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Why Do Businesses Today Need To Be Creative?

2014 August 3

In a famous scene in the 1967 movie The Graduate, a family friend takes aside Dustin Hoffman’s character, Benjamin Braddock, and whispers in a conspiratorial tone “Plastics.  There’s a great future in plastics.”

The line has become immortal because it signifies a common rite of passage: the abandonment of youthful dreams for the practicalities of adult life.  Promising young people have always been expected to bear down, follow the rules and lead pragmatic, productive lives.

Yet, these days, we encourage our youth to “follow their passion” and “find meaning.” Corporate retreats often feature creativity exercises and offbeat activities such as bongo lessons, jazz classes and improvisational theatre.  We take it for granted that business today is an essentially creative activity, but never question why.  What’s changed?

The Experience Economy

Clearly, one reason for creativity’s growing role is the increasing need to add value.  In a 1998 article in Harvard Business Review and accompanying book, Joseph Pine and James Gilmore argue that the evolution of economic activity is driven by a competitive obligation to create value over and above commodity goods and services.

To illustrate the point, they give the example of a homemade birthday cake giving way to a Betty Crocker mix, then to a store bought cake and finally to an event at Chuck E. Cheese’s with the birthday cake thrown in.  They describe the latest iteration as an experience economy in which basic services like airline travel have become mere commodities.

Some time has passed since Pine and Gilmore wrote their book and there is much to find fault with.  It’s easy to see how a mother would actually value the experience of baking a cake from scratch, especially if it’s an expression of her lifestyle and values.  Today’s home bakers have a vast array of products and services designed to enhance their experience.

Yet the basic premise still rings true and the user experience movement spawned by Don Norman’s The Design of Everyday Things has become a mainstream corporate activity.  In fact, we’ve seen a radical shift toward design as a core source of value creation.

The Age of Ecosystems

It’s not just products and services that have changed since The Graduate, careers are much different too.  In Benjamin Braddock’s day, you were expected to enter an industry and remain within it for your entire career.  Making the decision which one to enter, be it plastics or something else, was an important one.

Yet today, we don’t have industries so much as we have platforms and ecosystems.  It makes little sense, for example, to talk about the entertainment industry and not take into account companies like Apple and Amazon, who in turn compete with firms like Microsoft and IBM that have activities ranging from automobile to medical services.

We have, essentially a semantic economy in which value is not created in the context of a particular consumer or industry, but an entire ecosystem.  In essence, the source of competitive advantage has shifted from efficiencies to linkages.  While efficiencies are obvious, semantic connections are not.  It takes imagination to uncover them.

So unlike Benjamin Braddock, acquiring a skill set geared to a particular industry or set of activities will do us little good.  Today, we must develop dynamic capabilities that can sense and seize opportunities in the marketplace.

The Rise Of The Robots

I’m not sure what young Benjamin’s mentor expected him to do with plastics, but it’s a good bet that whatever the job was, it has now been automated.  From lights out manufacturing to 3D printing, the biggest challenge for young professionals today is how not to get replaced by a robot.

In earlier eras, professionals were prized for their ability to process information.  There was great value in being the one who had all the answers or who could quickly run the numbers in your head.  Yet today, a teenager with a smartphone has more instant access to information than even a genius of a generation ago.

Now that we are all at risk of being replaced by robots, value has shifted from processing to learning, from giving smart answers to asking insightful questions.  That’s an intensely creative process because it requires us to collaborate with others and synthesize across domains.

The New Role Of Leaders

The world has changed a lot since since The Graduate.  The confluence of experiences, ecosystems and automation has created an intensely different business environment.  Today, rather than simply planning and executing, firms need to constantly reinvent how they create, deliver and capture value.

Yet to do that effectively, we must fundamentally change the way our organizations work.  It is no longer enough to direct action, we must learn to manage unseen connections. That’s a major break from the past and many enterprises will not be able to make the leap.  The ones that don’t, will not survive.

Fortunately, we do have an increasing number of new tools to meet the challenge.  New forms of organization, such as holocracy, agile squads and self-organizing firms.  There are also new tools that allow us to scientifically track and analyze information flowing through organizational networks.

Yet most of all, if we are to unlock creativity, we need to recognize that leadership is more important than authority.  It is no longer enough to dictate the “what,” we must learn to inspire the “why.”

– Greg
 
 

5 Responses
  1. August 3, 2014

    You are absolutely right about the fact that generation is quite smarter but I think the patience level is also decreasing day by day. Especially when you see young entrepreneurs they all want to be millionaire in a single day. No one wants to wait and I think that is what creating chaos.

    Greg Reply:

    I see what you’re saying, but I’m not sure that I agree. It always seems to that the young are less patient, because we forget how immature we were at their age.

    Everybody was in a rush to get rich in the 80’s, for example, but it had nothing to do with creating anything. The startup kids of today can be a bit annoying, but they’re at least interested in building something. It’s substantially better to dream of being the next Mark Zuckerberg than the next Gordon Gecko.

    – Greg

  2. August 3, 2014

    Greg,
    While I like your article a lot, I think that it is the ‘application’ of these new observations and insights that sets one apart and can create distance between our rivals, whether they be human, robots, ecosystems, or constellations.
    Or said another way, the creativity economy is all about application.
    Regards,
    Rich

    Greg Reply:

    Interesting point, Rich. Thanks for sharing.

    – Greg

  3. Anna Lapushner permalink
    August 4, 2014

    Thank you for sharing this Greg. The picture was just as evocative for me as the article, reminding me of the famous line, “Would you like me to seduce you?” I thought about this suggestive guidance from a woman of experience to a young man eager to gain that experience. Equally, your article points to a male mentor’s desire to guide one of his own into the future. A part of being a synergistic leader is expressing the magnetism that simply facilitates collaboration. Many off-site groups encourage individuals to play and express themselves, which requires trust in the process, and above all in the leadership. I wouldn’t recommend Mrs. Robinson to be a Scrum Master, though I imagine if she were, all her team’s stories would be lined up like ducks in a row.

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