Innovation and Creativity

‘Creativity’ has become one of the most highly praised and prestigious concepts in modern business. Corporations are extremely keen to have a lot of it around and worry whenever it may be in decline. A large and lucrative market has emerged, feeding off some ill-focused insecurities. At worst, in a bid to increase creativity, senior executives might be sent to do some finger painting or else are let loose on a dressing-up box.

But business creativity is a little different from artistic creativity. A company is a group of individuals gathered together to solve a problem for other people. This helps to define what the true focus of business creativity should be: intense and lateral thinking about what could be missing from the lives of customers. Business creativity means skill at identifying and profitably meeting the needs (many of them unspoken and vague) of customers. Everything else – the factories, the technology, the logistics, the spreadsheets – is in a sense secondary to this aim; whatever efforts are subsequently lavished on execution, a business cannot succeed if it hasn’t zeroed in on a real, that is, sufficiently urgent, human requirement.

Competition in capitalism is a constant struggle by companies to find more accurate accounts of the needs of their consumers. A good business is one that has understood needs better than its competitors. Therefore, the creativity that really counts – and that companies should attempt to foster – is the one that best helps a business enter the minds of its customers accurately and powerfully.

ON STANDING BACK

The stresses of running any business with even moderate success are pretty much all consuming. It’s no wonder, therefore, if enterprises sometimes lack the time to stand back and think creatively about innovation – and suffer accordingly down the line.

Only a few companies can afford to send their teams to reflect on business in fancy lodges on the sides of mountains, but we can all get into the mindset such places are ideally meant to promote. We can get into the habit of mentally ‘standing back’ – and wondering whether the future of our business could be a bit different, and richer, than its past.

There are four big questions that can generate fruitful thinking:

Four ‘Stand Back’ Questions

1. What might your customer secretly be hoping for?

It sounds odd but many customers privately (and unclearly) harbour hopes of companies that go a long way beyond what these companies are currently offering. A great way to innovate is to tap into these secret hopes and build products and services to meet them. The possibilities for growth can be enormous.

Take some of the hopes that hover around the travel industry. Consider the Four Seasons hotel on the Caribbean island of Nevis. What it offers its customers currently includes: a set of bungalows with plunge pools, a spa, tennis courts, a three star restaurant and water-skiing facilities. But it’s evident that these elements don’t represent the limit of the hopes that customers might be bringing to the hotel when they go there, the travellers might also be hoping that:

– they can finally sort out anxieties around their careers

– their relationships with their children could improve

– they would reconnect with their partner

These three hopes are not currently addressed, but to take each of them seriously could mean setting up three new businesses (a professional development coach, a family therapist, marriage counselling).

Or let’s look at some of the secret hopes people bring to financial services companies. When we step back, a bank is not just a place to store money safely, with a competitive interest rate and decent customer service. We want these things, of course, but the less articulate secret hope is about something else: living well around money.

When it comes to money, we have questions about how to deal with envy, worries about what to spend money on, speculations about how to make money and desires for how to teach children about the value of money. There are big opportunities for the financial sector in understanding more correctly people’s biggest needs and ambitions around cash.

A wide path to growth emerges whenever companies see themselves as being able to tackle not just a local issue but one of the big themes of existence.

2. Are there neighbouring problems you could fix?

Does the problem that you’re fixing exist somewhere else and would it make sense for you to fix it there?

The designer Giorgio Armani founded his clothing business in 1975 and soon found widespread success. What motivated him was the desire to fix the chaos and clutter of the world – and he did this by giving his audience an experience of simple elegance delivered via clothes.

But with time, Armani realised that similar problems – of clutter, chaos, mess, disorder – could be identified in other areas of life. He’d fixed it in one area, could he now move on to addressing it in others?

The Armani company grew from clothes to perfumes to hotels and furniture.

Armani Hotel: Milan

3. Might you take the same Message into a different Medium?

It’s easy for a company to become fixated on the medium in which it first launched – and therefore to fail to see that its message (which is the really valuable bit) could happily and lucratively transfer.

This can happen to artists. Andy Warhol began his career making paintings. His values – an ironic, half-critical, half-loving look at the ephemera of American life – seemed ideally and perhaps exclusively suited to canvas.

But with time, Warhol stepped back and came to a richer realisation. His message could as happily exist in a book, a film, some photographs or a magazine. Which is how he came to make a two-minute film of himself eating a hamburger from Burger King.

The same manoeuvre can be made in business. For a long time, Michael Heseltine’s company, Haymarket Publishing, believed that it should exclusively focus on making magazines. But in the mid-1990s, Heseltine realised (these things always sound simple) that he had stuck a little too loyally to what was, after all, only the medium – and that his message (information relevant for businesses) could exist in many other media, an idea that lay behind a decision to start an event company, a digital platform and a consulting arm.

4. What is the Bigger Version of your current activity?

Of any current business activity we can ask ourselves: what is the bigger version of this? One can ask: what is the underlying principle within the business? And what would it look like for the business to apply that principle in larger ways?

Let’s take a very small thing indeed, a paperclip – and ask what the bigger version of this is.

When teasing out the underlying principle of a business, we shouldn’t look at what the business actually does as the move it is making. So the principle of a nut manufacturer isn’t making nuts, it is making healthy snacks. The principle of a phone company isn’t making phones, it is communication. This means that one can imagine the business operating in ways that are utterly faithful to its principles and yet with quite different products and services.

The underlying principle of the paperclip company is temporary order. The paperclip is a beautifully simple micro tool devoted to keeping sheaves of paper in order, while allowing them to be easily released. It was an advance on binding (which also orders papers but in a more permanent fashion, at odds with the need to extract particular sheets). 

The larger version of this activity could lie in filing cabinets, shelving, bags and briefcases. Because in each case the same principle is involved. One day, the paperclip company could logically get around to car parks. 

Or take a company that is currently making ear plugs. Its underlying principle is quiet. It’s tapping into the need for serenity: focus in a noisy world, where sound is a disturbing and intrusive factor. This could lead it into a range of new markets; noise-cancelling equipment, acoustic insulation or scented candles that promote tranquility. They might develop a brand of fee-paying luxury restrooms that are havens of quiet or reinvent the monastery as a quiet secular retreat.

After some time in the metaphorical ski lodge, with some leaning back, we get….

Let’s consider some recent examples of companies that stepped back to find their macro position in the scheme of things, and that properly asked how they fitted into a good life.

CASE STUDIES

LinkedIn

When LinkedIn was launched in 2003, the founders and management understood the company as being in the CV exchange business. Professionals – including potential employers – could view each others resumes and develop online and real life connections. However, recently, the company started to see itself from a far larger, less explored perspective. They realised that the huge underlying business opportunity was to try to match people’s true talents with the commercial needs of the world.

So LinkedIn redefined its mission as that of assisting everyone in getting the right, ideal job for them. To do this they would need consider a much broader range of issues, including: What are people’s real talents? How can people get to know them? How can talents be developed into skills? And how can proficiency in skills be demonstrated and proved to a global range of employers suspicious of the very variable and sometimes faulty markers of the current education system?

These are much bigger challenges than making sure your CV gets to the right HR department. For instance, a person might be too distracted to explore their own minds. Or they might overestimate their abilities in a particular direction; or they might be lacking a convincing badge to prove what they can actually do.

LinkedIn has finally broached what was always the big underlying – if tacit – longing of its users: that a company should be devoted to making sure they end up in the right job. A bigger future for LinkedIn therefore involves expansion into a range of areas:

Therapeutic career assessment: a major problem around making the best use of one’s abilities is the difficulty in working out what kind of work one is suited to. This can be a life-long concern. We might easily be swayed by unhelpful expectations from others (a pushy family, a peer group that’s very competitive around status). Existing services in this area are expensive, unreliable and accessing them still feels like an unusual thing to do. The huge opportunity for LinkedIn is to deliver this universally and inexpensively through the user of artificial intelligence.

Training materials: The very recent $1.5 billion acquisition by LinkedIn of the education material supplier Lynda.com has been guided by the idea that in order to realise potential – and thus end up with the most satisfying work – people need to enhance their skills. It’s obviously not a new idea in itself. The education on offer, however (unlike what typically happens in schools and universities), is focused on helping people do their jobs better.

These moves are an increasingly accurate assault on the fundamental problems the exchange of CVs was circling round: how to help people build good careers and how to help businesses build the workforces they ideally need.

Airbnb

When it was started in 2008, the founders of Airbnb originally conceived of their business as providing extra travel accommodation. The company grew very quickly on a huge scale.

Recently, though, Airbnb has reconsidered the business it is in, as a way of understanding how they can and should expand their operations. Conventional logic might have suggested they grow into an airline service (their customers do a lot of flying) or a bank (they are highly trusted around financial transactions). But instead they have structured their expansion plans around fulfilling some of the deeper hopes of travel. Not being able to find accommodation is one of the potential obstacles to happiness away from home. But there are lots of others.

© Flickr/expat-photographer

To get a handle on these, Airbnb has been studying what actually goes on when people travel. They have tracked individuals and families in detail, checking up on their heart rate, mood and anxiety levels. They’re discovering a lot of things that are going wrong with journeys:

Not really knowing where to go or why: the modern world is hugely invested in the general idea of travel and has large – but vague – hopes for what travel could deliver. But the travel industry on the whole operates on the assumption that people already know what they are looking for, the task is only to get them them there. And yet we’re constantly ending up in places where we don’t entirely know what to do (and so end up going to the museum; a trip has arguably always gone wrong by the time we’ve ended up in the museum).

To address this Airbnb is focusing on diagnostic help. Instead of asking ‘where do you want to go?’, they want to expand via the question: ‘what are you hoping to get from travel?’ They want to deliver a more psychotherapeutically informed travel-advisory service.

Troubles of the self: one can have a hideous row in the perfect bridal suite, feel anxious and lonely on a coral island, get bored in New York… The problem isn’t necessarily the place: there are petals on the bed, the white sand is perfect, the Frick Collection is around the corner. The problem is in us, we bring our distracted minds, our worries and frustrations with us. But up to now, the whole travel industry has been focused on only one half of the equation. In order to unlock the hopes of travel, Airbnb is now looking at:

– Solving loneliness when travelling: by developing an introduction service, essentially making its platform social.

– Using travel as a time to interact with other people in your line of work while on the move, to learn new things (a networking social version of LinkedIn).

– Romantic travel: helping couples to get on better

These are radical innovations in the travel business. But they are not random. They are highly focused expansions that target the underlying hopes of travel, which Airbnb initially got involved in by addressing what turned out to be one small part of a vast issue.

CONCLUSION

The Green movement often attacks business for filling the world with junk. It tell us that we already have more than enough and therefore that the growth-focused agenda of business is evil. But the argument here is that business actually has to grow (and can grow in admirable directions) because companies are still so bad at fulfilling needs. There are still so many things that customers want and yet which aren’t being provided. These things are not trivial distractions or extravagant indulgences. They are central supports for the good, flourishing lives we rightly aspire to lead.

Innovation is the key because – in the sense we’ve been exploring – it is the process of working out business-solutions to problems that are most important to us. The products that any company is currently offering might only be a small part of the customer’s real needs in a given area. Creatively re-defining the business area that a company is in can radically alter the sense of what its core tasks might be – and where its future opportunities might lie.