Session 6: Managing Creativity

Question 1

The nature of creative work can be:

Answer 1

1. Iterative
2. Analogous
3. Inspiration
4. Recombination
5. Applying idea in a different context
6. Serendipity (by chance) - e.g. Viagra
7. science-based

Question 2

Key points about the nature of creative work

Answer 2

1. Invention is an iterative search process for novel and useful products, processes, services, designs or technologies.
2. The outcomes of the search process are inherently uncertain.
3. Creative processes do not start with a blank sheet. They are most often the result of a recombination of existing elements of knowledge or build on prior knowledge for inspiration.
4. Creativity often involves a change of perspective: looking at problems from unusual, unexpected angles (which is often easier for relative outsiders).
5. Innovative outcomes can be the result of unplanned and serendipitous events (of which only ‘prepared minds’ see the value) or of systemic search efforts for example based on scientific knowledge.

Question 3

Draw the risk-reward matrix

Answer 3

Y: Lo/Me/Hi Potential reward
X: Lo/Me/Hi Risk

Question 4

What are the Risks in new product development?

Answer 4

1. Market risks
2. Competitive risks
3. Technological risks
4. Organizational risks
5. Operational risks
6. Financial risks

Question 5

How to do Balancing of the R&D project portfolio

Answer 5

1. Value maximization: allocate resources so as to maximize the value of the portfolio in terms of long-term profitability or return-on-investment.
2. Balance: achieve the right balance of long-term projects versus short-term ones, high-risk versus low-risk projects; across various markets and technologies.
3. Strategic direction: fit with the business strategy.

Conflict among these goals: the portfolio that yields the maximum return on investment may not be a balanced one!

Question 6

Explain the stage-gate process

slide 23

Answer 6

Draw

5 stages - 5 Gates

Idea > Gate 1 > Stage 1 > Gate 2 > Stage 2…. Stage 5> Launch

Question 7

What’s The value of early screening?

draw diagram

slide 24

Answer 7

slide 24

less than 1/10 of concepts make it to products

Question 8

The cost of early screening

Answer 8

The tyranny of measurement

sometimes strangling innovation

Question 9

Key points for the nature of creative work

Answer 9

1. Stage-gate models can be used to select among alternative projects and take stop-or- go decisions whilst projects progress.
2. Stage-gate models help to keep the costs of R&D under control and guide the allocation of resources to projects that best fit the organizations competencies and strategies.
3. Subsequent stages involve increasing costs and increasingly senior managers.
4. A rigid application of stage-gate models may carry the risk of the tyranny of
   measurement:

– High-risk or unconventional R&D projects are ‘killed’ before they have had the chance to
show their promise.
– Technology portfolios are a means for structuring and visualizing the risk and reward of current and potential R&D projects and are a prominent help to discussion and decision processes of project selection.

Question 10

What is bootlegging?

Answer 10

Bootlegging is defined as research in which motivated individuals secretly organize the innovation process. It usually is a bottom-up, non-programmed activity, without the official permission of the responsible management, but for the benefit of the company.

Question 11

Autonomy versus accountability

Answer 11

“Organizations often struggle to find a balance between allowing staff, especially R&D workers,
enough flexibility and autonomy to explore the “novel” and “unusual”,
and keeping them sufficiently reigned in to ensure that their innovative efforts are aligned with company strategies, objectives and priorities”

Question 12

Flexibility versus structure in creativity management

Answer 12

Developing innovations in large organizations is difficult, as these may go against established routines and cannibalize existing assets.

The adoption of formal structures and systems - project management, stage-gates – may help allocate resources and shape the delivery of R&D.

– Formalized R&D may lead to ‘incrementalism’ in R&D efforts
– Formalized R&D may constrain the creativity individuals can put into their work
– Formalized R&D may kill potentially winning projects

Question 13

What are the 3 possible cons of formalised R&D?

Answer 13

1. Formalized R&D may lead to ‘incrementalism’ in R&D efforts
2. Formalized R&D may constrain the creativity individuals can put into their work
3. Formalized R&D may kill potentially winning projects

Question 14

Key learning points in managing creativity

Answer 14

• Creativity is fostered when individuals have the freedom and autonomy on their work, but this freedom must be balanced with a degree of accountability to make sure individuals’ creative efforts stay aligned with company objectives.
• Individuals may engage in bootlegging activity in order to explore new ideas in relative freedom and delay assessment of embryonic ideas. They may even continue working in secret on prior rejected ideas.
• Some organizations have granted employees ‘free time’ to carry out research on their own ideas (e.g. 3M, Google, Genentech) or created skunk work departments where employees work outside the normal rules of the organization.