The future is in creativity, not mere productivity

The future is in creativity, not mere productivity

Organisations have nearly perfected the industrial model of managing work. For individuals, this model ensures that we know what we are supposed to do each day. For organisations, it guarantees predictability and efficiency.

4 HOURS 31 MIN AGO

Organisations have nearly perfected the industrial model of managing work. For individuals, this model ensures that we know what we are supposed to do each day. For organisations, it guarantees predictability and efficiency. The problem with this model is that work is becoming commoditised at an increasing rate, extending beyond manual tasks into knowledge work, as data entry, purchasing, billing, payroll and similar responsibilities become automated. Organisations are finding that it is increasingly difficult to draw value from the optimisation of repetitive work. The value of products and services today is based more and more on creativity — the innovative ways that products take advantage of new materials, technologies and processes.Value creation in the past was a function of economies of industrial scale: Mass production and the high efficiency of repeatable tasks. Value creation in the future will be based on economies of creativity: Mass customisation and the high value of bringing a new product or service to market, the ability to find a solution to a vexing customer problem, or the way a new product or service is sold and delivered.

We already have a word for creative output applied on a consistent basis to improve products and services: Innovation. But we need to take it out of the research and development lab and mainstream it — define it, measure it and optimise it. We need to understand how to manage creativity as well as we manage effort.

Productivity means we have wrung costs out of our operations. Creativity means we have created more value: We sold X units of something that did not exist before; we increased the sales of Y not because we made it cheaper, but because we made it better or we increased our value to customers by servicing needs we had not serviced before.

Think of how the iPhone redefined the mobile market, or how cable redefined how we consume entertainment. Taking costs out will always be important, but the equation is changing: Employees, management, strategy and operations will have to learn how to put value back in.

Organisational structure will have to change to meet the new reality of creativity as a core component of value and continuous innovation as the mechanism that sustains it.

The new organisation will include structures that support innovation around the clock and at increasing scale. These organisations will be more like organisms than machines. They will be structurally fluid — bringing individuals together in creative networks designed to adapt to an ever-changing landscape of customer needs and desires, often at a moment’s notice. Management will be the job of those who oversee creative economies, ecosystems and communities. Leaders will learn to manage innovation on a continuous basis; they will use scale to create differentiated products and services to solve problems and meet customer needs — all in real or near real time.

The value chain will supplant the supply chain. Supply chain management is about taking out costs and making processes more efficient. But today that is not enough. Value chain management is about how firms create value, how they coordinate the continuous innovations of creative contributors and how they make that process efficient for the consumer and contributor.

Creative networks will bring the same scale to creativity that social networks bring to our relationships. What social networks do for our ability to stay in touch and interact with others, creative networks will do for work, management, product innovation and, ultimately, value creation beyond anything we have ever seen.

Here is what you can do:

•Master machines. It does not take a programmer, maths whiz or rocket scientist to know that machines are taking over every form of routine work, whether physical or intellectual. Understanding how this happens and how to apply it to whatever you are doing will free you up to start thinking about how you can add creative value. That creative value may well be organising the machines to manifest a creative product or service.

•Get obsessed with value. How do you define and measure it? How would certain organisational changes create more value? What valuable new capability, product or service can your organisation offer customers? How will this make their lives better? How will it amaze them? Start getting your people together regularly to think about how to create more value for your customers and your organisation. Make this time sacrosanct.

•Make creativity real. This is not an R&D effort or something to be done outside of your normal role. If you are a member of the senior management team, make it clear that your company is beginning a long-term process of embedding innovation into its DNA, that creativity and innovation are real priorities. Innovation is what the organisation is and does — it is the primary responsibility of every employee.

Of course, nothing happens overnight. This process will take time, and it may be painful — after all, most people do not like change. Recognise that you are simply trying to improve the apple cart, not overturn it. It is a process, not an event. © 2013 Harvard Business School Publishing Corp

ABOUT THE AUTHOR:

Jack Hughes is the founder of TopCoder, one of the Web’s leading communities of developers.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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