Creativity and Strategic Innovation Management

Directions for Future Value in Changing Times

Malcolm Goodman, Sandra M. Dingli

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317199472
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

Creativity and Strategic Innovation Management was the first book to integrate innovation management with both change management and creativity to form an innovative guide to survival in rapidly changing market conditions. Treating creativity as the process, and innovation the result, Goodman and Dingli emphasise the importance of a strategic approach to management through fostering creative processes.

Revised and updated for a second edition, this ground-breaking book now includes:

• A new section on contemporary themes in innovation management, such as the use of social media and sustainability.
• More coverage of entrepreneurship, ethics, diversity issues and the legal aspects of technology and innovation management.
• More international cases and real life examples.

The book is also supported by a range of new tutor support materials.

This textbook is an ideal accompaniment to postgraduate courses on innovation management and creativity management. The focused approach by Goodman and Dingli also makes it useful as supplementary reading on a range of courses from management of technology to strategic management.

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Part I

The challenge of changing times

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1 The changing business environment

Can anything that is useful be accomplished without change?

(Emperor Marcus Aurelius)

If I have seen further it is by standing on the shoulders of giants.

(Isaac Newton)

Learning objectives

This chapter explores:

• The importance of the changing global business environment.

• The factors that have caused it and the major types of change.

• Management response paradigms and their suitability to today’s global business environment.

• The challenges that contemporary organisations face.

Introduction

Organisations of all kinds, large and small, private and public are experiencing profound changes in their business environment during the opening decades of the twenty-first century. Many organisations are being affected by rapidly changing business environments. Natural resources and energy supplies are becoming more expensive and advances in technology have resulted in the rapid expansion of virtual markets. Changes in the economic fortunes of individual nation states and their consequent social and political ramifications, together with an emerging shift in global power dynamics as developing economies rival established ones, have all presented organisations with the necessity of seriously reviewing their established modus operandi.

Chapter 1 sets the scene and provides an overview of the complexity of the shifting sands of the business environment. This establishes a platform for the text which addresses the equally complex matter of how organisations should identify, innovate and develop new ways of operating that are in tune with the challenges they face. (See Figure 1.1.)

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Figure 1.1 Explaining the changing business environment.

Context

What is change?

Everything and everyone is exposed to change. It is a feature of the natural world and dictates the environment in which the human race exists. At a basic level change may be defined as ‘the movement away from a present state towards a future state’ (George and Jones, 2012).

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Figure 1.2 Russian dolls.

A useful metaphor for change is a set of Russian dolls (Figure 1.2). The outer doll, which contains all the others, is the macro-environment that affects us all. The inner dolls can be taken to symbolise constituent or micro-environments that impact on our lives as results of political, economic, socio-cultural and technological factors. In the opening decades of the twenty-first century increasing concerns over the fate of the physical environment are being raised by many as global warming, land-use concerns, food provision and a rising world population are topics that feature daily in the world’s media.

The Concise Oxford English Dictionary (OED) defines change both as a noun and as a verb. Used as a noun change is defined as ‘becoming different’; ‘an alteration or modification (i.e. a change in someone’s facial expression)’ and ‘a new experience’. As a verb change is defined as something that concerns action, which ‘makes (something) different’. Change, then, is both about a state of being and about action to alter it.

The late twentieth century was a period of major social, economic and political changes. It was also a time in which there were big changes in knowledge – in how people see knowledge and how they use it. This period is now widely known as the beginning of the Knowledge Age – to distinguish it from the Industrial Age. The Knowledge Age is a new, advanced form of capitalism in which knowledge and ideas are the main source of economic growth (more important than land, labour, money, or other ‘tangible resources’). New patterns of work and new business practices have developed, and, as a result, new kinds of workers, with new and different skills, are required.

The macro-environmental factors that shape change can move in either small, almost imperceptible ways (incremental change) or in an explosive tsunami-like way and radically change the status quo in minutes. Change, whether incremental or radical (and people usually face a mixture of both) is a paradox of recorded history. Sometimes the environment changes positively and sometimes negatively. Theories about change have been exercising the human intellect for thousands of years. In that time there have been many explanations and stories about how change happens. Much of the recorded wisdom tells you what to do, but not necessarily how to do it. It provides both a challenge and a threat to human endeavour. Individuals and organisations that cope with the challenges brought about by change can be considered winners and those that fail to adjust their responses inevitably face a progressive and sometimes sudden deterioration in their perceived well-being (McCalman et al., 2016, pp. 5–6).

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Understanding the causes of change

To respond effectively to rapid change, it is necessary to understand the underlying causes. There is a considerable volume of literature that shows that change has provided a major challenge to organisations since the Industrial Revolution (Grey, 2003). It is not something that is needed periodically; it is a business constant (Graetz et al., 2006). Specific changes in an organisation’s internal structure and external markets often derive from wider changes in society, economics or technology (Senior and Swailes, 2010). Change takes place both ‘out there’ in the tangible and physical world and ‘in here’ in the internal world of the human mind, with all its memories, thoughts and ideas. The world appears both ‘objective’ and ‘subjective’. A change project starts from the subjective, inside human imagination, and gradually works out into the reality of managing other people and organising things in the world (Table 1.1).

Socio-cultural forces

Table 1.1 Key general forces affecting businesses in developed economies

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Figure 1.3 Business environment changes.

Note: Horizontal axis indicates the speed of transition from sellers’ to buyers’ market conditions.

General trends in society politics and demography touch everyone. In recent years these have resulted in upsurges in the pensioner, youth and consumer markets; a shift in emphasis from community to a more individualistic society; increased interest in diversity (Roosevelt et al., 2001; Bohnet, 2016) and ageing populations. Markets and monetary flows can fluctuate, competitive ways can alter dramatically, and technology and innovation can fracture established patterns. Technological advance in the twenty-first century is accelerating and is expected to accelerate exponentially. In particular the revolution in IT is having a profound impact on the business environment and many companies are also facing increased challenges from ecological and ethical forces (Figure 1.3).

Most managers in the developed economies accept that a diverse workforce is beneficial both to employees and organisations. Whilst cultural diversity is generally encouraged, gender diversity has tended to gain acceptance but is not always pursued with much vigour (Bohnet, 2016). In the less developed economies both cultural and gender diversity are often constrained by strong cultural attitudes and beliefs. Diversity bias is a complex problem that globally active organisations are seeking to address in order to develop a new mindset. As global businesses find that the going gets progressively more difficult they are giving more strategic attention to innovation. Successful diversity programmes break down stereotypes and enhance the creative process (Kurtzberg, 2005; Hewlett et al., 2013). Inherent diversity, however, is only half of the equation. Leaders also need acquired diversity to establish a culture in which all employees feel free to contribute ideas (Roosevelt et al., 2001).

People all over the world are expecting more out of life. Despite the emergence of the global economy millions still live out their lives below the official United Nations breadline. Basic needs to sustain life such as food, water, shelter and security are yet to be met in many countries. The technological revolution that has launched the digital age is fuelling people’s wants for products and services that will improve their standard of living, but the onward march of global communications often frustrates people who now know about the availability of such things but find it difficult or are unable to afford them.

IKEA react to strong western buyer’s markets for home furnishings

IKEA have found that the demand for home furnishings in the developed western markets has nearly reached saturation. Despite this IKEA have a target of almost doubling sales by 2020; changes in customer buying activity was a spur to rethinking the way the company conducts its business. IKEA has decided to concentrate on environmentally friendly business initiatives worldwide and to increase its penetration of the developing countries.

Source: Adapted from ‘We’ve hit peak home furnishings, says Ikea boss’, The...