Innovation and Creativity

Pressures for shorter product development cycles, lower project costs, and greater product variety have once again brought to the fore an old problem: how to organize product design and development. The central issue is, as it has always been, the 'creative spirit' and the way it seems to conflict with the efficient management of virtually every other aspect of the business. There is a well-developed set of tools for managing other business functions, but creativity is a 'black box'. We need to open up the black box and see what is inside. At the Industrial Performance Center we have been studying product and service design and development in a variety of sectors in an attempt to find out what such a theory might look like and how it could actually be used. This research has revealed two fundamental processes that are central to innovation. One, rational problem-solving, is well understood and dominates management and engineering practice and economic policymaking. The other, which we refer to as interpretation, is much less well understood, but is the source of much creative output. These two processes are radically different from each other in almost every respect, and require vastly different managerial approaches, yet both are needed to sustain the creative output of both individual firms and entire economies. One area of current research focuses on corporate strategies for preventing interpretive processes from being crowded out by the insistent demands of problem solving, and for combining the two processes effectively within the same organization. A second strand of research focuses on the implications for public policy of the need to cultivate interpretive spaces to boost the innovative performance of national economies.