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Why are creativity and innovation important topics for business

Updated on July 14, 2016


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In this paper I will be discussing why creativity and innovation are both relevant and important topics in business, and provide evidence that either supports or opposes theories found from research. I will also discuss how different models can be used to enhance innovation and creativity at an organisational level and also an individual level. Furthermore I will explain why it is important for an individual in business to decide what ideas are beneficial and how to decide what should be disregarded. Furthermore I will clarify how I and my team implemented these theories and models to achieve the best outcome for our ideas.

Creative thinking can be defined as “A way of looking at problems or situations from a fresh perspective that suggests unorthodox solutions (which may look unsettling at first). Creative thinking can be stimulated both by an unstructured process such as brainstorming, and by a structured process such as lateral thinking” (, 2016).

Types of innovation

Creative thinking is important in all aspects of business we need innovation of ideas to help organisations tackle challenges in a forever changing market place. There are numerus types of creativity the two most common being Incremental innovation and radical innovation (Gilliard, 2016).

Incremental innovation is what businesses must do in order to keep up with the current market or time period whether this be due to cost cutting or updating new technology to ensure the organisation puts itself into a superior position. There is no one certain explanation of incremental innovation partly because there are so many authors. Joseph Schumpeter studied how the capitalist system was affected by market innovations and went on to explain that the opening up of new markets constantly revolutionises the economic structure from within, meaning that to keep a business in a competitive position you must destroy the old and create new ideas so that organisations can keep up with the change of time, he called this “creative destruction” (, 2016). He then came to the conclusion that larger companies would be at a disadvantage over small companies in terms of innovation due to them being trapped in bureaucratic structures. As time changed Schumpeter suggested that larger companies who have more power could have advantage over smaller firms (Schumpeter, no date). Looking at this theory I found that larger companies in this economic climate tend to have more control over the market as they are able to invest more money into creative innovation and also already control large proportions of the market they are in, leaving smaller companies restricted with what can be innovated as they are constantly trying to cut costs and change with the rapidly changing market.

“Radical innovations also known as breakthrough innovations play an important role in changing the world this is usually done by providing something new to the world such as the first car or telephone, they end up replacing existing methods and are seen as an inspiration to other organisations” (Gilliard, 2016). Successful radical innovation is actually very rare this is because most designs attempts fail (Sandberg 2011). An example of radical innovation is Thomas Edison who created the light bulb although successful in the end he failed his design many times (, 2016). Although radical innovation is somewhat risky it has huge potential to change the market of those involved. However investing large amounts of money into research to help generate and create new ideas can be costly and may fail to return expenditure. Some Designs may actually cause a back lash on the market or organisation and so the ideas were too creative for example Ecstasy was invented by Anton Köllisch to help combat abnormal bleeding which in return ended up being used as a rave drug popular in the 80s onwards killing up to 50 people a year in the United Kingdom alone and being in the top four used illegal drugs in the world (ADDICTION HISTORY, 2006).

Radical innovations give the best opportunity to change the global markets and have huge profit rewards, although they take longer to create and success rates are low, whereas incremental innovation occurs more often and has a smaller profitable potential, equally deciding that both types of innovation are highly important in business to not only sustain an up to date market but help push the boundaries of what we can achieve as humans.

Enhancing Creativity

Enhancing creativity is thought to be achievable by learning to be more creative, In order to be creative or inspired to create Carl Rogers said that the individual must be healthy in how they perceived their own existence or self-actualisation of their own worth, and who they feel they should be also known as ideal self. Rogers believed that you could use a therapist or another individual to help reflect your feelings or emotions back in a positive way therefore boosting your self-esteem (mental health) allowing you to in vison more self-worth and encourage creativity (rogers, no date).

Another common theory introduced by Maslow’s hierarchy of needs suggested that an individual had six basic needs in which we must achieve for the human being to thrive or be creative (see appendix 1) (Maslow, 1943). Maslow divided creativity into three parts, primary, secondary and integrated creativity.

Primary creativity is what allows us to escape from everyday life such as a hobby for example painting, writing or even sculpting allowing us to be spontaneous. Secondary creativity requires more thought into what is being done, these are thought to be more planned out or thought of before commencing. Finally integrated creativity requires both the primary and secondary forms of approach, although spontaneous before the individual starts they have put thought into what they want to achieve from what they are doing (Ripper Design and Multimedia, 2013). An example would be writing maybe a spontaneous idea and before starting the goal could be to create a song that will get to number 1 in the charts.

Comparing both theories it is evident that in order for an individual to thrive and become more creative they must first not be distracted and have a certain level of self-actualisation forcing them to be more creative. However I also believe that these theories did not clarify that if an individual is struggling or in a position where they need to thrive and do better subject to force such as having no job or being homeless then that said individual has no choice but to thrive and be creative in order to get a higher level of self-esteem on an individual level.

On an organisational level the leadership in the organisation must be able to communicate information at the individual or team levels at the same time whilst also given the team or individual freedom in way of compromise and choices (Patterson, No date). The organisation needs to be flexible while controlling risk for example google allow one day per week for engineers to work on any project of their choosing called blue-sky and the other four days doing an assigned project (keithsawyer, 2009).

Creativity on a team level can come with many conflicts the main two types are task conflicts being disruptions or problems with the task at hand or the project and the second being relational conflict such as disagreements with personality or individuals in the team (jehn, 1995). Although this is normally seen as a negative, in my opinion this can be beneficial to a team’s performance as if task conflict is present it would force individuals to think of new ideas or put aside differences to find a mutual agreement.

A conflict of personality is also a good thing as different opinions will be incorporated into the task using new methods optimising creativity. Team building can be used to help form a level of creativity in a team and get individuals used to working together this can be done from tasks such as crossing lava where the team may get 4 squares in which they must work together to cross without falling off.

Recognising and realising opportunities

Recognising and realising opportunities is all about effective decision making, as a leader it is important to recognise individuals ideas, there are many ways to encourage creative thinking this can be done by being supportive encouraging the ideas of individuals and allowing freedom to think creatively. Rewarding creativity is also an important factor, setting a prize or acknowledging accomplishments gives the individual a feeling of self-worth (confidence).

Most importantly a leader must act on ideas this is a must but it is only worthwhile if the idea acted upon. In order to develop potentially creative ideas it’s important to allocate time for brain storming this allows individuals to come together and inspire each other (Marketing Donut, 2016). There are 2 types of decision making conditions, one is certainty and the other risk, certainty would be making a decision from all information gathered to get a result, risk is done by having enough information to estimate the likelihood of obtaining something such as a contract.

After ideas have been generated it is important to weigh up the advantages and disadvantages of the idea such as costs, production and time, you can use a variety of models 1 of the main types is called a weighted scoring decision making mode. This is done in four steps one being agree on decision criteria, 2 rank the criteria what is the most important and the least important, Step 3 involves rating and scoring each option which is done from a scale of 1-10 where 10 being most important, Finally for step 4 we calculate the weighted scores by multiplying the scores given to each idea (see appendix 2) (, 2016).

Creation of project idea

Generating an idea for our team proved to be a difficult one first of all as a team we were restricted due to the charity chosen leaving our creativity somewhat confined, As Patterson said in the previous paragraphs” it is important to give individuals freedom in way of compromise and choices”(Patterson, no date). Because other groups had already chosen selected ideas we were allowed to do this forced us into selecting a fundraiser for the Birmingham’s children’s hospital.

Using brainstorming collectively as a group we came up with ideas of a bag pack at local supermarkets, a quiz night and also an awareness campaign. Relational conflicts between the team proved our decision making to be difficult but also allowed us to better the idea using opinions from each individual.

Being the managing director I encouraged every individuals idea to be put forward and used a weighted score model as discussed earlier in the paper to choose the best option. The results showed the quiz night to have a higher success rate due to the fact we could create awareness and raise money killing two birds with one stone so to speak. During this process I believe lack of communication between the group resulted in no venue being set for a quiz night as they were all fully booked, By process of elimination we chose the next highest scoring weight on the model, this was an online awareness campaign by where we would use the power of social media to gain following and show support via photos. The disadvantage of using this model is that it can be difficult to estimate what other factors may affect the project such as deadline or if two models had a similar waited score which would be best to choose. This was the incremental innovation model as we took an idea previously used last year and made small adjustments allowing it to fit in with the new age of social media, essential destroying the old and creating the new (Schumpeter, no date).

During this process the team consistently met up for meetings and communicated through email and social media, The downfall to this was that due to work commitments and living arrangements we couldn’t all meet up together at the same time leaving communication by phone, If I was to do this again I would set deadlines and ensure that all members of the team could meet up at least once a week with evidence on research done or progress. I feel that taking on the role of managing director in a group of existing friends proved to be difficult as the level of authority was restricted this was because having a relationship on a personal level with an individual makes it difficult to receive orders or information within a team task.

The benefits were that when decisions had to be made promptly and quickly the team were comfortable with myself and leadership style which increased the chances of reaching the deadline.

If I were to come up with a new idea then I would of selected an idea which may have been more achievable for the time frame given, I would allocate tasks to the team but also allow them to brainstorm ideas to enhance creative thinking, and also set deadlines along the way to measure the progress of planning up to the event.

Enhancing creativity is a major importance of project management for charity events relating to Maslow’s theory of creativity we used the secondary creativity approach as a lot more thought had to go into what we were doing and other factors such as restrictions of what we could and could not do were in place (Maslow, no date), reflecting on how we enhanced our creativity using integrated creativity I feel would have been more useful as you combine both primary and secondary creativity this could of helped us generate ideas through common interest such as running which is a hobby of a few of the team members so a sponsored fancy dress run could have been a great option.


ADDICTION HISTORY. (2006). 1st ed. [eBook] Roland W. Freudenmann. Available at: [Accessed 30 Mar. 2016]. (2016). What is creative thinking? Definition and meaning. [Online] Available at: [Accessed 30 Mar. 2016].

Denti, L. (2012). Conflict in Teams – Does it Stimulate Creativity & Innovation? | Innovation Management. [Online] Innovation Management. Available at: [Accessed 30 Mar. 2016]. (2016). Radical Innovation. [Online] Available at: [Accessed 30 Mar. 2016]. (2016). Innovation and Schumpeter’s Theories. [Online] Available at: [Accessed 30 Mar. 2016].

Marketing Donut. (2016). Ten ways to encourage creative thinking. [Online] Available at: [Accessed 31 Mar. 2016].

McLeod, S. (2007). Maslow's Hierarchy of Needs. [Online] Simply Psychology. Available at: [Accessed 30 Mar. 2016]. (2016). Decision Matrix Analysis: Making a Decision by Weighing Up Different Factors. [Online] Available at: [Accessed 31 Mar. 2016].

Patterson, C. (2016). Individual and Organisational creativity. 1st ed. p.2.

Ripper Design and Multimedia. (2013). the Five Major Theories of Creativity. [Online] Available at: [Accessed 30 Mar. 2016]. (2016). The Humanistic Approach. [Online] Available at: [Accessed 30 Mar. 2016].

The Creativity Guru. (2009). Innovation at Google. [Online] Available at: [Accessed 30 Mar. 2016]. (2016). Edison Biography. [Online] Available at: [Accessed 30 Mar. 2016].

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