Why creativity, not productivity, is key to profitability

By Alan J. KaplanAlan_Kaplan

The Great Recession drove entrepreneurs to become masters of maximizing productivity. The long-term sustainability of any company, however, hinges on more than its ability to tighten belts and boost production.

Analyses suggest companies that focus on innovation achieve significantly higher profitability than companies that focus solely on productivity. Furthermore, innovation is not the sole domain of Silicon Valley. Companies of all sizes and specialties can excel by making strategic efforts to support employees’ creativity.


At its core, innovation is a team sport. Breakthrough products are not the result of one moment of blinding insight by a singular genius. Rather, innovations are time-honed results of a series of insights, critiques, missteps, revisions and progressively more inventive thinking by clusters of creative, intelligent and focused people.

Fuel that collaboration by forming project teams to tackle specific challenges. Design workspaces to encourage impromptu discussions and brainstorming sessions across different divisions. And build a culture that rewards teamwork and collaborative solutions rather than high productivity by individual contributors.


Communication plays a vital role in fueling innovation. Experts urge business leaders to provide feedback on all new ideas floated by employees, recognizing promising concepts, analyzing an idea’s relevance to the corporate mission and identifying potential problems. Such feedback can come from a designated supervisor or project team, or it can be crowdsourced through a company’s intranet. Some companies have discovered that online discussion forums and survey tools trigger valuable contributions from individuals who may not offer feedback during meetings.


Diverse teams are more likely to recognize a broader range of market opportunities and bring a richer spectrum of ideas to the table, according to a study by the Center for Talent Innovation (CTI). CTI gathered input from 1,800 survey respondents and conducted analyses of 100-plus innovators and 40 Fortune 500 companies. CTI concluded that companies with diverse leadership teams are 70 percent more likely to capture new markets and 45 percent more likely to improve their market share.


In Perkasie, PA, First Savings Bank embarked on a campaign three years ago to boost creative thinking among its employees. First Savings discovered that training was a powerful tool in that push for innovation. It began putting employees through change management and “power thinking” courses, which challenged them to find unconventional solutions to everyday issues. Once the staff developed potent ideas to modernize the bank’s practices, First Savings instituted a training program to help frontline staff implement those ideas.

Building an innovative workforce requires effort and patience, but it could deliver better business returns than all those recession-era efforts to drive productivity. 

Innovation at work

Can watercolor paintings and broken technologies really improve a company’s bottom line? The leaders of some of America’s highly innovative companies think so. Here are a few examples of innovation at work.

“Move fast and break things”: That’s one mantra of Mark Zuckerberg, founder of Facebook. Zuckerberg, like many other company leaders, realized that to foster innovation, company leaders must embrace a culture that encourages employees to take calculated risks and learn from the risks that fail. Taking risks and learning quickly, after all, is the only way that companies can bring innovative products to the marketplace ahead of their competition.

Feed off others’ ideas: Pixar Animation Studios — creators of Toy Story, The Incredibles and Finding Nemo, among other blockbusters — achieves a high level of innovation by using a simple process to fuel collaboration. When Pixar artists begin developing concepts for new movie characters, they gather around a table, begin making sketches of specific characters and tossing the sketches into the middle of the table. Artist after artist pulls sketches out of the pile and revises, enhances or combines character traits. The results are designs that can’t be attributed to any one artist but embody many artists’ creative abilities.

Make art: Every year, the United Auto Workers and Chrysler Group (UAW-Chrysler) host an Artists at Work exhibition. The juried and highly competitive show of paintings, sculpture, photography, textiles and ceramics encourages and celebrates creative thinking that also aids plant operations and the company’s evolution.

“There is a remarkable correlation between the artistic process and the manufacturing process,” says Michael Brown, co-director of the UAW-Chrysler National Training Center. “Transforming innovative ideas into reality — an artist’s formula for success — is what drives World Class Manufacturing (Chrysler’s production system) and gives Chrysler a competitive edge in the marketplace.” CEO

Alan J. Kaplan is founder and CEO of Kaplan & Associates, Inc., a Philadelphia-based executive search and talent advisory firm. www.kasearch.com. Contact him at alan@kasearch.com.

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