CREATIVITY & INNOVATION

MANAGEMNT
MMS SEM IV

Syllabus
2. Need for Creativity and Innovation in
Organizations
Role of Creativity and Innovation in the
Organisation
Dynamics that underlie Creative Thinking

 The most innovative companies really do think

differently, they develop a culture of creativity.
Innovation means more than just new products
or services. It means improving the process of
creating those products, or selling them, or
experiencing them, or even improving the ways
we manage the people who do all of the above.
Definition of innovation is Scott Berkuns:
Innovation is significant positive change.That
change can apply to products and processes, or
it can apply to people.

 Recently, the Institute for Corporate

Productivity published a study surveying
some of the top companies and people in the
fields of management and innovation. They
examined some of the best people
management practices at organizations
known for innovation and found several ways
that those companies develop and manage
their human capital. In summarizing their
findings, here are 10 human capital practices
that drive innovation.

 1.Use Technology to Collaborate and Share

Knowledge- Collaboration drives creativity and
innovation, and social media and conferencing
technologies can help bring people together (or
virtually together) more often for that
collaboration.
2. Promote Innovation as an Organizational
Value- The most innovative companies didnt
just luck into hiring creative people; they placed
creative and even average people into creative
cultures.
3. Include Innovation as a Leadership
Development Competency- Part of building an
innovative culture is having leaders who value

 4. Tie Compensation to Innovation- The jury is still

deliberating the influence of incentives on
creativity, but their use in organizations sends a
signal that innovation is valued. That signal is an
important part of culture building.
5.Develop an Idea-finding Program- Its not
enough to have great ideas. Innovative companies
build a system that taps into the collective
knowledge of everyone and lets everyone promote
good ideas.
6.Fund Outside Projects- It might sound
counterintuitive to allow funding to develop
projects that are technically outside your
organization, but as market boundaries continue to

 7.Train for Creativity- Creativity isnt innate.

Creative thinking skills can be developed and
the most innovative companies fund training
programs to develop them.
8.Create a Review Process for Innovative
Ideas- Even the best ideas dont come fully
formed. There is a process to refining,
developing and identifying the ideas with the
most market potential. Creating a review
process allows this to happen and signals that
innovative ideas are valued.

 9.Recruit for Creative Talent- Especially at

the undergraduate and graduate levels. The
war for talent is slowing shifting its focus from
quantitative minds to creative ones.
10.Reward Innovation with Engaging WorkResearch demonstrates that companies that
are able to identify their most creative
employees can enhance their creative ability
by providing them autonomy to work on
projects that are naturally interesting to
them.

Need for Creativity and Innovation in

Organisation
Over the last decades, innovation and creativity have
become critical skills for achieving success in
developed economies. The need for creative problem
solving has arisen as more and more management
problems require creative insights in order to find
suitable solutions.
Creativity goes hand in hand with innovation. And
there is no innovation without creativity. While
creativity is the ability to produce new and unique
ideas, innovation is the implementation of that
creativity - that's the introduction of a new idea,
solution, process, or product. Creativity is the driving
force behind innovation and the incorporation of
looking at things from a different perspective and
freedom of restrictions by rules and written or

Why is creativity important in

business?
Creativity and innovation within a well-run companies
have always been recognized as a sure path to success.
Stimulating creativity and exploring completely new
and unknown before territories lead as result
toincreasing the productivity of the organisation.
Encouraging the employees to think outside of the box
and giving them time and resources to explore new
areas for innovative ideas is the key to cost-effective
business solutions.
Creativity improves the process ofsolving problems.
It doesn't matter if we're talking about developing a
new strategy or an innovative way to stay ahead of the
competition.
Creative problem solving gives thatcompetitive

Why is creativity important in

business?
Creative ideas and innovative
approaches can come from almost
anywhere- from your partners,
customers, target groups, employees.
They can bring you fresh perspectives
and ideas, so show them that youre
listening and open to their feedback.
That's why it is important an open
exchange of ideas to be supported and
encouraged by the company.

Why is creativity important in

business?

The companies that have done the best over the

long run are those who are the most creative
and innovative. These organizations don't copy
what others do; instead, they may use
innovative ideas from others as a spring board to
come up with a unique application, product, or
service for themselves.
They tend to distance themselves from the
competition rather than compete with them. If
they see another company copying what they
do, they create something new and better. In
other words, they are able to leverage their
creativity and their innovative capabilities to
attain long-term success.

Why is creativity important in

business?
Would you like to be one of those
organizations?
In fact, all companies can be more creative
and innovative no matter what their
expertise, product, or service.
When you apply creativity and innovation
to everything aspect of your business, you
are able to stay ahead of a changing
marketplace and the competition.

What is Creativity?
Creativity is a function of knowledge, curiosity,
imagination, and evaluation. The greater your
knowledge base and level of curiosity, the more
ideas, patterns, and combinations you can
achieve, which then correlates to creating new
and innovative products and services.
But merely having the knowledge does not
guarantee the formation of new patterns.
Then the embryonic ideas must be evaluated
and developed into usable ideas. In other words,
there really is a process.

What is Creativity?
To help you master that process, you first
must understand three important levels of
creativity, which are discovery, invention,
and creation.
Discovery: The lower level of creativity is
discovery. Just as the name implies, it's when
you become aware of or stumble upon
something--discover it. For example, there is
art called "discovered art." It might be a rock
with a unique shape or a piece of wood with
an interesting pattern. If you have ever
purchased a piece of natural stone or wood
art, that art was discovered art. Many

What is Creativity?
Invention: A higher level of creativity is
invention. For example, Alexander Graham
Bell invented the telephone. But you have to
ask yourself, "Would the telephone have been
invented without Bell?" The answer is yes.
Eventually the telephone would have been
invented because the science was there. It
might have taken longer, but it would have
happened. So while invention is higher than
discovery, it's something that is going to
happen. If you don't invent it, someone else
will.

What is Creativity?
Creation: Creation is the highest level of
creativity. For example, the stage play
Othellois genuinely a creation. Elizabethan
drama would have gone on without
Shakespeare, but no one else would have
writtenOthello. Similarly, there are things
that only your organization can create! The
key is tapping in to what those things are.

What is Creativity?
You might discover a tool, a technology, or a
process that you didn't know before. You
purchase the tool for your staff, and that
discovery helps everyone work better. After
some time, that discovery may also spur an
innovative idea of how to apply the discovery.
You may then use that innovative idea as an
inspiration that yields something never seen
before, something created by your company
that helps you and your customers. That's
how the three levels of creativity can work
together.

Creativity v/s Innovation

Realize that creativity and innovation
are different. Creativity refers to
generating new and novel ideas.
Innovation refers to the application of
an idea and, in many cases, is a
collaborative enterprise. So in other
words, innovation is applied
creativity.

10 Strategies for Increasing your

Creativity and Innovation
Truly creative people have developed their
ability to observe and to use all of their
senses, which can get dull over time. Take
time to "sharpen the blade" and take
everything in.
Innovation is based on knowledge. Therefore,
you need to continually expand your
knowledge base. Read things you don't
normally read.
Your perceptions may limit your reasoning. Be
careful about how you're perceiving things. In
other words, defer judgment.

 Let your ideas "incubate" by taking a break from

them. For example, when working on a big
business project, one of the best things you can
do to take a break from it is play a guitar or the
flute for a few minutes, or take a ride on
motorcycle. It shifts you brain into another place
and helps you to be more innovative and creative.
Experience as much as you can. Exposure puts
more ideas into your subconscious. Actively seek
out new experiences to broaden your experience
portfolio.
Treat patterns as part of the problem. Recognizing
a new pattern is very useful, but be careful not to
become part of it.

 Redefine the problem completely. One of the

important line that we need to keep in mind is: "Your
problem is not the problem; there is another
problem. When you define the real problem, you can
solve it and move on." After all, if you had correctly
defined the real problem, you would have solved it
long ago because all problems have solutions.
Look where others aren't looking to see what others
aren't seeing.
Come up with ideas at the beginning of the
innovation process and then stop. Many times we
come up with several ideas and start innovating, and
then we come up with more ideas and never get a
single idea done. At some point you have to turn off
the idea generation part of the process and really
work on the innovation and execution part in order to

Role of Creativity and Innovation in the

Organisation
Innovation is the process of creating and
implementing a new idea. It is the process
of taking useful ideas and converting them
into useful products; services or processes
or methods of operation. These useful ideas
are the result of creativity, which is the
prerequisite for innovation. Creativity in the
ability to combine ideas in a unique way or
to make useful association among ideas.
Creativity provides new ideas for quality
improvement in organizations and
innovation puts these ideas into action.

 Change and innovation are closely related,

even though they are not the same.
Change often involves new and better
ideas. The new idea may be the creation
of a new product or process or it can be an
idea about how to change completely the
way business is carried out. Successful
organisations understand that both
innovation and change are required to
satisfy their most important stake holders.

Strategic Importance of
Innovation
For both established organisations as well
as new organisations, innovation and
change become important in a dynamic,
changing environment. When a company
fails to innovate and change as needed, its
customers, employees and the community
at large can all suffer. The ability to
manage innovation and change is an
essential part of a managers
competencies.

Types of Innovation
Three basic types of innovation
are:
(i) Technical
(ii) Process and
(iii) Administrative

Technology and
Innovation

Technology is defined as the systematic application

of scientific knowledge to a new product, process
or service. It is also defined as the methods,
processes, systems, and skills used to transform
resources into products. Technology is embedded in
every product, service, process and procedure used
or produced.
Innovation is a change in technology. When we
find a better product, process or procedure to do
our task, we have an innovation.

Process Innovation
Process innovations are changes which affect
the methods of producing outputs. For
example, manufacturing practices such as
just-in-time, mass customerisation,
simultaneous or concurrent engineering are
all innovations.

Process innovation involves creating a new

way of producing, selling or distributing an
existing good or service.

Administrative
Innovations
Administrative innovation occurs
when creation of a new organisation
design better supports the creation,
production and delivery of goods and
services.

 The various types of innovation often go hand

in hand. For example, the rapid development
of business to business e-commerce
represents process innovation.
But this new process requires many technical
innovations in computer hardware and
software. Also as firms began to use business
to business e-commerce, administrative
innovation soon followed.
Further, implementation of process
innovations necessitated organisational
change. Doing something new means doing
something differently. Thus, innovation and

 In contrast, product innovations are

changes in the actual outputs themselves.
Technological innovation is intimidating in
its complexity and pace of change. It is
vital for a firms competitive advantage
because todays customers often demand
products that are yet to be designed.
As technologies develop, product
obsolescence increases and innovative
products will have to be introduced into
the markets.

 Managing technology requires that

managers understand how technologies
emerge, develop and affect the ways
organisations compete and the way people
work.
Technology can greatly affect an
organisations competitiveness and
managers have to integrate technology
into their organisations competitive
strategy.
Managers need to assess the technological
needs of their organisations and the
means by which these needs can be met.

 Understanding the forces driving

technological development and the
patterns they follow can help a manager
anticipate, monitor and manage
technology more effectively.
i. First, there must be a need or demand
for the technology. The need acts as a
driving force for technological innovation
to occur.
ii. Second, it must be theoretically possible
to meet the need using the knowledge
available from basic science.

 iii. Third, it must be possible to convert the

scientific knowledge into practice in both
engineering and economic terms.
iv. Fourth, the necessary resources such as
finance, skilled labour, time, space and other
resources must be available to develop the
technology.
v. Finally entrepreneurial initiative is needed
to identify and put all the elements together.

 The diffusion of technological

innovations For successful diffusion of a new
technology over a period of time it
should have the following attributes(i) Great advantage over its predecessor
(ii) Compatible with existing systems,
procedures, infrastructures and ways of
thinking
(iii) Has lesser complexity than its
predecessor
(iv) Can be easily tried and tested without
significant cost or commitment

Dynamics that underlie Creative

Thinking