Every business in the United States is threatened by change. Change in competition, in the market, in technology, and in government regulations. How can your business respond successfully to this environmental turbulence and the hyper-competition? I can’t give you specifics for your firm in your market in this article, but I can give you the secret tool for success in these fast-changing times – creativity. What’s that you say, creativity…. how is that a secret weapon?

It’s simple. We solve business problems based on past experience. Here’s the problem (or marketing opportunity) and here’s what it’s similar to and here’s how we handled it before. Unfortunately, we have few or no past experiences to help us figure out these new problems.

Creativity is still somewhat mysterious to most of us. Yes, business people can be creative, and not just those in advertising or marketing research. And we can be more creative to develop better responses to these new challenges we face everyday.

OK, so what is creativity? How is it related to innovation, competitive advantage, and, of course, profits for my business? Do just a few people have this ability (and if so, how much do they cost)? Can we learn how to be more creative? All good questions and for now, let’s discuss just what is creativity.

Creativity uses divergent thinking. The goal of this type of thinking is to visualize a large number of alternative solutions to a particular problem or opportunity. We are accustomed to thinking analytically. This uses convergent thinking, and in this, we work, from many alternatives, toward the best answer, the ONE best answer. Unfortunately, in our thinking and solving of problems, we jump right into the ONE answer mentality and forget to look for the many possibilities for that ONE answer. Brainstorming is the best known of the many creative thinking tools. We need to think creatively first, to get plenty of alternatives, then think analytically to find the best answer for our business… the answer that will delight our customers and frustrate our competition.

Creativity is our production of novel, appropriate ideas. It’s the first step in innovation which is the implementation of these novel, appropriate ideas. Creativity is nothing without implementation and creating value for the customer.

Creativity starts with our knowledge and our imagination which is used to pull from our knowledge, and then transform this knowledge into a novel and appropriate way to solve the problem at hand. Don’t underestimate the power of imagination in developing creative responses. Albert Einstein stated, "Imagination is more important than knowledge". It’s not just what you know, it’s how you use it!

Each of us has our own unique creative capabilities simply because each of us draws from our different experiences, knowledge, and personalities. There are different creative skills and some of us are better at some and worse at others. You’ll notice I used the word skills. Skills can be learned, skills can be directed, and the more we use these skills, the greater our capabilities… and the results.

Business people have observed, for some time, that the business environment is undergoing continuing change, and we have adjusted. But, in the last decade we have seen the rate of change dramatically accelerate.

Change occurs to better serve customers by improving the value provided, or to cut costs, or to have greater control of channels of distribution (certainly not an inclusive list). For example, cell technology enabled the mobile phone market revenues to take off. Then, digital phones made cell phones obsolete, and now web-enabled phones are the requirement for suppliers to be in the mobile phone business.

Remember the old supply and demand curves at equilibrium in economics? Not applicable today. Points of equilibrium are for only briefs moments of time. Change occurs and the demand is for a different product as one competitor leapfrogs another to delight and capture the customer.

People are continually developing new ways to fulfill customers’ needs. The credit card was born when Frank McNamara ran out of cash at a restaurant and his wife had to drive two hours to pay the bill (boy, was that embarrassing). He could have simply remembered to take more cash next time; but instead, he developed the Diner’s Club card. Evolution occurs and we now have platinum and titanium Visa and Master cards.

Merrill Lynch has been THE name in brokerage for buying stocks and bonds. Charles Schwab changed the business model for buying and selling stocks and competed as a discount broker. Today E*Trade emphasizes on-line buying and selling. Merrill Lynch is desperately trying to play catch-up.

The business environment is like an airplane ride through the worst of a thunderstorm – fasten your seat belts and prepare for turbulence. You’re not just competing with the firm down the street or across town, but against the firm in California, which can ship goods to your customer by next day air. And against the firm in Poland which communicates over the web and has a lower cost of labor than you do. If your competition is looking to do manufacturing in Central America, you better have one great way to compete other than price or you better be looking into assembly operations in Dominican Republic.

2001’s headlines have included OPEC oil pricing jolts, a continuation of the dot.com and NASDAQ meltdown, the U.S. behind Japan and Europe on mobile web telephony, and another possible financial crisis in Asia and Latin America…. and September 11. The 2002 recovery from the terrorist recession was put on hold with the "credibility crunch" of Enron, Global Crossing, WorldCom and Arthur Anderson.

We need to have business firms that are nimble, can adapt, and can see opportunities when the competition sees only problems and frustration. In a recent American Management Association survey of 500 CEOs, the #1 skill for the coming years will be "practicing creativity and innovation", and less than 10% of these CEOs believe their firm is doing a great job in this area.

Research findings in the business press show a strong statistical positive relationship between the creative organization and business performance. My published academic research also shows a positive relationship between an entrepreneurial management style that’s proactive and innovative, an organization that’s flexible and adaptive, and business performance. My research also shows a strong positive relationship between marketing orientation and business performance.

Several years ago I used the Internet and Unix software to exchange information and do research. It was laborious. Now we all take advantage of the easy-to-use graphic interface world wide web; watch dot.coms take birth, grow, and often die before our eyes; be involved in B2C and B2B; and exchange information and communicate through web-based supply chain management systems. And we do this globally!

Business author Gary Vasilash has said what Total Quality Management was in the 80s, and Lean Management and Just-In-Time was in the 90s, Creativity will be in the 00s. Creativity is the innovative, adaptive, and imaginative response to change. It’s the next secret weapon for success in business. Pass the Word!

The news about Montgomery Ward’s demise reflected the inability of a once-successful firm to adapt over time to market changes. Wards never caught up in the shift from downtown shopping to suburban mall shopping. In a faster sequence, pets.com has gone under and we anxiously await Amazon.com making real profits (not proformas).

OK, creativity is a serious business tool and we need all the tools we can get our hands on. But, I’m not creative, you say. First, I suspect you are, and even if you haven’t shown any original creative activity since the 4^th grade, you can be. And it’s not difficult.

We were all very creative as small children. The drawing paper had no lines, our imagination was fertile, we asked why questions (and drove our parents crazy), had imaginary friends, and played school or store with others. Then, we were told the right way to do an activity and we were not to color outside the lines. The teacher had one and only one right answer.

We’re adults now and we can break some rules. You will notice that well-known artists start with a blank canvas. It’s OK for Hillary (also known as Senator Clinton) to have talks with Eleanor Roosevelt. We need to ask questions in identifying a problem (indeed, one expert recommends asking why at least five times). And there is more than one way to increase sales in the southern territory, or retool the manufacturing assembly line, or finance that new plant.

Brainstorming is perhaps the best-known creativity technique. In this, individuals within a group make a number of responses (the divergent phase) to a problem with no negative comments allowed. Participants often think of another possible response after seeing someone else’s suggestion. We build on each other’s work. Once we have a number of responses we can then turn on the evaluation light (this can best be done later with the same group or even a different group).

Now, it’s convergent thinking time. How do we get the large number of responses down to a manageable number to research deeply? We could have a "dot" vote that one of my colleagues uses when he leads brainstorming sessions. After generating a long list on a white board or flipchart, we have an evaluative discussion on the responses. We then each get a certain number of dots (with some adhesive on back) which we place beside our choices. We then further evaluate and research those with the most "dots".

We know that groups are generally better at generating possible answers or solutions to problems or opportunities than an individual. If two heads are better than one, then how about four, seven or twelve? Groups, with more individuals, have more diverse backgrounds and different perspectives from which to develop responses. Out of these different perspectives, we generally get more and better alternatives. Once the commonalities within the group are established, the diverse backgrounds and functions of the team members lead to more effective solutions.

There are a large number of techniques that have been developed to increase our creative thinking skills. Most of them are developed to increase the number of responses generated. To paraphrase the Nobel prize winning chemist, Linus Pauling, to get a few good ideas, you have to start with a lot of ideas, and throw away the bad ones.

Much of creative thought is based on pattern recognition. Our brain self-organizes our knowledge into patterns, a very extensive relational database if you are into information systems. As we might expect, many of the techniques involve the use of patterns.

One author, Jack Ricchiuto, sees four core competencies in creative thinking. First is open-mindness. Let your mind color outside the lines, see more than one right answer, and imagine how you could change an idea or product. Second is inventive. Look for various ways to solve problems. Group diversity and brainstorming are examples in this area. Third, occasionally, you have to stimulate you (and others) to think differently. Weird analogies can be used to force you to think outside your usual pattern. For example, how is the structure of our problem similar to the interstate highway system? Or you can build an idea box as a base for other ideas. The outcome may lead you to other usable responses. Fourth, the outcome must be practical so you must develop an implementable action plan with all the necessary details.

It has been shown that playfulness can enhance your productivity in creative thinking. Creative thought is brought out more during relaxed, non-stressful times. Many of the techniques involve play, almost child-like play. Figure out how you can have fun in your creative activities. Interestingly, it not only will be fun, but also produce more usable responses.

Do activities outside your normal areas of interest and expertise. If you like jazz, try going to a rock concert. Read much! Read outside your areas. Travel. Be exposed to different cultures, even if it’s the culture in New York City or Atlanta, Georgia. Of course, a trip to Paris would be more stimulating… France, not Tennessee. Look around for lessons or insights on creativity. In my previous career, on a flight to New York, the person seated beside me was a well-known country music songwriter. We spent the entire flight discussing her creativity in song writing. It was fascinating. Always look for ideas you can change as necessary and use successfully in your business.

The stable business environment is no more. We are in a time of fast changes, whether we are a local gift shop or a global manufacturing operation. To reach our best business performance, we need to have an entrepreneurial management style, organization flexibility, and a marketing orientation. An entrepreneurial management style is not just for small business start-ups (actually, in many ways, it’s more valuable in large firms). This style emphasizes that the firm must be proactive towards its customers and competition. It must understand how its customers define value, and through innovation, develop and implement products, programs, and services that satisfy the targeted customers better than the competition.

The successful 21^st century firm needs to have a flexible organization. The organizational culture recognizes the need to continually adapt to changes and anticipated changes in the business environment. Decision-making needs to be decentralized and decision makers need to be close to the customer. Employees are empowered. They are given the necessary tools, resources, and support to enable persons to make the best decision for the customer and the firm… and not have to wait to get the OK from a vice-president. The bureaucrat does not belong in this firm.

A market orientation exists throughout the firm and involves all employees. As one of my favorite bosses said, "marketing is much too important to be left to the marketers". We need to be information oriented and continually scan for news about our customers, competition, and suppliers; as well as on finance, technology, and socioeconomic issues. We will bring this information into the firm, and disseminate it throughout the firm. People can then analyze the information and come together in teams to have an understanding and collaboratively develop responses for implementation.

These need to be cross-functional teams (representing for example, manufacturing, sales, finance, purchasing) with diversity among its members. This diversity not only includes race, gender, and age; but also, diverse approaches to problem solving.

Creative thinking thrives best and produces best with such groups. However, while traditional, analytical thinking is straightforward, creative thinking is messy, uncomfortable, takes longer, can be chaotic, and is certainly not straightforward. In these times of change however, creative thinking produces market-driven and customer-driven responses that are generally more effective and more profitable.

Individual creativity is based on the person’s expertise or knowledge, creative thinking skills, and motivation. The organization can positively or negatively influence each of these. The organization can send people to seminars and conferences; bring in experts to give workshops in-house, encourage reading and other activities related to their positions and responsibilities. Interestingly, much of these activities can be something other than the person’s expertise. Learning outside the field of one’s expertise enhances creativity. People frequently need to be exposed to fresh approaches and other viewpoints.

Motivation in creativity is mainly intrinsic or self-motivation. Rewards, recognition and other extrinsic motivators do matter but to a much less degree. People do creative things because it’s fun! Because they want to! Provide creative thinkers clear, but not precise goals including a reasonable completion date. Allow some wiggle room. Provide continuing constructive feedback. Provide direction as needed. Provide adequate resources, but not overly so. Do provide a rich source of information and capabilities to process it. Provide relatively loose controls and immunity from interference.

In the work environment make sure there are plenty of white boards, flip charts, bulletin boards – anything to enhance communication and facilitate asking each other questions and opinions.

Accept failures as part of a business process to ensure the success of the process. In your projects, fail fast and fail smart. Find out what fails, learn from the failure, and move onto the next phase or project. If there are no failures, then you are not taking any risks. The greatest risk you can take is not to take a risk.

Develop trust in one another throughout the organization. This will reduce premature analytical evaluation of ideas. It facilitates creativity by sharing information and encourages the necessary risk-taking.

Why do people not suggest something new and different? Fear! Fear of not being taken seriously, or not listened to, or laughed at, or even being terminated in an organization highly resistant to change.

Don’t restrict creative thinking to advertising or new products. Wal-Mart dramatically increased the information flow within its system and with its suppliers and thereby lowered the cycle time for replenishment. This effectively lowered their inventories and need for working capital while simultaneously reducing stock-outs. They have also been creative in their pricing and human resource management activities. The result: Wal-Mart is the top retailer in the United States.

Creativity – working smarter.

Dr. Hilton Barrett is Associate Professor in the Davis School of Business & Economics at Elizabeth City State University. He has developed the workshop "Decision-Making and Change in the Business Environment" based on his work as a Director of Ventures in a Fortune 500 firm, his research in entrepreneurship and marketing, and his consulting work. He teaches the use of critical and creative thinking skills in business problem solving in his various business courses. He can be contacted at his university office (telephone 252 335-3580, email hbarrett@mail.ecsu.edu) and his home office (telephone/fax 252 331-2961, email hbarrett@inteliport.com)