What is creativity and why is it important for businesses?

This an excerpt from my bachelor’s dissertation (references are removed to increase readability).

Modern working

Modern economies are increasingly dependent on knowledge. The management guru Peter Drucker argued in 1988 that the organisation of the future will be knowledge-based and “composed largely of specialists who direct and discipline their own performance through feedback from colleagues, customers and headquarters”.

Concurrently, creativity, which is closely related to knowledge, is claimed to be an essential organisational competence. Indeed, over the last decades, innovation and creativity has become the primary engine of growth in developed economies and have replaced raw materials, labour and capital as the key sources of economic value. Florida claims human creativity has become “the decisive source of competitive advantage”.

Howkins reasons that the notion of “information society” is now inadequate and out of date:

If I was a bit of data I would be proud of living in an information society. But as a thinking, emotional, creative being – on a good day, anyway – I want something better. We need information. But we also need to be active, clever, and persistent in challenging this information. We need to be original, sceptical, argumentative, often bloody-minded and occasionally downright negative – in one word, creative.

For great a deal of employees, creative and in-depth thinking, co-operative tasks and complex problem solving are the very activities that now define their jobs. These ‘tacit’ activities – concerning the exchange of communication and knowledge, decision-making, and a requirement to harness and create many forms of knowledge and skills in the interaction with colleagues and clients – are taking an increasingly larger part of the typical model for businesses in the developed world. In fact, as an average of the UK, the USA and Germany, 41% of jobs chiefly involve tacit activities, making the ‘tacit workers’ more numerous than other the employee groups, which are the ‘transformational workers’ (who for example extract raw materials) and ‘transactional workers’ (for example clerks in the accounts-payable functions). Extending the reasoning of for example Amabile, Howkins and Nunamaker et al., a large part, perhaps the most important part, of these tacit activities require creativity to be performed well.

Many companies today who wish to boost productivity attempt to do this by streamlining and reducing the number of transformational or transactional activities, for example through outsourcing and computerisation. However, standardising or automating the work of a marketing manager, a software developer or a lawyer or substituting them with machines, cannot increase their productivity. On the contrary, to improve creative processes and tacit activities quite different methods and approaches must be taken.


What is creativity?

“In the long history of mankind (…), those who learned to collaborate and improvise most effectively have prevailed.” – Charles Darwin.

Defining creativity is not an easy task, as it undeniably is not a single thing. Arthur Koestler (1964), a key theorist on the psychology of creativity, famously separated the creative process into three different personas: the jester, the sage and the artist. The artist signifies the most traditional image of creativity as the making of art, while the sage has conventionally been the scientific and philosophical thinker. The jester personifies humour and playfulness. This is a wide, but arguably highly accurate picture of what creativity often entails.

From a management perspective, all three of Koestler’s personas are key when defining creativity. Arguably, a business that is to harness the benefits of creativity needs the humour of the jester to think outside the box and challenge tradition, the inspiration of the sage to invent new products and services and to tackle difficult business problems, and the ingenuity of the artist to refine the ideas and ensure elegance of form and solution.

Conversely, the Gestalt psychologists simply defined creativity as something that generates a new idea or insight through imagination, as opposed to reason or logic. Although probably not a rare understanding of creativity, in the context of this thesis, and arguably in management in general, this definition is too naïve and narrow. This is because it does not take into account that a process of getting to an idea or insight very often requires creativity, reasoning and logic in harmony, not as opposites. Arguably, the activities that define the jobs of knowledge workers are very often creative, tacit, logical, analytic and communicative, often all at the same time.

Even the great management guru Peter Drucker seems to have a quite narrow and negative view of creativity as something artistic and without direction. In his book “Innovation and Entrepreneurship” he claims: “Where conventional wisdom goes wrong is in its assumption that entrepreneurship and innovation are natural, creative, or spontaneous…But it is not creative. It is work.” The main point he makes in that paragraph is good one: Entrepreneurship and innovation can be achieved by any business, whether big or small. “But they must be consciously striven for” and one must practice it. Although this is absolutely true, his use of the term creativity is imprecise, not in agreement with how it is used in this thesis, and it serves as an example of some people’s view of creativity as something that is irrelevant for businesses and should not be encouraged.

In accord with Rosenfeld and Servo, it is assumed in the context of this thesis that some degree of creativity is prerequisite for innovation to happen, and that it indeed often is its very starting point.

The persons interviewed for this research project agree: creativity is a major part of important activities that a manager in a small tech business undertakes. Such activities might be to come up with a solution to a new problem, design an engaging and useful piece of software, invent a strategy to serve a new segment, put together incomplete pieces of information on customers to create a holistic understanding of the customer base etc. Perhaps especially for small businesses in a rapidly changing industry like the technology sector, creativity is vital. Interviewees report that it is often not feasible to do much research and analysis before making decisions or starting a process, hence more gut feeling, experimentation and creativity must be applied. Even if the customer actually knows what he wants, and you happen to understand the details of those needs, producing a product or service nevertheless requires you to put yourself in the position of customers and imagine how they might like those needs served. Hence, empathy and creativity is essential. As the creator of one the most successful innovations in the past 15 years, namely Harry Potter, JK Rowling said in a commencement speech for Harvard graduates:

Imagination is not only the uniquely human capacity to envision that which is not, and therefore the fount of all invention and innovation. In its arguably most transformative and revelatory capacity, it is the power that enables us to empathise with humans whose experiences we have never shared.


10 thoughts on “What is creativity and why is it important for businesses?

  1. Tree Lady says:

    I believe, you have said it all. BRAVO! Love the Grand Finale. Empathy is indeed at the core of creation and evolution. Awareness of the need for transformation is achieved through empathy. The solution, to achieve the needed result, comes from creativity. Love it! Thanks for sharing.

  2. Cazare Hoteluri Constanta

    Hi there! This post couldn’t be written much better! Going
    through this post reminds me of my previous roommate!

    He constantly kept preaching about this. I’ll send this article
    to him. Pretty sure he’ll have a good read. Thanks for sharing!

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