Introduction
Organizations seeking to gain a competitive advantage in the future need to focus on mechanisms of changing the manner they conduct their businesses. The most desired change is the one that enables an organization to become more profitable. Profitability may be achieved in various ways. One of the significant ways is by innovating new products and or services, which merge the rising consumer needs. According to Tidd and Bessant (2009), managing change embraces making use of tools and fundamental structures to control and monitor efforts of change in an organization (p.21). Change may involve the alteration of organizations’ missions, objectives, goals, and technologies (Boutellier et al. 2000, p.30). These changes need to be aligned to the need to foster the flourishing of creatively innovated products in an economy. The value of creativity in an organization seeking to remain competitive in the long-term is tied within the perspectives of the argument that only the products and services, which possess high utility values for the consumers, can stand the competition winds in a free market environment. It is upon the realization of the desired direction of change that concepts of change management become useful in an organization. With regard to De Faoite et al. (2003), change management refers to approaches that are deployed to shift and or transition people, teams, and organizations from the prevailing state into the desired future state (p.165). This paper argues that creativity and innovation are the main strategies for inducing change and plays a prominent role in the economic competitiveness of advanced economies.
Motivators for businesses to foster creativity and innovation
Many theorists endeavor to understand various sources of creativity and innovation among individuals. However, there lack of contentions among the researchers with many hypotheses remaining unsubstantiated. A major challenge in theorizing innovation and creativity is defining the terms since multi-faceted, wide, and complex forms of creativity occur in a myriad of contexts (Drunker 1999, p.14). Therefore, there is no direct rule that provides insight into sources of creativity and innovation both at an individual level and organizational level. Despite the lack of contention, there are theories that may be used to explain the sources of creativity and innovation in an organization.
At an individual level, theories of innovation and creativity may emanate from the existence of a conducive social environment that may make people innovative and creative (Mauzy & Harriman 2003, p.19) thus developing creativity in people’s life span (Nickerson1998, p.25). On the other hand, at an organizational level, innovation and creativity can emanate from the interaction of various components. According to Blanton, these factors include knowledge, creative thinking, and motivation (2009, p.57). Knowledge refers to understanding that people bring to the table of creativity and innovation. Creative thinking refers to the manner in which people approach various problems. It depends on working style and personality coupled with the way people think (Blanton 2009, p.59). For creativity and invention to thrive at an organizational level, an innovative and creative culture must be created. About Teresa (1998), motivation is a key production methodology, which is creative (p.383). Some theorists also attribute creativity to experimentation. For instance, Drunker (1999) argues that experimentation gives rise to creativity (p.76). This means that, for an organization to foster creativity, it needs to dedicate its fund’s facilities, time, and materials among other resources towards experimentation of new ideas. Organizational culture is yet another key facilitator for innovation and creativity. It refers to beliefs, norms, and values that are shared within an organization (Frans 2006, p.10). On one hand, an organization that builds its culture around the value of innovation and creativity gets more of it. On the other hand, an organization that minimizes risks such as financial loss risks related to unproductive research and experimentation often fails to embrace the values of innovation and creativity.
Relevance of Creativity, Innovation in the Contemporary Business Environment
In a contemporary business environment, it is crucial for an organization to come up with strategies that will enable it to gain a competitive advantage. Competitive advantage is gained when solutions are provided for the operation challenges encountered by organizations. Such solutions often capture new opportunities for placing products besides creating new ones with the chief aim of increasing both productivity and efficiency (Blanton 2009, p.52). While enacting and implementing strategies that give rise to these solutions, creativity and innovation are vital. Apple Company is one of the companies whose competitive advantage is dependent on the capacity to keep innovating new products. The company appreciates the values of innovation and creativity in its future success. In this line of argument, Dalal reckons that Apple has come up with an innovative factory and one that is capable of boosting the company’s employees. Unbridled creativity provides room for the generation of new ideas besides stimulating and making it possible to launch successful strategic decisions and profitable innovations (2011, Para.5). Apple Company operates in the technological industry. This means there are lots of technological changes and influxes that result to obsolesce of products. To counter this challenge, any organization needs to focus on creating new products that meet the new technological demands. For Apple to realize these concerns, the company “leverages its diverse ecosystem of employees, customers, suppliers, partners and global networks, proven innovation process, and a winning culture that does not accept a second place to seize the new opportunities in the marketplace to grow its business…exponentially” (Dalal 2011, Para. 4). Arguably, seizing new opportunities in the market demands an organization to keep at par with innovations and creativity characterizing the industry within which an organization operates.
Both creativity and innovation are relevant in modern organizations since the success of organizations in placing their products largely depends on the increasing values of their products and services to customers. This has the overall effect of reduced costs, achieving magnificent total quality, and a high cycle time without negating substantive satisfaction of customers (Atkin et al. 2002, p.23). In particular, the cost is an essential aspect that determines the level of consumption of a company’s products and services. Innovating products and services that have low costs of creation is essential in helping an organization gain a competitive advantage in the future. Smith and Munn are also inclined to this line of view since they further suggest that an organization can only succeed on global fronts if it can reduce its costs of production by improving its operational methodologies (2006, p.21). Creativity and innovation are the subtle tools towards achieving these concerns. The contemporary business environment is characterized by uncertainties. Shapiro accepts this assertion by pointing out how today’s business environment calls for the embracement of innovation and creativity due to the need for continuous change and or due to market volatilities (2002, p.113). In an attempt to survive in such a market, organizations continually look for mechanisms of having global market significance. This makes innovation and creativity crucial factors for maintaining organizational competitive advantage (Meisinger 2007, p.11).
Gaining competitive advantages through innovation and creativity requires a decentralized management approach. This means that focusing on innovation and creativity as the main ways of acquiring competitive advantage has resulted in empowering all employees through strategies such as collective collaboration and involvement of all of them in decision-making (Tsai & Beverton 2007, p.7). This makes all stakeholders in an organization develop the affiliation that they are part of a change that is being implemented in an organization. Cafolla (2007) posits that bottom-up management is essential since it encourages and creates a learning environment that is characterized by participation and alliance (p.35). Arguably, when organizational stakeholders including the employees are strategically organized such that they are engaged in the process of innovation and creativity, which leads to the development of new processes, companies immensely gain a competitive advantage because innovation and creativity have established a core role in the development of an organization. Indeed, according to Violino, collaboration entangles a basic premise, which provides futile grounds for the development of organizational innovation and creativity (2006, p.43). In the contemporary business environment, consumers have less loyalty and more options. This step is an incredibly significant turnaround in the consumption drivers in a competitive external environment. Therefore, creativity and innovation are important to the extent that, apart from envisaging capacities to make optimal use of any arising opportunity for increasing competitive advantage and market share, organizations also endeavor to perceive the external environment to determine any opportunity for profitable growth (Kirkpatrick 2004, p.54). Now, it is critical to argue that leadership in an organization has a noble role in creating an environment that would enable creativity and innovation culture to flourish. This effort can be done by putting mechanisms and strategies in place for capitalizing on every opportunity that may aid in cognition and or demonstration of innovative values among all organizational stakeholders.
Challenges that Companies are facing to Maintain a Competitive Edge
There are several challenges that may impede an organization from maintaining a competitive advantage. They include leadership style and cost leadership. By endeavoring to deploy perspectives of costs leadership, it infers that an organization attempts to outpower its competitors through cost reduction strategies. However, these present a challenge especially for small and medium organizations since the organization must have the ability to take advantage of economies of scale for innovation to facilitate an organization to offer products and services to the market at much-reduced prices (Smith & Munn 2006, p.24). For instance, Wal-Mart Corporation is one of the good examples of companies that have deployed innovation to put in place cost leadership approaches to gain a competitive advantage. At Wal-Mart, low-cost leadership has enabled the company to create a barrier for new entrants that do not have the advantages of economies of scale. One of the immense drawbacks of low-cost leadership as an innovative strategy for gaining competitive advantage is that it is prone to negative effects of global changes coupled with macroeconomic factors. For instance, IBM capitalized on an innovative strategy of low-cost leadership. However, new waves of outsourcing brought in new companies operating in Asia that offered even lower costs for software products. Despite the fact that IBM was able to respond proactively to this threat, some other companies such as the steel industry and garment industry lost their market competitiveness, which was driven by innovation techniques of low-cost leadership.
Organizational structure is yet another challenge for an organization seeking to deploy innovation and creativity as tools for gaining a competitive advantage. As discussed before, a decentralized organizational structure provides avenues for the growth of organizational culture fostering innovation and creativity. Unfortunately, bureaucratic organizations possessing inflexibility for foregoing a centralized structure are more common. According to Tsai and Beverton, top-down management is an immense hindrance to the capacity of an organization to develop cognitions of external influences (2007, p.15). This means that the value of external influence as one of the factors that make an organization establish areas of innovation that are crucial for helping to gain a competitive advantage is not properly identified in a centralized organization. A good example of how management structure may result in innovation and creativity in an organization is the case of the Toyota Company. Toyota Company has both top and bottom flow of information (May 2006, p.35). This means that the employees and the top management contribute to the generation of innovative ideas in the design of the Toyota automobiles (Balakrishnan 2010, Para.3).
Organisational Culture, Creativity, and Innovation in the Workplace
Innovation and creativity in the workplace require collaboration and teamwork. About Shapiro (2002), it is possible to design systems that are capable of producing both creativity and innovation (p.41). However, organizational systems can also impair creativity and innovation. Arguably, the capacity of an organization to be creative and innovative is dependent on whether the organizational culture developed gives room and or supports innovation as the core model for driving organizational success. Nevertheless, on creating such as culture, issues of efficiency come up. In this context, Frans (2006) informs that organizations, which establish a culture of innovation and creativity, propose that one of the best ways of maintaining the culture is to embrace co-action, experimentation, participation, and networking as opposed to concentrating on working methods and efficiency (p.109). Nevertheless, this does not imply that an organization with a culture developed to foster creativity and innovation does not focus on one core strategic process for achieving success. Rather, for creativity and innovation to flourish, freedom is required. This fact reveals why an organizational culture guided by paradigms of bureaucratic leadership fails to yield an organization that is creative and innovative. Such a system focuses on compliance, as opposed to listening and experimentation with other people’s ideas. An organizational culture that appreciates the value of innovation and creativity in enhancing organizational success is critical for several reasons. One of the reasons is increased organization’s knowledge base, the capacity to contextualize old challenges in new paradigms, and the creation of an opportunity to enable an organization to break from its historical practices (Frans 2006, p.112). The only problem of such a culture is that it creates a work environment that is immensely annoying and highly inefficient because there lacks a single person to give the necessary direction. Everybody in the organization is always looking for an idea that will work best. Consequently, innovative and creative organizational culture may hinder information sharing within an organization because there is constant competition in terms of idea generation among all the workers.
Amid the above drawbacks of creating an organizational culture that concentrates on creativity and innovation, many organizations contend that innovation and creativity are crucial for them to gain a competitive advantage in the modern dynamic market that is characterized by an influx of many products and services. For instance, Apple Company accepts that creativity and innovation culture cannot be negated for it to produce products that always hit the market. In this perspective, Dalal (2011) reckons that the “business strategy of Apple Company leverages the company’s unique ability to internally design and develop operating systems, hardware, application software, and services to deliver superior new products and solutions, which are differentiated by their ease-of-use, seamless integration, and innovative industrial design” (Para 9). It is only through creating an organizational culture that fosters creativity that Apple Company is capable to compete competitively in the technology industry.
Conclusion
Innovation and creativity are essential tools for gaining a competitive advantage. In the paper, it was argued that competitive advantage could only be acquired in an organization through the creation of an organizational culture that encourages innovation and creativity. Additionally, the paper holds that innovation and creativity play a decisive role in the economic competitiveness of advanced economies. This inference has been reached upon considering the challenges that organizations face to acquire a competitive advantage through innovation and creativity, the relevance of innovation and creativity, and motivators for innovation and creativity.
References
Atkin, R, Dykes, P, Hagerty, J, & Hoye, J 2002, ‘How customer performance partnerships can sharpen your competitive edge’, The Journal for Quality and Participation, vol.25 no.3, pp. 22-31.
Balakrishnan, R 2010, The Toyota Production System: A Case Study Of Creativity And Innovation In Automotive Engineering. Web.
Blanton, G 2009, Creativity, Innovation and Quality, McGraw Hill, New York.
Boutellier, R, Gassmann, O, & Zedtwitz, M 2000, Managing Global Innovation, Springer, Berlin.
Cafolla, L 2007, ‘Championing change from the bottom up’, China Staff, vol.13 no.7, pp. 33-41.
Dalal, S 2011, Apple’s Innovation Strategy – Learn How Apple Innovates. Web.
De Faoite, D, Colette, H, Johnston, K, & Sijde, P 2003, ‘Education and training for entrepreneurs: a consideration of initiatives in Ireland and Netherlands’, Education and training, vol.45 no.8, pp. 163-187.
Drunker, P 1999, The discipline of innovation: Harvard business review on break through, Harvard Business School Press, Harvard.
Frans, J 2006, The Medicci Effect: Breakthrough Insights at the Intersection of Ideas Concepts, and cultures, Harvard Business School Press, Harvard.
Kirkpatrick, D 2004, ‘Why “bottom up” is on its way up’, Fortune, vol.149 no.2, pp. 54-63.
Mauzy, J & Harriman, R 2003, Creativity Inc.: Building an Inventive Organisation, Harvard Business School Press, Harvard.
May, M 2006, The elegant solution: Toyota’s formula for mastering innovation, Free Press, New York.
Meisinger, S 2007, ‘Creativity and innovation: Key drivers for success’, HR Magazine on human Resource Management, vol. 52 no.5, pp. 10-15.
Nickerson, R 1998, Enhancing Creativity in Robert Sternberg’s Handbook of Creativity, Cambridge University Press, Cambridge.
Shapiro, M 2002, Innovation: A blueprint for surviving and thriving in an age of change, McGraw Hill, New York.
Smith, C & Munn, G 2006, ‘How to maintain a competitive edge’, PPI, vol. 42 no. 12, pp. 19-27.
Teresa, A 1998, ‘How to kill creativity’, Harvard Business Review, vol.3 no. 1, pp. 381-393.
Tidd, J & Bessant, J 2009, Managing Innovation: Integrating Technological, Market and Organisational Change, Wiley, Chichester.
Tsai, Y, & Beverton, S 2007, ‘Top-down management: An effective tool in higher education?’, The International Journal of Educational Management, vol. 21 no.1, pp. 6-25.
Violino, B 2006, ‘Top-down innovation’, Wall Street & Technology, vol. 1 no. 1, pp. 43-45.
