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Managing Creativity Chapter 12

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1 Managing Creativity Chapter 12
Presented by Chase Breland 3/23/11

2 “Weird Ideas that Work- Building Companies where Innovation is a Way of Life” by Robert Sutton
Professor of Management Science at Stanford Engineering School and researcher in the field of Evidence- based Management. Ph.D. Sutton received his Ph.D. in Organizational Psychology from The University of Michigan and has served on the Stanford faculty since 1983 He used to teach at the Haas Business School and was a Fellow at the Center for Advanced Study in the Behavioral Sciences during the , , and academic years Latest Publications: No Asshole Rule: Building a Civilized Workplace and Surviving One that Isn’t (2007) Good Boss, Bad Boss: How to be the Best…And Learn from the Worst (2007) the Stanford University professor elaborates on how to produce an innovative organization

3 Managers who want to create innovation
Managers are continually working on how to deal with stimulating new ideas, services and products i.e. Michael Dell (Founder of Dell Computer Corp) In contrast, Managers that like routines may end up stifling innovation and not even be aware of this. Even Managers with the best of intentions may be destructive i.e. Lotus Development Corp (now part of IBM) Managers are continually working on how to deal with stimulating new ideas, services, and products and at the same time deciding how to reliably produce these ideas, services and products. i.e. Michael Dell, who founded Dell Computer Corporation at 19 says in order to be innovative “pay attention to what your people are achieving, and build an infrastructure that rewards mastery.” That is how Michael Dell became the youngest CEO of a company ever to earn a ranking on the Fortune 500 list. In general, managers that like routines and routine work may end up stifling innovation and not even be aware of this. Even Managers with the best of intentions may be destructive, they may unintentionally destroy what made the company vibrant in the first place. In the mid 1980’s, Lotus Development Corp. (now part of IBM) ,founded by Kaplan and Sachs( whose first product was Lotus 1-2-3,which was an “app” that helped make the IBM personal computer such a success) The Lotus grew in sales from 53 million to 156 million in With the growth, a new Pres/CEO James Manzi was hired. He brought in a new sales force that ended up molding the company into a typical Fortune 500 company which remained profitable but could not come up with new products. Evidently the new team curtailed the creativity of the original employees so Lotus and the original employees had trouble developing successful new products. In an effort to learn more about this dilemma, the Chairman , Kaplan, took the resumes of the first 40 original employees that had been hired and changed the names on the resumes and sent them in as applicants to Lotus. The new team of employees rejected these resumes. Thus, Kaplan realized the fault lie in his new team guided by Manzi who did not want innovative people; and that was most likely why they weren’t creating new products anymore.

4 Best Management is Sometimes No Management
Some of most innovative companies manage with: Soft touch Getting out of the way Letting employees take charge of themselves and their jobs. i.e. Gillette Management delegates authority: By Enhancing productivity By Suggesting employee commitment i.e. Phil Jackson ( Chicago Bulls Head Coach) Some of the most innovative companies manage -with a soft touch -or by getting out of the way and letting their employees take charge of themselves and their jobs. i.e. Competing with the inexpensive and disposable razor segment, Gillette recognized the threat of its low cost rivals thus they researched and learned that there was a strong market for reusable razors. Then Gillette introduced the Sensor razor in 1994 and it became a hit; the Mach3 was revealed as the first triple blade razor in 1998; both products spearheaded Gillette as a dominant player in the refillable cartridge razor market. The managers at Gillette let their employees research and discover what would work in today’s market. Good things can happen when mgmt delegates authority- -enhances productivity -suggests employee commitment i.e. Phil Jackson, the Chicago Bulls coach, during the Michael Jordan era coached by sitting quietly, not calling plays, or time outs during critical moments. He let his players use their skills the way they saw fittest. Their success rested on their won shoulders. Consequently, The Lakers earned a championship

5 Innovation Means Selling not just Inventing New Ideas
All about Selling! Innovators try to sell their ideas to peers and bosses first If an innovator cannot sell the idea or find a rep to do it, it rarely goes beyond the innovators mind Stanford University’s “Elevator Pitch” In regards to start-up companies, wealthy entrepeneurs must convince their investors to support start-ups. i.e. in 1880-gas lighting vs. 12 watt bulbs of Thomas Edison No matter how great something new is, or how new of a product it will only be accepted if the right people can be persuaded of its value. All about selling! Selling begins with a company long before a product is brought to market. In every big organization, such as, FORD, NASA, SIEMENS, the innovators try to sell their ideas to their peers and bosses first. If an innovator can’t sell an idea or find a rep to do it, it rarely goes beyond the innovators mind. Presently, At Stanford, experienced entrepreneurs and investors teach their students how to sell through a process known as the “elevator pitch” exercise during a 2 minute elevator ride in a 5 story building. They are allowed the time spent in this elevator ride to market their product. The lesson teaches them how to sell quickly and concisely . In regards to start-up companies, wealthy entrepreneurs must convince their investors to support start-ups. i.e. In gas lighting vs. 12 watt bulbs of Thomas Edison Edison’s bulb was unreliable, had short circuitry, poor wiring, and was more expensive than gas. However, Edison had wonderful marketing skills and design decisions, so he promoted his idea and made it appear better than gas for lighting purposes; thus the light bulb was manufactured

6 Innovation Requires both Flexibility and Rigidity
Flexibility- need to be to able to generate different ideas Rigidity- helps define problems narrowly enough so they can be talked about in a constructive way Finding a balance between Flexibility and Rigidity Best Strategy: Keep the problem rigid and possible solutions flexible i.e. Disney Hold the solution constant and let problems vary (or be flexible) i.e. 3M and iPhone Flexibility-=need to be able to generate different idea – sell old things in new ways Rigidity= helps define problems narrowly enough so they can be talked about in a constructive way -So people know what to focus on and what to ignore - So ideas can be developed and tested In order to balance between rigidity and flexibility: One needs the ability to hold the solution to the problem constant, and let the other vary. Basically, the best strategy= -Find a problem -Search for and evaluate alternative solutions Thus: Keep the problem rigid and the possible solutions flexible. -Disney is always working on the problem of reducing long lines to their attractions or rides by trying to figure ways to get lines to move quicker or at least seem to be moving more quickly. Disney, also partnered with animation specialist Pixar to produce blockbuster animation movies like Toy Story and Finding Nemo. This partnership even changed the Hollywood animation landscape by combining Pixar’s software and Disney’s marketing research. Hold the solution constant and let the problems vary (or be flexible). This works when new or old technology, product, theory, or service is treated as the possible solution to many unknown problems (problems before they occur) i.e. In 1950s microreplication was developed by 3M to increase the brightness of overhead projectors. Then the 3M managers worked on finding more ways to use microreplication. It is now used in dozens of 3M products: recording tape, sandpaper, traffic lights, mouse pads. A ”solution driven search”. So far the company has introduced about 16,000 products through iPod and iPhones are other examples of this same solution driven search…both devices , the technologies are different, iPods address the needs of music listeners while iPhones are designed as communication equipment. Different technology apparatus’s are used to address the various needs of different customers.

7 Incite and Uncover Discomfort
Discomfort isn’t fun But it helps people to avoid and break out of mindless action It occurs when people imagine dumb things and try to do them When people argue over their precious ideas When employees defy bosses i.e. Oil of Olay Many successful ideas were born after someone got upset about something and then did something about it. Discomfort also plays another role i.e. Bicycle Seat Lock Discomfort- inevitable and desirable part of innovation Discomfort isn’t fun- -but it helps people to avoid and break out of mindless action. -It occurs when people imagine dumb things and try to do them -When people argue over their precious ideas -when employees defy bosses i.e. Oil of Olay, a cosmetic product that was considered dull and not so profitable two decades ago when Proctor and Gamble acquired it has now redefined its boundaries since its employees defied their bosses original thoughts about the cosmetic. When P&G employees heard its rival Unilever had launched a series of products with new features, P&G responded by introducing a cleansing line in 1990, a daily ultraviolet protection product in 1991, and the Olay beauty bar in Realizing that in order to sustain these products, P&G had to innovate aggressively, even if the managers there were not so sure, so certain employees came up with a series of “anti-aging” features to the Oil of Olay brand and now the line has been transformed into a billion dollar line. Discomfort also plays another role. Many successful ideas were born after someone got upset about something and then did something about it. i.e. An inventor, David Levy, noticed that tons of bikes near his lab had missing seats, so he realized they had been stolen. He was unhappy, felt uncomfortable, Guess what? - his discomfort inspired innovation=the bicycle seat lock.

8 Treat Everything like a Temporary Condition
When things are working well this does not mean that they will continue to work that way Organizations need to treat everything from procedure, to product lines to teams as eventually discontinuing Temporary organizations are constantly disbanding to get things done, to invent and stop mindless action. i.e. Twitter Organizing principles for innovative work reflect s the assumption that everything is a temporary condition- not permanent. Leaders of innovative companies warn all the time that just because things are working well does not meant they will continue to work that way. In order to sustain innovation Organizations need to treat everything from procedure, to product lines, to teams as although they may be useful now ( in the present), nevertheless, they will need to eventually be discontinued. i.e. Three weeks after Curtis Kimball opened his crème brulee cart in San Fransisco, a customer came to him to get dessert and said he had heard about the cart on Twitter. Mr. Kimball admitted at the time that he didn’t even know anything about Twitter but decided to signed up for an account after talking to his customer, and he now has more than 5,400 followers who wait for him to post current location of itinerant care and list the flavors of the day, like lavender and orange. Mr .Kimball treated his cart’s popularity and success as though it was temporary … He knew that he needed utilize something else to keep his popularity going. He used and will keep using Twitter to do this.

9 Make Process as Simple as Possible
Law of Parsimony= make everything as simple as possible. Focus on what matters and ignore everything else Innovation can be simplified by reducing the number of products or services developed and sold. i.e. Apple Computers If everyone follows a simple vision: Speeds development Focuses effort Results in simpler products or services Many innovative companies follow the- Law of Parsimony= make everything as simple as possible They want their employees to focus on what matters, and ignore everything else. They feel that aspiring innovators might get tangled in “red tape”, have to “meet” too many times, might be forced to be “too controlled” Basically, they may have to devote too much time selling ideas and playing organizational politics and not enough time developing ideas. Jack Welch at GE says, ”Bureaucracy hates simplicity… Simple messages travel faster, Simple designs reach the market faster, & Elimination of clutter allows faster decision making. Also, innovation can be simplified by reducing the number of products or services developed and sold. i.e. In 1997, Apple was selling so may computer models, that they didn’t know which one to promote or get their friends to buy. By 1999, Apple had 4 computers: a laptop and desktop for home and education markets and a laptop and desktop for business markets the result: Apple’s return to profitability. Finally if everyone follows a simple vision- -it speeds development -focuses effort -results in simpler products or services (which are easier to implement and build)

10 AJ Schuler’s Steps in the Process of Innovation
Select the most promising innovators 2. Create buffer zones 3. Give innovators room to play 4. Resist the temptation to look for immediate results 5. Commit to driving the best ideas through to implementation In further regards to parsimony (simplicity)--- Another author, A.J. Schuler, who has a doctorate in Psychology, explains the process of innovation that today’s market requires in 5 simple steps: Select the most promising innovators managers should cull out the most promising idea generators and give them extra resources Create buffer zones build a cocoon around the creative people by eliminating work policies or pressures that might get in their way make sure the tools and resources are available for them to retrieve their data or answer the questions they have Give innovators room to play let them mess around with data or projects that they see as helpful Resist the temptation to look for immediate results in other words, don’t set deadlines(this could kill the creative process) Commit to driving the best ideas through to implementation -the manager should be a filter to test the best ideas and solutions - then, the manager should commit to the internal sales and marketing department that they help in bringing the new idea to reality ***Remember-an affirmative response will show other innovators that their efforts will be used Basically, Schuler’s steps exemplify that business leaders have to commit to certain practices in order for business innovation to occur.

11 Innovation Means Living with Some Nasty Drawbacks
Can be annoying and frustrating Things need to be done that are unpleasant even frightening You may hire people you don’t like or that don’t like you There may be confrontation-people that worked for us defying requests People may never be taught what they are supposed to do Things may never be or get finished Even the average person, thinks they will succeed; but only a small % succeed An employee or the company may be a casualty i.e. Intel The hazards of building or joining an innovative company Working there: Can be annoying and frustrating things need to be done that are unpleasant or even frightening And in building an innovative company -you may hire people you don’t like or that don’t like you -there may be confrontation-people that worked for us defying requests -people may never be taught what they are supposed to do -things may never be or get finished -even the average person, thinks they will succeed; but only a small % succeed an employee or the company may be a casualty. But these drawbacks are second to the achievements produced by innovative companies. However, not to make innovative places seem horrible or a nightmare- A lot of people love confusion and think it is more satisfying to come up with new ideas rather than repeating the same thoughts and actions. It is exciting to work with people who are thrilled about a new idea. A lot of people become rich working in such places. i.e. Intel corp. is not known as a fun place to work because it encourages conflict and internal competition . They even hold classes that teach constructive confrontation. But this has made Intel successful. Just beware of the hazards.

12 Learn to Fail Faster, Not Less Often
Companies should not reduce the number of “screw-ups” According to Forbes and Red Herring Magazines Companies shouldn’t reduce the number of “screw-ups” because things might grind to a halt. According to articles, in Forbes and Red Herring magazines, a lot of website start-ups have had a lot of problems ( “screw-ups”) . Basically if the websites succeeded, the investors made a lot of money quickly, or the opposite occurred and they didn’t make much money if the website failed, because it happened so quickly.

13 Open is Good, Closed is Bad
Creates variance and different perspectives Blend ideas with what you are already know and invent new management practices, services and products i.e. Regional Advantage by Anna Lea Saxenian If one company owns a solution to a problem, this may spur people in other companies to invent an alternate solution. By being open to diverse people, ideas and products will get better and better. i.e. Linux Companies offer sabbaticals or allow employees time to work on their own projects Being open to ideas from others – people and places- creates variance and different perspectives, which can assist a company in not getting stuck in the past. And if you are open to outsiders and ideas you can blend their ideas with what you already know and invent new mgmt. practices, services, products. The value of this openness is illustrated in a book entitled, Regional Advantage, written by Anna Lee Saxenian, In the book, she explains how Silicon Valley companies like Hewlett-Packard, Intel, and Sun Microsystems survived because their engineers share ideas so openly within their own company and even between engineers of other companies. Comparatively, companies like DEC, WANG, and Data General, who were once great companies; didn’t work with innovation; therefore, they declined and died. In addition, if one company owns a solution to a problem, this may spur people in other companies to invent an alternate solution. Moreover, if a company gets the reputation of listening to other companies’ ideas, but not sharing any of their ideas- the other companies may ostracize them or clam –up – this type of closure hurts the company that only listened. By being open to diverse people, ideas and products will keep getting better and better. i.e. Linux ( software which is the only serious challenge to Microsoft Windows) has open source or free software, thus their code stays open and anyone can access or modify it, or even redistribute the programs code, as long as the modification do not change the distribution terms and if remains free software. Their policy has made them advance and grow. Another way to be open as one article suggests is “to offer sabbaticals or allow employees time to work on their own projects.” attend conferences outside of an employees normal expertise work with people from a different dept allow time to travel, hobbies or classes that enhance creativity and improve productivity

14 Class Question Do any of you all feel like work an innovative company?

15 Attitudes of Innovation
1.) In order to help make a company more innovative it is more important for the people in the company to have right ideas toward their work and each other, than the exact methods of innovation. 2.) Emotions and feelings drive people to work hard and turn good ideas into reality. 3.) Innovative companies are filled with people who are passionate about solving problems. 4.) If people are playful and curious – innovation occurs 5.) Employees need the ability to switch emotional gears between cynicism (deep doubt) and belief (confidence) to remain pioneering. 6.) We should all ask ourselves questions like: “What if these ideas are true?” “How might I help organize or manage my company differently?” “How can I act differently to make myself more creative?” In summary, Sutton reflects 1.) In order to help make a company more innovative it is more important for the people in the company to have right ideas toward their work and each other, than the exact methods of innovation. 2.) Emotions and feelings drive people to work hard and turn good ideas into reality. 3.) Innovative companies are filled with people who are passionate about solving problems. 4.) If people are playful and curious – innovation occurs 5.) Employees need the ability to switch emotional gears between cynicism (deep doubt) and belief(confidence) to remain pioneering. 6.) We should all ask ourselves questions like: “What if these ideas are true?” “How might I help organize or manage my company differently?” “How can I act differently to make myself more creative?” Essentially, new ideas are like toys and they really need to be examined , taken apart, played with,in order for them to improve. Play brings new knowledge, helps break away from the past. and create new. i.e. one final example:

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17 References Dell, Michael. “Direct From Dell.” Retrieved 13 March https://www.1000advices.com/guru/org.html Hansen, Eric. “Managing for Innovation: Insights Into a Successful Company.” Forest Products Journal. 1 Sept Retrieved 16 March 2011. “Innovation Strategies for Creating Competitive Advantage.” Research Technology Management. May- June Retrieved 3 March Miller, Claire Cain. “Mom-and-Pop Operators Turn to Social Media.” The New York Times. 23 July Retrieved 19 March Schuler, A.J. “Business Creativity and Innovation: How to Build an Innovative Culture.” Retrieved 13 March

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