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Elements of Corporate Creativity – 2
- By Weyinmi Jemide
- Published March 1st, 2010
- Business School
- Unrated
WE are still on a journey – an exploratory journey – to examine the relationship between the Creation Story and business strategy. In last week’s article, I highlighted three elements of corporate creativity namely: innovation, appetite for risk and creating customer demand. To recap in a nutshell:
•Innovation sustains companies and involves creating new things
•Corporate creativity cannot be activated without risk
•Creating customer demand is translating the latent to reality.
Two more elements of corporate creativity are:
•Investing in research
•Collaborations and alliances
Investing in Research
Research is linked to innovation and the willingness to take risks. Innovation is an expression of corporate creativity but it is aided by research. Companies that sustain market share regularly invest in research which hardly ever yields short-term results. This implies that research investment may and indeed sometimes lead to dead ends. Yet, in many industries such as cosmetics, household products, pharmaceuticals and biotechnology the long-term survival of companies is directly related to research spend and not just sales. Seeing and moving ahead of the pack cannot be achieved by standing still with old products. Rather, the level of research into new or upgraded products determines corporate sustainability. Research and risk are twins because there is always a chance that research will not generate the expected success. Nevertheless, forward-looking companies have to take huge research investment risks that might end up as “failed experiments”.
Vijay Govidajaran and Chris Trimble in “Ten Rules for Strategic Innovators” give this perspective:
“The essence of strategic experiments is that much more is unknown than known. No amount of research and planning can resolve the unknowns in advance. Despite this unsettling reality, companies must occasionally take risks on strategic experiments if they wish to stay ahead of the competition. The winner is not necessarily the company that starts with the best plan. Rather, it is often the one that learns and adapts quickest.”
In the oil and gas industry, research can often be equated to exploration. In spite of the advances in technology, there is still a risk that an oil company drills a well and does not find oil in commercial quantities. In oil exploration, it is sometimes a gamble and a catch-22 situation. If you don’t explore, you’ll never find oil. If you explore, you may not find oil. In such situations, the appetite for risk which I previously highlighted comes into play.
Collaboration and Alliances
Collaborations and alliances are expressions of corporate creativity. They entail working with cross-corporately (often with different corporate values) to produce mutually beneficial business outcomes for the collaborators. The global economic system recognises that no nation or company can function in a state of autarky (a policy of economic self-sufficiency). Nations like Libya and Iraq will testify of the adverse effects of trade sanctions on their domestic economies. Think about how backward the old Eastern-bloc countries were before the collapse of communism. Years later, many of these nations are still lagging behind their former counterparts in the old Western bloc.
Corporate creativity demands renewal and alteration of business models to shift focus from competitors to collaborators. A leading question for front-runners is no longer “who’s the competition?” but “who’s the collaboration?” Business survival might even dictate that yesterday’s competitor becomes today’s collaborator.
Companies, as the productive components of nations cannot also operate in autarky. Today’s global marketplace with 24/7 Internet and cross-border activities have compelled the end of isolation. Leading companies acknowledge collaboration as an element of corporate creativity. How are planes, automobiles, ships or computers made? Can any single manufacturer produce an item for the market without the intervention or inclusion of another company or supplier? Global outsourcing is proof of the power of collaboration. Nowadays, employees are serving customers thousands of miles away in countries they’ve never visited! National boundaries are being legally breached by technology and communication. Products are ordered and shipped across borders overnight. People live in one country and earn income from another. In the European Community, uniform passports mean that a skilled person can live in London and work in Paris. Numerous companies sell their products in Europe and America but produce them in Asia. All these scenarios have been strongly influenced by the corporate collaborations and alliances.
Let me close with these words from Rosabeth Moss Kanter:
“Alliances between companies, whether they are from different parts of the world or different ends of the supply chain, are a fact of life in business today. Some alliances are no more than fleeting encounters, lasting only as long as it takes one partner to establish a beachhead in a new market. Others are a prelude to a full merger of two or more companies’ technologies and capabilities. Whatever the duration and objectives of business alliances, being a good partner has become a key corporate asset. I call it a company’s collaborative advantage. In the global economy, a well-developed ability to create and sustain fruitful collaborations gives companies a significant competitive leg up.”
We’ve heard the expression “innovate or die”. An extension to this expression is “collaborate or die.”
•Innovation sustains companies and involves creating new things
•Corporate creativity cannot be activated without risk
•Creating customer demand is translating the latent to reality.
Two more elements of corporate creativity are:
•Investing in research
•Collaborations and alliances
Investing in Research
Research is linked to innovation and the willingness to take risks. Innovation is an expression of corporate creativity but it is aided by research. Companies that sustain market share regularly invest in research which hardly ever yields short-term results. This implies that research investment may and indeed sometimes lead to dead ends. Yet, in many industries such as cosmetics, household products, pharmaceuticals and biotechnology the long-term survival of companies is directly related to research spend and not just sales. Seeing and moving ahead of the pack cannot be achieved by standing still with old products. Rather, the level of research into new or upgraded products determines corporate sustainability. Research and risk are twins because there is always a chance that research will not generate the expected success. Nevertheless, forward-looking companies have to take huge research investment risks that might end up as “failed experiments”.
Vijay Govidajaran and Chris Trimble in “Ten Rules for Strategic Innovators” give this perspective:
“The essence of strategic experiments is that much more is unknown than known. No amount of research and planning can resolve the unknowns in advance. Despite this unsettling reality, companies must occasionally take risks on strategic experiments if they wish to stay ahead of the competition. The winner is not necessarily the company that starts with the best plan. Rather, it is often the one that learns and adapts quickest.”
In the oil and gas industry, research can often be equated to exploration. In spite of the advances in technology, there is still a risk that an oil company drills a well and does not find oil in commercial quantities. In oil exploration, it is sometimes a gamble and a catch-22 situation. If you don’t explore, you’ll never find oil. If you explore, you may not find oil. In such situations, the appetite for risk which I previously highlighted comes into play.
Collaboration and Alliances
Collaborations and alliances are expressions of corporate creativity. They entail working with cross-corporately (often with different corporate values) to produce mutually beneficial business outcomes for the collaborators. The global economic system recognises that no nation or company can function in a state of autarky (a policy of economic self-sufficiency). Nations like Libya and Iraq will testify of the adverse effects of trade sanctions on their domestic economies. Think about how backward the old Eastern-bloc countries were before the collapse of communism. Years later, many of these nations are still lagging behind their former counterparts in the old Western bloc.
Corporate creativity demands renewal and alteration of business models to shift focus from competitors to collaborators. A leading question for front-runners is no longer “who’s the competition?” but “who’s the collaboration?” Business survival might even dictate that yesterday’s competitor becomes today’s collaborator.
Companies, as the productive components of nations cannot also operate in autarky. Today’s global marketplace with 24/7 Internet and cross-border activities have compelled the end of isolation. Leading companies acknowledge collaboration as an element of corporate creativity. How are planes, automobiles, ships or computers made? Can any single manufacturer produce an item for the market without the intervention or inclusion of another company or supplier? Global outsourcing is proof of the power of collaboration. Nowadays, employees are serving customers thousands of miles away in countries they’ve never visited! National boundaries are being legally breached by technology and communication. Products are ordered and shipped across borders overnight. People live in one country and earn income from another. In the European Community, uniform passports mean that a skilled person can live in London and work in Paris. Numerous companies sell their products in Europe and America but produce them in Asia. All these scenarios have been strongly influenced by the corporate collaborations and alliances.
Let me close with these words from Rosabeth Moss Kanter:
“Alliances between companies, whether they are from different parts of the world or different ends of the supply chain, are a fact of life in business today. Some alliances are no more than fleeting encounters, lasting only as long as it takes one partner to establish a beachhead in a new market. Others are a prelude to a full merger of two or more companies’ technologies and capabilities. Whatever the duration and objectives of business alliances, being a good partner has become a key corporate asset. I call it a company’s collaborative advantage. In the global economy, a well-developed ability to create and sustain fruitful collaborations gives companies a significant competitive leg up.”
We’ve heard the expression “innovate or die”. An extension to this expression is “collaborate or die.”
