The business case for creativity – why invest in organizational creativity

I recently had a talk about creativity with a retired managing director of an international technology company. He told that he had systematically eliminated applicants in recruitment processes who described themselves as creative. To him, the will to work creatively showed that those applicants did not understand what it takes to succeed in the job. He saw creative individuals as a threat to the organisation’s performance.

I found this difficult to digest. I have worked in the creative industries and knowledge-intensive companies, where people have always wanted to work in creative and innovative ways. However, I understood the logic of his thinking. His opinions illustrated how rapidly the working life had changed, and on the other hand, how narrowly and superficially the concept of creativity has been understood.

His view also demonstrated why creativity has not been seen as an useful concept in many industries: the link between creativity and business performance have been hypothetical at best. Creative projects are all about discovering fresh ideas and exploring novel solutions, which makes them inherently uncertain and risky in the business context.

Investing in creativity has therefore been considered an irrelevant cost rather than a rational investment. In the light of traditional cost–benefit analyses, expected revenues of creative projects have been almost non-existent.

Professor Teresa Amabile from Harvard Business School, for example, has stated that the principles of business management actually kill creativity rather than foster it. Sales targets eat creative ideas for breakfast.

To put it bluntly, the business case for creativity has been poor. That is why creative initiatives have not featured on the agendas of executive boards or in strategic plans.

There are plenty of mantras and adages about the advantages of creativity. However, in many industries, there are fewer examples of creativity’s practical input to the businesses performance. If the commercial viability of creative projects is not clearly verified and the impact of creativity cannot be measured, businesses will not make strategic investments in creativity.

So is there a business case for creativity? The profitability of the creative projects needs to be demonstrated both in terms of money and the intangible benefits. When showcasing the returns on creative investments, at least the following question must be answered:

1. Business: How will the project contribute to sales, product or service development and business growth? In addition, it is vital to define the intangible impacts of the investment in creativity, especially for the future prospects of the company:

2. Reputation: How will the project increase the organisation’s attractiveness among the prospective employees, partners and stakeholders?

3. Motivation: How will the project create inspiration, commitment and inner motivation among the staff?

4. Learning: What will the organisation learn from the project, how can the lessons learnt be put into practice and how can they be shared with the rest of the organisation?

5. Renewal: How will the project promote critical thinking, open-mindedness and boldness to try new things within the organisation?

Decision-makers need to be shown why investing in creativity is crucial and what practical outcomes and results can be achieved. These benefits must be described comprehensively and thoroughly. Additionally, it is important to outline the future opportunities the organisation fails to reach if the project is not launched. This way even the most critical Chief Financial Officer can realize the strategic value of creative projects.

Nando Malmelin
nando.malmelin(a)vtt.fi

This blog is published in Finnish on Bonfire.

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