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Harnessing Creativity and Innovation in the Workplace


Creativity plays a critical role in the innovation process, and innovation that markets value is a creator and sustainer of performance and change. In organizations, stimulants and obstacles to creativity drive or impede enterprise.


  • Communities of practice
  • Creativity
  • High-performance organizations
  • Human capital
  • Idea sharing
  • Incentives
  • Innovation
  • Knowledge transfer
  • Motivation
  • Networks of practice
  • Open closed innovation
  • Rewards
  • Social capital
  • Social networking
  • Talent

These Knowledge Solutions do not discuss intellectual property, the new knowledge that arises out of the innovation process, nor the management systems that identify, protect, value, manage, and audit an organization’s intellectual property, e.g., copyrights, trademarks, patents, etc.

In a Word Creativity plays a critical role in the innovation process, and innovation that markets value is a creator and sustainer of performance and change. In organizations, stimulants and obstacles to creativity drive or impede enterprise.


There is no doubt that creativity is the most important human resource of all. Without creativity, there would be no progress, and we would be forever repeating the same patterns.

—Edward de Bono

Creativity has always been at the heart of human endeavor. Allied to innovation , which creates unexpected value, it is now recognized as central to organizational performance. (Some hold that the capacity to harness intellectual and social capital —and to convert that into novel and appropriate things—has become the critical organizational requirement of the age.) The shift to knowledge economies has been abrupt and there is a flurry of interest in creativity and innovation in the workplace. Innovation is considered, quite simply, an imperative for organizational survival. It may even be the key to some of the biggest challenges facing the world, such as global warming and sustainable development. Notwithstanding, we are still far from a theory of organizational creativity: the avenues for promising research that might contribute to its emergence are innumerable because of the increasing use of systems approaches and the growing number of agents involved in knowledge flows.Footnote 1


CreativityFootnote 2 is the mental and social process—fueled by conscious or unconscious insight—of generating ideas, concepts, and associations.Footnote 3 InnovationFootnote 4 is the successfulFootnote 5 exploitation of new ideas: it is a profitable outcome of the creative process, which involves generating and applying in a specific context products, services, procedures, and processes that are desirable and viable. Naturally, people who create and people who innovate can have different attributes and perspectives.

The Challenge

The key question isn’t “What fosters creativity?” but it is why in God’s name isn’t everyone creative? Where was the human potential lost? How was it crippled? I think therefore a good question might be not why do people create? But why do people not create or innovate? We have got to abandon that sense of amazement in the face of creativity, as if it were a miracle if anybody created anything.

—Abraham Maslow

It follows, then, that innovation begins with creativity . In the world of organizations, be they private or public, lack of either leads to stagnation, and leaves an organization unable to perform or meet change.Footnote 6 However, creative thinking cannot be turned on and off at the flick of a switch. And innovation does not occur in a vacuum; it requires effective strategies and frameworks, among which incentives are paramount. Creativity flourishes in organizations that support open ideas:Footnote 7 these organizations create environments that inspire personnel and maintain innovative workplaces; those that fail are large organizations that stifle creativity with rules and provide no slack for change. There is a role for management in the creative process: but it is not to manage it; it is to manage for it. Why? Because creativity does not happen exclusively and tacitly in a person’s head but in interaction with a social context wherein it may be codified. For any organization, operating in an external environment, an interactionist model of creativity and innovation needs to encompass organizational context, organizational knowledge, and inter- and intra-organizational relationships, not forgetting the (increasingly multicultural) creative makeup of the individuals (antecedent conditions, cognitive style, ability, intrinsic motivation , knowledge, personality), and teams (group composition, characteristics, and processes) who operate in it.Footnote 8

Types and Sources of Innovation

The main types of innovation are divided into product innovations, service innovations, and organizational (procedural or process) innovations.Footnote 9 The most common are market-led or market-push innovation ; others are technology-led innovations (for which markets must be developed). All can be classified depending on the degree of their impact, viz., incremental, radical, or systemic. Drucker (1985) identified seven sources of innovation: (i) unexpected occurrences, (ii) incongruities of various kinds, (iii) process needs, (iv) changes in an industry or market, (v) demographic changes, (vi) changes in perceptions, and (vii) new knowledge. (These seven sources overlap, and the potential for innovation may lie in more than one area at a time.) He explained that purposeful, systematic innovation begins with the analysis of the sources of new opportunities. However, he emphasized that in seeking opportunities, innovative organizations need to look for simple, focused solutions to real problems. That takes diligence, persistence, ingenuity, and knowledge.

Leveraging Enterprise

Creativity in products, services, procedures, and processes is now more important than ever. It is needed equally in the established enterprise, the public sector organization, and the new venture. Why is it then that many organizations unwittingly carry out managerial practices that destroy it? With exceptions, most managers do not stifle creativity on purpose.Footnote 10 Yet, in the pursuit of productivity, efficiency, and control, they often undermine it. Creative-thinking skills are one part of creativity, but expertise and motivation are also essential. Managers can influence the first two, but doing so is costly and takes time.Footnote 11 They can make a more effective difference by boosting the intrinsic motivation of personnel. To manage for creativity and innovation in ways that keep clients, audiences, and partners satisfied, they have five levers: (i) the amount of challenge they give to personnel to stimulate minds, (ii) the degree of freedom they grant around procedures and processes to minimize hassle, (iii) the way they design work groups to tap ideas from all ranks, (iv) the encouragement and incentives they give, which should include rewards and recognition, and (v) the nature of organizational support. Needless to say, managers must themselves be motivated.

Opening Doors to Diverse Perspectives

If you want to make an apple pie from scratch, you must first create the universe.

—Carl Sagan

Before World War II, closed innovation was the operating paradigm for most companies.Footnote 12 Innovating enterprises kept their discoveries secret and made no attempt to assimilate information from outside their own research and development laboratories. Collaboration need not be bounded by the wall of the organization. In recent years, the world has seen major advances in technology and organization assisting the diffusion of information. Not least of these are electronic communication systems, including the internet. Today, data and information can be transferred so swiftly that it seems impossible to prevent movement (should one want to). Since organizations cannot stop this phenomenon, they must learn to take advantage of it.Footnote 13 Communities and networks of practice are fertile venues that provide intellectual challenge, allow people to pursue their passions, foster mutual trust, organize a setting for “noble” work, and gather appreciative audiences. The above table underscores that open innovation requires mindsets and organizational cultures different from those of traditional (closed) innovation .

Table. Closed and open innovation

Closed innovation principles Open innovation principles
• The smart people in our field work for us • Not all the smart people work for us. We need to work with smart people inside and outside our company
• To profit from research and development, we must discover it, develop it, and ship it ourselves • External research and development can create significant value; internal research and development is needed to claim some portion of that value
• If we discover it ourselves, we will get it to market first • We do not have to originate the research to profit from it
• The company that gets an innovation to market first will win • Building a better business model is better than getting to market first
• If we create the most and the best ideas in the industry, we will win • If we make the best use of internal and external ideas, we will win
• We should control our innovation process, so that our competitors do not profit from our ideas • We should profit from others’ use of our innovation process, and we should buy others’ intellectual property whenever it advances our own business model
  1. Source Author

Components of Innovation Systems

To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines.

—Steve Jobs

There is no simple universal formula for successful innovation: it is nonlinear, works at many levels, and is too complex to be pinned down in that way. It is uniquely human and cannot be done by machines. Nevertheless, innovations are not random: they occur in relation to the past, present, and future conditions of an organization. The characteristics of innovation systems are that they recruit and retain highly skilled and trained personnel, give them access to knowledge, and then encourage and enable them to think and act innovatively. Components of an effective innovation system include:

  • Clarity in mission statements and goals, which invariably feature a commitment from senior managers to assume responsibility for the risk of failure.

  • An organizational culture that values innovation, where there is encouragement for personnel to think differently, take calculated risks, and challenge the status quo. Major forces such as leadership, attitudes to risk, budgeting, audit, performance measurement, recruitment, and open innovation are aligned in support.

  • A systems approach to management that understands innovation as one part of a wider context, appreciates interconnections, and can conduct systematic analyses of how a problem interacts with other problems, parts of the organization, projects, etc. Management fosters coordination across these interconnections and stresses integration rather than compartmentalization.

  • The adequate resourcing of innovation in line with strategy.

  • The placing of responsibility for innovation on all staff.

  • Understanding that creativity is desirable but insufficient. Innovation ambassadors must still take responsibility for follow-through.

  • An enriched physical workplace that enhances creativity by providing accessible, casual meeting spots; physical stimuli; space for quiet reflection; a variety of communication tools, e.g., white boards, bulletin boards; contact space for clients, audiences, and partners; and room for individual expression, among others.

  • Human resource systems that ensure staff have diverse thinking (or learning) styles, giving them a variety of perspectives on single problems.

  • Team set-ups that avoid groupthink and balance the beginner’s mind with experience, freedom with discipline, play with professionalism, and improvisation with planning. Teams embody divergent and convergent thinking, diverse thinking styles, and diversity of skills; and handle conflict.

  • High levels of decentralization and functional differentiation and a range of specialized areas within the organization.

  • Honed knowledge management systems and processes that constantly bring new ideas , concepts, data, information, and knowledge into the organization.

  • Numerous and empowered members of relevant communities and networks of practice .

  • Processes and methodologies that identify and share good practice.

  • A performance measurement system that measures the innovative pulse of the organization; ensures monitoring and evaluation of inputs, activities, outputs, outcomes, and impacts; and feeds lessons back to the system.

  • The instigation of incentives and rewards for innovative individuals and teams.

  • Plentiful space for creative thinking and reflective practice, e.g., away-days, brainstorming sessions, peer assists, after action reviews and retrospects, problem-solving groups, discussion groups and forums.Footnote 14

  • Linkages with the marketing function, in ways that involve stakeholders and seek regular feedback.

  • Effective dissemination systems.

  • Dedication information systems that ensure positive coverage and publicize success.

  • Structured intellectual property management systems that identify, protect, value, manage, and audit the organization’s intellectual property.


  1. 1.

    Usefully, given the plethora of opportunities, systemized research might cover four distinct stages: (i) ideas capture, (ii) growth and development, (iii) demonstration, and (iv) application. In general, little work has been done on what types of innovation have the biggest or most significant impact, and in what contexts.

  2. 2. defines creativity as “the ability to transcend traditional ideas, rules, patterns, relationships, or the like, and to create meaningful new ideas, forms, methods, interpretations, etc.; originality, progressiveness, or imagination”.

  3. 3.

    Creativity was once considered the province of artists, scientists, and writers. But the creative urge can express itself elsewhere and need not be limited by the job description. There is variety in typologies of creative people too: they can be quick and dramatic, or careful and quiet. It is also true that most new ideas are not flashes of inspiration in an inventor’s head; they come from how people identify, create, store, share, and use knowledge. According to the Snowflake Model of Creativity of David Perkins, developed in the 1980s, the six common traits of creative people are (i) a strong commitment to a personal esthetic, (ii) the ability to excel in finding solutions, (iii) mental mobility, (iv) a willingness to take risks (and the ability to accept failure), (v) objectivity, and (vi) inner motivation. The first three traits are largely cognitive; the last three are dispositional attributes. Because none of the six is thought to be genetic, Perkins argued that creativity can be taught, or at least encouraged.

  4. 4. defines innovation as “the act of innovating; [the] introduction of new things or methods”.

  5. 5.

    Success, of course, should be defined by quantitative and qualitative indicators. In addition to market share and reduced costs, for instance, scale and permanence can serve among others.

  6. 6.

    This is not to say that private and public sector organizations have the same reasons to innovate. In the private sector, the imperative owes primarily to economic contexts and concerns, e.g., reducing costs and raising productivity, maintaining competitiveness, breathing life into slowing or stagnant markets (or, alternatively, facilitating entry into new markets), adapting to changing environments. In the public sector, motivation can be political (and therefore less amenable to rational planning and analysis). For instance, innovation has often been exploited to enhance reputation and image. But innovation is also becoming crucial to the design and delivery of public services in a dynamic society. In the twenty-first century, it is only through innovation, including at policy level, that public sector organizations will shift out of mass provision to efficient, personalized modes of service provision: society is becoming increasingly diverse, and individuals now demand more from public services too—innovations are the product of the creative interaction of supply and demand, for example, in the areas of broad areas of shared services, procurement, efficiency, and joined-up services.

  7. 7.

    Peter Drucker maintained that creativity is rarely a limiting factor. He argued that there are more ideas in any organization than can possibly be put to use. The issue was how to create value out of them.

  8. 8.

    Put simply, drawing from Van de Ven (1986), the model articulates four basic factors: new ideas, people, interactions, and institutional context. This means that managers seeking to harness creativity and innovation confront four basic problems: (i) a human problem related to managing attention, (ii) a process problem related to managing new ideas into good currency, (iii) a structural problem related to managing part-whole relationships, and (iv) a strategic problem related to institutional leadership.

  9. 9.

    More recently, ancillary innovations in the form of changes in the boundary relationships of an organization have also appeared. These lead an organization to work with new partners outside previously existing areas and require close cooperation and collaboration in strategic alliances. Knowledge-sharing partnerships may qualify as such. Some have expanded the three conventional categories further, citing organizational innovations.

  10. 10.

    Still, preventing innovation can secure control over a workforce, be it by centralizing authority in a particular department or person, limiting possibilities for action, or reducing the need for human capital . A further explanation for aversion to risk in the public sector might be that the costs of failure remain so high—both politically and professionally—that managers shy away from innovation as a feature of everyday practice. Another might be that there are few financial or career incentives to think outside the box. Monopolistic structures, “adhocism,” tight budgets, and heavy workloads can also hinder the long-term investment and commitment that is needed to truly embed a culture of innovation. Paradoxically, the need to keep up sometimes also means that new technologies or ways of working are adopted before a prior innovation takes root.

  11. 11.

    Hiring the right person is the single, biggest, most important decision an organization makes. Obviously, success or failure flow from understanding (or not) the need to recruit. Having a talent management strategy gives managers guidance about what they should do more or less of. It also helps to ensure that everyone is familiar with the priorities of the organization and how recruitment can impact it. The steps are to (i) specify what kind of talent the organization needs, (ii) identify what and where the gaps are, (iii) identify high potentials, (iv) assess readiness for leadership transitions, (v) accelerate development, and (vi) focus and drive performance. (Personnel should play an active role in the management of their own talent too.)

  12. 12.

    In the past, innovation was considered a simple process of investment in fundamental research leading to commercialization of new products by farsighted management, usually in the “traditional” high-technology and manufacturing sectors. (However, knowledge-intensive services such as finance, business services, and engineering have formed important and successful elements of a trend of innovations in service and organizational, not product, innovations. Silicon Valley has been the world’s most prolific laboratory for information technology innovation for more than 40 years.).

  13. 13.

    Famously, Albert Einstein suggested that problems cannot be solved at the same level of awareness that created them. This means that novel answers often lie outside the current system. Therefore, individuals who search widely for innovations are crucial to a positive future. Organizations that mean to foster performance and change should identify and value scouts and give them the leeway and resources to search in distant places.

  14. 14.

    All Google engineers are encouraged to spend 20% of their work time, i.e., one-day per week, to pursue independent projects that interest them. At 3 M, it is 15%.


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Further Reading

  • Woodman R, Sawyer J, Griffin R (1993) Toward a theory of organizational creativity. Academy of Management Review 18(2):293–321

    Google Scholar 

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Serrat, O. (2017). Harnessing Creativity and Innovation in the Workplace. In: Knowledge Solutions. Springer, Singapore.

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