StratChat 5 November 2020: Creativity in Business Strategy

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StratChat is conducted under Chatham House Rules. Consequently, the summary below is presented without any attribution of who said what. As such, it is an agglomerate of views - not necessarily just those of the writer or indeed of any one individual.

On 5 November 2020, we discussed the relationship between creativity and business strategy.

The link between creativity and differentiation

At last week's StratChat, we talked about differentiation. But how can you differentiate without coming up with a novel idea?

Even if you follow a very evidence-based analytical approach to strategy, at some point you have to hope that one or more good ideas will emerge.

And you really need more than one good idea. If you only have one good idea, you're not really making a choice. And without making a choice, you're not really doing strategy - you're just reacting in the only way you can.

So, business strategy inevitably requires creativity at some point in the process.

Edward De Bono's PO

Edward De Bono popularised the idea of lateral thinking. This included ideas like The Six Hats and PO. He has written extensively on the subject. His writing has stood the test of time.

PO stands for Provative Operation. It is a way of suspending disbelief. It provides you with the space to examine your assumptions. It an invitation to think outside the box.

Rather than yes or no, PO conveys a sense of 'yes and' or 'no but'.It can be used to turn a closed question into an open one.

Closed questions restrict options. Yes or no? Do you want A or B? Open questions create new possibilities. What is it about A or B that you do or don't want? Why is that? What else could there be that you want?, etc.

De Bono suggests various exercises which can assist with this. For example, when faced with a problem, he suggests picking one or more nouns at random from the dictionary. Then think about all the possible connections between those nouns and the problem. Many of the ideas might be crazy. But they might also generate some interesting insights.

Introducing such seemingly frivolous ideas in a business context can be challenging. One approach is to use them as ice-breakers within more formal process. They can be particularly useful in longer meeting, such as strategy offsites. For example, when a group gets stuck with a particularly intractable problem, literally 'breaking' their thought patterns with a more creative exercise can enable them to come back to the original problem with fresh perspective and renewed energy. In this way, they can be particularly useful in the 'graveyard' session just after lunch, when energy levels tend to flag.

Even crazy ideas can be structured to ensure that at some point they lead to results. One technique is to ask "What? So what? and Now what?". As is:

• What? is the idea. Explore and describe it in some detail.
• So what? is interesting and relevant about it.
• Now what? can we do to develop or apply the idea in this context?

Psychological safety

Being creative entails some risk. When coming up with and exploring out-of-the-box ideas, you expose yourself to potential ridicule.

So, it is important to create an environment which feels psychologically safe.

You can do this by example. For example, by inviting people to talk about off-topic interests (like hobbies). In a situation where the speaker knows a lot about something which the audience knows very little about, the speaker may feel more confident and creative.

Or you can do it by hypothecating. For example, in a situation where no solutions are seen as possible, pick an impossible one, ask: if this were possible, what would it be like. A more specific example is the criminal mind exercise - ask: how would you solve this if you could break any law with impunity? The work backwards asking, how else could you achieve that. The same approach could be applied with other restraints, such as ethics, the laws of physics, etc.

One might imagine, for example, the inventors of the Sony Walkman asking: if we had to have a tape player which was too small to allow for speakers, how would we listen to the music?

Example: A charitable organisation needed to raise $10m in 30 days. Their board dismissed the idea as impossible. But someone hypothecated what they would need to do to make it possible: get an A-List celebrity endorsement, etc. Once these ideas were on the table, they started to see how the target could be achieved.

Augusto Boal developed the idea of Forum Theatre which uses theatrical improvisation to help people explore different solutions to intractable problems.

Different types of creativity

Many people, when thinking about creativity naturally start to think about the kinds of creativity we think about in the arts: painting, sculpting writing a book or poem, etc.

But creativity can come in many forms (much like Howard Gardner's Multiple Intelligences). In business, you can have creative product design and marketing, but also creative deal structures, etc.

The key ingredient is the ability to imagine something which does not yet exist. This requires you to be able to imagine multiple often contradictory things without the idea of one forcing you to dismiss the idea of the other. This is often what stops people from generating multiple ideas. Once they have one new idea, they stop. Because to come up with a second new idea, they'd have to give the first one up. But they've already become attached to that one.

Sometimes, creativity lies in finding the simple and (in hindsight) obvious solution. Unfortunately, our training, skills and experience often leads us to complex over-engineering. Like the (sadly not quite true) legend that NASA spent millions developing a pen that could write in space, while the Russians took a pencil. Other times, creativity requires difficult solutions to seemingly trivial problems. How do you get the flavour evenly on both sides of a crisp?

Management fads

Creativity doesn't just apply to the solutions we come up with. It also applies to the tools and technique we use in developing business strategies.

Some management ideas seem to come and go. We hardly ever hear anyone talk about Taylorism anymore, even though some of his ideas are still in use. Total Quality Management was very popular in the 80s, but has since lost much of its lustre. Just-in-time manufacturing and Six Sigma are other examples of approaches which seem to have passed their peaks. More recently, there has been a greater emphasis on the softer more human aspects of organisations and organisational development.

In searching for some consistency, it is unlikely that we will find one unified theory of organisations or business strategy. Organisations are just too complex. And the context in which we operate is continually changing.

But, we can hold on to those ideas which have stood the test of time. And we can maintain a healthy scepticism of consultants professing a new idea (all too often an old idea reworked) as the new panacea. There are few black-or-white choices. Rather we need to be able to mix and match from among an ever-evolving toolset as the need arises.

SWOT analysis is a great example of an idea in business strategy which has stood the test of time. If you look at Google search analysis, it is more frequently searched for than many other popular strategy frameworks combined. (See The consistently popular SWOT analysis.)

It is also one of the most frequently criticised frameworks. However, criticisms of SWOT are more often than not just criticisms of SWOT done badly. One of the penalties of its popularity may be how often it is misused.

But a SWOT done well can be an invaluable tool. SWOT can serve as great starting point for a strategic analysis. It can be used to provide a quick and dirty framework which is then used to highlight where further analysis is required. And it can be a very effective way of summarising the results of more detailed analysis at the end of a process.

We should, however, not be afraid to take existing frameworks and adapt them to our specific needs at any point in time. After all, our job is not to fill out templates and comply with management ideas, but to solve real business problems. We should be as creative in our use of tools and frameworks as we are in the solutions we use them to develop.

Participants: Chris Fox (host), Chris Norris, Jerald Welch and Philip Hodges.

Next week

Next week at StratChat we'll be exploring another creative idea - the metaphors we use when talking about business strategy.

Why not sign up and join us?