are you doing about it?’ their top managers reply, ‘why, nothing’.
Developing Skills in the Innovation Process Research and practical experience strongly indicate that the thinking skills required for executing the innovation process described and illustrated above can be learned, nurtured and managed. Using a multiple method, multiple measure field experiment, Basadur, Graen, and Green (1982) found that participants from an industrial organization made gains after experiential and practice-oriented training on specific cognitive, attitudinal and behavioral measures such as ‘more likely to pause to try new, unusual approaches’; ‘less likely to jump to conclusions as to what is the real problem’; ‘more open-mindedness to new ideas and approaches’; ‘more positive reaction to new, unusual ideas’; ‘deferral of premature critical judgment’; ‘less time spent in negative evaluation during idea generation’; ‘increased quantity and quality of problems found’; and ‘increased number of different problem definitions developed’. Other field research on the effects of training is summarized in Basadur (1995; 2004).
Managing and Nurturing the Innovation Process At the organizational level, top management can also be trained to apply these skills in their
Volume 15
Number 1
2006
58
CREATIVITY AND INNOVATION MANAGEMENT
work as individuals and as members of executive teams. Furthermore, they can be taught how to model and encourage the use of these new skills throughout the organization (Basadur, 1994). It is not sufficient to merely train employees in the innovation process. The top management of the organization must develop specific strategies to maintain the thinking skills in daily work life. The top managers must lead the way by learning and visibly using the process and create new managerial activities and new organizational structures to engage the rest of the members of the organization in applying the process daily. Examples of new managerial activities within such a strategic plan include publicizing, rewarding, modeling, providing resources, coaching and teaching, and visibly taking risks to promote the change-making process. These new activities enable subordinates to experiment without feeling afraid, learn from mistakes, act as problem and challenge finders, take ownership of problems, understand how their jobs fit with other peoples’ jobs and with organizational goals, share the ambiguity and uncertainty that their managers are experiencing due to accelerating environmental change, and accept the fact that there is no ‘grand scheme’ guiding the organization into the future. Managers must get used to ‘managing challenges’ rather than ‘managing solutions’. By involving subordinates in the early stages of the process, as the challenges are being sensed and formulated, the manager can manage many new change projects simultaneously.
Motivation and Commitment are Outcomes of Creative Activity Establishing adaptability as a daily, continuous process of problem finding and defining, problem solving, and solution implementation to complement efficiency increases employee commitment and motivation. Top Japanese organizations manage their world-class employee suggestion systems to induce creative behavior and to derive creative output including cost savings and new products and procedures. The primary objective of these suggestion systems is not to improve economic outcomes directly but to motivate people and increase their commitment (Basadur, 1992). Permitted to engage in creative problem solving (as it has been described here), workers become extremely motivated and desire even more participation in creative activity. They work harder at perfecting their routine jobs to increase quality and quantity and reduce costs, thus increasing organizational efficiency and short-term organizational effec-
Volume 15
Number 1
2006
tiveness. Creative activity also stimulates team-building as people help each other to solve problems. This connection between creative activity and employee motivation is supported by motivational literature in industrial and organization psychology. For example, two important motivational need sets – the need for competence and the need for curiosity and activity – provide the most direct explanations of how creativity motivates people (White, 1959; Berlyne, 1967). When people face new, challenging situations, their need for competence can be satisfied by performing creatively. Many people find that exercising their curiosity and exploring new things is intrinsically motivating. Herzberg, Mausner and Snyderman’s (1959) research also suggested that the way to truly motivate people at work was ‘job enrichment’, or redesigning jobs to require creativity. More recently, the research of Amabile (1993), Deci and Ryan (1985), and Hackman and Oldham (1980) has supported the link between creative work and motivation.
Creative Process Skills, Business Need and Infrastructure The organization can build skills in the complete innovation process (as described above) as a training intervention in one of two ways. It might integrate the training to boost an existing corporate improvement initiative like a total quality management program when a well-defined business need and infrastructure already exist. Alternatively, the organization might implement the training within a brand new innovation initiative created for the organization based on the process itself. In the latter case, the organization’s leaders must identify a clear business need and establish an infrastructure to ensure that employees use their new creative skills (Figure 4). Many worthwhile initiatives flounder because the organization lacks at least one of these three components: business need, infrastructure, and creative process skills. When it introduces a training intervention, the organization must spell out what specific business need it intends to address – lower costs, higher sales, fewer defects or customer complaints, shorter turn-around time or time to market, better products or services – in order to ensure that employees buy-in to the intervention and can measure success. The organization might lack an effective infrastructure such as performance appraisal systems and teamwork in order to encourage people to use the new philosophies and tools regularly. Even when the organization establishes clear business needs and infrastructures for implanting new initia© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
Business Need Intervention
59
Infrastructure Intervention
Training Intervention to Build Creative Process Skills
Figure 4. The Three Necessary Components of a Successful Organizational Development Effort to Mainstream Innovation
tives – it might underestimate the effort required to alter people’s innovative skills, attitudes, and behaviors, and thus fail to provide adequate training. In order to mainstream innovation, adaptability, and commitment, an organization must integrate innovative thinking skills with a clear-cut business need and infrastructure to encourage employees to use those skills.
An Example of Creating a Thinking Organization By 1982, senior managers at Frito-Lay based in Dallas, Texas, had decided that they needed to further improve the company’s productivity, Frito-Lay had always been profitable. During the inflationary ′70s, the company’s strategy had been to produce the highest quality snack foods and maintain its profit growth by simply increasing its prices to cover annual cost increases. By the early ′80s, however, facing lower-cost, lower-quality competition, the company recognized that it had to do more than simply increase prices each year in order to retain customers. If it didn’t make some imaginative changes, it could expect to see slower revenue growth even as costs continued to rise, resulting in a profit squeeze (Figure 5). The managers had already discussed standard solutions to their productivity problems with several consultants. But none had seemed suitable. Frito-Lay approached MB to help them better define what the company needed. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
The first two stages of the innovative thinking process of Figure 2 were employed to develop a three-part strategy. First, to help senior managers, the company’s desire to improve productivity was distilled into a simple, clear business need: to learn to offset inflationary cost increases in order to flatten costs. Second, managers aimed to encourage employees to find creative ways of meeting this business need by giving them training in the innovation process and skills described above. Third, the company decided to create interfunctional teams of upper and middle managers; these teams would use the innovation process to identify ways to save money, and spend money more effectively (Figure 6). These interfunctional teams would then hand off challenges to lower-level teams that had also received the training. To make the business need more concrete, the company president set a specific goal: to save a total of $500 million cumulatively over the next five years. The goal was developed with careful analysis to ensure that it was a reasonable one. To implement this strategy, senior managers visited the company’s various locations to explain the business need and to introduce the new initiative (called the ‘Off$et Process’). More than 50 internal line managers eventually received training so that they could teach the innovation process and skills to other employees and lead the organization in continually finding, defining, and solving problems and implementing solutions. Because they understood the overall strategy, Frito-Lay
Volume 15
Number 1
2006
60
CREATIVITY AND INNOVATION MANAGEMENT
Revenues
Profit margin
Costs
1980s
1970s
Projected if inflationary costs not flattened
Figure 5. Frito-Lay’s Business Need
Offsetting Inflation
Interfunctional Teams
Creative Process and Process Skills
Figure 6. Frito-Lay’s Strategy for Mainstreaming Innovation employees were very willing to undergo this training and to apply it within the new teams. The teams completed many kinds of projects, including the following: increasing equipment capacity; reducing rework; rolling
Volume 15
Number 1
2006
out a new product in record time; shortening new technology installation time; and accelerating the introduction of new product and packaging ideas. Progress was tracked and publicized. The company realized its goal of © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
THE ROLE OF KNOWLEDGE MANAGEMENT IN THE INNOVATION PROCESS
$500 million in savings a full year ahead of schedule. At this point, Frito-Lay revised its business need from merely flattening costs to actually reducing them regardless of inflationary pressures. The company might have found it a much less difficult task to integrate this innovation process with an existing initiative. Without an initiative already in place, Frito-Lay faced a lot of up-front work in convincing employees to understand and commit to mainstreaming innovation. But positive results and continued encouragement from senior managers eventually won their acceptance of the process.
Summary and Future Research Many companies still regard innovation as an irritant, something that gets in the way of the ‘real work’. They are content to turn out standard quantities of standard products and achieve the sales, cost and profit goals for this month, this quarter, this year. Their response to greater competition is to cut staff, reduce costs, lower service levels and, in some cases, lower quality. Too few respond creatively. Sometimes this is because they simply do not know how to go about it. In this paper, we have tried to demystify various concepts of knowledge management and innovation by integrating them into a single simplified approach focused specifically on improving organizational performance short and long term. Perhaps, more managers would be willing to give this simplified approach a try, especially if they could be shown how it helps them achieve even short term results more efficiently. Perhaps, future research could focus on strategies for helping managers grasp and increase comfort with the innovation process, skills, techniques and styles described.
References Amabile, T.M. (1993) Motivational synergy: Toward new conceptualization of intrinsic and extrinsic motivation in the workplace. Human Resource Management Review, 3, 185–201. Argyris, C. and Schon, D.A. (1978) Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley. Basadur, M.S. (2004) Leading others to think innovatively together: Creative leadership. Leadership Quarterly, 15, 103–21. Basadur, M.S. (1995) The power of innovation. London, UK: Pitman Professional Publishing. Basadur, M.S. (1994) Managing the creative process in organizations. In Runco, M.A. (ed.), Problem © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
61
finding, problem solving, and creativity. Chapter 12. Norwood, NJ: Ablex. Basadur, M.S. (1992) Managing creativity: A Japanese model. Academy of Management Executive, 6(2), 29–42. Basadur, M.S., Ellspermann, S.J. and Evans, G.W. (1994) A new methodology for formulating ill-structured problems. OMEGA: The International Journal of Management Science 22(6), 627–45. Basadur, M.S. and Finkbeiner, C.T. (1985) Measuring preference for ideation in creative problem solving training. Journal of Applied Behavioral Science, 21(1), 37–49. Basadur, M.S., Graen, G.B. and Green, S.G. (1982) Training in creative problem solving: Effects on ideation and problem finding in an applied research organization. Organizational Behavior and Human Performance, 30, 41–70. Basadur, M.S. and Head, M. (2001) Team performance and satisfaction: A link to cognitive style within a process framework. Journal of Creative Behavior, 35, 1–22. Berlyne, D.E. (1967) Arousal and reinforcement. In Levine, D. (ed.), Nebraska symposium on motivation. Lincoln, NE: University of Nebraska Press. Bruner, J.S. (1966) Toward a theory of instruction. New York: W.W. Norton. Bruner, J.S. (1960) Essays for the left hand. New York: Atheneum. Cooper, R.G. (1993) Winning at new products: Accelerating the process from idea to launch. Reading, MA: Perseus Books. deBono, E. (1976) Lateral thinking for management. New York, NY: American Management Association. Deci, E.L. and Ryan, R.M. (1985) Intrinsic motivation and self-determination in human behavior. New York: Plenum Press. Dervin, B. (1992) From the mind’s eye of the ‘user’: The sense-making qualitative-quantitative methodology. In Qualitative Research in Information Management (pp. 61–84): Englewood, CO: Libraries Unlimited. Flavell, J.H. (1963) The development Psychology of Jean Piaget. Princeton, N.J.: D. Van Nostrand Company, Inc. Gordon, W.J.J. (1971) The metaphorical way. Cambridge, Massachusetts: Porpoise Books. Gordon, W.J.J. (1956) Operational approach to creativity. Harvard Business Review, 9(1). Guilford, J.P. (1967) The nature of human intelligence. New York: McGraw-Hill. Hackman, J.R. and Oldham, G.R. (1980) Work redesign. Reading, MA: Addison-Wesley. Harvey, O.J., Hunt, D. and Schroeder, H. (1961) Conceptual systems and personality organization. New York: John Wiley. Herzberg, F., Mausner, B. and Snyderman, B. (1959) The motivation to work (2nd ed.). New York: Wiley. Jackson, P.W. and Messick, S. (1964) The person, the product and the response: Conceptual problems in the assessment of creativity. Princeton, NJ: Educational Testing Service. Joyner, R. and Tunstall, K. (1970) Computer augmented organizational problem solving. Management Science, 17(4), 212–25.
Volume 15
Number 1
2006
62
CREATIVITY AND INNOVATION MANAGEMENT
Kirton, M.J. (1976) Adaptors and innovators: A description and measure. Journal of Applied Psychology, 61, 622–9. Kolb, D.A. (1976) Learning style inventory technical manual. Boston, MA: McBer and Co. Land, E. (1972) From Sean Callahan’s article Dr. Land’s magic camera. Life Magazine, 27 October, 42. Lavoisier, A.L. (1777) Memoir on Combustion in General. Mémoires de l’Académie Royale des Sciences 1777, 592–600. [In Leicester, H.M. and Klickstein, H.S., (1952) A Source Book in Chemistry 1400– 1900. New York: McGraw Hill. Levitt, B. and March, J.G. (1988) Organizational learning. Annual Review of Sociology, 14, 319–40. Maier, N.R.F. (1967) Assets and liabilities in group problem solving: The need for an integrative function. Psychological Review, 74(4), 239–49. Meeker, M.N. (1969) The structure of intellect: Its interpretation and uses. Columbus OH: Charles E. Merrill Publishing Company. Mott, P.E. (1972) The characteristics of effective organizations. New York: Harper and Row. Osborn, A.F. (1953) Applied imagination: Principles and procedures of creative problem-solving. New York: Charles Scribner’s Sons. Parnes, S.J., Noller, R.B. and Biondi, A.M. (1977) Guide to creative action. New York, NY: Charles Scribner’s Sons. Simon, H.A. (1977) The new science of management decisions. Englewood Cliffs, NJ: Prentice-Hall. Simon, H.A. (1960) The new science of management decisions. Englewood Cliffs, NJ: Prentice-Hall. Simon, H.A., Newell, A. and Shaw, J.C. (1962) The processes of creative thinking. In Gruber, H.E., Terrell, G., and Wertheimer, M. (eds.), Contemporary approaches to creative thinking (pp. 63–119). New York: Lieber-Atherton. Swasy, A. (1993) Soap opera: The inside story of Procter and Gamble. New York: Random House.
Volume 15
Number 1
2006
Thorndike, E.L. (1931) Human Learning. Cambridge, MA: The M.I.T Press. Weick, K.E. and Roberts, K.H. (1993) Collective mind in organizations: Heedful interrelating on flight decks. Administrative Science Quarterly, 38(3), 357–81. White, R.W. (1959) Motivation reconsidered: The concept of competence. Psychological Review 66(5), 297–333.
Min Basadur (
[email protected]) began his career as a product development engineer at Procter and Gamble (P&G). He was awarded three US patents and his PhD in Organizational Behavior at the University of Cincinnati based on his work in guiding senior P&G management in engaging the entire organization in innovation for measurable results. He now teaches and consults world-wide from the Basadur Applied Creativity Centre in Ontario near his office at McMaster University’s DeGroote School of Business. Garry Gelade (garry@business-analytic. co.uk) lives in the UK. He is a graduate of Cambridge University and was awarded his doctorate from Nottingham University for his thesis on visual perception. His research interests include creativity and occupational psychology. He is currently the director of Business Analytic Ltd, a specialist company providing organizational research services to corporate clients.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
63
Innovation and Reputation: An Ethical Character Perspective Rosa Chun This study involves a survey of 407 managers from 3 services organizations, a retailer, a professional accounting firm and a bank. It revealed that the overall correlations between Integrity (socially responsible, trustworthy, sincere, honest) and Innovation (innovative, exciting, spirited, imaginative); between Courage (leading, ambitious, achievement-oriented) and Innovation; and between Employee Satisfaction and Innovation could be both positive, negative or without strong relationship, depending upon the culture of the firm. Both the retailer and professional accounting firm are regarded as aggressive and tough in nature. However, while one managed to link Innovation to a self-image for social responsibility, the other believed that they have to be less sincere, trustworthy or socially responsible in order to remain innovative and competitive. One consequence is that the retailer is prosperous and successful, while the large accounting firm failed to maintain its market leadership. The implication for managers is that Innovation based reputation is sustainable only if it is linked positively to both Integrity and Courage.
M
any successful companies (e.g., Canon, Sony, General Electric, 3M, Michelin) position themselves to be highly innovative (Keller 2003). The degree of Innovativeness of a firm is clearly an important factor that influences a company’s overall reputation. Innovativeness and Corporate Social Responsibility (CSR) factors account for two out of eight criteria for one of the most established rankings of corporate reputation, Fortune’s Most Admired Companies. Is it possible for successful companies to keep their corporate reputation for being both innovative and socially responsible at the same time? The relationship between the two is interesting. Recently there has been a call from both public and private sectors that business should take into account not just innovation but also corporate social innovation (CSI). This approach plays on the corporate sector’s ability to innovate without risk to the responsibilities the company has towards various stakeholders. However, such terminology so far has appeared mainly in the context of the community stakeholder group, urging a partnership between private enterprise and public interest that produces profitable, sustainable, and replicable change through a community project (Kanter 1999). © 2006 The Author Journal compilation © 2006 Blackwell Publishing
Existing literatures, other than the perspective of community and business partnership, rarely link CSR and innovation as key elements for a sustainable reputation. This paper aims to investigate the link between innovation and integrity (represented by socially responsibility, trust, honest, sincere), comparing three cases of service organizations; one perceived as innovative and successful, another perceived as innovative but failed, and the third perceived not innovative but survived.
Corporate Reputation Reputation management has become increasingly popular in the last decade. Its interdisciplinary nature has attracted both academics and practitioners across a broad range of functions and subjects, including marketing, accounting, and strategy. From marketing perspectives, investigating the interrelationship amongst corporate identity (logo, name, mission), image, and communication has been popular (Gray and Balmer 1998; Hatch and Schultz 1997; 1998). OB scholars have joined in, particularly from organizational identity
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00369.x
64
CREATIVITY AND INNOVATION MANAGEMENT
perspectives (e.g., Whetten 1997). While many of these studies are mainly conceptual rather than empirical, strategy scholars have discussed the game theoretical model or the modeling of reputation and financial performance using, for example, the Fortune raking data (e.g., Fryxell and Wang 1994). There have been contributions from other disciplines such as psychology (Bromley 2002) or sociology (Raub and Weesite 1990). However the distinction between the perspectives of corporate reputation adopted by different academic subject areas is becoming blurred and less useful in understanding the reputation paradigm due to the increasing awareness by practitioners and academics about the importance of aligning the internal and external aspects of organization reputation (Chun 2005). Recently, the lessons from Enron, Worldcom and others have left us a challenging task, in which reputation management can go beyond a ranking or image-led strategy. The task includes an integration of various stakeholders issues and various business functions and subjects across various sectors (Davies et al. 2003; Fombrun 1996) including business schools (e.g., Argenti 2000). Fombrun and Shanley (1990: 233) mention that having a favorable reputation may lead to favorable consequences, such as the charging of premium prices to the customer, the attraction of better applicants and more investors. The company’s superior reputation will attract employees and create a lower employee turnover (Institute of Directors 1999), create a positive customer attitude (Brown 1995), increase buying intention among corporate customers (Yoon, Guffey and Kijewski 1993), lower a client’s perception of risk (Ewing, Caruana and Loy 1999), create higher credibility (Herbig, Milewicz and Golden 1994), and create a more favorable media reputation (Deephouse 1997: 71). However, a strong financial performance may also help to create a favorable reputation, not only with business people, as in the Fortune rankings, but also with other stakeholders. High brand recognition, a price premium, and a high level of repeat buying, are indicators of reputation (Grant 1995). In marketing, reputation is often seen as a microeconomic consequence of customer satisfaction (Anderson and Fornell 1994: 253) when high customer satisfaction develops positive reputation (Anderson and Sullivan 1993; Andreassen and Lindestad 1998: 82). Andreassen (1994) found that reputation is positively correlated with satisfaction and loyalty, but no relationship was found between satisfaction and loyalty. The services marketing literatures refer to service quality as the common link between reputation and customer satisfaction.
Volume 15
Number 1
2006
If organizations earn a good corporate reputation for high quality, fewer customers will become dissatisfied and leave, and profitability increases. Their existing customers will provide positive word of mouth recommendations (Weigelt and Camerer 1988: 450).
Ethical Character: Innovation, Integrity and Courage Innovativeness and Reputation There are several of ways of assessing corporate reputation. Innovativeness appears as one of the key criteria for assessing corporate reputation. One of the most established methods of appraising reputation is the ranking index published annually by media. For example, Fortune’s America’s Most Admired Companies’ list assesses corporate reputation among business people, and assumes that eight factors contribute to our overall assessment of the reputation of a company: quality of management, quality of products and services, innovativeness, long-term investment value, financial soundness, employee talent, use of corporate assets, and social responsibility. Similar factors are used by the Financial Times and Management Today in surveys of business people. Fortune’s criteria have been criticized because they have no theoretical foundation as measures of reputation and because they are overly focused on financial performance (Fryxell and Wang 1994). Others put less emphasis on the functional benefits (products of quality, secure employment) and financial performance (reliable investment) that a firm provides to its shareholders and customers. Firms are now assumed to have other roles that matter, such as being a corporate citizen (Carroll 1999). Business Ethics magazine’s annual 100 Best Corporate Citizens ranking, which uses the KLD data discussed above, gains considerable attention (Russo and Fouts 1997). Essentially this school of thought ascribes roles (employer, producer of products, financial manager, corporate citizen) to organizations and asks respondents to assess how well they perceive the organization performs in these roles (is a good employer, produces quality products, achieves above average sales growth, is a good citizen). For those who believe that the reputation of a company is shaped through developing virtuous character, innovativeness is the business virtue which leads to customer and employee satisfaction. Virtue character traits are learnt from an accumulative perception of a firm’s behavior in everyday business life, and they © 2006 The Author Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
can predict the firm’s future action (Chismar 2001). An honest person is disposed to act honestly. ‘Agreeable’ types of conduct contribute to interpersonal harmony, respect, and symbolize an honoring of one’s associates. A person of character consistently exhibits in their conduct the character traits which comply with the associated principles calling for honest, fair, reliable, and trustworthy commitment to others (Paine 1991). The management of corporate reputation then depends on the firms’ ability to promote those values, which are transformed into corporate character, internally and externally. This perspective reinforces the need to investigate two related concerns. The employees’ views and the customers’ views on these dimensions of a firm are clearly linked, therefore values promoted to the external world have to be embedded in the corporate culture, in particular in the service sector. The interdependence among the core characters has received growing interest but empirical investigation to attempt to define the relationship has been limited.
Relationship between Integrity and Innovation In interviews with senior managers in 14 successful European and American commercial organisations, Davies and Miles (1998) found that most firms promote core values as central to managing their reputation, and that these core values include reliability, caring, innovation, trust, social responsibility, honesty, integrity and fun. Integrity has probably been one of the most frequently cited corporate value dimensions in the last decade. Integrity seems to be not a single virtue or the embodiment of any one value which is directly observable, but a composite of number of concrete virtues. The most commonly associated words for Integrity are honesty and trust. Integrity is defined as a reputation for trustfulness and honesty of the trusted person (Butler and Cantrell 1984). Integrity in an organization is defined as acting on a personal commitment to honesty, openness, and fairness – living by and for our standards (Becker 1998; Ventrella 2001). Being trustworthy is a trait of character that represents benevolence and integrity towards others (Moberg 1997). A trustworthy reputation can help firms build consumer loyalty and survive crises, as well as receive more favorable treatment from regulators and the media (e.g., Keller 2003: 550). Effective leaders will foster a social environment of integrity and trust in which participants feel comfortable seeking clarifications, and testing and proposing innovative ideas (Jassawalla and Sashittal 2002). The close asso© 2006 The Author Journal compilation © 2006 Blackwell Publishing
65
ciations between trust and innovation are well documented. In a trusting organization, potential innovation related initiatives are likely to be welcome, and when innovative initiatives are under discussion, the likelihood of micro-political intentions being mutually imputed is reduced (Gebert, Boerner and Lanwehr 2003). The opposite view is also discussed. Trust is implicated in the innovation process because if management sincerely wish to hear the workers’ innovative views, employees feel confident that the firm will always try to treat them fairly, and therefore that it is trustworthy (Clegg 2002). The relationship between trust and innovation seems to be mutual rather than causal. The relationship between honesty and innovation is expected to be positive, but to be driven by a normative belief. The continuation patent is a powerful business tool that protects and rewards honest innovation and thwarts competitors who try to exploit a patent’s weaknesses (Maxwell 2002). Lack of honesty and openness can be barriers to implementing innovation. For example, disclosure of goals and objectives, and an honest appraisal of the risk implied by the innovation, are needed. A notion of self reinforced innovativeness and CSR practice has received growing attention. Employees in the firms where CSR activities are routinely practiced and embedded in their cognition and identities (Dutton and Dukerich 1991) are more likely to have adjusted their aspiration levels (March and Simon 1958), to engage in CSR acts. Cohen and Levinthal’s (1990) discussion of absorptive capacity explains this self-reinforcing behavior: ‘If the firm engages in little innovative activity, and is therefore relatively insensitive to the opportunities in the external environment, it will have a low aspiration level with regard to exploitation of new technology, which in turn implies that it will continue to devote little effort to innovation. This creates a self-reinforcing cycle. Likewise, if an organization has a high aspiration level, influenced by externally generated technical opportunities, it will conduct more innovative activity and thereby increase its awareness of outside opportunities. Consequently, its aspiration level will remain high.’ While most cases link the level of innovative practice to a positive effect on corporate reputation, there is a possibility that a firm’s innovation can have a negative effect on other, although related, dimensions of a firm’s reputation for being, for example, socially responsible and trusted. We hear more and more
Volume 15
Number 1
2006
66
CREATIVITY AND INNOVATION MANAGEMENT
about how innovative technology or the culture of a firm can be disruptive to the market and community (Christensen 1997). High tech firms rely overwhelmingly on innovation in design and new technologies to remain competitive, employing a disproportionately large number of scientists, engineers, and technically qualified people (Von Glinow and Mohrman 1990).
Relationship between Courage and Innovation Harris (2001) defines courage in the business world as ‘success in achieving the desired outcome and effort by the agent’. According to Solomon (1992: 213–216), toughness, replaced from courage, often means simply smart, that is knowing how things should be done and knowing one’s competitors and deals. In his article ‘Tough-minded ways to get innovative’, Pearson (2002) suggests that managers should be ruthless and have the courage in ferreting out information about their business’s existing innovation investments and in cutting off those that don’t have a clear strategic purpose. In this vein, while many ‘ruthless’ organizations achieved notable efficiencies, the best reengineering success stories – as measured by long-term company sustainability achieved – came to be viewed as those that not only emphasized a tough focus on business drivers, but also combined this with a more human touch. The product-innovation culture is heady, freewheeling, – even arrogant. Monopolies, patents and copyrights can delay or prevent full commoditization through limiting competition, thus constraining the emergence of buyer choice and influence over vendors. For example, Microsoft still exerts tremendous power over its resellers, partners and endusers because of its monopoly in PC operating systems. An emerging candidate for breaking that monopoly is the open-source Linux operating system. In the pharmaceuticals industry, drug patents create monopolies that allow manufacturers to charge inflated prices and delay commoditization until their expiration. In the entertainment industry, copyrights on music and movies prevent Napster-style commoditization. Enron’s top leadership consciously called upon HR tools – flows and rewards – to shape employee behavior in support of continuous innovation and high performance. In turn, corporate leaders infused Enron’s culture with a sense of high arrogance and low transparency. A sense of confidence and pride infused Enron’s culture in a way that could be and often was, experienced as arrogance (Spector
Volume 15
Number 1
2006
2003). Enron’s rise and fall is explained by how Enron’s innovation in the deregulated energy industry has become both exuberant optimism and corruption accomplished by arrogant entrepreneurs. Over time, though, their initial legitimate successes intensified a can-do, no-holds-barred culture that increasingly scorned the rules that ordinary companies live by (Bryce 2002). Organizational culture that emphasizes innovation will engender positive responses by employees. While the relationship between innovation and integrity could be a virtuous circle in which innovation in a company’s social and business practices strengthens its reputation and the self-respect of its employees (Schwartz and Gibb 1999), the competitive environment demands innovation and aggressiveness for global competitiveness and survival. Organizational culture that emphasizes innovation will engender positive responses by employees. Positive associations were found between organizational culture for innovation and aggressiveness and employee commitment and job satisfaction (McKinnon et al. 2003). Thus three hypotheses are proposed. Hypothesis 1: The higher the reputation for being innovative perceived by employees, the less likely they are to perceive the firm as being trustworthy, honest, and socially responsible. Hypothesis 2: The higher the reputation for being innovative perceived by employees, the less likely they are to perceive the firm as being leading and competent. Hypothesis 3: The higher the reputation for being innovative perceived by employees, the more likely they are to be satisfied with the firm.
Research Methods Samples Sample firms are 3 companies in services sector; one professional accounting firm, one bank and one food retailer. For the large firm of accountants, professional accountants and partners were interviewed face-to-face. The company had positioned itself in the market as highly professional and aggressive. It paid top dollar for the best employees, but its chargeout rates were price competitive. The result included tremendous pressure on senior employees and perhaps a tendency to cut corners. Eventually, just after the survey was conducted, the company collapsed and was joined by one of their competitor accounting firms. © 2006 The Author Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
67
The high street bank is one of the successful cases of merged banks and has three businesses: UK Retail Banking, Insurance and Investments, and Wholesale and International Banking. The food retailer is a market leader in the sector and is known for its innovative image and customer services in both its UK and international operations. Sample respondents were middle and branch managers who have regular contact with customers. Middle managers on a management development program were asked to complete the questionnaire and most respondents were interviewed face-to-face. Therefore response rates were very high (no refusal) in all companies. Missing information was minimized due to the face-to-face questionnaire survey administration. Questionnaires with high levels of missing data were rejected. The total usable sample attained was 407.
Measures Integrity, Courage, Innovation The character trait approach was used to measure Integrity (honest, trustworthy, sincere, socially responsible) and Innovation (innovative, exciting, spirited and imaginative) and Courage (ambitious and achievement oriented, competent and leading). The 12 ethical character traits were drawn from a validated scale, the Virtue Ethical Character Scale (Chun 2005). The innovation dimension, although using the same item, was relabeled. Respondents were asked to rate the company’s character traits on a five- point Likert Scale (1
strongly disagree to 5 Strongly agree). Personality traits have been used to describe corporate image (Keller 1998). The sum total of the perceptions of the corporation’s personality characteristics is what we refer to as the corporate image (Spector 1961, p. 47–48). Satisfaction Satisfaction is assessed by the degree to which an employee or customer has positive emotions towards the organization. It differs from employee job satisfaction with their specific job role (e.g., Wanous and Lawler 1972: 96), and from customer satisfaction with specific product / service quality, price and image (e.g., Naumann and Giel 1995: 253). A fouritem measure was used: ‘I would recommend company A to my colleagues or friends’, ‘I am pleased to be associated with company A’, ‘I have an affinity with company A’, ‘Please indicate your overall satisfaction with company A’. A five-point Likert scale was used for all questions with the first three questions anchored as for corporate character (1 = strongly disagree; 5 = strongly agree and the last 1 = very dissatisfied; 5 = very satisfied).
Results Figure 1 compares averages scores for the three dimensions and satisfaction by four companies. The results can be interpreted into two ways.
Integrity 5
4
3
Satisfaction
2
Innovation
Retailer Accounting Firm Bank
Courage
Figure 1. Integrity, Innovation and Courage: Comparison of Average Score Figures represent an average range between 1 strongly disagree – 5 strongly agree © 2006 The Author Journal compilation © 2006 Blackwell Publishing
Volume 15
Number 1
2006
68
CREATIVITY AND INNOVATION MANAGEMENT
The averages of employee satisfaction were similar across the three companies ranging between 3.73 and 4.48 but managers from the retailer were the most satisfied group. On the Integrity dimension, the retailer scored highest, perceived as the most trustworthy, socially responsible, and sincere, by their managers, followed by the bank and the accounting firm, which was rated the lowest on Integrity. The picture was different with the Courage dimension. The accounting firm and retailer were rated highest on Courage (leading, competence, ambitious and achievement oriented) followed by bank. The order is similar on Innovation but the gaps in average scores between the three firms were much larger. The bank was rated lowest in Innovation (innovative, imaginative, spirited and exciting). At the level of firm, retailer and accounting firm share similar characteristics and have stronger character profile, compared to the bank whose character profile is relatively weak on all dimension except for Integrity. The profile of the bank is particularly low on Innovation. The accounting firm scored highest on Innovation and Courage but lowest on Integrity. and their employee satisfaction level is the highest. In the other words, employees working for the firm value Courage and Innovation rather than Integrity. The retailer shares a similar profile with the accounting firm, but scores a little bit lower on Integrity dimension, while higher on Integrity and Satisfaction.
Next, correlations analysis reveals the relationship between innovation, courage and Integrity and satisfaction. Table 1 suggests that Integrity is actually negatively correlated with both Innovation (r = −0.15) and Courage (r = −0.17) but the relationship between Courage and Innovation is significantly positive (r = 0.59) for the accounting firm. On the other hand for banks, Innovation has no significant associations with Courage (r = 0.22) but does with Integrity (r = 0.42). When all data were analyzed, Innovation generally correlated highest with Courage (r = 0.52) and secondly with Integrity (r = 0.31). Innovation was also positively correlated with manager satisfaction (r = 0.46). Therefore all three hypotheses were supported. While all three character dimensions had positive correlations with manager satisfaction, Innovation was the most significantly correlated, followed by courage (r = 0.29) and integrity (r = 0.23). Further correlation analyses were conducted with individual items to see which individual item correlates most with ‘innovative’ item (Table 2). Correlations between an item ‘innovative’ and other individual items were significant for the retailer. For the accounting firm, Innovativeness was shown to have significant correlations with leading (r = 0.41, p < 0.01), ambitious (0.49, p = 0.001), achievement oriented (r = 0.32. p < 0.01) and competent (r = 0.4. p < 0.01); but was negatively correlated with socially responsible
Table 1. Descriptive and Correlations Analysis Company
Dimensions
Average
SD
Retailer (327)
Innovation Courage Integrity Satisfaction Innovation Courage Integrity Satisfaction Innovation Courage Integrity Satisfaction Innovation Courage Integrity Satisfaction
4.15 4.48 3.97 4.48 3.96 4.46 3.35 3.95 2.77 4.04 3.73 3.73 3.36 3.92 3.71 3.70
0.53 0.41 0.49 0.46 0.56 0.39 0.56 0.49 0.79 0.54 0.62 0.59 0.77 0.75 0.67 0.79
Accounting Firm (39)
Bank (41)
Total Respondents (407)
Innovation
Courage
Integrity
0.483(**) 0.347(**) 0.352(**)
0.226(**) 0.211(**)
0.264(**)
0.585(**) −0.149 0.129
−0.166 0.215
0.119
0.218 0.418(**) 0.119
0.109 0.096
0.270
0.517** 0.314** 0.458**
0.182** 0.294**
0.231**
** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).
Volume 15
Number 1
2006
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
69
Table 2. Correlations of Individual Items Company Retailer
Accounting Firm
Bank
1
2
3
4
5
6
7
Honest 0.50 Trustworthy Socially0.34 0.32 responsible 4 Sincere 0.46 0.45 0.30 5 Imaginative 0.18 0.20 0.25 0.13 6 Innovative 0.16 0.28 0.28 0.11 0.58 7 Exciting 0.16 0.08 0.22 0.09 0.40 0.39 8 Spirited 0.17 0.25 0.17 0.14 0.34 0.31 0.28 9 Leading 0.16 0.24 0.24 0.08 0.41 0.47 0.29 10 Competent 0.22 0.28 0.22 0.14 0.26 0.23 0.18 11 Ambitious 0.07 0.21 0.17 0.01 0.30 0.37 0.22 12 Achievement0.09 0.04 0.07 0.00 0.08 0.17 0.08 oriented significant at 0.01 level; r > 0.15, significant at 0.01 level; 0.11 < r < 0.15
8
9
10
11
0.32 0.24 0.18 0.19
0.37 0.47 0.20
0.34 0.22
0.28
0.05 0.13 0.00 0.21
0.17 0.20 0.07
0.17 −0.05
0.12
0.28 0.03 0.32 0.10
0.12 0.15 0.44
0.31 0.02
0.52
1 2 3
1 2 3
Honest 0.68 Trustworthy Socially0.11 0.17 responsible 0.46 0.36 0.25 4 Sincere −0.09 −0.01 −0.10 −0.12 5 Imaginative 0.50 6 Innovative 0.07 0.11 −0.14 −0.14 7 Exciting −0.21 −0.01 −0.04 −0.21 0.41 0.41 8 Spirited −0.19 0.04 −0.17 0.00 0.45 0.20 0.37 9 Leading 0.07 −0.07 −0.23 −0.09 0.34 0.41 0.25 0.03 0.39 0.40 0.32 10 Competent 0.30 0.27 −0.15 11 Ambitious −0.06 −0.04 0.05 −0.21 0.33 0.49 0.16 12 Achievement- −0.20 0.05 0.03 −0.33 0.04 0.33 0.26 oriented significant at 0.01 level; r > 0.4, significant at 0.01 level; 0.31 < r < 0.4 1 2 3
Honest Trustworthy 0.64 Socially0.35 0.32 responsible 4 Sincere 0.57 0.46 0.27 5 Imaginative 0.43 0.32 0.27 0.55 6 Innovative 0.24 0.21 0.28 0.27 0.77 7 Exciting 0.14 0.14 0.37 0.25 0.52 0.62 8 Spirited 0.25 0.30 0.52 0.31 0.38 0.36 0.50 9 Leading 0.15 −0.03 0.10 −0.04 0.24 0.36 0.10 10 Competent 0.27 0.26 0.05 0.31 0.39 0.14 0.02 11 Ambitious 0.23 0.17 0.05 0.26 0.25 0.24 0.01 12 Achievement0.11 −0.06 −0.16 −0.07 −0.01 0.09 −0.10 oriented significant at 0.01 level; r > 0.4, significant at 0.01 level; 0.3 < r < 0.4
(r = −0.14) and sincere (−0.14); and almost no correlations with honest (r = 0.07). In the case of bank, the correlations between innovative item and Integrity dimension (trust, honest, sincere and socially responsible) were found to be positive but none of them was significant. The relationship between innovative item and Courage dimension is also positive relationship and was © 2006 The Author Journal compilation © 2006 Blackwell Publishing
significant with only one item, leading (r = 0.36, p = 0.02). Finally the correlations between innovation and other items within Innovation dimension (exciting, imaginative, and spirited) were positive and significant. In particular ‘imaginative’ was particularly strongly associated with innovation with bank managers (r = 0.77) that was the highest among all correlations.
Volume 15
Number 1
2006
70
CREATIVITY AND INNOVATION MANAGEMENT
Discussion and Conclusion An Innovative and Successful Company: Positive Relationship with Integrity In this study, the survey of 407 managers from 3 services organizations revealed that the overall correlations between Integrity (socially responsible, trustworthy, sincere, honest) and Innovation (innovative, exciting, spirited, imaginative); between Courage (leading, ambitious, achievement-oriented) and Innovation; and between employee satisfaction and Innovation were significant. Employees and managers in service organizations are likely to perceive their organization as more trustworthy, honest, and leading; to be pleased to be associated with and satisfied with the company, if they feel innovation is embedded in their organizational culture. The three hypotheses are supported. However further analysis conducted at the level of the firm addressed an important issue that results may not be generalisable across all firms, and therefore firm specific factors such as culture and market performance need to be considered. In this study, the associations between character dimensions were positive and stronger with the retailer whose average profiles were highest on all three characteristics, Integrity, Courage and Innovation. Manager respondents of the retailer, typically, store managers, saw trustworthiness, innovativeness and competence as interrelated. They also rated their company higher on all three dimensions, and their satisfaction levels with the company were higher. Not surprisingly the retailer is seen as a market leader and innovator, not only by their own managers, but also by the market, media and customers. For example, the retailer has successfully led the market in loyalty schemes and Internet shopping and has successfully introduced non-food items to their stores, innovations that in turn have brought them a sustained record of profitability.
Volume 15
tors. In other words, although managers thought they were leading, competent and highly innovative, they didn’t see themselves as honest, trustworthy or socially responsible. In their mind, innovation is irrelevant to the Integrity factor (honesty and social responsibility) but only relevant to the Courage factor (leading, ambitious and achievement oriented). Even worse, correlation coefficients between Integrity and Innovation, and between Integrity and Courage were actually negative (shown in Table 1). An implication here is that for firms to be innovative and therefore competitive, they have to be insincere, not trustworthy or socially responsible! The outcome driven approach to Innovativeness was well embedded in their ruthless and aggressive culture, and finally recognized by the media and public. The firm used to be one of the major players in the industry but no longer.
A Not Innovative but OK Company: Positive Relationships with Integrity While both retailer and accounting firms were seen as innovative, the innovativeness score for the bank as perceived by their own managers were noticeably low. Here Innovation was significantly related to Integrity but not to Courage. The bank’s managers rated their own bank low on innovativeness but this didn’t have much effect on their perceived competence level. The bank, six years old after the merger, had successfully integrated different cultures, heritages and customer bases, and has been positioned as an up-market and leading bank. Neither the perceived level of competence nor the market performance of the bank appeared to have been affected negatively by the low level of perceived innovativeness.
Implications and Future Study
An Innovative but Unsuccessful Company: Negative or no Relationship with Integrity
Theoretical Contribution and Practical Implications
A case of the professional accounting firm revealed a different picture. The firm was also highly rated on Courage (leading and ambitious, achievement oriented) and Innovation by their accountants and managers, but had poor scores on Integrity. What really makes the retailer distinctive from the accounting firm lies in the level of perceived Integrity, and its association with Innovation. The accounting firm was perceived in the market as overly competitive and aggressive and even arrogant in their approach to customers and competi-
This study has demonstrated how a firm’s level of Innovation as perceived by employees is related to trustworthiness and social responsibility (represented by the Integrity dimension); to being seen as leading, competent and achievement oriented (represented by the Courage dimension); and to employee satisfaction. While existing literatures claim a positive relationship between the two factors, this study has found that the relationship can be both positive and negative or that no strong relationship exists, depending upon the cul-
Number 1
2006
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
ture of the firm. There are clear lessons from the contrasting results for long-term reputation management and market performance. Innovation based reputation is sustainable only if it is linked positively to both Integrity and Courage. Both the retailer and professional accounting firm are regarded as aggressive and tough in nature, but while one managed to link Innovation to a self-image for social responsibility, the other didn’t. The retailer is still prosperous and successful, while the large accounting firm was successful only up to the point when its internal reputation as an insincere and socially irresponsible company spilled over into the market. One consequence was that it failed to maintain its innovative reputation, and the company no longer exists as it was. The bank had high integrity and competence, despite of low innovativeness, perceived by their managers. It is still the Integrity, rather than Innovativeness, dimension that drives the competence dimension of banks, but Integrity itself didn’t make the firm a market leader. Today, the opportunity for innovation in financial products rests not with the core products of checking, savings and various forms of credit, but in how these elements are packaged together, linked, personalized and leveraged through various means such as Internet banking, and innovative technology. Market leaders are now using product innovation as a major element for revenue growth. Retail banks in general can no longer afford to simply rely upon a credibility and trust factor to be distinctive and a leader in the market. Since the Enron debacle, we hear of more and more examples in the practical world where a firm with an innovative image, often a market leader, can collapse. The paper demonstrated that when a firm’s innovativeness is not accompanied by socially responsible action, the firm can lose market leadership without early warning signs.
Limitations and Future Study The sample here was chosen from management who had face-to-face contact with customers. The sample characteristics are similar across all firms to make the results comparable. In particular, the data are collected from middle managers, typically branch managers, from all over Britain, so a small sample bias is minimized. One of the study’s limitations relating to the nature of the sample is that a large portion of the total sample was from the retailer. The nature of the research questions and the sample, one firm per industry, makes it difficult to generalize the findings across all firms. Therefore, the results were analyzed and interpreted at the level of the firm, which © 2006 The Author Journal compilation © 2006 Blackwell Publishing
71
also gives more meaningful results for practitioners compared with the interpretation at the individual. The study has looked at employee’s perception, mainly those of managers, on the Integrity, Innovation, and Courage and their satisfaction, and the relationship between them. From the perspectives of customers, corporate image associations, specifically a reputation for innovation and of trustworthiness (but not social responsibility) have an impact on consumer evaluations of a product (Zeynep and Batra 2004). Others suggest that innovation is an important corporate image association that affects consumer product evaluations (Brown and Dacin 1997: 546; Keller 2003; Spector 1961). As noted elsewhere, innovation in the services sector should go beyond product innovation. A future study could focus on the relationship between an innovative organizational culture as perceived by employees and its image with customers and their satisfaction with the organization. Finally, it would be interesting to do the same study at individual level too. One reason for the negative relationship between innovativeness and integrity is that innovators often can be the first to encounter an ethical dilemma between for example new technologies and innovative production methods. This relates to the ethical judgment capabilities of the innovator, especially when they are also the entrepreneurs of a new company. The virtue ethical scale allows testing both organizational and individual level of virtues.
References Anderson, Eugene W. and Fornell, Claes (1994) ‘A Customer Satisfaction Research Prospectus.’ In Service Quality: New Direction in Theory and Practice, Eds. Oliver, Richard L. Thousand Oak: Sage Publications. Andreassen, Tor Wallin (1994) ‘Satisfaction, Loyalty and Reputation as Indicators of Customer Orientation in the Public Sector.’ Journal of Public Sector Management 7, 16–34. Andreassen, Tor Wallin and Lindestad, Bodil (1998) ‘The Effect of Corporate Image in the Formation of Customer Loyalty.’ Journal of Service Research 1, 82–92. Argenti, Paul (2000) ‘Branding B-Schools: Reputation Management for MBA Programs.’ Corporate Reputation Review 3, 171–8. Becker, Thomas E. (1998) ‘Integrity in Organizations: Beyond Honesty and Conscientiousness.’ Academy of Management Review 23, 154–61. Berkley, Gupta (1995) ‘Identifying the Information Requirement to Deliver Quality Service.’ International Journal of Service Industry Management 6, 16– 35.
Volume 15
Number 1
2006
72
CREATIVITY AND INNOVATION MANAGEMENT
Bromley, Dennis (2002) ‘Comparing Corporate Reputations: Leagues Tables, Quotients, Benchmarks, or Case Studies?’ Corporate Reputation Review 5(Spring), 35–50. Brown, S.P. (1995) ‘The Moderating Effects of Insupplier/Outsupplier Status on Organizational Buyer Attitudes.’ Journal of Academy of Marketing Science 23, 170–81. Brown, Tom J. and Dacin, Peter A. (1997) ‘The Company and the Product: Corporate Associations and Consumer Product Responses.’ Journal of Marketing 61, 244–9. Bryce, Robert (2002) Pipe Dreams: Greed, Ego, and the Death of Enron: Public Affairs. Butler, J.K. and Cantrell, R.S. (1984) ‘A Behavioral Decision Theory Approach to Modeling Dyadic Trust in Superiors and Subordinates.’ Psychological Reports 55, 19–28. Carroll, Archie B. (1999) ‘Corporate Social Responsibility: Evolution of Definitional Construct.’ Business and Society 38, 268–95. Chismar, Douglas (2001) ‘Vice and Virtue in Everyday (Business) Life.’ Journal of Business Ethics 29, 169–76. Christensen, Clayton M. (1997) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail Cambridge, MA: Harvard Business School Press. Chun, Rosa (2005) ‘Ethical Character and Virtue of Organizations: An Empirical Assessment and Strategic Implications.’ Journal of Business Ethics 57(3), 269–84 Chun, Rosa (2005) ‘Corporate Reputation: Meaning and Measurement’. International Journal of Management Review (forthcoming). Clegg, Chris, Unsworth, Kerrie, Epitropaki, Olga and Parker, Giselle (2002) ‘Implicating Trust in the Innovation Process.’ Journal of Occupational & Organizational Psychology 75, 409–22. Cohen, W. and Levinthal, D. (1990) ‘Absorptive Capacity: A New Perspective on Learning and Innovation.’ Administrative Science Quarterly 35, 128–52. Davies, Gary, Chun, Rosa, daSilva, Rui and Roper, Stuart (2003) Corporate Reputation and Competitiveness. London: Routledge. Davies, Gary and Miles, Louella (1998) ‘Reputation Management: Theory Versus Practice.’ Corporate Reputation Review 2, 16–27. Deephouse, David L. (1997) ‘The Effect of Financial and Media Reputation on Performance.’ Corporate Reputation Review 1, 68–72. Dowling, Graham R. (1994) Corporate Reputation: Strategies for Developing the Corporate Brand. London: Kogan Page. Dutton, Jane E. and Dukerich, Janet M. (1991) ‘Keeping in Eye on the Mirror: Image and Identity in Organizational Adaptation.’ Academy of Management Journal 34, 517–54. Ewing, Michael, Caruana, Albert and Loy, Ernest Rinson (1999) ‘Corporate Reputation and Perceived Risk in Professional Engineering Services.’ Corporate Communications 4, 121–8. Fombrun, Charles J. (1996) Reputation: Realizing Value from the Corporate Image. Boston: Harvard Business School Press.
Volume 15
Number 1
2006
Fombrun, Charles J. and Shanley, Mark (1990) ‘What’s in a Name? Reputation Building and Corporate Strategy.’ Academy of Management Journal 33, 233–58. Fryxell, Gerald F. and Wang, J. (1994) ‘The Fortune Corporate “Reputation” Index: Reputation for What?’ Journal of Management 20(Spring), 1–14. Gebert, Diether, Boerner, Sabine and Lanwehr, Ralf (2003) ‘The Risks of Autonomy: Empirical Evidence for the Necessity of a Balance Management in Promoting Organizational Innovativeness.’ Creativity & Innovation Management 12, 41–119. Grant, Robert M. (1995) Contemporary Strategic Analysis: Concepts. Techniques, Applications. Cambridge, MA: Blackwell. Gray, Edmond R. and Balmer, John M.T. (1998) ‘Managing Corporate Image and Corporate Reputation.’ Long Range Planning 31, 695–702. Gremler, Dwayne D. and Gwinner, Kevin P. (2000) ‘Customer-Employee Rapport in Service Relationship.’ Journal of Service Research 3, 82–104. Harris, Haward (2001) ‘Content Analysis of Secondary Data: A Study of Courage in Managerial Decision Making.’ Journal of Business Ethics 34, 191–208. Hatch, Mary Jo and Schultz, Majken (1997) ‘Relations between Organizational Culture, Identity and Image.’ European Journal of Marketing 31, 356– 65. Herbig, Paul, Milewicz, John and Golden, Jim (1994) ‘A Model of Reputation Building and Destruction.’ Journal of Business Research 31, 23– 31. Heskett, James L., Thomas, Jones O., Loveman, Gary W. Sasser, W. Earl Jr. and Schlesinger, Leonard A. (1994) ‘Putting the Service Profit Chain to Work.’ Harvard Business Review 72, 164– 74. Institute of Directors (IOD). 1999) Reputation Management: Strategies for Protecting Companies, Their Brands and Their Directors. London: Director Publications (Director’s guide series). Jassawalla, Avan R. and Sashittal, Hemant C. (2002) ‘Cultures That Support Product-Innovation Processes.’ Academy of Management Executive 16(August), 42–54. Kanter, Rosabeth Moss (1999) ‘From Spare Change to Real Change.’ Harvard Business Review 77, 122– 32. Keller, Kevin Lane (1998) Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Upper Saddle River, NJ: Prentice Hall. Keller, Kevin Lane (2003) Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Upper Saddle River, NJ: Prentice Hall. Larkin, T.J. and Larkin, Sandar (1996) ‘Reaching and Changing Frontline Employees.’ Harvard Business Review May-June. March, J. and Simon, H. (1958) Organizations. New York: Wiley. Maxwell, Roger (2002) ‘Smart Patents.’ Harvard Business Review 80, 18–9. McKinnon, Jill L., Harrison, Graeme L., Chow, Chee W. and Wu, Anne (2003) ‘Organizational Culture: Association with Commitment, Job Satisfaction, Propensity to Remain, and Information Sharing © 2006 The Author Journal compilation © 2006 Blackwell Publishing
INNOVATION AND REPUTATION
in Taiwan.’ International Journal of Business Studies 11, 25–44. Moberg, Dennis J. (1997) ‘Trustworthiness and Conscientiousness as Managerial Virtues.’ Business & Professional Ethics Journal 16, 171–94. Naumann, Earl and Giel, Kethleen (1995) Customer Satisfaction Measurement and Management: Using the Voice of the Customer. Cincinnati, OH: Thomson Executive Press. Paine, Lynn Sharp (1991) ‘Ethics as Character Development: Reflection on the Objective of Ethics Education.’ In Business Ethics: The State of Art, Eds. Freeman, R. Edward. New York: Oxford University Press: 67–88. Pearson, Andrall E. (2002) ‘Tough-Minded Ways to Get Innovative.’ Harvard Business Review 80. Raub, Werner and Weesite, Jeroen (1990) ‘Reputation and Efficiency in Social Interactions: An Example of Network Effects.’ American Journal of Sociology 96(November), 626–54. Reichheld, Fredrick F. (1996) The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value. Boston: Harvard Business School Press. Russo, M.V. and Fouts, P.A. (1997) ‘A ResourceBased Perspective on Corporate Environmental Performance End Profitability.’ Academy of Management Journal 40, 534—59. Schwartz, Peter and Gibb, Blair (1999) When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalization. New York: Wiley. Sergeant, Andrew and Frenkel, Stephen (2000) ‘When Do Customer Contact Employees Satisfy Customers?’ Journal of Service Research 3, 18–34. Solomon, Robert C. (1992) Ethics and Excellence: Cooperation and Integrity in Business. New York: Oxford University Press. Spector, A.J. (1961) ‘Basic Dimensions of Corporate Image.’ Journal of Marketing October, 47–51. Spector, Bert (2003) ‘Hrm at Enron: The Unindicted Co-Conspirator.’ Organizational Dynamics 32, 207–20. Ventrella, Scott W. (2001) ‘Intentional Integrity.’ Executive Excellence 18(May), 9–10.
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
73
Von Glinow, M.A. and Mohrman, S.A. (1990) Managing Complexity in High Technology Organizations. New York: Oxford University Press. Wanous, John P. and Lawler, Edward E. III (1972) ‘Measurement and Meaning of Job Satisfaction.’ Journal of Applied Psychology 56, 95–105. Weigelt, Keith and Camerer, Colin (1988) ‘Reputation and Corporate Strategy: A Review of Recent Theory and Applications.’ Strategic Management Journal 9, 443–54. Whetten, David (1997) ‘Theory Development and the Study of Corporate Reputation.’ Corporate Reputation Review 1, 26–34. Winkleman, Michael (1999) ‘The Right Stuff: Survey on Corporate Reputation.’ Chief Executive (U.S.) 143, 80–1. Yoon, E.H., Guffey, J. and Kijewski, V. (1993) ‘The Effects of Information and Company Reputation on Intensions to Buy a Business Service?’ Journal of Business Research 27, 215–28. Zeynep, Gürhan-Canli and Batra, Rajeev (2004) ‘When Corporate Image Affects Product Evaluations: The Moderating Role of Perceived Risk.’ Journal of Marketing Research 41, 197–205.
Dr Rosa Chun (
[email protected]) is Senor Lecturer in Reputation and Business Ethics, and Director of the MSc in Corporate Communications and Reputation Management at Manchester Business School. Her research has focused on corporate reputation, branding, and business ethics in particular on the topic of aligning image and identity, virtue ethics, code of conducts. Her work appears in over 30 refereed publications and a coauthored book ‘Corporate Reputation and Competitiveness (Routledge, 2002)’.
Volume 15
Number 1
2006
74
CREATIVITY AND INNOVATION MANAGEMENT
Case Study: Jack Welch’s Creative Revolutionary Transformation of General Electric and the Thermidorean Reaction (1981–2004) Pier A. Abetti This case study draws a parallel between the French Revolution and the GE ‘revolution’, according to three waves of transformation. We discuss the ‘hard’ effects on GE employees (strategy, structure, employment, rewards) and the ‘soft’ effects (culture, work climate, indoctrination). In parallel with the French Revolution, the retirement of CEO Jack Welch was followed by a ‘Thermidorean reaction’ characterized by the relaxation of Welch’s professional and ethical standards, lassitude and indecision in the GE organization, and the fall of GE stock price by 45 percent. Welch’s role as revolutionary leader and driving force is highlighted.
Introduction GE and Jack Welch’s Legacy alued at $380 billion, General Electric (GE) is the world’s most valuable and admired company. This status is still attributed to the 20-year leadership of CEO Jack Welch (1981–2000). During that period, GE’s market value increased 3213 percent at a compounded annual growth rate (CAGR) of 20.4 percent, while the Standard and Poor 500 (S&P) Index increased 915 percent (CAGR = 13.1 percent). Two years after Welch’s retirement, GE’s market value had fallen by 45 percent, while the S&P index declined by 32 percent. These figures lead to the conclusion that GE’s success was essentially due to the leadership of Welch and that his successor, Jeff Immelt, was unable to maintain the momentum of his predecessor. However, two differing theories also need to be considered.
Objective, Methodology, Sources, and Plan
(1) GE was a company ‘built to last’ (Collins and Porras, 1997). If GE had selected another CEO in 1981, he or she would have obtained similar results. The question thus becomes: was Welch a product of GE, as claimed by Collins and Porras, or was GE after 1981 a product of Welch? (2) The collapse of GE’s market value was primarily due to what can be called a
The objective of this historical study is to answer these questions by describing Welch’s career and his creative revolutionary transformation of GE according to three waves of ‘creative destruction’ (Schumpeter, 1930) and their effects on GE’s employees, organization, and culture. We have deliberately elected not to draw on the extensive and sometimes contradictory
V
Volume 15
Number 1
doi:10.1111/j.1467-8691.2006.00370.x
Thermidorean reaction after Welch’s retirement. (The French Thermidorean reaction refers to the period after the Reign of Terror, in 1794, when the tyrant Robespierre was removed from power and an economically and culturally liberal government came to power.) This reaction, in turn, was due to Welch’s less creative, more opportunistic and more intolerant leadership during his last years of tenure and the ensuing lassitude and indecision among employees (Abetti, 2001). The question thus becomes: was the sharp decline of GE’s stock value due to the collapse of the Internet bubble or to the Thermidorean reaction which, in turn, had its root cause in Welch’s last years as CEO?
2006
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
CASE STUDY
theories of leadership in general and executive or managerial leadership in particular. Rather, since Welch was a revolutionary, always proactive, sometimes ruthless, we draw a parallel between his actions and the French Revolution (1789–1815) and other revolutions that had a major impact on their countries and the world, namely the Russian Revolution (1917–1993), the Chinese Revolution (1921–1972), the Mexican Revolution (1911–1940), the Fascist Revolution in Italy (1919–1943) and the NationalSocialist Revolution in Germany (1923–1945)1. In fact, GE’s value added in 1981 was of the same order of magnitude as the GNP of France in 1789: $30 billion in 2004 prices2 (Hohenberg, 2005). Today GE’s value added is approximately $100 billion, similar to the GNP of Ireland. We also draw a parallel between Welch’s origins, motivation, leadership, personal and managerial characteristics, and actions and those of the leaders of these other revolutions3. We hope this unorthodox approach will help answer the two controversial questions above. The sources for this study are the ample business and popular literature on GE and Welch, and the author’s personal experience over 32 years (1948–1981) at GE, as well as his conversations with other GE employees who worked under Welch and his successor (1982– 2004). The literature on GE and on Welch is extensive but uneven. It can be divided into five categories. (1) Serious business studies, such as the seminal study of GE by Collins and Porras (1997), and Harvard Business School and other cases, for instance, Aguilar et al. (1981, 1985, 1991); Malwight and Aguilar (1996); Elderkin and Bartlett (1993); Jack Welch, GE’s Revolutionary (1994); Heskett (1999); Bartlett and Wozny (2000); Bartlett and Glinka (2002); Bartlett and McLean (2004). (2) Books and articles by Welch’s laudatory semiofficial biographers (a better designation would be hagiographers4) such as Slater (1994, 1996, 1998, 2000); Tichy and Sherman (1994); Tichy and Cohen (1997); Heller (2001); Lowe (2001). (3) A few critical studies, for instance, a wellresearched book (O’Boyle, 1998) based mostly on interviews with disgruntled employees and Welch’s critics. (4) Countless interviews with Welch published in a book (Lowe, 1998) and in business magazines, (Tichy and Charon, 1989), and in the popular press. (5) Welch’s autobiography (2001) with an afterword (2003) and a final interview in the Harvard Business Review (Collingwood © 2006 The Author Journal compilation © 2006 Blackwell Publishing
75
and Coutu, 2002). It should be noted that the last two sources must be treated with caution. Welch’s autobiography was hastily co-authored with a professional journalistic writer. My analysis of the styles in the text show that only around onequarter of it was written by Welch. As will be described later, the final interview is a watered – down version of the original interview that could not be published because of a conflict of interest. (6) Soon after his retirement, revelations about Welch’s personal life stirred up many scandalous stories in the popular press, (Beam, 2004), and in a book (Byron, 2004). The plan of this historical study follows the evolution of Welch from his family background to his first job at GE; the event that caused him to become a revolutionary; his rise through the ranks by exploiting the GE system; his selection as CEO; the coup d’état that led to his assumption of full power; the three creative revolutionary waves; their hard and soft effects on GE’s employees, organizations and culture; the hardening of his personality and increasing intolerance of dissent; the attempt to keep power beyond the mandatory retirement age; the selection of three candidates for succession; the decision to appoint one and fire the other two; the grooming, indeed attempted cloning, of his successor, Immelt. We then describe the Thermidorean reaction as it affected GE and its employees and Welch personally, including business and marital scandals that have left a permanent mark on Welch’s image. We conclude by answering the two questions above and by revealing the driving force underlying the rise and fall of American’s most successful and admired executive.
Welch the Revolutionary The Origins of the Revolutionary Like many militant revolutionaries, Welch was born in a humble family of Irish descent at the margins of the ruling class. His father was a conductor on a commuter railroad, the Boston and Maine, who sold and punched tickets and never advanced in rank. More importantly, when Jack was born (1935), most members of the ruling class in the Boston area and executives in leading U.S. companies were WASPs (White Anglo Saxon Protestants). Welch was white, but Irish and Catholic, and regarded the ruling class with admiration, envy, and perhaps some hostility. Ireland, which had been repressed for centuries by England, had just recently gained independence, in 1922.
Volume 15
Number 1
2006
76
CREATIVITY AND INNOVATION MANAGEMENT
We can draw a parallel with Napoleon Buonaparte, who came from an impoverished Corsican family, despised by the French nobility. Welch’s roots in a comparable poor, despised minority could have given rise to a comparable ambition to become the powerful ruler of the majority. Welch was smart enough to obtain a Ph.D. in engineering in three years. With his strong technical background, he was hired by a leading, technologically advanced, growing and progressive company, GE, which was the ideal vehicle for acquiring power.
The Making of the Revolutionary Most potential entrepreneurs do not launch their enterprises until they are either stimulated or forced by a precipitating event, usually a negative one such as dismissal for unjust reasons, lack of recognition, or boredom (Timmons, 1999). Similarly, many potential revolutionaries initially attempt to work within the system, hoping they can modify it through persuasive or pacific means, until a major shock convinces them that revolution is the only possible solution. At the beginning of the French Revolution the oppressed Third Estate (the 98 percent of the population who were neither nobles nor clergy) addressed petitions to the French king that went unanswered. Only when the Third Estate was denied equal representation did they rebel against the king and storm the Bastille. In Mexico, Francisco Madero sought power through a democratic election and started a revolution only after the vote was rigged by the incumbent dictator Porfirio Diaz. In Russia, Lenin began by trying to gain control of the democratically elected Constituent Assembly. After he was forced into hiding, he decided to overthrow the government by violent means. Welch’s first job at GE was with the Plastics Division, an innovative venture outside GE’s conservative electrical core business. He was given responsibility for developing a new product and for the pilot plant. By working extremely hard, he achieved outstanding results his first year. He expected to be compensated financially and with a promotion, as he had been promised before he was hired. Instead his supervisor, apparently a bureaucrat who did not appreciate Welch’s zeal, gave him a minimal raise. This was the precipitating event that pushed him over the line. He decided to quit GE and look for more rewarding employment. Fortunately for GE, his potential had been noticed by a vice president who was able to convince Welch to stay thanks to a substantial raise and promises of a brilliant career. Welch realized he had a unique
Volume 15
Number 1
2006
opportunity to revolutionize the system and make GE the world’s greatest company. To achieve this end, however, he had to gain power by becoming CEO.
The Rise of the Revolutionary According to Machiavelli (1515) there were three ways to become the ruler of an Italian Renaissance state: (1) being chosen by the incumbent prince; (2) a palace revolution (coup d’état); (3) violence. Welch advanced by being chosen by the incumbent president and then implementing the coup d’état that allowed him to revolutionize GE. After the Reign of Terror, Napoleon, a penniless general, was asked to subdue with a ‘whiff of grapeshot’ the mob that wanted to restore the repressive regime of Robespierre. Napoleon rose politically, was elected consul, then first consul, then consul for life after a coup d’état in 1798. Finally he crowned himself emperor. In a similar progression, Welch had first gained recognition by working within the system before being selected as a candidate for succession and then, as CEO, revolutionizing GE. Although he hated GE’s highly politicized, sanitized, ‘superficially congenial’ (Welch, 2001) headquarters, with its bureaucratic policies and procedures, he exploited the system as he rose through the ranks. He gained recognition through hard work, detailed analyses, polished presentations, and most of all outstanding business results. Nonetheless, in 1975, he was not on the list of ten possible successors to CEO Reginald Jones, who was to retire in five years. The senior vice president of human resources believed Welch drove too hard for results and had too little respect for the company’s rituals and tradition (Welch, 2001). But Jones was also frustrated with GE’s slow-moving bureaucracy and wanted a successor who would shake things up. He insisted that Welch be the eleventh candidate. In 1979, Jones interviewed all of them according to the ‘airplane interview,’ whose format was: ‘You and I are flying in a company plane. The plane crashes and we both die. Who should be the next CEO of GE?’ The purpose was to determine each candidate’s opinion of the other contenders and whether they would be able to work together after Jones’ retirement. But Welch had his own agenda: to prove he was the best choice for CEO. He conveniently forgot he was supposed to be dead and proposed himself as Jones’ successor! As a final test, Jones named three of the candidates, including Welch, vice-chairmen. Welch proved his ability and was named CEO © 2006 The Author Journal compilation © 2006 Blackwell Publishing
CASE STUDY
on April 1, 1981. He had gained limited power by climbing the traditional ladder. Over time he built a small, dedicated group of young, aggressive followers who shared his vision of the new GE and were loyal to him. As with Napoleon, these ‘dashing generals’ were rewarded with promotions, recognition as members of the elite team, and generous financial packages, as long as they kept winning.
77
ended the dog-and-pony show. He wanted to lead rather than ‘review and approve.’ He did not want to see the books, but rather look into the heads and hearts of the business leaders and the passion they poured into their arguments. With two powerful actions – the massive dismissal of people and the dismantling of the bureaucracy – Welch showed that he was fully in charge. Now he was ready to start the revolution5.
Welch’s Coup d’Etat To assert himself and prove he was in charge, Welch consolidated his power through a coup d’état. His goal was to seize the few neural centers where power was exercised and from there to conquer the entire constituency (Malaparte, 1931). Accordingly, he started at headquarters and eliminated the complacent bureaucrats who might offer passive resistance, firing 167 out of 200 and adding 67 members of his own loyal team. He also realized that the world was entering a recession and that GE should reduce expenses, becoming ‘mean and lean’ to face the double challenge of a recession and increased international competition. He laid off 80,000 employees the first year and 42,000 over the next two years, targeting older, more expensive employees who might be more resistant to change. There was one problem: GE’s long-standing policy that employees with 25 or more years of service could not be dismissed for lack of work. Welch realized that canceling this policy would have negative repercussions among stakeholders and the press and therefore decided to add the words ‘when appropriate’ to the policy. As far as I know, not one single case of ‘appropriateness’ was ever registered! In parallel with dismantling the infrastructure of the GE bureaucracy, Welch wanted to change the modus operandi at headquarters and in the field. This was exemplified by the preparation and review of the plans of GE’s 65 strategic business units (SBUs). From January to May, every SBU prepared strategic plans of 100 or more pages with detailed forecasts for the next five years. Staff headquarters checked and even graded them. They then prepared tough or irrelevant questions for the CEO and top executives to ask during the formal review in July. These reviews were elaborately prepared and rehearsed to avoid unpleasant surprises. Welch put an end to all this. He refused to see the books before the presentation and insisted on asking his own questions. The formal presentations with over 40 people in attendance became shirt-sleeve, informal, open discussions of the business and its challenges with fewer than 10 persons. Welch © 2006 The Author Journal compilation © 2006 Blackwell Publishing
Welch’s Creative Revolution (1981–2000) The Three Waves By definition, the goal of a revolution is to destroy a regime that is unsatisfactory to the majority of the people (‘stakeholders’ in business parlance) and replace it with a new order6 that, it is hoped, will meet their needs and aspirations. Welch achieved this goal over 20 years by bringing about a revolution in waves. The advantage of acting in separate waves rather than one continuous revolution is that revolutionary fervor cannot last forever. People become tired and want to relax and enjoy the rewards of their work. To make progress, they must be reenergized and pushed ahead in periodic waves. Welch’s 20-year revolution can be conceptualized as three waves with the following starting dates and major objectives: 1981, first wave (hard) Create a new vision and strategy to drive reorganization, mass dismissals, divestments and acquisitions. 1985, second wave (soft) Revolutionize GE to gain the strengths of a big company with the leanness and agility of a small company. 1996, third wave (soft and hard) Develop an integrated, boundaryless, stretched, total quality company with A-players. The characterization of the waves as hard or soft refers to the means Welch employed. In the hard waves, the lives of the employees are physically disrupted by mass dismissals, divestments, acquisitions and major organizational changes. In the soft waves, the minds and habits of the employees are disturbed, because they must absorb new ways of operation and new working practices. Physical disruption is minimal, except for those who cannot cope with the new company environment and are forced to leave.
Volume 15
Number 1
2006
78
CREATIVITY AND INNOVATION MANAGEMENT
The First Wave (1981–1984) Now that Welch had conquered headquarters, he had to conquer the field, including the minds of managers, staff, and workers of all ranks. To achieve this, Welch, for the first time in GE’s history7, created a unified vision and strategy for the entire company, the famous three-circle concept. All GE businesses had to fit within three categories: 1. Core business (such as Power Generation, Appliances) with moderate returns, managed as cash cows with selective investments. 2. High-tech businesses (such as Medical Systems, Plastics and Aircraft Engines) with high growth, negative cash flow and high investments. 3. Services (such as GE Capital, NBC and Information Services) with high returns, high growth, cash generation and low investments. Welch then evaluated each business. Those that were first or second in their industry were placed inside one of the three circles. The others were given two years to become first or second. If they could not, they were closed or sold. Welch’s message to all employees was crystal clear: Be first or second! If not, you’re out! At the same time, Welch regrouped the 65 SBUs into 13 businesses, which he managed directly. Welch carried his message to the field and met formally and informally with employees of all ranks. Because of his working-class origins, Welch could relate easily to blue-collar workers and listen to their suggestions for improving efficiency. He regularly visited the GE executive training center in Crotonville, N.Y., to give lectures and meet informally with future general managers. He listened to their complaints about the lingering bureaucracy and delays in obtaining approvals and decisions from superiors. Welch’s ‘workout’ meetings (Ulrich et al., 2000) may be compared to Chairman Mao’s frequent meetings with Chinese workers and soldiers, and his management meetings to Mao’s open discussions with the younger party leaders.
The Second Wave (1985–1995) Having achieved, almost by force, impressive financial results, Welch was concerned that GE’s organization would not be able to maintain its growth rate. Therefore, he embarked on a major reorganization that would ensure the motivation and the capability to grow successfully. He took the following actions: 1. Flattening of the corporate pyramid from eight to four levels.
Volume 15
Number 1
2006
2. Reducing staff and changing its role from controlling and revising to assisting and coaching. 3. Instituting a new reward system based more on performance bonuses rather than salaries, with more stock options. 4. Ending employment security. The company could dismiss anybody, any time, regardless of length of service or merit. At the same time, employees who found better jobs outside the company were free to leave and would not be considered disloyal. The first wave had created a smoothly functioning company that generated plenty of cash. A portion of this cash was paid to the stockholders, but the majority was reinvested in R&D, capital investments, and acquisitions, which, in turn, generated more cash, a concept developed by Welch that was called the ‘GE growth engine’ (Elderkin and Bartlett, 1993). The second wave created a more efficient, streamlined organization that reduced bureaucracy and motivated employees, through tangible incentives, to achieve improved financial results.
The Third Wave Because GE’s success was identified with Welch personally rather than the new GE system, the challenge was to prevent a slackening of efforts and a slowdown in growth and profits after his retirement. In the third wave, he had to create new GE values, a new GE culture, and an emotional climate that would transcend his personality as well as his strategic and organizational reforms. The third wave was both soft and hard. On the soft side, it included watchwords like ‘speed, simplicity and self-confidence,’ ‘candor, openness, ownership,’ ‘integrated diversity,’ and even ‘evangelizing.’ On the hard side was the total quality (six sigma) initiative, which produced significant results. To enforce the six sigma culture, Welch made it clear that nobody would be promoted unless he or she was a certified ‘black-belt’ team leader (Heckett, 1999). Welch then started a similar campaign for digitization and e-commerce. All managers had to find a mentor who would teach them how to access the Internet (Bartlett and Glinka, 2002). Probably the most important aspect of the third wave was the selection of a top team of A-players, the future leaders of GE (Bartlett and McLean, 2004). We know that Welch studied the German strategies of World War I and admired the German general staff. He may also have read Karl von Clausewitz’s famous treatise Vom Kriege (On War) (1830). Welch’s © 2006 The Author Journal compilation © 2006 Blackwell Publishing
CASE STUDY
79
The New GE
Imperial Germany Smart
Stupid
Eager
General Staff
Out!
Lazy
Force Them
Troops
Karl von Clausewitz, 1830
Achievers
NonAchievers
Believers
Teach and Stretch
Motivate and Train
NonBelievers
Out!
Do Not Hire
Jack Welch, 2000
Figure 1. Welch’s third wave: selecting leaders. Source: Abetti (2001)
criteria for selecting leaders are very similar to the criteria for selecting the elite members of the German general staff. As shown in the left matrix of Figure 1, Clausewitz classified all potential candidates as smart or stupid and as eager or lazy. There are four possible combinations: 1. The ‘smart and eager’ (top left quadrant) are the obvious choice, but there are not enough of them. 2. Therefore, the ‘smart and lazy’ will be forced to move from the lower left to the upper left quadrant. 3. If they do not respond, they will have to join the ‘stupid and lazy’ troops in the lower right quadrant. 4. ‘Stupid and eager’ is the worst combination because these people cause all kinds of trouble with their overzealousness. They should be thrown out!
Welch’s Succession and Retirement The Hardening of Welch At the end of the third wave, faced with the prospect of mandatory retirement, Welch’s attitude hardened. He became more and more demanding, setting unattainable stretch goals, and more intolerant of dissent. For instance, while most companies would be content with a 10 percent annual increase in operating margins, say from 10 to 11 percent, Welch demanded a 50 percent increase, from 10 to 15 percent, and a doubling of inventory turns. Attempting to achieve such goals can cause exhaustion or ‘fixing the books;’ missing the goals can cause fear of sanctions and loss of morale. Welch also demanded more and more conformity with his tenets. For several years, GE managers were encouraged to carry in © 2006 The Author Journal compilation © 2006 Blackwell Publishing
their wallets a card listing the GE values, just as Chinese party members, soldiers, and students had to carry Chairman Mao’s Little Red Book. Welch applied these same values as criteria for selecting GE’s future leaders. Welch characterized potential leaders in the new GE as achievers and non-achievers, believers and non-believers, as shown on the right side of Figure 1. There are four possible combinations: 1. ‘Achievers and believers’ are the obvious choice, but there are not enough of them. 2. Therefore, the ‘believers and non-achievers’ are motivated and trained to move from the top right to the top left quadrant. 3. ‘Non-achievers and non-believers’ should not be hired. 4. The ‘achievers and non-believers’ represented a problem for Welch. His attitude toward them changed over time. Initially he recognized grudgingly their contributions but also saw them as a management problem. Later, in his last letter to stockholders, Welch launched a crusade to eliminate type-IV managers: ‘. . . we have to remove these type IV’s because they have the power, by themselves, to destroy the open, informed, trustbased culture we need to win today and tomorrow . . . There are undoubtedly a few type IV’s remaining, and they must be found. They must leave the company because their behavior weakens the trust that more than 300,000 people have in its leadership.’ (GE Annual Report, 2000) Here again, a parallel with major revolutions is instructive. The French Revolution did away with the moderates, the Russian Revolution cast out the non-party specialists who had contributed to the post-war reconstruction,
Volume 15
Number 1
2006
80
CREATIVITY AND INNOVATION MANAGEMENT
and Mao’s Cultural Revolution purged intellectuals. History shows that all these purges caused economic disruptions. To summarize, during the first wave, Welch changed the physical infrastructure of GE and what people did. During the second wave he changed the organization and how people operated. During the third wave, he changed the culture and both what and how people should think. It should be noted that the psychological pressure on employees and their resentment and potential resistance increased as one wave was followed by the next. During the first wave, employees were told what to do. They recognized that it was part of management’s prerogatives, indeed of management’s duties, to direct their effort where it would be most valuable for the company. During the second wave, employees were told how to do their assignments. Thus, there was some concern that experimentation and creativity may have been curtailed during the second wave. During the third wave, employees were asked to endorse without reservations the new GE values, culture, and emotional climate. This new approach is potentially dangerous, because: 1. Some employees may be rewarded for being politically correct rather than for their results; 2. Some high-performing employees may be considered politically unreliable and forced to leave; 3. Some employees may be afraid to speak their minds for fear of retaliation. Here again, a parallel with revolutions is instructive. The situation above corresponds to the beginning of the Terror during the French Revolution (1793)8. A fourth wave from Welch would not have been viable because it would have demanded more conformity than was good for the company and more submission than the employees were willing to accept. But in line with GE policy, it was time for Welch to retire.
Welch’s Last Stand Welch, however, was not ready to give up power. He wanted to leave with a bang, some major business coup that would satisfy his ego and consolidate his fame as the world’s most admired executive (Murray et al., 2000). Having heard that Honeywell was being sold, Welch made a last-minute offer at an inflated price. Then he stated that he would not retire until this acquisition was consummated and Honeywell was successfully integrated within GE. Fortunately for GE stakeholders, Welch was unable to obtain approval from the anti-
Volume 15
Number 1
2006
trust authority of the European Economic Community. The deal fell through and Welch finally retired, having lost glory and credibility.
Welch’s Succession Although he was in no hurry to retire, Welch selected potential successors following GE’s personnel policies and the example set by Reginald Jones (Bartlett and McLean, 2004). However, the way Welch treated his potential successors, especially the two losing candidates, was quite different. Like Jones, Welch narrowed his search to three candidates, but they were all working in the field, not at headquarters. Welch challenged each one to outperform the others and to develop a successor who would be able to take over if that candidate was appointed CEO. After heated competition, Welch selected Jeff Immelt, whom he had mentored for many years, and who was loyal to him. Immelt had been in charge since 1997 of GE Medical Systems, Welch’s most successful business before he was named CEO (Khanna and Weber, 2002). The day before he announced his successor, Welch took the company plane to Milwaukee to give the good news to Immelt. Then he flew to Cincinnati and Schenectady and fired the two losing candidates. GE was known as the company that trained future CEOs and, in fact, some of the unsuccessful front runners for Welch’s job had already left GE to head Fortune 500 companies. Welch told the two losers ‘You are going to be offered a CEO position sooner or later, so you should leave right now!’ As a ruthless politician he knew the losers could do nothing more for him and thus followed the maxim: ‘In politics there is no gratitude because nothing is ever given’ (Guzman, 1951). On November 27, 2000, Welch and Immelt appeared on television in identical blue shirts open at the collar, navy sports coats, even matching tasseled loafers–the non plus ultra of conformity! No wonder Fortune called Immelt ‘The Man who would be Welch’ (Moore, 2000). From then on, Immelt’s problem was being considered Welch’s clone, and clones are never as good as the original. Welch kept Immelt on a leash for nine months as he gradually turned over power. According to Sonnenfeld’s typology of succession patterns (1988), Welch was a general who was leaving reluctantly and trying to stay in charge. Welch retired in September 2001, and it was only after three years that Immelt began to shake his image as Welch’s follower. In 2004 Fortune changed its tune and the headlines were ‘Another boss, another © 2006 The Author Journal compilation © 2006 Blackwell Publishing
CASE STUDY
revolution. Jeff Immelt is following a timehonored GE tradition: abandoning the most treasured ideas of his predecessor’ (Useem, 2004).
The Thermidorean Reaction Welch’s ‘Terror’ As the French Revolution evolved and France fought to prevent European powers from invading and reinstating the king, Robespierre became dictator and instituted the Reign of Terror. Two hundred years have passed, and GE is not France, nor are its competitors striving to conquer GE. Nonetheless, Welch instituted his own polices of conformity, as described above, as well as a reign of terror (Byron, 2004) to consolidate and assert his power. GE managers and employees were scared by Welch’s increasing outbursts of rage, even over small issues, that were punctuated by foul language. The worst, however, was his policy that every year ten percent of employees in each department must be replaced. Across the board the lowest performers were removed, regardless of their actual performance. This policy is not effective (Lawler, 2002), and in the case of GE was clearly unfair, because some departments had excellent results, others poor results. No matter, ten percent had to go (Welch, 2001)! Also, as discussed above, some higher performers who were suspected of disloyalty to Welch’s values or who lacked political support were fired. In this way Welch kept everybody on edge and paved the way for the Thermidorean reaction.
The Thermidorean Reaction in France (1793–98) During the Reign of Terror, Roberpierre demanded complete loyalty to the principles of the Revolution, and he executed anyone suspected of dissent or disloyalty. This lasted until July 27, 1794 (9 Thermidor, year II according to the new Revolutionary calendar), when Robespierre and his associates were overthrown and executed in a coup d’état. The people of France, tired after years of turmoil, gave a sigh of relief and supported the new, more moderate leaders, who were called Thermidoreans. This was the beginning of the Thermidorean reaction, which lasted until Napoleon took power. It was characterized by relaxed moral standards, conspicuous consumption, drunkenness, orgies and sexual license, all fueled by war profiteering, political payoffs and corruption. © 2006 The Author Journal compilation © 2006 Blackwell Publishing
81
The Thermidorean Reaction at GE (2002–2004) In the case of GE, the Thermidorean reaction, which came after 20 years of Welch’s revolution, had three main aspects: 1. Lassitude among GE employees who hoped to relax under Immelt, who was reputed to be less ‘mean’ than Welch. Their attitude was ‘let’s wait and see which way Jeff will go.’ 2. A reexamination by business analysts and the press of GE’s financial results, accounting practices, and forecasts. For instance, The Economist published an article critical of GE with the headline ‘The Jack and Jeff show loses its luster’ (Economist, 2002). 3. A long period of transition (2002–2004) while Immelt was reenergizing GE and differentiating himself from Welch.
Welch’s ‘Thermidor’ For Welch the Thermidorean reaction led to changes in his personal and professional behavior that tarnished his image. Suffice it to say that The Economist, which had often praised Welch to the sky, became disillusioned and excoriated him as an ‘aging philanderer’ (Allio, 2003). This radical change in Welch’s image was due to two episodes that were treated as scandals in the press and in a book: his severance package and his affair with a prominent editor. The policy and practice at GE has always been no employment contracts. Employees can be terminated by the company at will, and they can also leave at anytime. In 1996, five years before his retirement, Welch negotiated a contract that included an extremely generous, even lavish, package of life-long, postretirement benefits. This contract came to light when Welch’s second wife sued for divorce and claimed a payment of almost half a billion dollars. Welch, who had been praising ‘openness, simplicity and unyielding integrity,’ was condemned by the press. He had no choice but to give up the entire package and repay GE for $2 to $2.5 million annually in services (Welch, 2002). The second scandal was caused by an interview with the editor of Harvard Business Review that promoted Welch’s autobiography. The resultant headline in Business Week was ‘Too Close for Comfort. GE’s legendary former CEO Jack Welch kicks up a controversy over his affair with a journalist.’ The journalist boasted openly of her relationship with Welch and ‘quit after having lost the confidence of her staff’ (Orecklen, 2002). Due to the conflict of interest, a watered-down version of the interview was edited by others (Collinwood
Volume 15
Number 1
2006
82
CREATIVITY AND INNOVATION MANAGEMENT
and Coute, 2002). Other dismal aspects of Welch’s Thermidor were publicized as a result of the divorce proceedings but will not be discussed here.
Conclusion Answers to the Two Questions After having described the rise and fall of the revolutionary Jack Welch, his creative transformation of GE, and the Thermidorean reaction, we turn to the two questions at the beginning of this paper: 1. Was Welch a product of GE, as claimed by Collins and Porras, or was GE (after 1981) a product of Welch? Our conclusion is that, while GE would have selected another capable executive in his stead, GE’s revolutionary transformation was due primarily, if not exclusively, to Welch’s creative leadership. In fact, it is clear that Welch, as a true revolutionary, intended to overthrow the GE system after his disillusionment with his first year of employment, and that he worked within the system in order to become CEO, seize power through a coup d’état, and destroy the old system. 2. Was the major decline of GE’s stock value due to the collapse of the Internet bubble or to the Thermidorean reaction, which in turn had its root cause in Welch’s last years as CEO? GE’s stock fell 45 percent from 2000 to 2003, while the S&P Index fell by 32 percent. Other large, well-managed companies were less affected. Microsoft fell 19 percent, WalMart 10 percent and IBM 22 percent. As discussed above, Welch’s hardening and his determination to stay in power would have made a fourth wave of change ineffective, indeed dangerous, for GE. We have also shown that Welch’s insistence that his successor should be his clone reinforced the effects of the Thermidorean reaction and delayed for three years Immelt’s establishment as the new CEO and his differentiation from the Welch legacy. Our conclusion is that Welch was the major cause of both GE’s success and GE’s decline.
Welch’s Accomplishments and Driving Force In spite of the managerial and personal shortcomings at the end of his tenure, Welch’s
Volume 15
Number 1
2006
accomplishments are unique in the history of business. He transformed a mature electrical company with a slow-moving, overstaffed bureaucracy, poor cash flow, and lethargic stock into a global powerhouse, where electrical products represent only 15 percent of sales, other innovative high-tech products (aircraft engines, engineering plastics, man-made diamonds, medical diagnostic systems, etc.) 10 percent, and services 75 percent. While there have been many revolutionary leaders in politics and business with clear vision and unbreakable motivation to implement their vision, not many have succeeded in maintaining the momentum for 20 years. Welch is unique in his successful implementation of revolutionary change in a company that was already among the most admired when he became CEO. How did Welch achieve this? The progress of nations is marked by revolutions that lead to a higher level of wellbeing for the citizens. As Thomas Jefferson wrote in 1787 ‘A little rebellion now and then is a good thing’ (Jefferson, 1853–54).9 In a similar manner, according to Greiner (1972), companies do not grow continuously and smoothly but rather go through periods of evolution and revolution, separated by crises. According to Collins and Porras (1997): Visionary companies install powerful mechanisms to create discomfort to obliterate complacency and thereby stimulate change and improvement before the external world demands it. Visionary companies are created by visionary leaders who take advantage of impending external crises (as an economic recession) or even create their own crises in order to revolutionize the company and raise it to a higher level of performance. Markides (1998) states: The successful innovators were not afraid to destabilize a smooth running machine and to do so periodically but continuously. . . . The development of positive crises. . . . is a powerful mechanism to destabilize the system and start the thinking process again. . . . However, one revolution is not enough. The revolutionary spirit fades over time, and a Thermidorean reaction follows10. At the same time, few visionary company leaders are willing and able to maintain the revolutionary drive over their entire tenure. It takes a great leader to fundamentally question his or her mental models continuously and escape the trappings of success more than once (emphasis added) (Markides, 1998). © 2006 The Author Journal compilation © 2006 Blackwell Publishing
CASE STUDY
In conclusion, the driving force of Welch’s undeniable accomplishments was his will and ability to create a new vision of GE, to implement it through a continuous revolution, to question the status quo, to dynamically modify his vision and strategy, and to propel the company to ever higher levels of performance and success.
Notes 1 The literature on revolution is enormous. A basic reference is the Encyclopedia of World History (Langer, 1968). The French and Russian revolutions are analyzed by Crane (1957), the Mexican revolution by Johnson (1968), the Chinese revolution by Guillermaz (1972), the Fascist revolution by De Felice (1981), and the National Socialist revolution by Bullock (1952). 2 The sales of large multinational corporations are often compared to the GNPs of developing countries. A better measure is the value added by a company (Bartlett, Goshal, Birkinshaw, 2004). 3 Following the example of Machiavelli (1515) we present the leaders as they were and their actions without passing judgment. 4 From the Greek α′γιος = saint and γρα′ϕος = writer, the writers of the ‘Lives of the Saints’ of early Christianity. 5 According to Welch, Reg Jones did not expect drastic changes. In fact, Jones was often disappointed with Welch’s behavior starting with the coming-out party he organized just before Welch officially became CEO (Welch, 2001). Although Jones had doubts about the wisdom of his choice, Jones did not interfere after retirement (Byron, 2004). 6 For instance, the ‘Novus Ordo Seclorum’ (New Order of Centuries) of the American revolution, as shown on one dollar bills. 7 Attempts to develop a ‘GE Strategy’ under Reg Jones failed for three reasons: (1) the task was delegated to analysts, (2) the top executives were not involved and kept changing their minds, (3) the strategy was top-secret, and only five executives (out of 400,000 employees) had access to the documents. 8 Other examples are the early Stalin era in the Soviet Union (1927–37) and Chairman Mao’s cultural revolution (1966–67). 9 Jefferson referred to the American revolution as a ‘rebellion’. 10 To forestall the slackening and bureaucratization of the Soviet revolution, Trotsky developed the theory of the ‘permanent © 2006 The Author Journal compilation © 2006 Blackwell Publishing
83
revolution’ (Deutseher, 1954) which was anathema to Stalin, who wanted to consolidate his power by stabilizing the Soviet Union.
Acknowledgement The author wishes to thank Lindsay Evans for reviewing and editing the manuscript.
References Abetti, P.A. (2001) General Electric after Jack Welch: Succession and Success? International Journal of Technology Management, 22(7/8), 656– 69. Aguilar, F.J., Hamermesh, R. and Brainard, C. (1981) General Electric: Strategic Position 1981, Harvard Business School, case 381-179. Aguilar, F.J., Hamermesh, R. and Brainard, C. (1985) General Electric 1984, Harvard Business School, case 385-315. Aguilar, F.J., Hamermesh, R. and Brainard, C. (1991) General Electric: Reg Jones and Jack Welch, Harvard Business School, case 9-391-144. Allio, R.J. (2003) The Seven Faces of Leadership, Tatu McGraw Hill, New Delhi. Bartlett, C.A., Ghoshal, S. and Birkishaw, J. (2004) Transnational Management, 4th ed., Irwin, Boston. Bartlett, C.A. and Glinka, M. (2002) GE’s Digital Revolution: Redefining the E in GE, Harvard Business School, case 9-302-001. Bartlett, C.A. and McLean, A.N. (2004) GE’s Talent Machine: The Making of a CEO, Harvard Business School, case 9-304-049. Bartlett, C.A. and Wozny, M. (2000) GE’s Two – Decade Transformation: Jack Welch’s Leadership, Harvard Business School, case 399-150. Beam, A. (2004) Books About Schnooks, Atlantic Monthly, November, 112–116. Brinton, C. (1957) The Anatomy of Revolution, Vintage Books, New York. Bullock, A. (1952) Hitler – a Study in Tyranny, Odhams, London. Byron, C. (2004) Testosterone, Inc: Tales of CEOs Gone Wild, Wiley, New York. Collingwood, H. and Coutu, D.C. (2002) Jack on Jack, Harvard Business Review, 80, February, 88–94. Collins, T.C. and Porras, J.I. (1997) Built to Last, Harper Business, New York. DeFelice, R. (1981) Mussolini, vols 1–5, Einaudi, Turin. (In Italian). Deutscher, I. (1954) Trotsky, vols 1–3, Oxford University Press, New York. Economist (2002) Business: The Jack and Jeff Show Loses its Luster: General Electric. The Economist, 363(8271) May 4, 63–65. Elderkin, K.W. and Bartlett, C.A. (1993) General Electric: Jack Welch’s Second Wave, Harvard Business School, Case 391-248. GE Annual Report (2000) General Electric Company, Fairfield, Connecticut.
Volume 15
Number 1
2006
84
CREATIVITY AND INNOVATION MANAGEMENT
Greiner, L.E. (1972) Evolution and revolution as organizations grow. Harvard Business Review, 50 (July–August), 37–46. Gillermaz, J. (1972) Histoire du Parti Communiste Chinois, vols 1–2, Payot, Paris (in French). Guzman, M.L. (1951) La Sombra del Caudillo (The Shadow of the Chief), Compañia General de Ediciones, Mexico, D.F., Mexico (in Spanish). Heller, R. (2001) Jack Welch, Dorling Kindersley, New York. Heskett, J.L. (1999) GE. . . . We Bring Good Things to Life (A and B), Harvard Business School, cases 9899-162 and 9-899-163. Hohenberg, P. (2005) Personal Communications from Paul Hohenberg, former Chair, Department of Economics, RPI, January 18. Jack Welch: General Electric’s Revolutionary (1994) Harvard Business School, case 394-065. Johnson, W.W. (1968) Heroic Mexico, Doubleday, Garden City, New York. Jefferson, T. (1853–54) The Writings of Thomas Jefferson, 9 vols, Washington, D.C. Khanna, T. and Weber, J. (2002) General Electric Medical Systems, 2002, Harvard Business School, case 9-702-428. Langer, W.L. (1968) An Encyclopedia of World History, 4th ed. Houghton Mifflin, Boston. Lawler, E.E. III (2002) The Folly of Forced Rankings, Strategy and Business, 28, Third Quarter. Lowe, J.C. (1998) Jack Welch Speaks, Wiley, New York. Lowe, J. (2001) Welch, An American Icon, Wiley, New York. Machiavelli, N. (1515) Il Principe (The Prince), MS, Florence. Malaparte, C. (1931) Technique du Coup d’ Etat (Technique of the Coup d’Etat) Grasset, Paris (in French). Malwight, T.W. and Aguilar, F.J. (1990) GE-Preparing for the 1990s, Harvard Business School, case 9390-091. Markides, C. (1998) Strategic Innovation in Established Companies, Sloan Management Review, Spring, 31–42. Moore, P.L. (2000) The Man Who Would Be Welch, Business Week, December 11, 56–59. Murray, M., Cole, J., Deogun, W. and Pasztor, A. (2000) On eve of retirement, Jack Welch decided to stick around GE a bit, Wall Street Journal, 23 December. O’Boyle, T. (1998) At Any Cost: Jack Welch and the Pursuit of Profits, Random House, New York. Orecklin, M. (2002) Too Close for Comfort, Time, March 18, 65. Slater, R. (1993) The New GE, Irwin, Burr Ridge, Illinois. Slater, R. (1996) Get Better or Get Beaten, McGraw Hill, New York.
Volume 15
Number 1
2006
Slater, R. (1998) Jack Welch and the GE Way, McGraw Hill, New York. Slater, R. (2000) The GE Way Fieldbook, McGraw Hill, New York. Schumpeter, J.A. (1932) The Theory of Economic Development, Harvard University Press, Cambridge, Massachusetts. Sonnenfeld, J. (1988) The Hero’s Farewell, Oxford University Press, New York. Tuchy, N. and Charan, R. (1989) Speed, simplicity, self-confidence: an interview with Jack Welch, Harvard Business Review, 67, September–October, 114–34. Tichy, M.N. and Cohen, E. (1997) The Leadership Engine, Harper Business, New York. Tichy, M.N. and Sherman, S. (1994) Control Your Destiny or Someone Else Will, Harper Business, New York. Timmons, J. (1999) New Venture Creation, 5th ed., Irwin, Boston. Ulrich, O., Kerr, S. and Ashkenas, R. (2002) The GE Work-out, McGraw Hill, New York. Useem, J. (2004) Another Boss, Another Revolution, Fortune, April 5, 112–22. Von Clausewitz, K. (1830) Vom Kriege, (On War) Berlin. Welch, J. (2001, 2003) Jack, Straight from the Gut, Warner Books, New York. (The text was published in 2001, the afterword added in 2003). Welch, J. (2002) My Dilemma – And How I Resolved It, Wall Street Journal on Line, Sept. 16 (Reprinted in Welch 2001, 2003).
Pier A. Abetti (
[email protected]) holds a Ph.D. degree in Electrical Engineering from Illinois Institute of Technology. Prior to joining Rensselaer Polytechnic Institute in 1982, as Professor in the Lally School of Management and Technology, he worked 32 years for the General Electric Company (USA). He was manager of the Electrical and Information Advance Technology Laboratories and manager of General Electric’s Europe Strategic Planning Operation. He presently teaches management of technology and technological entrepreneurship courses in the USA, Finland, and Tunisia. Author of two books and more than 150 technical and management papers in five languages, he was the recipient of the 1993 Kaufman Foundation Award as University Entrepreneurship Professor of the Year.
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
85
The New Product Development Improvement Motives and Practices of Miles and Snow’s Prospectors, Analysers and Defenders Bjørge Timenes Laugen, Harry Boer and Nuran Acur Marketing, strategic management and contingency theory suggest that different strategies require different practices. The new product development (NPD) literature, however, hardly addresses the product development practices needed to support different strategies. An analysis of eight prospectors, twenty-seven analysers and seven defenders (Miles and Snow, 1978) suggests that the NPD improvement motives and practices of these three types of strategies are less different than we expected. Our explanation for this finding is that the three strategic types are growing towards each other, forced by changes in competition and enabled by new technologies and management concepts.
Introduction trategy implementation is the process by which (new) objectives and practices (i.e. processes, technologies, organisational arrangements and/or managerial systems and approaches) are put into action. One of the key principles associated with successful strategy implementation is that at any time, strategy and practices need to be consistent with, and supportive of, each other (Chandler, 1962; Owen, 1982). Many generic corporate (e.g. Miles and Snow, 1978; Porter, 1980; Kotler et al., 2001) and manufacturing (e.g. Hayes and Wheelwright, 1984; Sweeney, 1991, 1993; Richardson et al., 1985) strategies have been proposed. Indeed, most of these typologies suggest that different strategies require different organisational and managerial practices or, in other words, a structural consistency between strategy and organisational design parameters. Other authors (e.g. Hayes and Wheelwright, 1984) suggest that a consistency is required between corporate strategy and functional strategies such as new product development (NPD), manufacturing and marketing strategy or, in other words, a strategic consistency. While structural and strategic consistency are widely accepted as prerequisites for success, also in adjacent areas such as organisa-
S
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
tion design theory (e.g. Mintzberg, 1979), there have not been many attempts to examine new product development (NPD) strategies and practices from this perspective. For example, one well-known typology of market strategy distinguishes between leaders, fast and late followers. However, the differences in NPD strategies and practices between the three categories are not well described. Another underexplored area concerns the link between corporate strategy and NPD strategy and practices. This article seeks to address this area, and examines the following question: What are the relationships between corporate strategy and new product development strategy and practices? The next section will provide the background we used to operationalise this question in the form of five hypotheses.
Background Various studies have argued that strategies are best interpreted and dealt with in terms of configurations of, for example, competitive priorities and innovation characteristics, rather than by looking at single elements or constructs. We will follow this recommendation and discuss
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00371.x
86
CREATIVITY AND INNOVATION MANAGEMENT
how strategic configurations can be used to understand relationships between corporate strategy and NPD practices. In so doing we will take Miles and Snow’s (1978) typology as our point of departure. The Miles & Snow Typology Miles and Snow’s (1978) strategy typology distinguishes four types of companies – prospectors, defenders, analysers and reactors. Prospectors are the most innovative type and emphasise the development of new products and technologies and the exploration of new markets. They try to be first in the market with new products, and continuously experiment with responses to emerging trends and changes in the market place. They are characterised by a low degree of formalisation, decentralised decision making and high flexibility. Defenders primarily stay in their existing domains and stable market niches. Product development for these companies is limited to the improvement of existing products. Efficiency and control are important factors for these companies, and they have a higher degree of formalisation and centralisation than prospectors. Analysers try to combine the exploration capability and innovativeness of the prospectors with the defenders’ ability to serve existing markets effectively. These companies pursue efficiency in the stable markets they serve, and try to be adaptive to and prepared for change in the turbulent markets in which they are also active at the same time. However, analysers are not ‘first movers’. Rather their focus is on quick adoption of new concepts launched by successful prospector companies. Finally, reactors are companies without a consistent strategy-structure relationship. These companies do perceive changes in the markets in which they operate, but are not able to respond to these changes effectively. The two extremes (prospector and defender) are consistent with findings put forward by the other authors, e.g. Burns and Stalker (1961) and Porter (1980). Burns and Stalker (1961) found two ‘management systems . . . which represent the . . . polar extremities of the forms which such systems can take when they are adapted to a specific rate of technical and commercial change’ (ibid., p. 119). They labelled these extremes the mechanistic and organic management system, respectively. Mechanistic systems are appropriate in stable conditions and have a functional organisation structure, a high degree of formalisation, and many rules and procedures. Organic systems are most appropriate in changing conditions and are characterised by loose structures and few rules.
Volume 15
Number 1
2006
Porter’s (1980) cost leaders try to win market share by offering products with a lower price than their competitors. They pursue their strategy by focussing on efficiency and cost reduction, and, consequently, tight cost-control. Companies that adopt a differentiation strategy compete by distinguishing their products from their competitors’ products. This requires a strong focus on innovation, creativity and marketing. Miles and Snow’s (1978) prospector corresponds with Burns and Stalker’s organic system and Porter’s differentiation strategy, while the defender strategy corresponds with Burns and Stalker’s mechanistic system and Porter’s cost leadership strategy. Analysers combine cost-leadership and a mechanistic system orthogonally with differentiation and an organic system. That is, they either spatially or temporally separate innovation and operation, but do not do both in the same part of the company or at the same time (Volberda, 1998, pp. 270–274).
Hypotheses Miles and Snow examined relationships between various organisational and contextual factors, including the rate of change in the organisation’s products and markets and the organisation’s technology, structure, managerial processes and power distribution within each strategy type. Our interest is in the relationships between corporate strategy and NPD strategy and practices. We will focus on the relationships between strategy and NPD improvement motives (strategy) and action programmes (new practices), rather than current practices. This is an appropriate approach because company improvement motives indicate future strengths pursued while action programmes indicate how companies intend to achieve these strengths. Our hypotheses do not include reactors; we are only interested in motives and programmes of the three strategic types – that is, prospectors, defenders and analysers, which Miles and Snow (1978) describe as sustainable strategies. This is in line with many previous studies that used Miles and Snow’s classification (e.g. Slater and Narver, 1993; Shoham et al., 2001).
Market and NPD Practices Many authors on strategic management (e.g. Andrews, 1971; Porter, 1980) suggest that strategy should be about aligning the business with its environment. This means that strategy is an adaptive mechanism. Miles and Snow (1978) see strategy as a constraint for the © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
organisation to respond to its environment. Consequently, they do not try to answer the question ‘which strategy is best for this environment?’, but rather focus on ‘how do we implement the chosen strategy?’. Prospectors systematically add new products and new markets to their portfolio and put a lot of effort into monitoring ‘a wide range of environmental conditions, trends and events’ (Miles and Snow, 1978, p. 56). Defenders tend to ‘ignore developments outside of [their] domain’ (ibid., p. 37). Analysers imitate ‘the best of the products and market developed by Prospectors’ (ibid., p. 72) and accomplish this ‘through extensive marketing surveillance mechanisms’ (ibid., p. 72). We hypothesise: H1a: For analysers, market motives are more important drivers of NPD performance improvement than for prospectors and defenders. H1b: Analysers make more use of mechanisms to ensure customer intimacy than prospectors and defenders. However, prospectors aim to locate and exploit new product and market opportunities, and do that by monitoring a wide range of environmental conditions and events. Hence, we hypothesise: H1c: Prospectors make more use of mechanisms to scan their environment for general information than analysers and defenders.
Time and Cost Motives and NPD Practices As prospectors focus on innovation, analysers on quick imitation, and defenders on their existing products, we argue that the motives they have for improving the NPD function will be different for the three types as well. Defenders search profitability by maintaining existing products in established markets through ‘technological efficiency’ (Miles and Snow, 1978, p. 48). Analysers combine efficiency in their operations with effectiveness pursued by adding new products and markets (ibid., p. 77). Prospectors are continuously developing new products and markets and, consequently, tend to have difficulties achieving operational efficiency (ibid., p. 66). In order to achieve their efficiency objectives, the defenders and analysers have well-developed control systems. It makes logical sense to expect the following implications. As the defenders compete on cost, their NPD activities should be aimed at low cost and cost reduction as well. Analysers try to combine low cost and fast imitation (of the prospectors’ products) and should therefore be expected to put considerable effort into © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
87
achieving ever-lower cost and higher speed in their NPD activities. Finally, prospectors will tend to focus on design, rather than cost and speed. We hypothesise: H2a: For defenders, cost and price motives are more important drivers of NPD performance improvement than for prospectors and analysers. H2b: Defenders make more use of mechanisms to control and improve cost than prospectors and analysers. H3a: For analysers, time motives are more important drivers of NPD performance improvement than for prospectors and defenders. H3b: Analysers overlap phases in the development process to a higher extent than prospectors and defenders to control and improve timerelated performance. H3c: Analysers make more use of formal mechanisms to control and improve time-related performance than prospectors and defenders.
Technology Motives and NPD Practices While defenders tend to ‘establish only a single core technology’ (Miles and Snow, 1978, p. 40), ‘[t]he Prospector develops multiple technologies’ (ibid., p. 58). If it comes to new product development, the analyser ‘. . . resembles the Prospector’s technological orientation’ (ibid., p. 73). We hypothesise: H4a: For prospectors, technology motives are more important drivers of NPD performance improvement than for analysers and defenders. As prospectors develop multiple technologies they need mechanisms to integrate and coordinate these in the various functions involved when developing new products (Miles and Snow 2003, p. 66). We hypothesise: H4b: Prospectors make more use of integrating design tools in order to improve their NPD function, than defenders. The use of the analysers’ NPD tools is comparable to that of the prospectors.
NPD Organisation Prospectors, innovative companies, have to be flexible and prepared for quick adaptation to changes and movements in the market place. Many studies have indicated that such companies are best managed with a low level of formalisation, i.e. not based on rules and procedures (Burns and Stalker, 1961, Hage and Aiken, 1970, Miles and Snow, 1978). Defenders, in contrast, have to be managed more formally in order to achieve efficiency, while analysers are likely to sit in between.
Volume 15
Number 1
2006
88
CREATIVITY AND INNOVATION MANAGEMENT
Although we are aware that there are other important organisational contingencies, notably centralisation and professionalism, we focus on formalisation. Burns and Stalker (1961) explicitly mention that mechanistic firms have a functional organisation structure with precisely defined rights and obligations – i.e. they are highly formalised. In organic firms, on the other hand, tasks are continuously redefined – i.e. they are much less formalised. Considering centralisation, Burns and Stalker (1961) write that mechanistic firms have ‘a hierarchical structure’ (ibid. p. 120), and ‘a tendency for the interaction between [its] members . . . to be vertical, that is, between superior and subordinate’ (ibid. p. 120). However, hierarchical structure and vertical communication lines are not necessarily an indication of a high degree of centralisation. Regarding professionalism, the differences between mechanistic and organic firms are not clear. Hage and Aiken (1970) argue that centralisation might have a negative influence on innovation, while professionalism is considered as being positive. However, research by Huber et al. (1993) indicates that centralisation and specialisation (an element of professionalism (Hage and Aiken, 1970) have no significant relation to innovation, while formalisation is considered to be significant negatively related. So, although centralisation and professionalism might have influence on innovation and, hence, the different strategic positions that
Miles and Snow (1978) suggest, interpreting the authors above, formalisation seems to be most salient of the dimensions to investigate. We hypothesise: H5a: Relative to analysers, defenders have a higher and prospectors a lower degree of formalisation in their NPD function. It makes logical sense to assume that the same pattern also holds for the formalisation of NPD projects. Hence, we hypothesise that: H5b: Relative to analysers, defenders have a higher and prospectors a lower degree of formalisation of their NPD projects.
Methodology Data To test the hypotheses, data from a quantitative benchmarking survey are used. The database comprises 55 manufacturing companies from Australia, Denmark and Norway. Most respondents are medium sized and large companies representing a wide range of industrial sectors (see Table 1). The survey was developed by an international consortium, and carried out late 2002/early 2003. Most companies were sampled randomly; some companies that had collaborated with consortium partners in previous projects were handpicked. The questionnaires were filled in by NPD managers of independent firms, and
Table 1. Number of companies representing industry sectors (numbers in brackets represent the NACE code for each industry) Industry sector (NACE) Food (15) Textile (17) Paper (21) Printing (22) Plastic (24) Chemicals (25) Metal products (28) Machinery (29) Electronics (31) Radio, TV, communication (32) Professional instruments (33) Automotive (34) Other transport (35) Furniture (36) Construction (45) Total
Volume 15
Number 1
2006
Defender
Analyser
4 1
3
1
1
7
1 1 1 1 2 6 4 1 1 1 2 2 1 27
Prospector
1 1 1 2 2 1
8
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
by managers responsible for the development of new products in business units of larger concerns.
89
ANOVA. See Appendix for the definition of the variables we used to test the hypotheses.
Operationalisation
Results and Discussion
We classified the respondents as prospector, analyser or defender, using two criteria:
The results from the analyses are shown in Table 2, and explained and discussed next.
• The newness of the company’s product portfolio; see Appendix for the definition of newness. • The respondents’ assessment of whether they regarded themselves as primarily product innovative, primarily production innovative, or both product and production innovative. We defined prospectors (N = 8) as respondents whose sales portfolio consists for more than 60% of true innovations (products new to the world) and new product lines, and who assessed themselves as primarily product innovative. We labelled companies with more than 60% of sales coming from improved or existing products and who assessed themselves as primarily production innovative defenders (N = 7). Finally, with more than 25% of sales coming from existing products, product improvement/line extensions and new lines/true innovations, analysers (N = 27) have struck a balance between innovating, improving and maintaining their product portfolio, and focus on both product and production innovation. If inconsistency between the two classification criteria occurred, we used the development in NPD and manufacturing performance within the last three years as an additional criterion, labelling companies with high improvement in NPD performance prospectors, companies with high improvement in manufacturing performance defenders, and finally companies with performance improvement in both NPD and manufacturing analysers. As a final step, we checked the classification of each respondent manually, based on our knowledge of the companies. We could not classify one of the respondents in any of these categories, and another 12 companies due to missing data. Consequently, the analysis presented in the next section is based on a sample of 42 companies. Data Analysis Using SPSS 11.5 for all analyses, we estimated the differences in motives and action programmes between the three types of strategies by calculating mean values for the three strategic types. We controlled the level of significant variation between the groups using © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
Hypothesis H1: Market as a Driver of NPD Improvement Analysers are more driven by market motives than prospectors, but significantly less so than defenders. H1a is therefore rejected. Discussion: A possible explanation for this finding is that the defenders know (and listen to) their (existing) markets much better than the prospectors (can) know the new markets they are developing all the time. Our data do not allow us to check this explanation. Although, as expected, analysers make the highest use of customer relation management (CRM), the differences with prospectors and defenders are not significant. We cannot therefore confirm H1b. An interesting observation concerns the relatively high use of CRM among the prospectors, which is close to that of the analysers. Discussion: A possible explanation of this finding is that different types of company actually use CRM, but in different ways – as an operational tool by defenders, to maintain their relationship with existing customers, as a more tactical tool by analysers, and as a strategic tool by prospectors who, aware of their lack of market knowledge, are seeking ways to improve their market intelligence function. H1c is rejected: the differences between the three types are small and insignificant and, against our expectation, defenders make more use of benchmarking than the other two types of organisation. Discussion: All three types of company seem to put more or less the same focus on monitoring the market for general information. This could indicate that defenders are moving away from doing ‘. . . little or no scanning of the environment for new areas of opportunity’ (Miles & Snow, 1978, p. 551) to actively seeking market information as an important input to NPD improvement efforts. Hypothesis H2: Cost/Price as Drivers of NPD Improvement We find that prospectors are least driven by cost/price motives, which supports our expectations. Contrary to hypothesis H2a, however, we find that cost/price motives are more important improvement drivers for analysers
Volume 15
Number 1
2006
Volume 15
Number 1
2006 0,69 1,23 1,03 0,54 1,21 0,82 0,98 1,07 0,54 0,79 0,79 0,69
2,43 2,33 3,00 2,57 3,14 2,57 3,57 2,43 3,14
SD
3,14 2,50 1,67
Mean
Prospectors
*** < 0,01, ** p < 0,05, * p < 0,15 PA Prospectors and analysers are significantly different from each other. PD Prospectors and defenders are significantly different from each other. DA Defenders and analysers are significantly different from each other. NS No significant differences between any of the strategies See Appendix for definitions of variables and scales used.
H1: Market as a driver of NPD improvement H1a: Market motives to improve NPD H1b: Use of customer relation management H1c: Benchmarking H2: Cost/price as drivers of NPD improvement H2a: Cost and price motives to improve NPD H2b: Use of activity based costing H3: Time as a driver of NPD improvement H3a: Time motives to improve NPD H3b: Use of concurrent engineering H3c: Use of stage-gate management H4: Technology as a driver of NPD improvement H4a: Technology motives to improve NPD H4b: Use of CAD/CAM in NPD H5: Organisation H5a: NPD organisation structure H5b: NPD project formalisation
Hypotheses
2,37 2,74
2,65 3,54
2,96 2,35 3,56
3,35 2,67
3,16 2,84 2,22
Mean
Analysers
Table 2. Differences in mean values and standard deviation (SD) between the three groups (ANOVA)
0,84 1,06
0,94 1,24
0,66 1,27 1,50
0,75 1,40
0,75 1,14 1,13
SD
2,43 2,67
2,50 2,33
2,60 3,00 5,00
3,25 1,83
3,80 2,29 2,20
Mean
SD
0,79 0,42
0,58 2,31
1,14 1,73 0.00
0,96 1,33
0,45 1,25 1,30
Defenders
NS PA*
NS DA*
NS NS PD**, DA*
PD*, PA*** NS
PD*, DA* NS NS
Significantly different pairs
90 CREATIVITY AND INNOVATION MANAGEMENT
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
than they are for defenders. Therefore, we reject H2a for the difference between analysers and defenders, but accept the hypothesised role of cost/price as drivers for NPD improvement by prospectors and defenders. Discussion: Even if the difference between analysers and defenders is not significant, the findings indicate that analysers are even more concerned about cost/price than defenders. Could it be that defenders have their cost under control, while analysers find it difficult to combine operational effectiveness and innovativeness in an efficient way, and therefore put relatively more effort into improving their performance in this area? This would be in line with our findings with regard to H2b, namely that analysers make more use of activity based costing (ABC) than prospectors and defenders, with the latter actually scoring lowest, rather than highest, as we had expected. Discussion: One explanation for this finding may be that defenders already have tools and procedures for cost control and improvement in place, and do not therefore put much effort into further improving this aspect. Analysers, in contrast, might have become aware of the difficulties to combine cost-effective operations with innovation, and are using ABC as a tool to confine this problem. Another explanation could be that analysers are more aware of financial risks than defenders, and therefore experience a higher need for tools like ABC. Hypothesis H3: Time as a Driver of NPD Improvement As to the role of time as a driver for improving their NPD function (H3a), the analysers score higher than the prospectors and the defenders. However, the differences are not significant. We cannot therefore confirm the hypothesis. Discussion: Miles & Snow published their work in 1978. Time has become a much more important competitive factor since, perhaps also for defenders, in addition to cost/price. Our analysis of the use of concurrent engineering (CE) and stage-gate management as mechanisms to control and improve time (H3b and H3c) produces an unexpected picture. Defenders make most use of CE, analysers less, and prospectors least. As to the use of stage-gate management, the same picture emerges. We therefore reject H3b, and H3c for the difference between analysers and defenders, and cannot confirm the hypothesised difference between prospectors and analysers. Discussion: The relatively low use of CE by prospectors is not surprising, nor is the high use of CE among the defenders, if this concept is implemented to improve design for manu© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
91
facturing instead of NPD project lead-time. In addition, could the unexpectedly high use the defenders make of stage-gate management indicate, as suggested above, that time has become a key factor, also for defenders? Alternatively, would the fact that time has always been a key factor for analysers (quick imitation of the prospectors’ products) mean that they already use stage-gate management? Further research is needed to unravel this finding. Hypothesis H4: Technology as a Driver of NPD Improvement Hypothesis H4a is rejected for the difference between prospectors and analysers, and not confirmed for the difference between prospectors and defenders. Contrary to the hypothesis, the analysers, not the prospectors, score highest. The difference between prospectors and defenders is in the hypothesised direction, but small and not significant. Discussion: The role of technology motives produces a surprising picture. Technology seems to be a more important driver of the improvement activities among the analysers than among the prospectors. This could indicate that analysers have become aware of the high margins from products launched first to the market, and are now aiming at being firstmovers with new products, and not fast followers, as Miles and Snow (1978) suggest. However, as the differences between the three groups are currently small and insignificant, future research is needed to find out whether this explanation is going to hold. Analysers make significantly more use of advanced tools in NPD than defenders. Prospectors, too, make considerably more use of advanced integrating tools than defenders, but the difference is not significant. Thus, H4b is only partly confirmed. Discussion: The analysers’ use of advanced tools in NPD is consistent with their ‘second and better’-strategy, which implies that they need to be able quickly to adopt and further develop promising products launched by prospectors (Miles et al., 1978). The use of advanced NPD tools among the analysers does not differ significantly from that of the prospectors, which confirms Miles and Snow (1978). The difference between prospectors and defenders is large, as expected, but not significant. Other than sample size effects, we have no adequate explanation for this finding. Hypothesis H5: Organisation H5a is rejected: the differences in formalisation degree of the three types of company are small and insignificant.
Volume 15
Number 1
2006
92
CREATIVITY AND INNOVATION MANAGEMENT
Discussion: The scale we used ranged from functional, via matrix/hybrid, to projectbased. It could well be that the difference between prospectors and analysers is small and insignificant as, today, most new product development processes are organised as projects. Therefore, it is reasonable to expect that prospectors, for whom new product development is core business, and analysers, with their binary organisation (Sutcliffe et al., 2000) of exploration and exploitation (March, 1991) tend to organise their NPD activities in similar ways. It is interesting, however, that defenders have the same low level of formalisation as the two other types. Could this indicate that the defenders try to be more innovative, adaptive to change and facilitate generating new ideas through loose structures and a project-based organisation? More in-depth research is needed to answer this question. H5b is rejected for the relationship between prospectors and analysers. We find that prospector have a significantly higher degree of formalisation of their NPD projects than analysers. The difference between defenders and analysers is small and insignificant. Discussion: This finding creates a surprising pattern. The high level of formalisation goes against Miles and Snow’s (1978) suggestion, and is also inconsistent with the seminal theory on the relationship between formalisation and innovation (Burns and Stalker, 1960; Hage and Aiken, 1970). The only explanation we have for this finding is that prospectors have a
high volume of development activities. Hence, they need to have a separate function for development activities, and they need to, and can (due to scale effects), organise this function relatively formally. Defenders, in contrast, might, due to the low volume of development projects, not have a standing, but an ad-hoc organisation for such activities and, consequently, a relatively low level of formalisation.
Conclusion We took our point of departure in Miles and Snow’s (1978) strategic types – prospectors, defenders and analysers, and studied new product development related differences between the three types through statistical analyses of data from 42 manufacturing companies in Australia, Denmark and Norway. Perhaps the most interesting feature of the study is not in the hypotheses accepted, but in the hypotheses rejected, not confirmed, or only partially accepted – see Table 3. We see two essentially different explanations. Operationalisation – The four strategies (prospectors, analysers, defenders and reactors) are ideal types. We classified the companies in our sample according to the newness of their product portfolio and their assessment of their innovation orientation. This resulted in eight prospectors, twenty-seven analysers, and seven defenders. We think this is an appropriate operationalisation, but may actually have included some firms in the wrong
Table 3. Summary of the results Hypotheses H1: Market as a driver of NPD improvement H1a: Market motives to improve NPD H1b: Use of customer relation management H1c: Benchmarking H2: Cost/price as drivers of NPD improvement H2a: Cost and price motives to improve NPD H2b: Use of activity based costing H3: Time as a driver of NPD improvement H3a: Time motives to improve NPD H3b: Use of concurrent engineering H3c: Use of stage-gate management H4: Design/ technology as drivers of NPD improvement H4a: Technology motives to improve NPD H4b: Use of CAD/CAM in NPD H5: Organisation H5a: NPD organisation structure H5b: NPD project formalisation
Volume 15
Number 1
2006
Result
Rejected Not confirmed Rejected Accepted for PD, rejected for DA Rejected Not confirmed Rejected Rejected AD, not confirmed PA Rejected PA, not confirmed PD Not confirmed for PD, accepted for AD Rejected PA, not confirmed DA Rejected PA, not confirmed DA
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
category and, for example categorised analysers with an excellent NPD function as prospectors, or included some ‘defenders’ that are perhaps better regarded as reactors. Our data do not provide any way to check this. Furthermore, we strictly linked our operationalisation of improvement programmes to single performance improvement motives (e.g. ABC – cost/ price, CRM – market intelligence, CE and stage-gate management – time). However, the (intended) impact of most if not all of these concepts goes beyond one single indicator; CE, for example, may be used to achieve cost/ price reductions, in addition to time benefits. Developments since 1978 – Miles and Snow published their work in 1978. According to March (1991), ‘[e]xploration and exploitation are linked in an enduring symbiosis . . . Each interferes with the other . . . [and] organizations persistently fail to maintain an effective balance between the two’. Indeed, Burns and Stalker (1961) and Porter (1980) proposed two either/or categories, not three (like Miles and Snow, 1978). However, there is ample evidence that companies are continuously looking for possibilities to combine the two capabilities, i.e. to excel in production operations and innovation. Examples include matrix and hybrid structures, flexible production systems, concurrent engineering, continuous improvement and, the latest ‘fashion’, the learning organisation. Furthermore, until the mid-1970s, competition was mostly price based. Companies today are increasingly required to combine operational excellence in terms of price, quality, variety and speed with innovation excellence (Boer and Gertsen, 2003). In effect, differences between companies, in terms of their competitive priorities and the systems they use to support their functioning, may be disappearing. If that is the case indeed, many of our findings are self-explanatory. The findings in this article suggest a couple of areas for further research. One is to investigate whether the role of the prospectors and defenders has developed or changed over the years. Our findings suggest that market and design have become important improvement drivers for defenders, and that prospectors are implementing programmes to improve the efficiency of their activities. We see two different explanations for this. Formulated as two hypotheses for further research: • In order to cope with the necessity to combine operational and innovation excellence, prospectors today are concerned about efficiency in addition to innovation, while defenders are putting more effort into innovation, in addition to efficiency. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
93
• The prospectors and defenders do not change strategy; they adopt the same practices but use them differently. Finally, whatever the case, we need to increase the sample size in order to improve the validity of the findings and control for contextual factors (i.e. industry type, company size).
Acknowledgement The authors thank the two anonymous reviewers for their valuable comments and recommendations.
References Andrews, D.R. (1971) The concept of corporate strategy, Dow Jones Irwin, Homewood. Boer, H. and Gertsen, F. (2003) From continuous improvement to continuous innovation: a (retro)(per)spective, International Journal of Technology Management, Vol. 26, No. 8, pp. 805–827. Burns, T. and Stalker, G.M. (1961) The management of innovation, Tavistock, London. Chandler, A.D. (1962) Strategy and structure, MIT Press, Boston. Hage, J. and Aiken, M. (1970) Social change in complex organizations, Random House, New York. Hayes, R.H. and Wheelwright, S.C. (1984) Restoring our competitive edge: competing through manufacturing, John Wiley & Sons, New York. Huber, G.P., Sutcliffe, K.M., Miller, C.C. and Glick, W.H. (1993) Understanding and predicting organizational change, in Huber, G.P. and Glick, W.H., Organizational change and redesign, Oxford University Press, New York. Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (2001) Principles of marketing, Prentice Hall, London. March, J.G. (1991) Exploration and exploitation in organizational learning. Organization Science, Vol. 2, No. 1, pp. 71–87. Miles, R.E. and Snow, C.C. (1978) Organizational strategy, structure, and process, McGraw Hill, New York. Miles, R.E., Snow, C.C., Meyer, A.D. and Coleman, H.J. (1978) Organizational strategy, structure, and process, Academy of Management Review July, pp. 546–562. Miles, R.E. and Snow, C.C. (2003) Organizational strategy, structure, and process, Stanford University Press, Stanford, California. Mintzberg, H. (1979) The structuring of organizations, Prentice-Hall, Englewood Cliffs. Owen, A.A. (1982) How to implement strategy, Management Today, pp. 50–53. Porter, M.E. (1980) Competitive strategy. Techniques for analyzing industries and competitors, The Free Press, New York. Richardson, P.R., Taylor, A.J. and Gordon, J.R. (1985) A strategic approach to evaluating manufacturing performance, Interfaces, Vol. 15, No. 6, pp. 15–27.
Volume 15
Number 1
2006
94
CREATIVITY AND INNOVATION MANAGEMENT
Shoham, A., Evangelista, F. and Albaum, G. (2001) Strategic firm type and export performance, International Marketing Review, Vol. 19, No. 3, pp. 236– 258. Slater, S.F. and Narver, J.C. (1993) Product-market strategy and performance: an analysis of the Miles and Snow types, European Journal of Marketing, Vol. 27, No. 10, pp. 33–51. Sutcliffe, K.M., Sitkin, S.B. and Browning, L.D. (2000) Tailoring process management to situational requirements, in: Cole, R.E. and Scott, W.R. (eds.), The quality movement & organization theory, Sage Publications, Thousand Oaks. Sweeney, M.T. (1991) Towards a unified theory of strategic manufacturing management, International Journal of Operations & Production Management, Vol. 11, No. 8, pp. 6–22. Sweeney, M.T. (1993) Strategic management: restructuring wasteful production to world-class, Journal of General Management, Vol. 18, No. 5, pp. 57–76. Volberda, H.W. (1998) Building the flexible firm. How to remain competitive, Oxford University Press, Oxford.
Appendix – Definition of Variables – Newness of the product portfolio: True innovations – Products, launched within the last three years that are new to your business unit and the world. New product lines – Products, launched within the last three years that are new to your business unit and allow you to maintain or improve your position in existing markets, or to access new markets. Product line extensions – Products, launched within the 2ast three years that are new to your business unit but added to an existing family. Improved products – Existing products modified within the last three years to offer improved performance to customers. Existing products – Products last launched, improved or modified three or more years ago. H1: Market as a driver of improvement – Market motives to improve NPD: ‘What are the main motives for the action programmes aimed at improving your business unit’s NPD performance for the next three years?’ 1 = Not important, 4 = Of critical importance. – Use of customer relationship management (CRM): ‘Business unit action programmes: Indicate the extent to which the programme (CRM) has been undertaken the last three years.’ 1 = None, 5 = High. – Use of benchmarking: ‘Business unit action programmes: Indicate the extent to which
Volume 15
Number 1
2006
the programme (benchmarking other companies’ practices and performance) has been undertaken the last three years.’ 1 = None, 5 = High. H2: Cost/price as drivers of improvement – Cost motives to improve production: ‘What are the main motives for the action programmes aimed at improving your business unit’s operations performance for the next three years?’ 1 = Not important, 4 = Of critical importance. – Use of activity based costing (ABC): ‘Business unit action programmes: Indicate the extent to which the programme (ABC) has been undertaken the last three years.’ 1 = None, 5 = High. H3: Time as a driver of improvement – Time motives to improve NPD: ‘What are the main motives for the action programmes aimed at improving your business unit’s NPD performance for the next three years?’ 1 = Not important, 4 = Of critical importance. – Use of concurrent engineering (CE): ‘NPD function action programmes: Indicate the extent to which the programme (stage-gate management) has been undertaken the last three years.’ 1 = None, 5 = High. – Use of stage-gate management: ‘NPD function action programmes: Indicate the extent to which the programme (stage-gate management) has been undertaken the last three years.’ 1 = None, 5 = High. H4: Technology as a driver of improvement – Technology motives to improve NPD: ‘What are the main motives for the action programmes aimed at improving your business unit’s NPD performance for the next three years?’ 1 = Not important, 4 = Of critical importance. – Use of CAD/CAM to improve NPD: ‘NPD action programmes: Indicate the extent to which the programme (CAD/CAM) has been undertaken the last three years.’ 1 = None, 5 = High. H5: Organisation – NPD organisation structure: ‘Which of the following best describes your business unit’s product development organisation?’ 1 = Functional, 2 = Hybrid/matrix, 3 = Project. – NPD project formalisation: ‘How would you describe the way NPD projects are managed in your business unit?’ 1 = No formal procedures None, 5 = Systematically and planned.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
NEW PRODUCT DEVELOPMENT IMPROVEMENT MOTIVES AND PRACTICES
95
Bjørge Timenes Laugen is Assistant Professor at the Department of Business Administration at University of Stavanger, Norway. He received his MSc in engineering from Aalborg University in 2000. His main research interest is the link between new product development, production, organisational development and continuous innovation. Harry Boer is Professor of Organisational Design and Change at the Center for Industrial Production, Aalborg University, Denmark. He holds a BSc in Applied Mathematics and an MSc and PhD both in Management Engineering. He has (co-)authored numerous articles and several books on subjects such as Organisation Theory, Flexible Automation, Manufacturing Strategy, and Continuous Improvement. His current research interest is continuous innovation, that is, the integration of dayto-day operations, incremental change and radical innovation. Nuran Acur is an Assistant Professor at the faculty of Business Administration, Bilkent University, Turkey. Nuran holds a BSc and an MSc degree in Statistics. In 1997, she came to the University of Strathclyde (UK), where she gained a PhD in Strategic Management. She was also actively involved in a number of project management and consultancy assignments, directly related to facilitating strategy development with a number of companies. After graduation, she joined Worldmark as an Engineering Consultant. In 2002, she joined Aalborg University. In 2005 she returned to Turkey to join Bilkent University. Her current research focuses on operations management, benchmarking and operations strategy.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
Volume 15
Number 1
2006
96
CREATIVITY AND INNOVATION MANAGEMENT
Team Polarity and Creative Performance in Innovation Teams Jan Kratzer, Roger Th.A.J. Leenders and Jo M.L. van Engelen Creativity is essential for research and development efforts. Research and development endavours are typically organized in teams. Unfortunately, little is known about how the polarity or in other words the conflict potential determines the creativity of such teams. Based on a sample of 51 research and development teams (R&D teams), this study examines the effects of polarity on team creativity and attemps to explore situational conditions when conflict potential is detrimental or facilitating R&D team creativity. The results show that foremost in the conceptualization phase of R&D efforts polarity positively influences the creative performance of R&D teams, whereas at lower degrees of complexity or in situations later in the development cycle polarity negatively impacts the creative performance of R&D teams.
Introduction ast developments in technology, product life cycles that become shorter, increased global competition, and more stringent customer demands strongly pressurize the pace and quality of innovation activities in companies. The central role of innovation activities is the long-term survival of companies (Ancona and Caldwell, 1992) but, at the same time, it constitutes a source of high risk and huge amounts of money get lost at attempts to innovate year by year (Stevens et al., 1997). As a consequence, companies search for ways to ensure successful innovation endeavors. The factors that determine success in product innovation, therefore, are of major concern to companies (e.g., Allen, 1984; Wheelwright and Clark, 1992 etc.). As research has shown the creative performance of innovation teams is one of the most important factors (e.g., Kratzer et al., 2004). Creative performance of innovation teams, however, is scarcely examined and knowledge about the conditions that enhance or obstruct innovation team’s creative performance is scant. One factor that has been recognized to impact the creative performance is the team’s communication (e.g., Leenders et al., 2003) and team communication also involves to a certain extent disagreements between communicating colleagues. The exist-
F
Volume 15
Number 1
doi:10.1111/j.1467-8691.2006.00372.x
2006
ence of disagreement arising from differences in opinions and perspectives is labeled task conflict in the scientific literature (Jehn, 1995) in contrast to interpersonal conflicts referring to incompatibilities among team members (Jehn, 1995). The present study exclusively refers to task conflict, which is labeled team polarity in the special case of innovation activities (Van Engelen et al., 2001, Leenders et al., forthcoming). Innovation activities refer to the systematic variation of solutions to subcomponents of the task. This systematic variation inherently involves the convergence and divergence of opinions among the members of innovation teams with the purpose to create a decreasing level of abstraction throughout the innovation cycle. In this sense team polarity is inherently part of modern and systematic design approaches (Leenders et al., forthcoming) and different to task conflict in work groups outside of innovation activities. In research it has been shown that team polarity differently affects the performance of innovation teams depending on certain situational conditions (e.g., Van Engelen et al., 2001). The relationship between team polarity and creative performance, however, is widely unexplored, in particular regarding different situational conditions of innovation activities. In this article, therefore, we investigate the relationship between team polarity and cre© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
TEAM POLARITY AND CREATIVE PERFORMANCE
ative performance and empirically examine situational conditions of this relationship.
Team Polarity and Creative Performance Thomas and Schmidt (1976) found that managers of innovation teams have to spend over 20 percent of their time in handling conflict. This is not surprising, given that almost 60 percent of innovation projects studied by Souder (1987) have some form of task-based disharmony, and that Hoegl and Gmuenden (2001) found the variation of stances to be one of the most critical performance factors. In much of the previous research, team polarity is generally deemed detrimental to performance and satisfaction (Blake and Mouton, 1984; Pondy, 1967). Team polarity can hamper the process of work by retarding crucial decisions, especially if the members are aware of the different opinions (Pelled, 1995). Therefore, it is no surprise that today’s managers and employees still overwhelmingly view team polarity as negative and something to be avoided or immediately resolved (Losey, 1994; Stone, 1995). Other studies, however, have examined the benefits of team polarity (e.g. Jehn, 1995). Disagreement about tasks can be helpful in identifying and better understanding the issues involved in the discussion (Putman, 1994), can assist in developing new ideas and approaches to tasks (Baron, 1991), can increase team member’s tendency to scrutinize task issues and to think more deeply (De Dreu and Weingart, 2003) and can make team members more flexible in their thinking (Carnevale and Probst, 1998). Even frequent disagreements on alternatives showed to be a quality of successful teams (Bourgeois, 1980). Nowadays, it is widely agreed that team polarity can have positive as well as negative consequences (e.g. Souder, 1987; Van Engelen, et al. 2001). As research indicates, the positive or negative impact of team polarity on performance is mediated by the tasks conducted (e.g. Jehn, 1997, Gladstein, 1984; Jehn and Mannix, 2001). Categorizing the task of innovation team activities is a sophisticated issue (Steele, 1975). Therefore, among others, Wheelright and Clark (1992) propose to categorize innovation activities according to the degree of product and process change. If changes are situated on an incremental level, one can speak of derivative projects. Changes on a moderate level are labeled as platform projects, whereas breakthrough projects imply major changes in terms of product as well as process. Researchers confirmed that © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
97
team polarity is a hindrance in groups performing tasks that involve low degrees of product and process changes as it interferes with efficient processing (Guzzo, 1986). When groups consistently perform the same or similar tasks, team polarity that arises from the task may be interruptive, counterproductive, and time consuming for the group and its members (Guzzo, 1986). When groups conduct tasks that involve high degrees of product and process changes, differing viewpoints should be encouraged and alternative consequences should be considered (e.g. Putman, 1994; Tjosvold et al. 1992). As a study of Jehn (1995) indicates, team polarity should be stimulated to increase the performance of groups executing tasks that involve high degrees of product and process changes, based on the negative effects that a lack of team polarity has on benefits. However, even when considering tasks of high degrees of product and process changes team polarity may decrease the creative performance when exceeding a certain threshold as indicated in studies of Van Engelen et al. (2001) and Leenders et al. (forthcoming). Thus, it can be expected that in innovation teams executing tasks with low degrees of product and process changes team polarity affects the creative performance negatively and in innovation teams executing tasks with high degrees of product and process changes inversely U-shaped. H1: In innovation teams executing activities that involve low degrees of product and process changes team polarity affects the creative performance negatively. H2: In innovation teams executing activities that involve high degrees of product and process changes team polarity affects the creative performance inversely U-shaped. Almost all innovation teams execute development efforts using stage-gate approaches (e.g., Wheelwright and Clark, 1992) nowadays. This development goes back to the 60s. Companies are put under pressure so much that they started to structure the innovation activities. Tushman (1977), based on the previous work of Marquis (1969), describes these emerging structures and makes a distinction between different phases that can be seen within the innovation process: idea generation, problem solving and implementation. Hayes, Wheelwright and Clark (1988) created the development funnel that provides a framework for current thinking about the innovation process. This funnel concept can be transferred from an organizational to the team level. According to the concept, the innovation projects start out
Volume 15
Number 1
2006
98
CREATIVITY AND INNOVATION MANAGEMENT
with the creation of new product and process ideas. In the beginning, the main task is the creative widening of the funnel by knowledge acquisition and concept investigation. Thereafter, the funnel must be narrowed by assessing the ideas and concepts resulting in a prototype and a basic design, followed by pilot production, manufacturing ramp-up, and market introduction. According to the model, two main phases of the innovation cycle can be distinguished: the conceptualization phase as a period of creative idea and product generation and the commercialization phase as a period of translating decisions into fully-fledged products and processes (Kratzer, 2001). Since the conceptualization phase refers to major product and process changes and the commercialization stage to remaining minor product and process changes it can be expected that the relationship between team polarity and creative performance of innovation teams at the conceptualization phase is inversely U-shaped and at the commercialization phase negative. This expectation is widely confirmed in the work of Ouchi and Price (1983). H3: In innovation teams executing activities at the conceptualization phase team polarity affects the creative performance inversely U-shaped. H4: In innovation teams executing activities at the commercialization phase team polarity affects the creative performance negatively.
The Empirical Study Sample and Procedure For this study we employed data on 51 innovation teams in eleven companies. The companies were engaged in the development of copy machines, mobile phones and the technical equipment for biotechnical companies. Thus, the sample was very homogeneously selected among high-tech companies developing electronic products. Sampling high-tech companies allows capturing teams who execute tasks involving high and low degrees of product and process changes as well as teams who are distributed over the two phases of the innovation cycle. In this way the sample was very appropriate to study the issues raised earlier. All team members, a total of 264, were requested to fill out a questionnaire regarding their views on certain task-related aspects, the position of the team within the stage-gate process and whether there is a product and/or process change involved in the development process. In addition, we asked the team members several questions regarding their background
Volume 15
Number 1
2006
and their membership. On average, the team members were aged 35, had been in their field of specialization for 9.2 years, and were almost exclusively (94 percent) male. Members had been with the company for an average of 7.3 years. The main fields of specialization were chemical engineering (13 percent), mechanical engineering (23 percent), and computer science (22 percent). Most had a polytechnic education (44 percent) or an academic education (30 percent) and 12 percent had a doctorate. The questionnaires were administered on site during formal team meetings and achieved a response rate of 95 percent (the five percent missing is due to members not being present at the meetings). At these meetings, a researcher was present to answer potential questions. The questionnaire was personalized such that each team member could unequivocally report with whom he or she maintained interaction. This individual identification was removed once the data were entered, such that the information about the identity of the individuals was invalidated.
Creative Performance of the Innovation Teams Measuring creative performance is notoriously difficult. In most studies creative performance is measured in either of two ways. First, by the performance of (groups of) individuals on standardized creative performance tests, or second by measures those entail the rating of actual products in response to open-ended instructions. In the current case, however, none of these methods can be applied. Since the task of an innovation team is complicated and multi-faceted, it is not clear what kind of standardized system could be used or what outputs can be rated to score the team’s creative performance. There are only very few studies executed yet in an innovation context and none of them on the level of teams measuring the creative performance. According to the underlying meaning of the variable ‘creative performance’ and several pre-tests of the following and other operationalizations, we measured this variable by asking the team members to rate the teams’ creative accomplishment – in the sense of generating new ideas, methods, approaches, inventions, or applications – on a 7-point scale (from ‘not at all’ to ‘highly’). For all 51 teams, we collected these ratings and averaged the scores per team as the measure of creative performance. This measure and operationalization of creative performance was taken from the questionnaire used to collect the data reported by Cohen © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
TEAM POLARITY AND CREATIVE PERFORMANCE
(Cohen and Cohen, 1991; Cohen and Zhou, 1991), Shenhav (1992), and Zuckerman (Gabbay and Zuckerman, 1998; Reagans and Zuckerman, 2001), and has been validated in the literature. The measure for creative performance thus derives from the assessment by its members; in this sense, it is a quasi self-report measure. Self-report measures are often criticized, mainly through the argument that some people are unable to report their performance accurately, due to reasons of poor introspection (Locke et al., 1988). It was possible for us to test the quality of these self-reports since team manager data were available for 20 of the teams. For these teams we compared the manager ratings with those of the team members. The average team managers rating of the creative performance of their teams was 4.82 on a 7-point scale slightly higher than the rating given by the team members (4.67). A pairedsamples t-test of the difference between the two samples (team members versus team managers) showed no statistically significant difference between the two ratings (t = 1.26, p < 0.22). In order to investigate whether there were certain teams in which the difference between manager and team member ratings was large, we calculated the absolute deviations between the scores of the team members and the team managers; the absolute deviations vary between 0 and 1.20, with a mean of 0.49. In sum, the rating by the team members themselves scarcely differs from the outsiders rating provided by the team managers. The rating of creative performance by the team members themselves, therefore, appears a valid procedure in our sample.
Team Polarity The team polarity has been defined as differences in opinions and perspectives among members of innovation teams in the process of systematic variation of problem solutions. To investigate the team polarity the team members were asked to assess the quality of the conceptual design with respect to a later market success and to asses the quality of the created prototype with respect to a later market success, for each item along a seven-point scale from 1 (it very certain will not) to 7 (it very certain will). Thereafter the variance of opinions in each team on these two variables was used to create a team polarity measure for each innovation team. The squared term of team polarity and the linear term of team polarity are highly correlated. We solved this by centering team polarity by subtracting the overall mean from it. The squared value incorporated into the regres© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
99
sion analyses is the squared value of this centered variable.
Degree of Product and Process Change The degree of product and process change was investigated by asking every team member to indicate whether his/her work involves the development of new product/process features and/or the improvement of existing product/ process features. After, these indicators were coded into 0 for no indication; −1 for an indication of an improvement of existing product/ process features; and 1 for the development of new product/process features. The coding made it possible to calculate innovation team scores indicating the degree of product and process change. When they majority of team members indicate that they are involved in the development of new product/process features the innovation team score is higher than 0, when they majority of team members indicate that they are involved in the improvement of existing product/process features the innovation team score is lower than 0. Since most innovation teams indicate higher scores than 0 (37 innovation teams) the median of the team score distribution was used the discriminate between innovation teams with lower degrees of product and process change and innovation teams with higher degrees of product and process change. Distribution of all 51 teams according to the degree of product and process change Low degree 24 teams
High degree 26 teams
Phase of the Innovation Process The conceptualization phase has been described as the phase of concept formulation, testing and researching of possible components until the point where the basic design and the proto-type of the new product has been found (e.g., Kratzer, 2001). During the commercialization phase the team will improve the proto-type, extend the marketing activities, conducts customer-tests (alpha and beta-testing), and start with the production of the new product (Kratzer, 2001). Accordingly, the following list of items including a description about them has been used to discern between the mentioned two phases: toolingup stage, laboratory stager, engineering stage, product- and market preparation, marketintroduction. The innovation team members
Volume 15
Number 1
2006
100
CREATIVITY AND INNOVATION MANAGEMENT
were asked to mark the point of the project state along these five milestones of the innovation process (for each item along a five-point scale from 1 it does not fit at all to 5 it totally fits). Then after coding the data the median of these five items of every team was calculated. If the median was at the tooling-up stage or at the laboratory stage the teams were sorted to teams situated at the conceptualization phase. On the other hand, if the median was at the stage of product- and market preparation or at the stage of market introduction the teams were classified into the commercialization phase of innovation activities. In 5 teams the median were situated at the engineering stage. This stage represents the cut-point between the two phases of innovation activities because there an elaborated proto-type goes into a stage of testing. Therefore a closer look was needed to classify these teams into the innovation phases. That was done by excluding the item engineering-stage from the analysis and to calculate the median of the 4 remaining items. If this median was at the tooling-up stage or at the laboratory-stage the teams were still in the conceptualization phase. And consequently, if the median appeared to be at the two other stages the teams were sorted to the commercialization stage of innovation activities. Distribution of all 51 teams over the two phases of innovation activities Conceptualization phase 32 teams
Commercialization phase 19 teams
Control Variable There are numerous other characteristics of the team and its context that have been or may be shown to influence the creative performance of innovation teams. While it is not possible to include all these variables in this study, we did control for one variable that strongly has been suggested to affect team performance. Team tenure: It is often argued that the creative performance of teams decreases with their age. For instance, Lovelace (1986) contends that the creative performance of research scientists decreases with the time they are part of a group. The main argument is that with team age, problem solving and cognitive processes become more established, reinforced, and habitual through uncertainty reduction by team members. Since it is not the
Volume 15
Number 1
2006
age of the team per se, but the time its current members have been part of the team, we measured team tenure as average number of years that team members had been member of the team.
Analysis In this research, we are interested in the factors that explain the creative performance of innovation teams. In innovation settings where the object is complex and requires skills from multiple bases of expertise, it is difficult to separate out individual- from team-level contributions. In the present article we follow the suggestion of Drazin et al. (1999) and Klein et al. (1994) and assume individuals to act homogeneously within the teams as they engage in creative behavior. In order to statistically justify this aggregation, a one-way analysis of variance was conducted to determine if there was greater variability between teams than within teams on team creative performance and team polarity ratings. The analysis of variance supported the appropriateness of the aggregation (for creative performance F = 3.44, p < 0.000; for team polarity F = 3.37, p < 0.000). Prior to aggregating team members’ evaluations, interrater agreement on the team’s creative performance and team polarity was calculated by averaging the inter-rater reliability (IRR) score suggested by James et al. (1984). The IRR for creative performance was 0.75 and for team polarity 0.72. The IRR justified the use of the arithmetic mean as a team score. The measures of creative performance and team polarity are based on ordinal Likert scales. Likert scales are very commonly used with interval procedures, since the use of Likert scales do not seem to violate the assumptions for executing multiple regressions and do not seem to affect Type I and Type II errors as a review of research on this topic reveals (Jaccard and Choi, 1996). The means, standard deviations, and bivariate correlations for all variables are presented in Table 1. The overall correlations suggest that all variables can be included in one regression model. In addition, an analysis of the Variance Inflation Factors (VIF’s) showed the VIF’s in all models to be lower than 2.5. Therefore, all variables could be maintained in the regression analysis (Neter et al., 1996). In order to investigate the hypotheses four multiple regression analyses are conducted. In the text significant results are referred to an alpha of 0.05 or lower. For testing hypotheses 2 and 3 the expected nonlinear effects were tested by including the polynomial quadratic term in the regression function. When the polynomial quadratic term © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
TEAM POLARITY AND CREATIVE PERFORMANCE
101
Table 1. Descriptive statistics (n = 51) Variable Creative performance Phase Degree of Change Team polarity Team polarity2 Team tenure
M
SD
1
2
3
4
5
6
4.59 1.37 1.51 1.67 4.13 2.04
0.66 0.49 0.51 1.18 5.59 1.17
–
0.04 –
0.04 −0.14 –
−0.31* 0.25 −0.23 –
−0.32* 0.22 −0.27 0.11 –
−0.32* −0.06 −0.01 0.05 0.12 –
* Significant at 0.05.
Table 2. Regression results: Team polarity and creative performance at low degrees of change
Table 4. Regression results: Team polarity and creative performance at conceptualization phase
Variables Constant Team polarity Team tenure Adjusted R2 = 0.15
B
SE
Sig, T
Variables
4.79 −0.17 −0.15
0.29 0.13 0.08
0.000* 0.033* 0.243
Constant Team polarity Team polarity2 Team tenure Adjusted R2 = 0.33
B
SE
Sig, T
4.67 0.21 −0.22 −0.23
0.35 0.12 0.72 0.19
0.000* 0.017* 0.003* 0.252
* Significant at 0.05; n = 25. * Significant at 0.05; n = 32.
Table 3. Regression results: Team polarity and creative performance at high degrees of change Variables Constant Team polarity Team polarity2 Team tenure Adjusted R2 = 0.03
B
SE
Sig, T
4.07 0.15 −0.24 −0.29
0.45 0.13 0.69 0.21
0.000* 0.245 0.725 0.112
* Significant at 0.05; n = 26.
has a negative sign the shape of the distribution is inversely U-shaped.
Results In Table 2 the results testing hypothesis 1 are presented. As it is displayed the relationship between team polarity and creative performance is indeed negative on a statistically significant level. The team tenure does not affect the creative performance of the innovation teams under these conditions. The explained variance is 15%. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
In Table 3 it was investigated how team polarity affects creative performance under high degrees of product and process change. The hypothesized inversely U-shaped effect indeed appears since the squared term of team polarity has a negative sign. The effect, however, is not statistically significant. The explained variance with 3% is rather low. It was also examined whether there is a linear effect of team polarity on the creative performance of the innovation teams, but no statistically significant effect was found. Table 4 illustrates the results of the relationship between team polarity and creative performance at the conceptualization phase. The results show that hypothesis 3 is confirmed. There is an inversely U-shaped effect of the relationship between team polarity and creative performance. The explained variance is considerably high when taking the small sample size and the small number of independent variables into account. Team tenure does not affect the creative performance on a statistically significant level. In Table 5 the hypothesis 4 is tested. As it can be seen team polarity affects the creative performance of innovation team negatively. The effect is on a statistically significant level and confirms hypothesis 4. The explained variance
Volume 15
Number 1
2006
102
CREATIVITY AND INNOVATION MANAGEMENT
Table 5. Regression results: Team polarity and creative performance at commercialization phase Variables Constant Team polarity Team tenure Adjusted R2 = 0.22
B
SE
Sig, T
4.23 −1.14 −0.32
0.25 0.41 0.08
0.000* 0.011* 0.002*
* Significant at 0.05; n = 19.
is moderately high with 22% considering the small sample size and the number of independent variables. Team tenure affects the creative performance on a statistically significant level under these conditions. The effect is negative. Summarizing the results it can be stated that 3 of the 4 formulated hypotheses are confirmed on base of the results presented. The team polarity negatively affects the creative performance of innovation teams at low degrees of product and process change. The same result turns out at the commercialization phase of innovation team activities. At the conceptualization phase of innovation activities the relationship between team polarity and creative performance is inversely U-shaped.
Summary and Conclusions The paper addresses one factor that impacts the creative performance of innovation teams. In research it has been shown that one important aspect of communication, namely the involved disagreements, influences the performance of innovation teams. In the context of innovation teams the level of disagreement among the team members is labeled team polarity since the design process itself involves a systematic variation of opinions. Knowledge about the effect of team polarity on team performance, in particular on the creative performance of innovation teams is scarce. Therefore the study investigated the effect of team polarity on the creative performance. In the first part it is discussed how team polarity might affect the creative performance of innovation teams. There it turned out that team polarity might have detrimental or facilitating effects mediated by the conditions that characterize the innovation teams. In this section it was hypothesized that team polarity affects the creative performance negatively under conditions of low product and process change and
Volume 15
Number 1
2006
inversely U-shaped under conditions of high product and process change. Moreover, it is hypothesized that in the conceptualization phase of the innovation process the effect of team polarity on the creative performance is inversely U-shaped and at the commercialization stage negative. In the second part of the study the formulated hypotheses are empirically examined, showing that three of the four hypotheses can be confirmed. It could be confirmed that team polarity affects the creative performance of innovation teams negatively under conditions of low product and process change. Moreover, at the conceptualization phase team polarity is inversely U-shaped related to the creative performance, whereas at the commercialization phase of innovation activities negatively. The results make it possible to draw three central conclusions. First of all it was manifested that team polarity is indeed an important factor that impacts the creative performance of innovation teams. Second, the results clearly indicate that the effect of team polarity is mediated by the conditions under which the innovation teams operate. In the beginning of an innovation process or at the conceptualization phase team polarity has positive as well as negative effects. A certain degree seems to be facilitating the creative performance, whereas too high degrees seem to be detrimental. At the commercialization phase the relationship turns into a negative one. This result indicates the managerial challenge to realize certain degrees of team polarity at the conceptualization phase and to minimize these degrees at the commercialization phase. There are many managerial tools that can do so, such as changing work-related interdependencies (e.g., Leenders et al., 2004), the use of electronic means of communication (e.g., Matzat, 2001), or by navigating the virtuality of R&D teams (e.g., Kratzer et al., 2005). The most important managerial instrument, however, are the systematic design methods itself. Since polarity is inherently part of systematic variations of problem solutions this design method can be adapted to the requirements of creative performance (Leenders at al., forthcoming). Also with respect to the degree of product and process change the managerial challenge of adapting to different conditions seems obvious. Although it could not be statistically established that the effect between team polarity and creative performance is inversely U-shaped under conditions of high product and process change it also could not be rejected. This result is leading to the third conclusion. In a paper by Van Engelen et al. (2001) it was shown that team polarity affects © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
TEAM POLARITY AND CREATIVE PERFORMANCE
the team performance very differently according to the detailed subject of the disagreement. In the present study it was not possible to investigate the effects of team polarity in this detail. Further research on this topic, however, should concentrate to study very thoroughly the detailed subjects of the disagreement. It might be that the relationship between team polarity and creative performance of innovation teams is not only mediated by external conditions as the degree of product and process change or the phase of the innovation process, but also by the subject of the disagreement.
References Allen, T.J. (1984) Managing the flow of technology: Technology transfer and the dissemination of technological information within the R&D organization, Cambridge, MA.: MIT Press. Ancona, D.G. and Caldwell, D.F. (1992) ‘Bridging the boundary: External activity and performance in organizational teams’, Administrative Science Quarterly, Vol. 37, pp. 634–65. Baron, R.A. (1991) ‘Positive effects of conflict: A cognitive perspective’, Employee Responsibilities and Rights Journal, Vol. 4, pp. 25–36. Blake, R. and Mouton, J. (1984) The Managerial Grid, Houston, TX: Gulf Publishing. Bourgeois, L.J. (1980) ‘Performance and Consensus’, Strategic Management Journal, Vol. 1, pp. 227– 48. Carnevale, P.J. and Probst, T.M. (1998) ‘Social values and social conflict in creative problem solving and categorization’, Journal of Personality and Social Psychology, Vol. 74, pp. 1300–9. Cohen, B.P. and Cohen, E.G. (1991) ‘From Groupwork Among Children to Innovation Teams’, Advances in Group Processes, Vol. 8, pp. 235–51. Cohen, B.P. and Zhou, X. (1991) ‘Status processes in enduring work groups’, American Sociological Review, Vol. 56, pp. 179–88. De Dreu, C.K.W. and Weingart, L.R. (2003) ‘Task versus relationship conflict, team performance, and team member satisfaction: A meta-analysis’, Journal of Applied Psychology, Vol. 88, pp. 741–9. Drazin, R., Glynn, M.A. and Kazanjian, R.K. (1999) ‘Multilevel theorizing about creativity in organizations: a sensemaking perspective’, Academy of Management Review, Vol. 24, pp. 286–307. Gabbay, S.M. and Zuckerman, E.W. (1998) ‘Social capital and opportunity in corporate R&D: The contingent effect of contact density on mobility expecations’, Social Science Research, Vol. 27, pp. 189–217. Gladstein, D.L. (1984) ‘Groups in context: A model of task group effectiveness’, Administrative Science Quarterly, Vol. 29, pp. 499–517. Guzzo, R.A. (1986) ‘Group decision making and group effectiveness in organizations’, In: Goodman, P.S. (ed.), Designing effective work groups, San Francisco: Jossey-Bass. © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
103
Hayes, R.H., Steven, C., Wheelwright, K.B.C. and Clark, K.B. (1988) Dynamic manufacturing: creating the learning organization, New York: The Free Press. Hoegl, M. and Gemuenden, H. (2001) ‘Teamwork Quality and the Success of Innovative Projects: A Theoretical Concept and Empirical Evidence’, Organization Science, Vol. 12, pp. 435–49. Jaccard, J. and Choi K.W. (1996) LISREL approaches to interaction effects in multiple regression, Thousand Oaks, CA: Sage Publications. James, L.R., Demaree, R.G. and Wolf, G. (1984) ‘Estimating Within-Group Interrater Reliability With and Without Response Bias’, Journal of Applied Psychology, Vol. 69, pp. 85–98. Jehn, K.A. (1995) ‘A Multimethod Examination of the Benefits and Detriments of Intragroup conflict’, Administrative Science Quarterly, Vol. 40, pp. 256–82. Jehn, K.A. (1997) ‘A qualitative Analysis of Conflict types and dimensions in organizational groups’, Administrative Science Quarterly, Vol. 42, pp. 530– 57. Jehn, K.A. and Mannix, E.A. (2001) ‘The dynamic nature of conflict: A longitudinal study of intragroup conflict and group performance’, Academy of Management Journal, Vol. 44, pp. 238–51. Klein, K.J., Danserau, F. and Hall, R.J. (1994) ‘Level issues in theory development, data collection, and analysis’, Academy of Management Review, Vol. 19, pp. 195–229. Kratzer, J. (2001) Communication and performance: An empirical study in innovation teams, Thela Thesis: Amsterdam. Kratzer, J., Leenders, R.Th.J.A. and Van Engelen, J.M.L. (2004) ‘Stimulating the potential: creativity and performance in innovation teams’, Journal of Creativity and Innovation Management, Vol. 13, pp. 63–70. Kratzer, J., Leenders, R.Th.A.J. and Van Engelen, J.M.L. (2005) ‘Navigating creative team performance in virtual R&D environments’, Research-Technology Management, April–March, pp. 37–41. Leenders, R.Th.A.J., Van Engelen, J.M.L. and Kratzer, J. (2003) ‘Virtuality, Communication, and New Product Team Creativity: A Social Network Perspective’, Journal of Engineering and Technology Management, Vol. 34, pp. 69–92. Leenders, R.Th.A.J., Kratzer, J. and Van Engelen, J.M.L. (2004), Building Creative Virtual New Product Development Teams, PDMA-Toolbook for New Product Development 2004, John Wiley & Sons, pp. 69–86. Leenders, R.Th.A.J., Kratzer, J. and Van Engelen, J.M.L. (forthcoming), ‘Do modern systematic design methods affect the creativity of engineering design teams?’, Journal of Product Innovation Management. Locke, E.A., Latham, G.P. and Erez, M. (1988) ‘The Determinants of Goal Commitment’, Academy of Management Review, Vol. 13, pp. 23–39. Losey, M.R. (1994) ‘Managing in a era of workplace violence’, Managing Office Technology, Vol. 39, pp. 27–8. Lovelace, R.F. (1986) ‘Stimulating Creativity Through Managerial Interventions’, R&D Management, Vol. 16, pp. 161–74.
Volume 15
Number 1
2006
104
CREATIVITY AND INNOVATION MANAGEMENT
Marquis, D.G. (1969) The anatomy of successful innovations, In: Tushman, M.L. and Moore, W.L. (eds.), Readings in the management of innovation, Cambridge, MA: Ballinger. Matzat, U. (2001) Social networks and cooperation in electronic communities, Thela Thesis: Amsterdam. Neter, J., Kutner, M., Nachtsheim, C. and Wasserman, W. (1996) Applied Linear Statistical Model (4th ed.). Homewood, IL., Irwin. Ouchi, W.G. and Price, R.L. (1983) Hierarchies, Clans, and Theory Z: A new perspective on organozational development, In: Hackman, J.R., Lawler III, E.E. and Porter, L.W. (eds.), Perspectives on Behavior in Organizations, McGraw Hill, New York. Pelled, L.H. (1995) ‘Demographic diversity, conflict, and work group outcomes: An intervening process theory’, Organization science, Vol. 6, pp. 45– 56. Pondy, L.R. (1967) ‘Organizational Conflict’, Administrative Science Quarterly, Vol. 12, pp. 296– 320. Putman, L.L. (1994) ‘Productive Conflict: Negotiation as implicit coordination’, International Journal of Conflict Management, Vol. 5, pp. 285–99. Reagans, R. and Zuckerman, E. (2001) ‘Networks, Diversity, and Productivity: The Social Capital of Corporate R&D Teams’, Organization Science, Vol. 12, pp. 502–17. Shenhav, Y.A. (1992) ‘Expected Managerial Careers with Growing and Declining R&D Establishments’, Work and Occupations, Vol. 18, pp. 46–71. Souder, E.W. (1987) Managing new product innovations, Lexington Books, Lexington, Massachusetts. Steele, L.W. (1975) Innovation in Big Business, New York: American Elsevier Publishing Company, Inc. Stevens, G. A. and Burley, J. (1997) ‘3,000 ideas equals 1 commercial success!’ Research-Technology Management, Vol. 40, 16–27. Stone, R.A. (1995) ‘Workplace homicide: A time for action’, Business Horizon, Vol. 34, pp. 17–20. Thomas, K. and Schmidt, W. (1976) ‘A survey of managerial interests with respect to conflict’, Academy of Management Journal, Vol. 10, pp. 315–8. Tjosvold, D., Valerie, D. and Choy W. (1992) ‘Managing conflict between departments to serve customers’, Human Relations, Vol. 45, pp. 1035–54. Tushman, M. (1977) ‘Communication across organizational boundaries: Special boundary roles in the innovation process’, Administrative Science Quarterly, Vol. 22, pp. 654–67. Van Engelen, J.M.L., Kiewiet, D.J. and Terlouw, P. (2001) ‘Improving Performance of Product Development Teams Through Managing Polarity’,
Volume 15
Number 1
2006
International Studies of Management and Organization, Vol. 31, pp. 46–63. Wheelwright, S.T. and Clark, K.B. (1992) Revolutionizing Product Development, New York, London, Toronto, Sydney, Tokyo, Singapore: The Free Press.
Jan Kratzer (
[email protected]) is Assistant Professor at the Faculty for Management and Organization at the University of Groningen, The Netherlands. He received his Master’s degree in Business Science and Sociology at the University of Leipzig, Germany. After, he conducted 4 years of research in R&D departments in the Netherlands. This research resulted in his Ph.D. from the University of Groningen on Communication and Performance in Innovation Teams. Currently, his main research interests concern human factors and human networks in product development processes especially regarding developments in virtual teams. Roger Th.A.J. Leenders (R.T.A.J.
[email protected]) is Associate Professor of Business Development at the Faculty of Management and Organization, University of Groningen, The Netherlands. He holds an M.Sc. in Econometrics and a Ph.D. in Social Sciences. His current research focuses on the positive and negative effects of social networks on organizations in general, and innovation activity in particular. He is mainly interested on how social networks assist or obstruct the performance of innovation teams and their members. Jo M.L. van Engelen (jovanengelen@ mac.com) studied Physics and Mathematics at Eindhoven University of Technology as well as Management and Organization at Twente University, The Netherlands. He received his Ph.D. from Twente University on Information Technology in Marketing Management. He has a three-year experience as management consultant and six years experience at Océ (Copying and Printing) in several management functions. At the moment, he is Professor of Business Development and Business Research Methods at the University of Groningen, The Netherlands, and consultant and board member for several leading companies in the Netherlands.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
105
Understanding the Benefits and Detriments of Conflict on Team Creativity Process Ming-Huei Chen Intra-team conflict research has shown the different effects of conflict on team output, but it has not fully addressed how conflict influences the team creativity process in different task types of project teams over the project life cycle. Conflict, project life cycle, and project types are important predictors of team creativity. This paper focuses on examining the degree of conflict that the different types of project teams experienced, and more specifically this paper seeks to understand the benefits and detriments of conflict on the team creativity process. Furthermore, this paper shows that the project life cycle is a significant moderator of the conflict-creativity relationship in different project teams.
Introduction onflict often occurs in the project team process since project teams are composed of individuals from diverse skills, disciplines, knowledge, and experiences. Project teams have become the fundamental unit of organizations that strive to implement strategies to enhance innovation because of the turbulent environment and the rise of competition in business (Gladstein, 1984; Katzenbach and Smith, 1993). Teamwork creates more opportunities for employees to participate in problem-solving and decision making, and offers a range of lines to ensure that creative ideas are supported and eventually brought to fruition in the workplace (King and Anderson, 1990). Diversified views and disciplines can enhance the creativity of teams to complete the task; however conflict on task agenda and on interpersonal relationship can also emerge. Research on conflict pointed out that whether conflict was beneficial or detrimental depended on the type and level of conflict and the nature of team task (Jehn, 1995). Furthermore, the dynamic nature of conflict is also found to be varied during the early, middle, and late stages in a project’s life cycle (Jehn and Mannix, 2001). Therefore, managing conflict has become an important issue in project
C
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
management since the divergence of opinions can stimulate creative ideas and solutions to the problems, but can also be detrimental to the creativity process. In this paper, I argued that conflict, project type, and project life cycle are important predictors of creativity in project teams. Two types of project teams, labeled as service-driven and technologydriven project teams, were drawn from Taiwan’s context and were compared for their experience in managing conflict on project team processes. Project teams are defined in the paper as: (1) the project team is regarded as a social system; (2) team members are interdependent to finish a common task assigned by the organization during a fixed period of time; and (3) the project outcomes need to meet stakeholders’ requirements (Ancon and Caldwell, 1992).
Team Creativity Creativity is generally studied on three levels including an individual (Oldham and Cummings, 1996), team (Paulus, 2000; Rickards and Moger, 2000) and organizational level (Woodman et al., 1993). For creativity on the individual level, Kirton (1989) proposes that creative styles underline the behavioral preferences forming a continuum from the most adaptive
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00373.x
106
CREATIVITY AND INNOVATION MANAGEMENT
to the most innovative. Recently, Kaufmann (2004) expands the perspective of novelty on the stimulus and novelty on the solution required by proposing a new model of reactive creativity and proactive creativity. For creativity on the organizational level, Woodman et al. (1993) proposes a comprehensive framework enriching knowledge to understand influences across levels of analysis of individual, team, and organization. Creativity in project teams plays a bridging role for linking individual creativity and organizational creativity. Project teams were often applied by organizations in order to generate creative ideas, and transfer these newly created ideas into useful technology, products, or services (Iansiti and West, 1997; Thamhain, 2003). Existing knowledge might be inadequate to satisfy the new specifications required for competitive new product advantages, requiring high levels of creativity from the project teams (Leenders et al, 2003). Creativity is increasingly essential to the nonroutine performance of project teams in new product development or R&D settings because we are facing rapid advances in science and technology, a turbulent and competitive environment, and short life term of products. The arguments that creativity is particularly worthy of study at a project team level are as follows: Firstly, creativity in project teams is a subset of the broad domain of innovation in organizations. Innovation in organizations significantly depends on creativity in project teams in order to integrate different knowledge and information, and to turn an imaginative idea into an innovative service, product, process or business model. Creativity in project teams is a complex social system since it involves a combination and integration of various inputs and knowledge from multiple and interdependent project team members. Therefore, studying creativity in project teams can help understand the social interaction of project members in order to generate more creative outputs. Secondly, creativity in project teams involves the interpersonal discussion process (Kratzer et al., 2004) and motivates the interaction of project team members (Gardner, 1988). Stimulating the creativity of project teams can encourage team members to contribute a shared understanding of the customer, market and product design. Moreover, the creative problem-solving process facilitates more interaction among project members, which leads to new product successes (Sethi et al., 2001). Thirdly, project team members need to connect with each other for exchanging information and knowledge to develop new specifications or innovative products.
Volume 15
Number 1
2006
Although the mix of appropriate capabilities within the team is quite important, it is unlikely that project team members all have relevant expertise, knowledge and information necessary to design the project. Therefore, project team members need to network with each other in order to exchange and transfer knowledge and information, and network with the external environment in order to collect critical information. The process of networking encompasses social interaction, trusting relations, and value systems that facilitate the actions of project team members in order to access knowledge and resources, and exchange information, which can lead to more creative output of the project teams (Nahapiet & Ghoshal, 1998). Fourthly, project teamwork creates more opportunities for team members to participate in problem-solving and decision making, and offers a range of different skills, abilities, knowledge, and experience to ensure that creative ideas are supported (King & Anderson, 1990). Although creativity is sufficiently important to be studied at project team level, team creativity is studied using different approaches. The humanistic school concentrates on the maintenance functions of the group. More specifically, this school is characterized by a normative approach that encourages openness and smooth interpersonal relations in order to improve effectiveness. Decision theorists have identified behaviors that improve group performance such as weighting individual inputs according to knowledge and skill (Gladstein, 1984). Creativity theorists use the consensual assessment technique to define the measurement of innovative performance including creativity, innovation, and productivity (Oldham and Cummings, 1996; Amabile et al., 1996; Rickards et al., 2001). I follow the consensual assessment approach to define the measurement of team creativity including three components of creativity, productivity, and innovativeness the team produces (Amabile et al., 1996). Creativity refers to novel and socially valued products in the studied domain. Productivity refers to the extent to which a system uses its resources to achieve its goals. Innovativeness is the process of transforming an invention or idea into action that is commercially useful and valuable. Team creativity is defined as an aggregated concept of creativity, productivity, and innovativeness. Team creativity can generate more creative ideas, but can involve more conflict in the communication and discussion processes. The relationship of conflict and creativity is found on different studies. For example, task conflict © 2006 The Author Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
has found to have positive effect on team innovation when working on the non-routine task which involves complex task with few set procedures, standard solution, and high degree of uncertainty (Jehn, 1995). Task conflict can increase team members’ tendency to scrutinize task issues and to think more deeply, which can foster learning and the development of new and creative insights, leading the team to become more creative (De Dreu and Weingart, (2003). Other study is found that participants were more flexible in their thinking and more creative in their problem solutions when they anticipated low conflict with another individual (Carnevale and Probst, 1998). In other words, when participants anticipated a competitive, hostile negotiation (high interpersonal conflict), participants’ creative thinking would decrease. When interpersonal conflict becomes more intense and arousal increases, cognitive load increases, information processing is impeded, which interferes with cognitive flexibility and creative thinking. Research on task groups has suggested that the type of task a group performs influences the relationship between conflict and group performance (Gladstein, 1984). This implies that different types of project teams might experience different levels or degrees of conflict, and creativity. Two types of project teams, labeled as servicedriven (e.g. information system development teams) and technology-driven (high-tech R&D teams) project teams, were drawn from Taiwan’s context and were compared for their experience in managing conflict on project team creative processes. Thus, hypothesis 1 is suggested: Hypothesis 1: Service-driven and technology-driven project teams will experience different degrees of task conflict, interpersonal conflict, and creativity over the project life cycle.
Team Conflict This paper focuses on team conflict, defined as task conflict and interpersonal conflict occurring among team members within a team. Task conflict occurs when team members argue over alternatives related to the team’s task, whereas interpersonal conflict results from interpersonal clashes not directly related to achieving the team’s function (Jehn, 1995; Amason, 1996). The types of conflict were identified in different typologies, but with similar meanings. Task conflict exists when there are disagreements among team members about the content of the tasks being performed including differences in viewpoints, ideas, and opinions; interpersonal © 2006 The Author Journal compilation © 2006 Blackwell Publishing
107
conflict exists when there are interpersonal incompatibilities among team members including tension, animosity, and annoyance among members within a team (Jehn, 1995). Task conflict is related to cognitive disagreement arising from difference in perspective. However, interpersonal conflict is related to affective disagreement arising from personal dislikes and disaffection (Amason and Sapienza, 1997). Research has paid attention to the functional and dysfunctional effects of conflict on team performance since the concept of conflict is multi-dimensional (Buchanan and Huczynski, 1997). The traditional perspective views conflict as a malfunction within the group since conflict is regarded as bad and harmful to group development. In contrast, the human relations perspective implies that conflict is an inevitable natural occurrence, and can be viewed as reinforcing the status quo and even enhancing performance in certain circumstances. The inter-actionist perspective goes beyond the pluralist school’s toleration and management of conflict and encourages both conflict stimulation and conflict resolution. Empirical studies have illustrated that interpersonal conflict is negatively associated with team innovation (Mortensen and Hinds, 2001), while task conflict is positively associated with team innovation (Amason, 1996). Research on task groups has suggested that the type of task a group performs influences the relationship between conflict and group performance (Gladstein, 1984). This implies that different types of project teams might experience different levels or degrees of task and interpersonal conflict. Team creativity can generate more creative ideas, but can also involve more conflict in the interaction processes within the project teams. The relationship of conflict and creativity in existing studies has found to differ. Jehn (1995) found that task conflict has a positive effect on team innovation when working on the nonroutine task which involves complex task with few set procedures, standard solution, and a high degree of uncertainty. Similarly, De Dreu and Weingart (2003) found that task conflict can increase team members’ tendency to scrutinize task issues and to think more deeply, which can foster learning and the development of new and creative insights, leading to the team becoming more creative. The other study found that participants were more flexible in their thinking and more creative in their problem solutions when they anticipated low conflict with another individual (Carnevale and Probst, 1998). In other words, when participants anticipated a competitive, hostile negotiation (high interpersonal conflict), par-
Volume 15
Number 1
2006
108
CREATIVITY AND INNOVATION MANAGEMENT
ticipants’ creative thinking would decrease. When interpersonal conflict becomes more intense and arousal increases, cognitive load increases, information processing is impeded, which interferes with cognitive flexibility and creative thinking. A recent meta-analysis study conducted by De Dreu & Weingart (2003) shows the negative effect of task conflict on team performance. Although De Dreu & Weingart (2003) take an information processing perspective and argue that task conflict was less negatively related to team performance when task conflict and relationship conflict were weakly correlated, they elicit some more critical and debatable questions for further discussion. Firstly, the reverse causality of task conflict and performance needs to be seriously considered. Secondly, the high levels of within-team trust, openness, psychological safety and collaborative communication within the team might lead to task conflict having any positive effects on team performance. Thirdly, the effect of conflict on performance is contingent on project task types and the measurement of performance. Besides, the relationship between task conflict and interpersonal conflict is open to question. Previous studies suggest that task conflict and interpersonal conflict are mutually independent. However, recent evidence has proved that one type of conflict can breed the other. In other words, when one type of conflict is salient, the other type might be increased (Amason, 1996; Jehn, 1995). Based on these arguments, hypotheses 2 and 3 are proposed. Hypothesis 2: Task conflict will be significantly and positively correlated with interpersonal conflict. Hypothesis 3: The effects of task conflict and interpersonal conflict on team creativity will be different for service-driven and technology-driven project teams.
Project Life Cycle Management Project teams are a dynamic system and continue to change subject to a turbulent environment, the rapid rate of technology changes, and the stakeholders. In order to capture the project development process, the change in the team overtime needs to be taken into consideration (Gersick, 1988; Ekvall, 1993). Research has highlighted that the life cycle construct is shown to be applicable to project management theory (Cleland and King, 1983). A project’s life cycle has proved to play a key role in determining critical project implementation success, and as a key explanatory construct in affecting project outcomes (Pinto and Prescott,
Volume 15
Number 1
2006
1988; Thamhain and Wilemon, 1975). The life cycle during which an identifiable set of activities occurs are categorized as stages or phases of group development. Several life-cycle project management models are suggested. A life-cycle project management is proposed in which the objective functions are employed as the criteria for decision-making through the project’s life including the financial objectives, customer satisfaction objectives, and due diligence objectives (Jaafari, 2000). A quality assurance model of project team management is proposed to improve project quality and cost management in high-tech manufacturing and information system development contexts. The model is built in the light of total quality concepts, and is to satisfy the objectives of the system users and the stakeholders in terms of efficiency, accuracy, compatibility, flexibility, and acceptability. Conflict issues associated with the stages of project life cycles are important for project management because different stages of a project’s life cycle contribute to understanding team change and development processes over time. However, the life cycle of the project team is contingent upon its project and task type, and each team works in its own unique way and differs in its patterns of behavior (Gersick, 1988; Ekvall, 1993). If project managers can anticipate some of the major sources of conflict in the various phases of the project life cycle, there is a greater likelihood that the detrimental aspects of conflict can be minimized (Thamhain and Wilemon, 1975). Moreover, the conflict related to schedules, project priorities, and manpower resources can cause problems for the project managers over the entire project cycle, but their intensity perceived by project managers is different over the phases of project cycle. Thus, I propose hypothesis 4. Hypothesis 4: The dynamics of conflict and creativity over the project life cycle will be different for service-driven and technologydriven project teams.
Method This paper focuses on conflict within project teams of high-tech firms. Since project teams were distributed in a wide range of different areas in Taiwan and their populations are hard to define, this paper therefore uses the snowball strategy to collect convenient data (Rubin and Babbie, 2001). Two studies were conducted in this paper. Study one focuses on collecting data from service-driven project teams, whereas study two focuses on collecting data from technology-driven project teams. © 2006 The Author Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
Study One: Data was collected 142 respondents of several on-going information system development teams from one tele-communication firm and one software design firm from 2003–4, Taiwan. This type of project team aims to develop software according to clients’ needs, which is labeled as service-driven project teams. In regard to professional background, 34 respondents (24.5%) majored in electronic engineering; 61 (43.9%) majored in physics; 20 (14.4%) majored in information technology; and 24 (17.3%) majored in management. Seventy-eight percent of respondents were male; 48% were under 30 years old; 80% held masters degrees. Study two: The collected data comprised 106 respondents in 11 new product development project teams from one global high-tech manufacturing firm with the monitoring headquarters being located in Taiwan. Data was collected in March 2004. All respondents were Taiwanese and worked as a project manager, design engineer, testing engineer, or supporting manpower in their project teams. This type of new product development project team aims to develop computer monitoring with process innovation, which is labeled as technology-driven project teams. In regard to professional background, 53 respondents (50%) majored in electronic engineering; 18 (17%) majored in mechanics; 8 (7.5%) majored in information technology; 6 (5.7%) majored in management, and only 8 (7.5%) majored in other fields. Eighty-seven (82.1%) respondents were male, and 14 (13.2%) were female. Twenty (18.9%) respondents were under 30 years old, 36 (34%) were 31–35 years old, 29 (27.4%) were 36–40 years old, 12 (11.3%) were 41–45 years old, and only 7 (6.6%) were over 46 years old. Seventy (66%) respondents held bachelors degrees, 22 (20.8%) held masters degrees, and only 9 (8.5%) held a college degree.
Measures Team Creativity Scale A 6-item scale was used to measure the creativity of teams by reviewing the previous work (Amabile et al., 1996; Rickards et al., 2001). The scale contains 2 items each for creativity, productivity, and innovativeness. The creativity scale refers to a team that creates novel and useful ideas on task-related issues and creates knowledge that has not existed before the team was formed. The productivity scale refers to a productive team that adheres to on-time performance. The innovativeness scale refers to a new product, technology, or service © 2006 The Author Journal compilation © 2006 Blackwell Publishing
109
the team develops can meet market needs, and achieve customer satisfaction. Respondents were answered on a five-point Likert scale (5 = strongly agree, 1 = strongly disagree).
Team Conflict Scale A 6-item scale is used to measure task conflict of teams by reviewing from the previous work (Jehn, 1995). Respondents were asked to indicate the degree of task conflict within the team which includes procedures, key decision areas, the appropriate choice for action, and the perceived performance standard. A 3-item scale is developed to measure interpersonal conflict of team which includes negative emotion, interference, and work tension within the team. Higher scores represented more conflict within the team. Respondents were answered on a five-point Likert scale (5 = strongly agree, 1 = strongly disagree).
Within-Group Agreement In this paper, all of the individual scores on the studied variables, team creativity and team conflict, were aggregated (composed of the responses of two or more individuals involved in a team). To assess whether the responses of the team members could be aggregated to the team level of analysis, it was necessary to establish whether a team exhibited withingroup agreement (Glick, 1985). Inter-rater reliability (i.e. James, Demaree & Wolf’s (1984) rwg) and internal consistency (alpha) were calculated to examine the within-group agreement. The levels of within-group agreement and reliability for each variable are shown in Table 1. Within-group agreement was estimated using the method, rwg, developed by James, Demaree and Wolf (1984). For the total sample, the mean scores on all six items of the creativity scale ranged from 3.44 to 4.13. The mean scores on all six items of task conflict scale ranged from 2.64 to 3.76, and those on all three items of interpersonal conflict scale ranged from 2.22 to 2.84. Reliability, alpha, was used to test the internal consistency of results obtained in this research. The results of rwg and alpha of the studied variables for the entire data exceeded 0.76, indicating that it is appropriate to aggregate the variables into group-level variables for the analysis of team level (Glick, 1985).
Stage of Project Life Cycle A preliminary interview to project team leaders was conducted to identify the stage of the
Volume 15
Number 1
2006
110
CREATIVITY AND INNOVATION MANAGEMENT
Table 1. Within-group Agreement and Reliability of Each Variable (N = 248) Variables
Task conflict Interpersonal conflict Creativity
Service-Driven Project Teams rwg
alpha
rwg
alpha
0.84 0.91 0.95
0.73 0.93 0.83
0.96 0.92 0.92
0.76 0.81 0.86
project life cycle used in an empirical context. The stage-gate quality assurance, including five stages, is commonly used by project teams. Therefore, this study used the stages of quality assurance model to split the sample in order to understand the dynamics of conflict and creativity in teams at different stages of the project life cycle.
impact of conflict on project team creativity. The results from the empirical studies of Taiwan are discussed below.
Stage 1: requirement planning stage includes client interviews and need analysis Stage 2: design stage includes the preliminary design and advanced design Stage 3: system development stage involves programming and system infrastructure Stage 4: testing stage involves functional testing, module testing, and integrative testing Stage 5: installation and maintenance stage includes system construct, maintenance, and customer service
This paper identifies two types of conflict, echoing to the Jehn’s work (1995). They are task and interpersonal conflict which have positive and negative impact on team creativity process. The finding supports to hypothesis 1, which suggests that servicedriven project teams (mean = 2.73) experience higher interpersonal conflict than do technology-driven (mean = 2.37) ones (see Table 2). On the contrary, technology-driven project teams (mean = 3.39) experience higher task conflict than do service-driven (mean = 2.95) ones. The service-driven project teams, such as information system development project teams, involve multiple and interdependent parties (Robey et al., 1993). Clients depend on ISD teams to develop the system. Information system development project teams depend on the clients evaluating the developed system, and both parties depend on upper management to provide the necessary resources for the project. Therefore, the service-driven project teams involve political preferences, personal taste, and interpersonal style. The process of negotiation and interaction among users, project members, and stakeholders aims to attain project goals to spur emotionally charged clashes and work tension (Amason, 1996). Barki and Hartwick (2001) also found that information system development project teams from Canadian organizations experience negative emotional reactions to perceived disagreements and interference with the attainment of project goals. This, therefore, is one reason for service-driven project teams experiencing more interpersonal conflict.
Control Variables Team size and tenure were used as controls in the analyses of the creativity in teams to ensure that they are neither accounting for nor suppressing the association between the dependent and independent variables. Team size has been shown to affect team performance and strategic decision quality in high-tech companies since larger teams will decrease informal communication and slow down decision-making (Smith et al., 1994). And, team tenure has also been shown to affect team performance (Gladstein, 1984) measured by asking project leaders the initiating time of the project.
Results and Discussions This paper sets out to examine the dynamics of conflict over a project’s life, and to examine the
Volume 15
Technology-Driven project teams
Number 1
2006
Service-Driven and Technology-Driven Project Teams Experience Different Degree of Conflict
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
111
Table 2. Correlations of task conflict, interpersonal conflict and creativity Service-Driven Teams (N = 142)
1. Task conflict 2. Interpersonal conflict 3. Creativity
Mean (S.D.)
1
2.95 (0.44) 2.73 (1.02) 3.73 (0.55)
– 0.43*** −0.16
Technology-Driven Teams (N = 106) 2
3
– −0.35*** –
Mean (S.D.)
1
3.39 (0.47) 2.37 (0.86) 3.88 (0.56)
– 0.22* 0.56***
2
3
– 0.02 –
Note: * p < 0.05, ** p < 0.01, *** p < 0.0
Compared with service-driven project teams, technology-driven project teams experience that task conflict and an exchange of information can facilitate problem solving, decision-making, and the generation of ideas (Pelled et al., 1999). It indicates that task disagreements foster technology-driven team members from different functions to recognize their different needs, to think deeply, to stimulate information processing and to find creative solutions related to task issues. Technology-driven project teams experience many task conflict areas in the entire project life cycle, such as conflict over schedules, priorities, manpower, technical and procedures (Thamhain and Wilemon, 1975). All of the conflict sources are mainly related to task issues. Besides, research on technology-driven project teams experiencing more task conflict is supported. For example, Lovelace et al. (2001) found that technology-driven project teams, such as new product development teams of high-tech companies, experience that task conflict is positively associated with team innovativeness when the dominant moderator, collaborative communication, is significant (Lovelace et al., 2001). Woodman et al. (1993) supported at technology-driven project teams have high absorptive capacity because the differing expertise of their members’ allows them to tap a broad array of external information and new knowledge, and stimulate creativity in teams. Therefore, task conflict of opposing points of view encourages technology-driven project teams to generate new idea, delves into issues more deeply, and develops a more complete understanding of problems and alternative solutions.
Task Conflict and Interpersonal Conflict Are Positively and Significantly Correlated The finding supports hypothesis 2, which suggests that task conflict and interpersonal conflict are positively correlated for both © 2006 The Author Journal compilation © 2006 Blackwell Publishing
service-driven (r = 0.43, p < 0.001) and technology-driven (r = 0.22, p < 0.05) project teams (see Table 2). This indicates that one type of conflict can breed the other in the sense that attempts to stimulate task conflict may increase interpersonal disagreement and disaffection (Ensley et al., 2002). The finding is consistent with previous research in a wide variety of team contexts. In top management teams, Amason (1996) found that cognitive conflict and affective conflict can be related and influence decision quality, understanding, commitment to decisions, and affective acceptance. In new venture teams, Ensley et al. (2002) found the levels of cognitive and affective conflict experienced during decision making will be positively related. Research attempts to deal with the paradoxical effect of conflict on strategic decision making, and suggest how top management teams can use conflict to enhance the decision quality without sacrificing consensus and affective acceptance among their members. In cross-function teams, Pelled et al. (1999) found that each type of conflict tends to accompany the other type and ‘task conflicts may be taken personally by group members and generate emotional conflict, or emotional conflict may prompt group members to criticize each other’s ideas, thereby fostering task conflict’ (p.23). The finding of project teams indicates that one type of conflict can breed the other in the sense that attempts to stimulate task conflict may increase interpersonal disagreement and disaffection.
The Effect of Conflict on Creativity Process is Contingent to Project Types Table 3 reports the regression result used to test hypothesis 3, which predicts the effect of conflict on creativity. For service-driven project teams, the result reports that interpersonal conflict has a negative effect on creativity (t = −3.35, p < 0.001), however the impact of task conflict on creativity is not found, but
Volume 15
Number 1
2006
112
CREATIVITY AND INNOVATION MANAGEMENT
Table 3. Results of Regression Analysis of Conflict on Project Team Creativity Control and Independent variables
Step 1: control variables Team size Team tenure Step 2: team conflict variables Task conflict Interpersonal conflict Adjusted R2
Service-driven teams
Technology-driven teams
ß
T
ß
0.32 −0.15
2.79** −1.30
0.04 0.02
−0.06 −0.32 0.16
−0.62 −3.35***
0.58 −0.11 0.33
T
0.48 0.28 6.83*** −1.29
Note: ** p < 0.01, ** p < 0.01, *** p < 0.001 ß represents for the standardized coefficients.
reveals a negative regression coefficient (ß = −0.06). On the contrary, for technology-driven project teams, the result indicates that task conflict has a positive effect on creativity (t = 6.83, p < 0.001). The impact of interpersonal conflict on creativity is not supported, but reveals a negative regression coefficient (ß = −0.11, t = −1.29). The findings imply that the effects of task and interpersonal conflict on project team creativity depend on project types, which provides support for Jehn’s (1995) argument. Although De Dreu and Weingart (2003) conducted a meta-analysis study and claimed that task conflict was less negative related to team performance when task conflict and interpersonal conflict were weakly correlated, the effect of task conflict on team creativity remains arguable. This paper has found that task conflict has a positive impact on creativity of technologydriven project teams. The finding implies that task debates improve best-fit or high-quality ideas and decisions by allowing multiple views. Task conflict of opposing points of view encourages team members to generate new idea, delves into issues more deeply, and develops a more complete understanding of problems and alternative solutions. During creative idea-evaluation sessions, debates are also encouraged to select best-fit ideas and to enhance decision quality. To project managers who are interested in conflict and creativity might need to concern the creative problemsolving approach, which includes divergent thinking and convergent thinking stages. To the divergent thinking stage, task conflict can be detrimental to the quantity of idea generation, however, to the convergent thinking stage, task conflict is encouraged to evaluate best-fit ideas.
Volume 15
Number 1
2006
The Project Life Cycle Plays as A Significant Moderator to Conflict-Creativity Relationship Project teams are a dynamic system and continue to change subject to a turbulent environment, the rapid rate of technology changes, and the stakeholders. In order to capture the project development process, the change in the team overtime needs to be taken into consideration (Gersick, 1988; Ekvall, 1993). I use ANOVA analysis to test hypothesis 4 which examines the variations of conflict and creativity over the project’s life cycle. For service-driven project teams, results of the ANOVA analysis indicate that the mean scores on task conflict (F = 2.09, p < 0.05), interpersonal conflict (F = 6.51, p < 0.001) and creativity (F = 5.19, p < 0.001) are significantly varied over different stages of the project team’s activities. At the system development stage, service-driven project teams achieve the highest creative output (mean = 4.07) as it experiences the lowest level on both interpersonal conflict (mean = 1.76) and task conflict (mean = 2.73) (see Figure 1). At the testing stage, the team shows the lowest creative output (mean = 2.92) as it encounters the highest level on both interpersonal conflict (mean = 3.5) and task conflict (mean = 3.33). Moreover, the mean score of interpersonal conflict is beyond that of task conflict only at the testing stage. For technology-driven project teams, results of the ANOVA analysis indicate that the mean scores on interpersonal conflict were significantly varied over the different stages of the project’s life (F = 2.86, p < 0.05), but those of task conflict and creativity were not (F = 0.81, © 2006 The Author Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
113
5
4.07 Conflict and Creativity
4
3
3.82
3.53
3.66
3.5
2.93
3.02 2.93
2.92
2.95
2.64
Task conflict
3.33
2.91
Interpersonal conflict Creativity
2.73
2 1.76
1 requirement
design
system development
testing
install and maintain
Stages of Project Teams
Figure 1. Conflict and Creativity during Stages of Project Life-Cycle for Service-Driven
5
conflict and creativity
3.96
4.03
4
3.83
3.53 3.48 3.25
3
3.28
3.4
Task conflict Interpersonal conflict Creativity
2.61 2.56
2.38
2 1.85
1 requirement
design
system development
testing
transfer to factory
stages of project teams
Figure 2. Conflict and Creativity during Stages of Project Life-Cycle for Technology-Driven Project Teams
p > 0.05). Technology-driven project teams achieve the highest creativity (mean = 4.03) as they experienced both the highest task conflict (mean = 3.48) and interpersonal conflict (mean = 2.61) at design stage (see Figure 2). When interpersonal conflict drops to the © 2006 The Author Journal compilation © 2006 Blackwell Publishing
lowest point (mean = 1.85) at the testing stage, team creativity increases. The finding suggests that service-driven project teams have the highest level of task conflict and interpersonal conflict at the testing stage, compared with other stages.
Volume 15
Number 1
2006
114
CREATIVITY AND INNOVATION MANAGEMENT
However, the dynamics of task conflict for technology-driven project teams are quite stable over the project’s life cycle, but they encounter the highest level of interpersonal conflict at the system development stage. These findings provide different insights from the work of Jehn (1995) and Jehn & Mannix’s (2001) as to the dynamic nature of conflict. Jehn & Mannix (2001) found that high performing teams usually have moderate levels of task conflict at the midpoint of the group interaction compared with the early and late stages. My findings are justified as follows: Firstly, the nature of the project task can influence the dynamics of conflict and creativity. Jehn (2001) used routine and non-routine work to classify project tasks. Routine tasks have a low level of task variability, defined as the amount of variety in methods and repetitiveness of the task process (p.259), while nonroutine tasks require problem solving, have few set procedures, and have a high degree of uncertainty (p.260). However, this paper employs the service-driven team as a surrogate term representing project teams of information system development in the telecommunication and software design sectors, and the technology-driven team as a surrogate term of new product development of technology type from one high-tech manufacturing project team. Secondly, Jehn & Mannix (2001) used three stages as early, middle and late to classify the 14-week longitudinal study. However, this paper uses stage-gate quality assurance as the five stages to classify the project life cycle and conducted a cross-sectional study to classify sample into five stages. Although the findings of this study provide different insights from Jehn’s work, both studies highlight one important issue, which is that conflict must be viewed and examined as a dynamic process, rather than as a static event.
Implications for Practice Project teams have increasingly become the fundamental unit of organizations in order to enhance innovation and respond to shorter product development time. The multidisciplinary combination from diversified expertise, knowledge and views is involved in the project teams. At the same time, conflict within the project teams can also occur. The results of this paper provide several implications for managing conflict on team creativity process. Firstly, the project life cycle is a significant moderator of the conflict-creativity relationship. Therefore, project managers need to understand at which stage of the project’s
Volume 15
Number 1
2006
life cycle conflict is most likely to occur and creativity is most likely to be released. Such knowledge provides project managers employing the stage-gates of the project life cycle to manage conflict in order to foster the team creativity process. Some suggestions are made for project mangers: (1) positive conflict values and attitudes need to be built at the early stage of the project life cycle; (2) Training in conflict awareness, communication skills and conflict resolution approaches for enhancing common understanding, improving interpersonal relationships and mitigating relationship conflict need to be developed over the project life cycle; (3) building a trustbased team where team members share a supportive climate and have psychological safety in an open environment is a critical aspect of the role for project managers. Secondly, service-driven and technology-driven project teams experience different degrees of conflict. This implies that the nature of the project task and the task complexity can influence the level of interaction of team members concerning conflict. Finally, task conflict and interpersonal conflict are positively correlated. This indicates that one type of conflict can breed the other in the sense that attempts to stimulate task conflict may increase interpersonal disagreement and disaffection. Suggestion are made for project mangers in simultaneously managing the two types of conflict: (1) to identify what type of conflict the team encounters; (2) to understand how task conflict interacts with interpersonal conflict, and (3) to undergo conflict training in resolution as to how to use agreeable and active approaches in different conflict contexts. While this paper makes an important and meaningful contribution to the knowledge of conflict of the team creativity process, some research limitations merit discussion. One limitation was that the research did not include the team climate, such as team member’s interaction and communication, as an important moderator of the conflict-creativity process. Another limitation of the research was the applied cross-sectional comparison studies using one-time measures of service-driven and technology-driven teams, raising interesting questions for future research. A longitudinal study can provide in-depth information about a dynamic model of conflict, team climate affecting conflict overtime, and changes in conflict overtime. Besides, the data from this study illustrates the benefits and detriments of conflict in service-driven and technology-driven project teams without taking contextual and organizational factors into account. Future research could be benefited by developing a more © 2006 The Author Journal compilation © 2006 Blackwell Publishing
UNDERSTANDING THE BENEFITS AND DETRIMENTS
comprehensive model including organizational, team and individual levels. Finally, the explained variances for service-driven teams with a sample size of 142 only achieve a figure of 16 percent, which is inherently suspect. Future research could improve the quality and reliability of findings by enlarging the sample size.
Acknowledgement The authors would like to thank the National Science Council, Taiwan, for funding the project coded NSC 92-2416-H-155-011.
References Amabile, T.M., Conti, R., Coon, H., Lazenby, J. and Herron, M. (1996) Assessing the work environment for creativity. Academy of Management Journal, 39, 1154–84. Amason, A.C. (1996) Distinguishing the effects of functional and dysfunctional conflict on strategic decision making: Resolving a paradox for top management teams. Academy of Management Journal, 39, 123–48. Amason, A.C. and Sapienza, H.J. (1997) The effects of top management team size and interaction norms on cognitive and affective conflict. Journal of Management, 23, 495–516. Ancona, D.G. and Caldwell, D.F. (1992) Demography and design: Predictors of new product team performance. Organization Science, 3, 321– 41. Barki, H. and Hartwick, J. (2001) Interpersonal conflict and its management in information system development. MIS Quarterly, 25, 195–228. Buchanan, D. and Huczynski, A. (1997) Organizational Behaviour: An introductory text. London: Prentice Hall. Carnevale, P.J. and Probst, T.M. (1998) Social values and social conflict in creative problem solving and categorization. Journal of Personality and Social Psychology, 74, 1300–9. Cleland, D.I. and King, W.R. (1983) Project management handbook. (Eds.) NY: Van Nostrand Reinhold Co. De Dreu, C.K.W. and Weingart, L.R. (2003) Task versus relationship conflict, team performance, and team member satisfaction: A meta-analysis. Journal of Applied Psychology, 88, 741–9. Ensley, M.D., Pearson, A.W. and Amason, A.C. (2002) Understanding the dynamics of new venture top management teams cohension, conflict, and new venture performance. Journal of Business Venturing, 17, 365–86. Ekvall, G. (1993) Creativity in project work: A longitudinal study of a product development project. Creativity and Innovation Management, 2, 17–26. Gardner, H. (1988) Creative lives and creative works: A synthetic scientific approach. In © 2006 The Author Journal compilation © 2006 Blackwell Publishing
115
Sternberg, R.J. (Ed.). The nature of creativity: Contemporary psychological perspectives. NY: Cambridge University Press, 298–321. Gersick, C.J.G. (1988) Time and transition in work teams: Toward a new model of group development. Academy of Management Journal, 31, 9– 41. Gladstein, D.L. (1984) Groups in context: A model of task group effectiveness. Administrative Science Quarterly, 29, 499–517. Glick, W.H. (1985) Conceptualizing and measuring organizational and psychological climate: Pitfalls in multi-level research. Academy of Management Review, 10, 601–16. Iansiti, M. and West, J. (1997) Technology integration: Turing great research into great products. Harvard Business Review, 69–79. Jaafari, A. (2000) Life-cycle project management: A proposed theoretical model for development and implementation of capital projects. Project Management Journal, 31, 44–52. James, L.R., Demaree, R.G. and Wolf, G. (1984) Estimating within-group interrater reliability with and without response bias. Journal of Applied Psychology, 69, 85–98. Jehn, K.A. (1995) A multimethod examination of the benefits and detriments of intragroup conflict. Administrative Science Quarterly, 40, 256–82. Jehn, K.A. and Mannix, E.A. (2001) The dynamic nature of conflict: A longitudinal study of intragroup conflict and group performance. Academy of Management Journal, 44, 238–51. Katzenbach, J.R. and Smith, D.K. (1993) The wisdom of teams. HarperCollins. Kaufmann, G. (2004) Two kinds of creativity – But which one?. Creativity and Innovation Management, 13, 154–65. King, N. and Anderson, N. (1990) Innovation in working groups. In West, M.A. and Farr, J.L. (eds.). Innovation and Creativity at Work: Psychological and organizational strategies. Chichester, England: Wiley, 81–100. Kirton, M. (1989) Adaptors and innovators: Styles of creativity and problem solving. NY: Routledge. Kratzer, J., Leenders, R.Th.a.J. and van Engelen, M.L. (2004) Stimulating the potential: creataive performance and communication in innovation teams. Creativity and Innovation Management, 13, 63–71. Leenders, R., van Engelen, J. and Kratzer, E. (2003) Virtuality, communication, and new product team creativity: a social network perspective. Journal of Engineering Technology Management, 20, 69–92. Lovelace, K., Shapiro, D.L. and Weingart, L.R. (2001) Maximizing cross-functional new product teams’ innovativeness and constraint adherence: A conflict communications perspective. Academy of Management Journal, 44, 779–93. Mortensen, M. and Hinds, P. (2001) Conflict and shared identity in geographically distributed teams. The International Journal of Conflict Management, 12, 212–38. Nahapiet, J.E. and Ghoshal, S. (1998) Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23, 242–66.
Volume 15
Number 1
2006
116
CREATIVITY AND INNOVATION MANAGEMENT
Oldham, G.R. and Cummings, A. (1996) Employee creativity: Personal and contextual factors at work. Academy of Management Journal, 39, 607–34. Paulus, P.B. (2000) Groups, teams, and creativity: The creative potential of idea-generating groups. Applied psychology: An international review, 49, 237–62. Pelled, L.H., Eisenhardt, K.M. and Xin, K.R. (1999) Exploring the black box: An analysis of work group diversity, conflict, and performance. Administrative Science Quarterly, 44, 1–28. Pinto, J.K. and Prescott, J.E. (1988) Variations in critical success factors over the stages in the project life cycle. Journal of Management, 4, 5–18. Rickards, T. and Moger, S. (2000) Creative leadership processes in project team development: An alternative to Tuckman’s stage model. British Journal of Management, 11, 273–83. Rickards, T., Chen, M. and Moger, S. (2001) Development of a self-report instrument for exploring team factor, leadership and performance relationship. British Journal of Management, 12, 243–50. Robey, D., Smith, L.A. and Vijayasarathy, L.R. (1993) Perceptions of conflict and success in information system development projects. Journal of Management Information System, 10, 123–39. Rubin, A. and Babbie, E. (2001) Research methods for social work. CA: Wadsworth/Thomson Learning. Sethi, R. Smith, D.C. and Park, C.W. (2001) Crossfunctional product development teams, creativity, and the innovativeness of new consumer
Volume 15
Number 1
2006
products. Journal of Marketing Research, 38, 73– 85. Smith, K.G., Smith, K.A., Olian, J.D., Smis, H.P., O’Bannon, D.P. and Scully, J.A. (1994) Top management team demography and process: The role of social integration and communication. Administrative Science Quarterly, 39, 412–38. Thamhain, H.J. (2003) Managing Innovative R&D Teams. R&D Management, 33, 297–311. Thamhain, H.J. and Wilemon, D.L. (1975) Conflict management in project life cycles. Sloan Management Review, 31–50 Woodman, R.W., Sawyer, J.E. and Griffin, R.W. (1993) Toward a theory of organizational creativity. Academy of Management Review, 18, 293–321.
Ming-Huei Chen (
[email protected]. edu.tw) is an assistant professor at the Graduate Institute of Technology & Innovation Management, National Chung Hsing University, Taiwan, Republic of China. Dr. Chen’s research interests cover creativity and conflict, entrepreneurship and creativity. She teaches graduate level and EMBA Creativity and Innovation Management courses, and lectures creative problemsolving methods in training programs.
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
BOOK REVIEWS
117
Book Reviews Rickards, T. and Clark, M., Dilemmas of Leadership, Routledge, London, 2006, 252 pp with index, ISBN: 0-415-35585-0
Dilemmas of Leadership, by Tudor Rickards and Murray Clark is based on a set of ideas that need time to be put in practice so that one makes the most out of them. This does not mean that the book has a difficult-tounderstand content, but one needs time to experience and feel some of the thoughts on the book, such is the more or less implicit plea created by Rickards and Clark. This is not another book of recipes on leadership that presents you with some kind of tree-decision model that you can use in all sorts of situations and contexts. Dilemmas of Leadership is a wellwritten, insightful and stimulating text, which takes a novel approach to the complex and old theme of leadership. More than indicating you which traits you need to be born with if you want to be a great leader, or what focus (people versus task) style you need to adopt if you want to convince others of your intentions, the book assumes that you already have leadership talents, and aims to help you see and develop those inside you. In fact, everyone is seen as capable of developing leadership skills and capabilities, but this has to come via him or herself, more than through understanding models, theories and concepts depicted in the literature. These theories, models and concepts are nevertheless important; they are part of a formal codified knowledge, which on the whole are what the authors call platforms of understanding. They are important basis for the study and development of comprehension, but they do not suffice to achieve such goals. Another important element is individual experience, and the capability to learn from it. Be it past or current experience, every single human being is often posed with dilemmas. These are ‘hard-to-resolve but important issues in theory and practice’ (p. 26), and they largely constitute the lifeblood of leadership. How to solve such dilemmas, then? By sustaining a disciplined, systematic and focused conversation with the situation and phenomenon under scrutiny. In other words, by applying critical thinking. Only through critical thinking is one able to dissect both own © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
experience (individual experience) and others’ experience (secondary knowledge, codified in the form of theories and models). It should be clear by now what was said in the opening paragraph of this review. The book is written in a manner that invites the reader to experience ideas, not just read and assimilate what is exposed. This is actually more or less assumed by the authors, when they write on page 8 that ‘by the time you have read the book you will have become experienced and skilled in real-life leadership challenges’. To achieve these goals, the book presents the same structure throughout chapters 2 to 10 (basic concepts are launched in the Introduction). In addition to ideas such as dilemmas, platforms of understanding and critical thinking, the authors introduce and explain a few other concepts in chapter 1. One such notion is map reading, which includes a selected set of platforms of understanding, and some contextual material, i.e., background material that is specific and related to the theme under discussion in each chapter. Then, the reader is invited to test such maps – map testing – in a subsection called integration. Its aim is to assemble both platform of understanding and contextual material, in a personal effort to achieve deeper understanding of the particular topic. The final step is to create your own maps – map-making – using the critical thinking approach and the dilemmas challenges above described. Let me try to be more practical. In chapter 2 one of the oldest dilemmas in leadership is the trigger to this map-making process: the born or made dilemma. The platforms chosen to initiate discussion are Alan Bryman's analysis of leadership in organisations, and David Day's meta-study of leadership development. Contextual material is of various kinds, ranging from a few appointments on Shakespeare's deep writings on leadership, to an examination of the Center for Creative Leadership. In the integration section, the authors discuss the evolution of traits theories on leadership, and how they were partly substituted by behav-
Volume 15
Number 1
2006
doi:10.1111/j.1467-8691.2006.00375.x
118
CREATIVITY AND INNOVATION MANAGEMENT
iour theories. They also draw implications of such dilemmas to the practice of leadership. One of the most novel parts of the book comes in the section on getting personal. In it the authors posit several questions to help you think and reflect upon the initial dilemmas. The goal is to set the reader to generate his/her own maps on leadership, not to give answers. Indeed this is a peculiar way to approach an intricate subject: each chapter starts with answers, and ends with questions! The mechanics is the same for the remaining chapters. In chapter 3 project teams and two key dilemmas are addressed: those of coordination and boundary management. In the next chapter, Rickards and Clark tackle charismatic leadership and its most recent developments, namely transformational leadership. In chapter 5 they concentrate on symbolism, making of meaning and culture change. Trust on leadership is the topic under examination in chapter 6; with this topic, the authors show how leadership is a highly complex subject, which cannot be reduced to models exposed by rational theories. The following chapter introduces another central topic in leadership studies: strategy and strategic leaders. And chapter eight deals with two contemporary dilemmas: gender and diversity. Another scorching topic is treated on chapter 9: ethics and the behav-
iour of leaders. The last chapter takes a glance at the future of leadership; without making futurology, the authors discuss and invite readers to discuss how leadership is becoming a highly complex subject to study, investigate and practice. All in all, this book offers a refreshing look in a field in which it is markedly difficult to make significant advances. Even its less positive points are non-significant in light of the overall message. For instance, one could question the models, the theories and the authors selected by Rickards and Clark as points of departure to present and debate issues; however, these two writers have a long tradition and experience in the field, therefore their choices do represent the main streams of research and current thinking on leadership. Also, one could ask for more on personal challenges, on critical thinking and on provocative questions, since the last parts of each chapter – those where readers are invited to think about and reflect on vital questions – seem far shorter than expected; but the aim of such sections are to help readers think and as a consequence to gain deeper understanding on the subjects. It is not to do the thinking for them. Jorge F. da Silva Gomes
ISPA, Portugal
Blackwell Publishing Ltd.Oxford, UK and Malden, USACAIMCreativity and Innovation Management0963-1690Blackwell Publishing Ltd, 2006.2006151••••BOOK REVIEWBOOK REVIEWSCREATIVITY AND INNOVATION MANAGEMENT
Book Review
Lemmens, Charmianne (2004) Innovation in Technology Alliance Networks, Edgar Elgar Publishing, ISBN 1 84376 990
Charmianne Lemmens’ book deals with social networking behaviour of high-technology firms for innovation performance. Competition in high-technology sectors has not only resulted in a large number of alliances, but these alliances have resulted in alliance block formation. The book takes a wide focus to explain this dynamical process of alliance formation in technology-based networks. The book’s argumentation is mainly based around the social networking theory. Lemmens does this by means of eight wellstructured chapters. One chapter deals with the methodological approach of the study. Qualities of this book are the longitudinal empirical evidence and analysis gained in the microelectronics sector. The longitudinal dimension is achieved by sixteen clusters of alliance formation behaviour. Innovative performance is measured by means of a firm’s patent intensity.
Volume 15
Number 1
2006
Her argumentation circles around three research questions that set out the evolutionary formation of alliance blocks. The first, and largest part deals with the effects of social embeddedness. The investment in social relationships creates social capital in the form of trust. This brings an advantage for individuals or groups to attain their goals and reap higher returns. The trustworthiness of ones social environment generates effects of embeddedness. The positive effects of embeddedness ensure that alliance block formation becomes more likely as the network increases in size and that firms replicate their existing ties within their alliance block. The effects of embeddedness can also have a detrimental affect on alliance formation. The benefits from trustworthiness transform into negatives when they start to restrain a firm’s ability to manoeuvre and create relational lock-in. The replication of relationships causes © 2006 The Authors Journal compilation © 2006 Blackwell Publishing
BOOK REVIEWS
that technological profiles of group members become more similar. The second part of Lemmens argument affirms the reason for technology block formation. As relationships become stronger, mutual trust and intimacy grow, and result in more productive innovation. It is no surprise that firms positioned within a technology block prove to have a better innovative performance. But this statement is not offered without nuance. After some time, the linear increase in innovativeness as a result of block membership, results in decreasing returns to scale. The third part of the book differentiates between the effects of technology block membership on firms dealing with cumulative or disruptive technological change. Block membership proves more beneficial than expected.
© 2006 The Authors Journal compilation © 2006 Blackwell Publishing
119
Non-block members have a low innovative performance under cumulative and disruptive technological change. Interestingly, trustbased governance, based on the existence of social capital, is also able to enhance innovation under turbulent technological change. The findings of the book cannot be called revolutionary, but the rich theoretical picture that is portrayed together with some unique empirical evidence makes the book certainly worth reading. When you consider that these qualities are combined with a clear and pleasant writing style, it is not hard to conclude that this is a recommendable book for anyone who is interested in the behaviour of technology-driven firms, including interested practitioners. Erik Harkink University of Twente
Volume 15
Number 1
2006
120
CREATIVITY AND INNOVATION MANAGEMENT
Conference Report Impressions of the 9th European Conference on Creativity and Innovation, ECCI 9 4–8 September 2005 in Lodz, Poland
E
very two years European academics and practitioners in creativity and innovation meet during their European Conference on Creativity and Innovation (ECCI) organised by the European Association for Creativity and Innovation (EACI). The series started in 1987 in Noordwijk, the Netherlands and gradually grew to the major European event in creativity and innovation. As an expression of welcoming the new European countries ECCI 9 was held in Lodz, Poland. Over 90 participants were attracted by the theme Transformation, building the new out of the remains of the old. They represented 20 countries, most European but also some from North America, South America, Asia and Africa. The conference set-up is only a few keynotes and the majority of activities in parallel theme groups and paper presentations.
Alex Jaccaci facilitated a large theme group on Creativity and Leadership. His emphasis was on spiritual leadership. Natasha Dagneaud and Guy Aznar worked with their group on four families of tools and techniques of creativity. The tools seemed rather basic material but the group also covered some ground in cultural diversity and the gap between North and South Europe. Wieslaw Karolak with his rather small group addressed the topic of Creativity through art. The group reported back some deep understandings of objects and how to reach subjectivity or ‘internal ownership’. The Dutch association Kreanet had a large theme group on contempory methods and cases. Their theme was ‘Transformation in Practise: Common Understanding’. The approach was highly practical and gave a good overview of methods used by Dutch practitioners. Makary Stasiak led a group on the Methodology of Subjectivity Education. This methodology is the basis for the success of his university that did grow from 200 students in 1994 to over 20.000 students nowadays. The methodology itself provides a balance in content oriented knowledge and personal development of the human being by creative action.
Keynotes The first keynote was the acceptance speech by Walter Swap on his book ‘When Sparks Fly’. Swap and his co-author Dorothy Leonard won the EACI award 2005 for Best Book on Innovation. The book itself gives a well designed and easily readable overview on the field of creativity within groups. The two other keynote sessions by Jerzy Czubak and Lech Walesa, Mieczyslaw Rakowski and Stefan Niesiolowski were impressive demonstrations of the process of transformation in Poland.
Papers
Theme Groups
In 1953 Osborn published his famous book “Applied Imagination” in which he introduced the principle of “Brainstorming”. He argues that organised ideation flourishes when the divergent (or generating) mode is separated from the convergent (or selecting) mode. His thinking eventually led to the
Each morning the conference started with parallel theme groups. Each group focused for 2 hours on one topic in a workshop type of setting. This year there were five of such theme groups.
Volume 15
Number 1
doi:10.1111/j.1467-8691.2006.00376.x
2006
The conference is always a good mix of academic papers and presentations from practise. This year there were 14 academic papers and 18 practitioners sessions. The best academic papers will be published in CIM in a special section. I will concentrate here on some basic trends in the papers and sessions.
Trend in Creativity: Towards a Modular Approach
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
121
task
divergent convergent
divergent reflection convergent
Figure 1. The Classical Osborn – Parnes Diamond in Creative Problem Solving
result traditional North American 5 or 7 stage diamond shaped model also known as the Osborn – Parnes Creative Problem Solving model. Over the years practitioners found this model both helpful as well as restricting. The model is limited in its use since it is North American culture biased as well as rigid in its linearity. In the conference several papers suggest another approach towards organised ideation. In their paper Marc Tassoul and Jan Buijs suggest to add an extra stage ‘reflection’ in the diamond. Nel Mostert suggested to move from the classical ‘diversity in groups’ to ‘diversity of the mind’. By and large most papers suggest to move away from the rigid classical linear approach to a more flexible use of a basic module in a series of both serial and parallel stages. From the papers a basic module can be suggested with 5 steps (task appraisal, divergent or generating stage, reflection stage, convergent or selecting stage, result appraised and decision on next stage). Among others Anne Heleen Bijl demonstrated in her highly appreciated practitioners session “creative ways to motivate teams” the more modular approach towards Creative Problem Solving.
Trend in Innovation: Open System The trend in the approach of innovation is rather obvious. The days of implementing simple stage/gate systems for stimulating © 2006 The Author Journal compilation © 2006 Blackwell Publishing
Figure 2. The Basic Module in A European Approach to Creative Problem Solving
and controlling innovation in organisations are over. Today emphasis in innovation systems is on open systems. Six of the 14 academic papers emphasize on Open Systems and 4 of the 8 innovation system oriented practitioners sessions did. Ranjan Malik’s presentation on ‘Quantum Innovation’ was a good example of the latter. He showed several instruments for open systems varying from ‘Generate Escape Velocity’ to ‘Pilgrimages’. In the academic papers for instance Scott Isaksen in his paper ‘Leadership’s Role in Creating the Climate for Organisational Transformation’ did give clues towards an open innovative climate. Frido Smulders’ paper gave insights in the interface interactions in the fuzzy front end of product innovation. Han van der Meer presented a paper on a survey of the application of the principles of open innovation in Dutch industry. His research shows in Holland a lot of work still has to be done in companies towards a more open system approach of innovation especially regarding the flexible use of business models. It is no surprise Henry Chesbrough won the EACI Award 2005 for Best Book on Innovation for his book ‘Open Innovation’. Chesbrough will be a keynote speaker on ECCI X in Denmark.
Volume 15
Number 1
2006
122
CREATIVITY AND INNOVATION MANAGEMENT
ECCI X: Copenhagen, 14–17 October 2007 Following the traditions of EACI, the conference will invite practitioners and academics to contribute with presentations so please mark the date in your agenda. The Call for papers is
Volume 15
Number 1
2006
available from www.eaci.net and will also be published in Creativity and Innovation Management Han van der Meer
[email protected] Secretary EACI OS-M460HM5V05
© 2006 The Author Journal compilation © 2006 Blackwell Publishing
