Creation, innovation ... or stagnation

Individualism is gaining some commercial credibility - but will firms ever really trust employees' creative instincts? Roger Trapp reports

After years of "downsizing" and cost cutting, UK companies and their advisers are realising that if they are to expand in a time of slow growth, they need to be creative and innovative.

Inevitably, the USA leads the way here. But UK organisations are also playing a substantial part in making "innovation" and "creativity" the latest management buzzwords.

Only last week the prominent designer Michael Peters called for every company to appoint a director for creativity. Now head of a brand consultancy, Identica Partnership, he said in the report Visionary Profits - Why companies must create to compete that creativity should not be confined to the traditional ghettoes of design and promotion. It should involve everything from clearing production bottlenecks without new machines, to halving order processing time without losing the personal touch. "The most competitive corporations will be those that recognise and manage creativity as a core strategic skill."

This might be all very well in, say, information technology and pharmaceuticals, where Glaxo Wellcome, Hewlett-Packard or 3M invest vast sums on research and development and produce a steady stream of new products. But are they suitable for a nation of shopkeepers? Yes: Tesco has challenged Sainsbury's largely through repeatedly coming up with new ideas. Marks & Spencer has long innovated, from its approach to suppliers to selling pre-packed meals.

As the Government repeatedly points out, Britain has an enviable reputation for creativity in fashion, music and software. Even in conventional industrial sectors Britain has pockets of expertise, with organisations such as The Technology Partnership and Cambridge Consultants developing products with and for companies in Britain and around the world that lack the specialists to do it themselves.

The real problem is that innovation and creativity are in danger of being treated like any other management concept. At best, they are nodded to in annual reports and mission statements; at worst, they are ignored.

Mr Peters accepts as much in his report. "Companies pay lip service to the idea of becoming more creative. They may even send executives on courses to learn to 'think out of the box'. But many will never succeed, because they have a 'NO' culture where inconvenient ideas are shot down in flames and nobody dares to risk making a mistake."

Much the same conclusion is reached by a team of management consultants from Coopers & Lybrand, who wrote in their Innovation Survey that creating "the right environment" was crucial to foster innovation. Techniques such as "brainstorming", "scenario planning" and "focus groups" can help solve problems andproduce ideas, but are unlikely to go anywhere unless the culture of the organisation encourages diverse opinion.

The task for those who want to change was made clear by Professor Michael West of the Economic and Social Research Council's centre for organisation and innovation. He told the British Association Annual Festival of Science in September that his studies indicated that most organisations were fairly hostile or indifferent to real innovation. "Everybody has the capacity to be creative at work but surprisingly little is done in practical terms to encourage this faculty," he said. "The human part of the equation is very often looked upon by management as problematic, risky, messy and too burdensome in terms of time and money - yet precisely this aspect is the cornerstone of all good inventions and work practices."

Indeed, there seem to be many executives who - even if they accept the need for innovation and creativity - are loath to get too closely involved with it for fear that it will wither under the spotlight.

This is rejected by Arthur D Little, the US-based management consultancy and parent of Cambridge Consultants. It says a worldwide survey it published last week confirms that innovation not only MUST be managed, but CAN be effectively managed.

With the same survey indicating that, while 84 per cent of companies make innovation a high priority for future success, only 25 per cent feel they are effective at it, the firm sets out six key factors for overcoming barriers to innovation. These are: clear top management support and commitment; effectively executed role of chief technology officer; skilled leaders and managers; marketing and technology departments located together; seamless and value-driven innovation process; and visioning and idea-generation processes.

Companies have a lot to do if creativity and innovation are not to go the same way as quality and customer service have gone in many organisations. But quick fixes seem to be as prevalent as ever, and it is almost inevitable that many will not regard it as worth the bother.