No Ideas? You're Not Alone
If you're in a group, you'll have a better shot at being creative
Quick: Be creative. Go on, think of a new product or idea that will dramatically improve your company's sales, cut costs, or even just make the daily commute a little more bearable. Still haven't come up with anything? Not to worry. Conventional wisdom has it that breakthrough ideas come only from the minds of geniuses. Edison, Tolkien, Darwin—history's biggest brains are responsible for its biggest innovations. Inventors, in popular history, are loner-savants, solving the world's problems solo in musty labs and libraries. Many companies are organized with this idea in mind.
But here's the thing: Thomas Edison didn't work alone. The invention of the light bulb was the work of an entire lab team; it was one of his assistants who came up with the idea of screwing the bulbs into sockets instead of just mounting them straight up. Same goes for J.R.R. Tolkien, who wrote his Lord of the Rings novels at the same time C. S. Lewis was creating The Chronicles of Narnia. Both authors generated ideas for their stories in a weekly literary group of Oxford scholars called the Inklings. Charles Darwin's work on evolution wasn't dreamed up in a vacuum, either: While doing his research, he was corresponding with dozens of scientists across Europe.
No "I" in team. Creativity, in other words, isn't a solitary affair—and it's not the exclusive domain of the brilliant and gifted. In fact, research shows that people working in groups are far more innovative than previously thought. A handful of academic papers in the past decade have found that team-based organizations consistently outperform traditional bureaucracies, largely because they allow better ideas to bubble to the top. Phrases like the "wisdom of crowds" have entered the lexicon, and companies like YouTube and craigslist have taken advantage. According to one recent study, 14 percent of the "substantial innovations" that come out of small groups account for 61 percent of all profits. "Most people think the creative economy is artists, musicians, and sculptors," says Richard Florida, author of The Rise of the Creative Class. Actually it's not: Whether you're a lawyer or a factory worker, he says, companies are relying more and more on your ideas.
So what can businesses do to take advantage of their employees' creativity? Two books published this month, one by Keith Sawyer, a professor of psychology at Washington University in St. Louis, and another by Richard Ogle, a business consultant and researcher, offer the beginnings of an answer. Sawyer and Ogle maintain that group effort always has been the best source of innovation—and they offer a glimpse into companies that are finding new ways to harness the ingenuity and entrepreneurship of their employees.
Generating new ideas, they point out, isn't as simple as pouring money into R&D. Indeed, a 2005 Booz Allen Hamilton study found no relationship at all between the dollar amount companies spend on research and development and the growth of sales or profits. Kind of makes sense: Microsoft, with its massive $5 billion research budget, isn't known for its innovations (witness the Zune), while Toyota, only the third-biggest R&D spender in the auto industry (behind Ford and DaimlerChrysler), not only came up with the most popular hybrid vehicle on the market but is well on its way to becoming the world's largest automaker.
Tapping into employee creativity takes more than money: It requires a new way of thinking about management—one that is often hard for those at the top to accept. "Most managers aren't willing to give up enough autonomy," says Sawyer, author of Group Genius: The Creative Power of Collaboration. He points to Semco, a Brazilian manufacturer of devices from marine pumps to commercial dishwashers, as an example of a managerial paradigm shift. Until 1980, Semco was a traditional company, with a top-down management structure and a shelf full of binders with procedures for any situation. The only problem: It was on the verge of bankruptcy.
Then Ricardo Semler, the son of the company's founder, took over as CEO. Semler tossed the binders, fired most of his senior managers, and handed the reins to the company's employees. "It was like taking an improvisational jazz ensemble and ramping it up to the organizational level," Sawyer says. Small groups now run the company with near-total autonomy. Large, 300-worker factories have been split into smaller, 100-worker units. The move initially caused inefficiencies and higher costs but eventually allowed low-level innovation to flourish. Empowered factory-line workers, it turns out, really do know how to do their jobs better. Inventory backlogs have eased, product lines have expanded, and sales have jumped. "That's not a lack of structure; that's just a lack of structure imposed from above," Semler has said. After the company's reorganization, revenues climbed from $4 million to $212 million. Semler held a party in 2003 to celebrate the 10th anniversary of the last time he says he made a decision. Semco is "a radical rethinking of the organization," Sawyer writes, "and most companies aren't willing to go there just yet."
Glide path. Some are, though. W. L. Gore & Associates, the Delaware-based developer of Gore-Tex and Glide dental floss, has been widely praised for creating a collaborative atmosphere. Since its founding in 1958, the company has been organizationally "flat." There's no chain of command. Employees are referred to as "associates" and hired into evolving work areas, not specific jobs. They are guided by "sponsors," not bosses. Workers, not managers, choose product areas that fit their skills. Small task forces organize as issues arise, work to solve them, then disband. To prevent bureaucratic creep, Gore tries to erect a new building any time a work group exceeds 200 people. It's a system designed to breed meritocracy and self-sufficiency. "Your team is your boss, because you don't want to let them down," as one employee puts it.
This environment has allowed ad hoc teams room to flourish—and to create most of Gore's most lucrative innovations. Three employees familiar with the company's Ride-On bike cables wondered if the same technology—a wire encased in a thin coat of plastic—could be used on guitar strings. Without the guidance of senior managers, the associates came up with the Elixir guitar string. Released in 1997, it quickly became a top seller.
When a full organizational makeover isn't possible, smaller dabs of collaboration are always an option. British Petroleum, for example, has redesigned its Houston office around espresso bar "nodes": To get anywhere in the building, employees have to pass through these central hubs, forcing disparate groups of workers to interact with one another. At Cisco Systems, the networking giant, senior managers have begun allowing non-salespeople to talk to customers, something that was frowned upon for years. When engineers hear complaints directly from customers, the thinking goes, they're likely to generate new ideas. Open-source software and wikis, the newest form of Web-enabled collaboration, are being used by groups ranging from would-be authors generating book ideas to the more than 1,400 developers who created Nicholas Negroponte's $100 laptop, a rugged, bare-bones computer for use in educating children in developing countries. "You simply couldn't do some of these things any other way," says Ogle, author of Smart World: Breakthrough Creativity and the New Science of Ideas. "The knowledge economy is morphing into the creative economy. This is where your big competitive edge is going to be."
Payoffs. Some managers are also trying to inspire employee creativity the old-fashioned way. Gary Carini, a professor of management at Baylor University's Hankamer School of Business, found that companies that offer financial rewards for business ideas have seen worker "idea outputs" increase by up to 40 percent. At Interminds, a San Francisco consulting firm, employees who come up with ideas that save the company money are awarded half of the first year's savings. An executive assistant earning $38,000 a year recently devised a way to automate the system for tracking field reps and was awarded a $152,000 bonus. "Every single employee has ideas," Carini says. "We say let's get these folks eyeball to eyeball in groups and create an atmosphere that says ideas are good and you're going to be rewarded for them."
Not everyone is convinced dangling bonuses in front of workers is the best way to inspire collaboration. "It won't work in the long run," Florida says. He believes employees will learn that hoarding ideas for personal gain is the fastest way to a quick buck. (Wait, isn't that the American way?) For purists who support collaboration for collaboration's sake, bottom-up innovation isn't something managers can do piecemeal. Employees in the future will either be empowered or they won't. Whether managers think they can compete without creative workers, of course, is up to them.
This story appears in the June 18, 2007 print edition of U.S. News & World Report.