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CREATIVITY & INNOVATION

CREATIVITY IS THE GENERATION OF IDEAS THAT RESULT IN THE IMPROVED EFFICIENCY OR EFFECTIVENESS OF A SYSTEM - Timothy A.Matherly. Entrepreneurs with creativity have the ability to see, recognize, & create opportunity where others find only problems. According to Global Innovation Index India ranks 23 among the world nations with a score of 3.57, whereas USA tops with a score of 5.80 (www.managementtoday.co.uk ) Top 5 countries are: USA 5.80 Germany 4.89 UK 4.81 Japan 4.48 France 4.32
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According to World Patent Report the number of patents filed per million of resident population in 2005 in respect of a few countries is as under: Japan Korea USA UK India Philippines 2875 2530 701 296 6.04 1.82

CREATIVITY
Can we develop it ? OR Is it hereditary ? Yes, partly hereditary BUT also can be developed. - Many think that only geniuses are innovative. - But everybody has streaks of creativity may be in a different area. CREATIVE PROCESS: 1. Accumulation of Knowledge: Knowledge accumulation is one and using it as entirely different and is essential. It could be domain knowledge or knowledge in various related or unrelated fields. Various Processes for knowledge accumulation:

Normal Sources of Knowledge: Reading from various sources, (b) professional groups, (c) magazines travel, (e) discussions, (f) pursuing natural curiosities (g) observation 2. Incubation: Allowing sub-conscious mind to sift and synthesize volumes of information gathered. Occasionally avoid routine activities for introspection. Thought process can be continuous. Sometimes Giving a break helps. 3. Idea Experience: Answers or solutions to the problems is important. Experiencing the solution is critical. Solutions should withstand enquiry from various Angles. This is a thought-process based exercise. 4. Evaluation & Implementation: This is the last stage of creative process. This is an iteration process Between stage 3 and 4.

ADAPTOR
1. 2. 3. 4.

INNOVATOR
1. 2. 3. 4.

5.
6.

Employs a disciplined, precise, methodical approach Is concerned with solving rather than finding problems Attempts to refine current practices Tends to be means oriented Capable of extended detail work Is sensitive to group cohesion

5.
6.

Approaches tasks from unusual angles Discovers problems and avenues of solutions Questions basic assumptions Has little regard for means; is more interested in ends Has little tolerance for routine Has little or no need for consensus; often insensitive to others

Source: Michel Kirton, Adopters & Innovators: A Description & Measure These are general observations and need not be very accurate and are suggestive in nature. You can have your own understanding of these
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A CREATIVE CLIMATE
A trustful management that does not over control the personnel Open channels of communication among all business members Considerable contact & communication with outside members A large variety of personality types A willingness to accept change An enjoyment with experimenting with new ideas Little fear of negative consequence for making a mistake Selection and promotion of employees on merit Use of techniques that encourage ideas, including suggestion system and brainstorming Sufficient managerial, financial, human and time resources for accomplishing goals Note: These suggestions are mostly followed in Indian Corporates without much result. Following in letter and not in spirit.

INNOVATION
Innovation is a key function in entrepreneurial Process. It is the process by which entrepreneurs convert opportunities into marketable ideas. Thus, it needs opportunity identification which in turn is the function of environment scan & creativity. Ideas must be marketable. As innovations depend on environment scan, they are period sensitive (change from time to time). In late 1970s & early 1980s, the new companies were trying to overtake the established firms. This was the age of information technology and the new firms were taking advantage of this Total Quality Management was the order of the day. (Sony Walkman & Toyota cars All this forced the American Cos. to adopt new information technology to change their production techniques).
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Late 1980s witnessed take-over bids to unlock values of un utilized assets. This forced the companies to adopt new processes (process innovation). American Airlines started Sabre Reservation System to reduce costs. How do you Innovate? Identify the problem areas It is not easy to identify the problem. Many pseudo causes appear to be causes of the problem. When Toyota is Increasing its share in automobile markets in the US, the automobile giants thought it is due to undervalued yen, docile work force, Japanese culture, superior automation etc. But the fact is that the Toyota adopted a method of taking innovation to the front-end workforce instead of experts like in American companies (Is it product or mgmt) 9

Innovation is: Introduction of new goods or products

Introduction of new methods of production Discovery or opening new markets Finding new sources of supply Introduction of new organizational structures

SOUCES OF INNOVATION: 1. Unexpected occurrences: These are unexpected success or failures often end up in a major innovative source for the company 2. Demographic changes 3. Change in perceptions. Physical fitness outlets 4. Knowledge-based concepts. Inventions 5. Incongruities. Gap in consumer expectations and reality.
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MANAGEMENT INNOVATION: Most companies adopt product innovation by earmarking large portions of their budget and manpower but similar allocations either by way of budgets or manpower are not made for management innovations. What is management innovation? You have to understand what is management? Setting goals & laying out plans Motivating & aligning effort Coordinating & controlling activities Accumulating & allocating resources Acquiring & applying knowledge Building & nurturing relationships Identifying & Developing talent
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CAN YOU THINK OF MANAGEMENT INNOVATIONS ?

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CLASSIC TRAPS IN INNOVATION


Rosabeth Moss Canter: Strategy

Mistakes: Companies are guided by premium prices and high margins to seek blockbuster innovations like iPod. This leads to extensive screening of ideas and the resultant muffing of new ideas. A related mistake is that too much emphasis is given to product at the cost of new ideas emanating from production and marketing. (example of manufacturing yarn which is breaking too often and the solution coming from a worker who has been toiling with the idea for 30 years). Marketing innovations in tetra packs for liquids, new retail outlets etc. Similarly financial innovations to reduce financial costs.
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Process Mistakes: Too tight controls. A second set of classic mistake lies in process; specifically The impulse to tighten innovation with tight controls the same planning, budgeting and reviews applied to existing businesses. Structure Mistakes: Connections too loose, Separations too Sharp: It is dangerous to hold fledgling companies to the Same processes as established business and at the same Time, companies must be careful how they structure the 2 entities, to avoid clash of cultures or conflicting agendas. (example: Saturn & GM. Gillette having 3 separate divisions tooth brush (Oral B), appliances unit (Braun & A battery unit (Duracell) but failed produce battery operated tooth brush)
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Skill Mistakes: Leadership too weak, Communication too poor: Undervaluing the human side of innovation is another common mistake. Technically-oriented managers mistakenly assume that ideas will speak for themselves & so they neglect external communication. Or they emphasize tasks over relationships, missing opportunities to enhance the team chemistry necessary to turn undeveloped concepts into useful innovations.

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