/ 19 August 2008

‘Creategy’ for a time of recession

Focusing on creativity and innovation can be a recipe for success in tough economic times.

Does this sound strange? After all, common knowledge dictates that when the going gets tough, it’s a natural and appropriate for businesses to take the cautious approach, reducing costs and cutting budgets to give themselves a stronger leg to stand on.

But think of the Tour de France — it is won in the mountains, the tough times, as much as it is on the flat. It’s in the mountains that leaders carve out an advantage that gives them an unbeatable lead on easier ground.

Kevin Coyne, Professor at the Goizueta Business School of Emory University and a former senior partner at McKinsey & Company, agrees in a recent Harvard Business School article, saying: “Conventional wisdom holds that boom times call for new ideas, and recessions call for execution. That ‘wisdom’ is wrong. In fact, even more creativity is needed when times get rough.”

He makes the point that in slowdowns sales are tougher to come by, which means your sales force needs to be more compelling and your products more alluring than ever before. Secondly, he argues that the back of the house needs more creative belt-tightening than the usual “let’s cut travel budgets, impose a hiring freeze, and lay off the bottom 10%” approach.

“Your competitors are going to take those same actions, and there is an iron-clad rule in economics — in a highly competitive market, any savings that are common to most suppliers get passed along to the consumer. Thus, although you may have to take obvious actions too, the only gains you get to keep will be those from ideas your competitors don’t think of. Recessions are the best time to step up your competitiveness. Studies have shown that companies have twice the opportunity to change their relative position in an industry during a recession compared to growth times,” he writes.

It’s a compelling argument for more creativity in business, and it makes a lot of sense — why not do things differently when everyone else is on the backfoot?

In South Africa, despite our challenges, this opportunity exists just as much for businesses. There are even more opportunities for innovative products, some would argue, given the emerging economy context of the continent and the vast possibilities of reaching new consumers who are undersupplied. When one looks at the cellular telephony industry on the continent and the success of a company like MTN in particular, one can see how boldness and innovation can yield huge returns.

When one looks at the top of Business Week‘s annual ranking of the world’s most innovative companies, one sees Apple and Google right at the top for one reason — these highly successful and dynamic companies use creativity and innovation to great effect — it’s at their very core.

What many may not know is that Google was founded in 1998 and grew at a time when the dotcom bubble had burst and sent tremors of fear across the entire industry. Apple, despite so many firms and consumers tightening their belts this year, is now launching its innovative iPhone 3G into global markets already flooded with all manner of devices — but it’s precisely its high levels of innovation that have made it stand out and got consumers rabidly champing at the bit to get their hands on one.

So perhaps now you’re asking how you can get a bit of this creativity?

Luckily, creativity is inherent in us all. Twyla Tharp, one of the world’s most celebrated choreographers and author of The Creative Habit: Learn It and Use It for Life, says in a recent Harvard Business School article that “everyone can be creative, but you have to prepare for it with routine. It’s a practice and it’s a daily practice, and it’s a commitment. But it is available to everyone.

“There’s no other way around it. It’s an absolute mistake to think that art is not practical — or that business cannot be creative,” she adds.

What the world’s most innovative companies have been able to achieve, however, is to adopt a new type of organisational philosophy and model that drives creativity throughout the organisation, creating the foundation for “daily practice” that can deliver innovation. This can be described as “creategy”.

Pentacle UK, a leading innovation educator, also describes this as the Rabbit process. “The old method of innovation is to breed thousand of ideas, like rabbits, and put them through a corporate process where they are grinded through various separate departments and bottlenecks, and end up damaged and unhealthy — more often than not as products that miss the mark with consumers.

“The new style of organisation breeds a few healthy, strong ‘rabbits’, nurtures and strengthens them, and grows them into fit and robust products. While many organisations have people who are very creative, everything does not come together to create a movement. A fluid creative movement within organisations allows for the removal of blockages and the nurturing of a few great ideas from conception to their entry into the market.

Perhaps the best place to kick-start this process is unlocking the powerful creativity within oneself and others.

Jon Foster-Pedley is director of the creategy short course at the UCT Graduate School of Business. Creategy refers to business strategies that are infused with creative thinking. As part of its creategy short course the UCT Graduate School of Business is harnessing the talents of artists as business consultants, such as John Vlismas, one of South Africa’s leading comedians, and Christophe Gillet, the former director of business innovation for Sony Business Europe