Adaptive and creative leadership

According to the cited research, in established enterprises the creative process requires different personalities at various stages:

• People with creative and open mindsets in idea generation
• People that stick to an idea without making too many concessions in the idea promotion
• People that are task and detail oriented, and also flexible in the implementation stage

In our experience with start-ups, it helps to always keep an open and explorative mind and keep adapting continuously. A few years ago, a young entrepreneur and awardee came up with a new business concept for recycling waste metals in industrial processes. He went on to win the national business plan competition and received substantial Venture Capital funding. He subsequently pitched his ideas to several large chemical producers. After endless rounds of pitching, the young entrepreneur was no closer to getting his first client, causing detrimental effect to his own sanity, as well as to his professional and personal relationships. Despite numerous rejections, he still held a strong belief in his product. Two years later, after the young entrepreneur had run out of his funding, he returned to the first potential customer and pitched again —and faced another rejection. This led to a mental breakdown on the spot. It was only then that his potential client asked the painful but honest question: are you finally ready to listen to what is still missing in your product?

Undoubtedly, you need people with grit that will only let a problem go when it is solved, but this does not mean holding on to your own ideas without making concessions. A new innovative product or business concept is often riddled with false assumptions and imperfections. Continuous adaptation can be key during the promotion stage.

The study proposes various financial rewards during the different stages of the creative process:

• Allow independence in the idea generation stage, where financial rewards are unnecessary and unwanted.
• Let personal conviction drive the idea promotion stage.
• Offer financial rewards only in the implementation stage as an acknowledgment of work well done.

We at THNK experience that rewards in terms of positive and negative feedback in idea generation and promotion will allow you to remain customer-centric — especially when dealing with innovative products or services that have no proven track record. The encouragement from test users will motivate the creative leader to keep improving the product to solve a real-life problem and fulfilling a real need. Moreover, negative feedback from test users will stimulate the creative leaders to change their concept before making implementation investments.

To illustrate, a large, multi-national consumer magazine publishing house once investigated its success record in launching new titles. Over the preceding decade it had launched close to 50 new titles, approximately a third of which had generated substantial successes. The launches could be grouped in three types: license copies of successful titles abroad, titles based on clear exploration of new customer segments and needs, and those proposed by the creative developers as concept they would love to read themselves. The success rate of the both first two groups was more than two times higher than that of the third group.

With regards to preferred group structure, the study finds that:

• Complementarity of group knowledge is key in idea generation, but less so during idea promotion
• Complementarity of implementation skills is key in idea implementation

At THNK, we also experience the many benefits of group complementarity. Creativity and innovative ideas often arise when people with different backgrounds, perspectives and skill sets come together and exchange knowledge and experience.

Yet, similarity can also be valuable. Venture capitalists like to invest in start-ups within an emerging category. When a start-up first idealizes a novel concept, it often gets dismissed for being too unproven and uncommon. As more start-ups emerge, typically from the same geographic area, e.g. one university campus, the opportunity is judged as being more feasible. The start-ups motivate each other, and exchange ideas and people. As investment capital starts coming in, the number of people involved starts to explode. What started as only a few believers is now an emerging sub-sector of like-minded people. Complementary of group knowledge is very important, and finding common ground and understanding is too – despite the need for diversity of operational and implementation skills.

In terms of leadership, the study proposes that for situations of continuous innovation:

• People need a lot of autonomy during the idea generation phase, as hierarchy can inhibit creativity.
• During idea promotion, the team needs a “leader” (formal or informal) that acts as intermediary to influential outsiders.
• Governance is needed to implement and execute plans and ideas during the final stage.

We want to add that this should not result in a lack of leadership during idea generation. In emergency situations where immediate action is required, the creative leader selects the creative team to generate the new idea. This is a hierarchical task that includes evaluation of team performance and replacing team members if needed. Creative leaders need to set out the group’s overall vision and direction, identifying where the creative solution is most likely to be found. Furthermore, they may also have to direct the team to change course and explore a new direction, even if the team prefers to continue on the current track.

During idea promotion, leaders might be better off facilitating direct interaction, rather than acting as an intermediary between the creative team and influential outsiders. By linking people directly, they might improve mutual understanding and trigger new ideas and even co-creation. In many cultures, new ideas are only accepted when outsiders have the opportunity to become insiders by engaging as an intellectual co-owner of a new concept. As the saying goes, success has many fathers, while failure is a lonely stepchild. 

With regards to organizational resources such as contact networks, information access, transparent organization structure and funding, the study proposes to give people:

• Access to information and interpersonal contacts during idea generation.
• Access to information about funding, resources, and networks during idea promotion.
• Funds, time, and competencies during idea implementation phase.

We want to add that “funding information” is crucial feedback for idea generation, especially for start-ups. When you pitch your innovative business concept to investors and they refuse to invest in it, what really happens? Do the investors fail to see the brilliance of your idea or are you at fault by failing to understand that your idea is actually quite weak —think about the young entrepreneur? Information about funding —which tells you whether or not your idea is fundable— can be very important feedback that would trigger you to stay into idea generation stage.