Creativity and Innovation


Creativity is basically the generation of ideas that result in improved efficiency or effectiveness in a system. Creativity is characterized by the ability to perceive the world in new ways, to find hidden patterns, to make connections between seemingly unrelated phenomena, and to generate solutions. If you have ideas, but don’t act on them, you are imaginative but not creative.


Whether Creativity can be Taught

Creativity can be developed and improved. Some individuals have a greater aptitude for creativity than others. But, like entrepreneurial skills, creativity can also be learned. There is an increasingly large number of universities that offer courses to develop creativity.


Creativity is an iterative process of:

    Connection of disparate ideas

    Discovery of opportunities and possible solutions

    Invention as the application of discovery

    Application in feasible adoption of solutions.


What is Innovation?

Innovation can be defined as the process of implementing new ideas to create value for an organization. This may mean creating a new service, system, or process, or enhancing existing ones. Innovation can also be discontinuing an inefficient or out-of-date service, system, or process.


World’s Most Innovative Companies

When we look at innovative companies, they solve different complex problems in different ways but at the heart of many of them there is a climate of fostering innovation. Savvy leaders shape the culture of their company to drive innovation.


Top 10 Innovative Companies

Characteristics of a Creative Climate

The top innovative companies exhibit the following characteristics to foster innovation at their workplace. Some of them are:

    1. Enjoyment in experimenting with new ideas

    2. Trustful management that does not over-control

    3. Considerable communication with outsiders

    4. Open channels of communication

    5. Willingness to accept change

    6. Little fear of negative consequences for making a mistake

    7. Selection and promotion of employees based on merit

    8. Sufficient financial, managerial, human, and time resources for accomplishing goals


Types of Innovation


Business Model Innovation

Business Model Innovation is about changing the way business is done in terms of capturing value.  It’s about how customers, suppliers and partners can be better connected. It’s not easy and can take decision makers out of their comfort zones, but the results can be dramatic.

Dell didn’t invent the Personal Computer, but they invented the build-to-order model. They believed that there was a market for individuals who wanted to choose the configuration of their computer, rather than being restricted to what is available in stores.


Marketing Innovation 

Marketing Innovation is about developing new marketing methods with improvement in product design or packaging, product promotion, or pricing.

Nike, in 1987, launched a new product called Air Max. The marketing campaign for this product was supported by a memorable TV ad in which the Beatles' Revolution was the soundtrack. It was for the first time that a Beatles song was used in a TV advertisement.


Organizational Innovation

Organizational Innovation is the creation or alteration of business structures, practices, and models, and may therefore include process, marketing, and business model innovation

Avon is a cosmetics company that pioneered the usage of the customer-based sales force. They have not opened large retail stores or sold their product to other large retailers, but they have equipped individuals, largely women that were working part time, to sell cosmetics to their friends and relatives.


Process Innovation

Process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.

Process innovation involving logistics includes the factory-to-customer delivery of custom-built computers by Dell Corporation; the use of barcodes, scanners, and Internet that allows customers to track parcels in real-time as couriers are transporting them.


Product Innovation 

Product Innovation is the introduction of new goods or services that are new or substantially improved. It may include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.

Apple iTunes or the 3M Post-It Notes are some of the innovative products which have changed our lives.


Service Innovation 

Service innovation is similar to product innovation except that the innovation here relates to services.

Zipcar is a car rental company in the United States. It offers its car renting service in a different way than other companies that have set up retail outlets. It has a membership model; you can go online and become a Zipcar member. What is different about Zipcar is that you can rent the car on an hourly basis. So if you need a car for an hour, you can do that affordably. They place their cars in a distributive manner; there can be cars in the parking lot of a club, apartment, market or other convenient places. A member can go online and find a Zipcar near his/her place and make a reservation conveniently.


Supply Chain Innovation

Supply Chain Innovation occurs in the sourcing of input products from suppliers and the delivery of output products to customers.

Alibaba’s web-based supplier directory helps individuals and businesses find each other in a more comfortable and easy way globally.

Creativity ignites innovation in entrepreneurship. For entrepreneurs, innovation has become a necessity in today’s global business because of increasingly stiff competition in the market. Entrepreneurs who recognize this fact early on and nurture innovation as the ultimate source of competitive advantage will surely reap the benefits. 

When we think about innovation we often think about Product Innovation, and innovation is limited to the features and functions of the product. But innovation goes far beyond Product Innovation; there can be innovation in Business Model, Supply Chain, or in Service, as described in the examples above. There is a need to limit ourselves to Product Innovation and think broadly about what is needed in the market and how that requirement can be served.


Author: Puneet Agarwal

Edited by : Doqumend