Sparking creativity in teams: An executive’s guide

Here is an article co-authored by Marla M. Capozzi, Renée Dye, and Amy Howe and featured online by The McKinsey Quarterly (April 20110),  the business journal of McKinsey & Company.

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Senior managers can apply practical insights from neuroscience to make themselves—and their teams—more creative.

Source: Strategy Practice

Although creativity is often considered a trait of the privileged few, any individual or team can become more creative—better able to generate the breakthroughs that stimulate growth and performance. In fact, our experience with hundreds of corporate teams, ranging from experienced C-level executives to entry-level customer service reps, suggests that companies can use relatively simple techniques to boost the creative output of employees at any level.

The key is to focus on perception, which leading neuroscientists, such as Emory University’s Gregory Berns, find is intrinsically linked to creativity in the human brain. To perceive things differently, Berns maintains, we must bombard our brains with things it has never encountered. This kind of novelty is vital because the brain has evolved for efficiency and routinely takes perceptual shortcuts to save energy; perceiving information in the usual way requires little of it. Only by forcing our brains to recategorize information and move beyond our habitual thinking patterns can we begin to imagine truly novel alternatives.

In this article, we’ll explore four practical ways for executives to apply this thinking to shake up ingrained perceptions and enhance creativity—both personally and with their direct reports and broader work teams.

While we don’t claim to have invented the individual techniques, we have seen their collective power to help companies generate new ways of tackling perennial problems—a useful capability for any business on the prowl for potential game-changing growth opportunities.

[Here’s the first. To read the complete article, please click here.]

Immerse yourself

Would-be innovators need to break free of preexisting views. Unfortunately, the human mind is surprisingly adroit at supporting its deep-seated ways of viewing the world while sifting out evidence to the contrary. Indeed, academic research suggests that even when presented with overwhelming facts, many people (including well-educated ones) simply won’t abandon their deeply held opinions.

The antidote is personal experience: seeing and experiencing something firsthand can shake people up in ways that abstract discussions around conference room tables can’t. It’s therefore extremely valuable to start creativity-building exercises or idea generation efforts outside the office, by engineering personal experiences that directly confront the participants’ implicit or explicit assumptions.

We’ve seen that by orchestrating personal encounters with their and competitors’ customers, companies predispose their employees to greater creativity. For executives who want to start bolstering their own creative-thinking abilities—or those of a group—we suggest activities such as:

• Go through the process of purchasing your own product or service—as a real consumer would—and record the experience. Include photos if you can.

• Visit the stores or operations of other companies (including competitors) as a customer would and compare them with the same experiences at your own company.

• Conduct online research and gather information about one of your products or services (or those of a competitor) as any ordinary customer would.

• Try reaching out to your company with a specific product- or service-related question.

• Observe and talk to real consumers in the places where they purchase and use your products to see what offerings accompany yours, what alternatives consumers consider, and how long they take to decide.

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Executives looking to liberate their creative instincts by exploring company orthodoxies can begin by asking questions about customers, industry norms, and even business models—and then systematically challenging the answers. For example:

What business are we in?

What level of customer service do people expect?

What would customers never be willing to pay for?

What channel strategy is essential to us?

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Marla Capozzi is a senior expert in McKinsey’s Boston office, Renée Dye is a senior expert in the Atlanta office, and Amy Howe is a principal in the Los Angeles office.

How and why gray matter really does matter

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We’ve been thinking quite a bit about the intersection of neuroscience and management of late, thanks to the pioneering work of our Claremont Graduate University colleague, Paul Zak.

Then today, we spotted this fascinating McKinsey & Co. analysis, which explores how managers and their teams can apply practical insights from neuroscience to become more creative.

In the case of both Zak’s work (which deals, in large part, with why and how we establish bonds of trust) and that of Emory University’s Gregory Berns (which is highlighted in the McKinsey report), what intrigues us is how much the science supports what Peter Drucker and other great management minds have told us for a long time.

For instance, the McKinsey piece notes that to spark creativity, Berns and others believe that “we must bombard our brains with things it has never encountered. . . . Only by forcing our brains to recategorize information and move beyond our habitual thinking patterns can we begin to imagine truly novel alternatives.”

But how should we do this? McKinsey’s Marla M. Capozzi, Renée Dye and Amy Howe recommend that managers immerse themselves in environments far beyond those they normally occupy. They cited the experience of one specialty retailer, for instance, that sent out small teams of employees to stores and boutiques offering “retail concepts very different from its own.”

“Seeing and experiencing something firsthand can shake people up in ways that abstract discussions around conference room
tables can’t,” the McKinsey authors explained. “It’s therefore extremely valuable to start creativity-building exercises or idea generation efforts outside the office, by engineering personal experiences that directly confront the participants’ implicit or explicit assumptions.”

Peter Drucker counseled very much the same thing, urging executives to get out from behind their desks as much as possible. It is vital “to get outside information—which is information on how other people, with other jobs, other backgrounds, other knowledges, other values and other points of view see the world, act and react, and make their decisions,” Drucker wrote. In the long run, information about the outside may be the most important information managers need to do their work.”

Some executives dismiss the building of creativity and trust as “soft skills.” It’s nice that we now have more and more hard science to back up the need for them.

Seven steps to better brainstorming

Here is an excerpt from an article co-authored by  Kevin P. Coyne and Shawn T. Coyne, featured by The McKinsey Quarterly website (March 2011). The magazine is published by McKinsey & Company. To read the complete article, check out other material, and obtain subscription information, please click here.

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Most attempts at brainstorming are doomed. To generate better ideas—and boost the odds that your organization will act on them—start by asking better questions.

Companies run on good ideas. From R&D groups seeking pipelines of innovative new products to ops teams probing for time-saving process improvements to CEOs searching for that next growth opportunity—all senior managers want to generate better and more creative ideas consistently in the teams they form, participate in, and manage.

Yet all senior managers, at some point, experience the pain of pursuing new ideas by way of traditional brainstorming sessions—still the most common method of using groups to generate ideas at companies around the world. The scene is familiar: a group of people, often chosen largely for political reasons, begins by listening passively as a moderator (often an outsider who knows little about your business) urges you to “Get creative!” and “Think outside the box!” and cheerfully reminds you that “There are no bad ideas!”

The result? Some attendees remain stone-faced throughout the day, others contribute sporadically, and a few loudly dominate the session with their pet ideas. Ideas pop up randomly—some intriguing, many preposterous—but because the session has no structure, little momentum builds around any of them. At session’s end, the group trundles off with a hazy idea of what, if anything, will happen next. “Now we can get back to real work,” some whisper.

It doesn’t have to be like this. We’ve led or observed 200 projects over the past decade at more than 150 companies in industries ranging from retailing and education to banking and communications. That experience has helped us develop a practical approach that captures the energy typically wasted in a traditional brainstorming session and steers it in a more productive direction. The trick is to leverage the way people actually think and work in creative problem-solving situations.

We call our approach “brainsteering,” and while it requires more preparation than traditional brainstorming, the results are worthwhile: better ideas in business situations as diverse as inventing new products and services, attracting new customers, designing more efficient business processes, or reducing costs, among others. The next time you assign one of your people to lead an idea generation effort—or decide to lead one yourself—you can significantly improve the odds of success by following the seven steps below.

[Note: Here are three of the seven steps. To read the complete article, please click here.]

1. Know your organization’s decision-making criteria

One reason good ideas hatched in corporate brainstorming sessions often go nowhere is that they are beyond the scope of what the organization would ever be willing to consider. “Think outside the box!” is an unhelpful exhortation if external circumstances or company policies create boxes that the organization truly must live within.

Managers hoping to spark creative thinking in their teams should therefore start by understanding (and in some cases shaping) the real criteria the company will use to make decisions about the resulting ideas. Are there any absolute restrictions or limitations, for example? A bank we know wasted a full day’s worth of brainstorming because the session’s best ideas all required changing IT systems. Yet senior management—unbeknownst to the workshop planners—had recently “locked down” the IT agenda for the next 18 months.

Likewise, what constitutes an acceptable idea? At a different, smarter bank, workshop planners collaborated with senior managers on a highly specific (and therefore highly valuable) definition tailored to meet immediate needs. Good ideas would require no more than $5,000 per branch in investment and would generate incremental profits quickly. Further, while three categories of ideas—new products, new sales approaches, and pricing changes—were welcome, senior management would balk at ideas that required new regulatory approvals. The result was a far more productive session delivering exactly what the company wanted: a fistful of ideas, in all three target categories, that were practical, affordable, and profitable within one fiscal year.

2. Ask the right questions

Decades of academic research shows that traditional, loosely structured brainstorming techniques (“Go for quantity—the greater the number of ideas, the greater the likelihood of winners!”) are inferior to approaches that provide more structure.1 The best way we’ve found to provide it is to use questions as the platform for idea generation.

In practice, this means building your workshop around a series of “right questions” that your team will explore in small groups during a series of idea generation sessions (more about these later). The trick is to identify questions with two characteristics. First, they should force your participants to take a new and unfamiliar perspective. Why? Because whenever you look for new ways to attack an old problem—whether it’s lowering your company’s operating costs or buying your spouse a birthday gift—you naturally gravitate toward thinking patterns and ideas that worked in the past. Research shows that, over time, you’ll come up with fewer good ideas, despite increased effort. Changing your participants’ perspective will shake up their thinking. (For more on how to do this, see our upcoming article

“Sparking creativity in teams: An executive’s guide,” to be published in April on mckinseyquarterly.com.) The second characteristic of a right question is that it limits the conceptual space your team will explore, without being so restrictive that it forces particular answers or outcomes.

It’s easier to show such questions in practice than to describe them in theory. A consumer electronics company looking to develop new products might start with questions such as “What’s the biggest avoidable hassle our customers endure?” and “Who uses our product in ways we never expected?” By contrast, a health insurance provider looking to cut costs might ask, “What complexity do we plan for daily that, if eliminated, would change the way we operate?” and “In which areas is the efficiency of a given department ‘trapped’ by outdated restrictions placed on it by company policies?”2

In our experience, it’s best to come up with 15 to 20 such questions for a typical workshop attended by about 20 people. Choose the questions carefully, as they will form the heart of your workshop—your participants will be discussing them intensively in small subgroups during a series of sessions.

3. Choose the right people

The rule here is simple: pick people who can answer the questions you’re asking. As obvious as this sounds, it’s not what happens in many traditional brainstorming sessions, where participants are often chosen with less regard for their specific knowledge than for their prominence on the org chart.

Instead, choose participants with firsthand, “in the trenches” knowledge, as a catalog retailer client of ours did for a brainsteering workshop on improving bad-debt collections. (The company had extended credit directly to some customers). During the workshop, when participants were discussing the question “What’s changed in our operating environment since we last redesigned our processes?” a frontline collections manager remarked, “Well, death has become the new bankruptcy.”

A few people laughed knowingly, but the senior managers in the room were perplexed. On further discussion, the story became clear. In years past, some customers who fell behind on their payments would falsely claim bankruptcy when speaking with a collections rep, figuring that the company wouldn’t pursue the matter because of the legal headaches involved. More recently, a better gambit had emerged: unscrupulous borrowers instructed household members to tell the agent they had died—a tactic that halted collections efforts quickly, since reps were uncomfortable pressing the issue.

While this certainly wasn’t the largest problem the collectors faced, the line manager’s presence in the workshop had uncovered an opportunity. A different line manager in the workshop proposed what became the solution: instructing the reps to sensitively, but firmly, question the recipient of the call for more specific information if the rep suspected a ruse. Dishonest borrowers would invariably hang up if asked to identify themselves or to provide other basic information, and the collections efforts could continue.

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Traditional brainstorming is fast, furious, and ultimately shallow. By scrapping these traditional techniques for a more focused, question-based approach, senior managers can consistently coax better ideas from their teams.

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Kevin Coyne and Shawn Coyne, both alumni of McKinsey’s Atlanta office, are cofounders and managing directors of the Coyne Partnership, a boutique strategy consulting firm. This article is adapted from their book, Brainsteering: A Better Approach to Breakthrough Ideas (HarperCollins, March 2011).

Notes

1 For two particularly useful academic studies on the ineffectiveness and inefficiency of traditional brainstorming, see Paul A. Mongeau, The Brainstorming Myth, Annual Meeting of the Western States Communication Association, Albuquerque, New Mexico, February 15, 1993; and Frederic M. Jablin and David R. Seibold, “Implications for problem solving groups of empirical research on ‘brainstorming’: A critical review of the literature,” Southern Speech Communication Journal, 1978, Volume 43, Number 4, pp. 327–56.

2 For a full discussion about identifying and using a portfolio of such right questions in the generation of personal and institutional ideas, see Brainsteering, the book from which this article is adapted, as well as Patricia Gorman Clifford, Kevin P. Coyne, and Renée Dye, “Breakthrough thinking from inside the box,” Harvard Business Review, December 2007, Volume 85, Number 12, pp. 70–78.

Creating more value with corporate strategy: McKinsey Global Survey results

Here is an excerpt from article featured by The McKinsey Quarterly online (January 2011). To read the complete article, check out other resources, obtain subscription information, and sign up for free email alerts, please click here.

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Few companies create strategies that deliver more value than the sum of their business unit parts, but those that do also excel at moving resources and removing barriers.

Source: Strategy Practice

The development of a corporate strategy should amount to more than the aggregation of business unit strategies. The best corporate strategies, in our experience, force a multibusiness company to make clear choices about its portfolio and the allocation of its resources. Yet the results of a recent McKinsey survey show that just one executive out of five says his or her corporation fully addresses strategy in this way. What’s more, more than a quarter of executives at multibusiness companies say their corporations lack a consistent process for developing strategy.

In this survey, we asked executives at multibusiness companies how they approach the development of corporate strategy—the frequency with which they review it and the amount of time they spend on it, the inputs of the process and the resulting activities, the barriers to reallocating resources, and the talent and other management processes they apply to overcome these barriers.
[Note: The online survey was in the field from December 7 to December 17, 2010, and received responses from 2,313 executives around the world, representing the full range of industries, regions, tenures, and functional specialties. Of those, 1,944 respondents are at multibusiness companies and can describe their companies’ process for developing a corporate strategy.]

A small group of 151 respondents emerged who rate their companies’ approaches to strategy development as very effective and also say their profit margins are higher than those of competitors. Executives at companies that are “effective developers of strategy” are twice as likely as their peers to say their companies apply a distinct corporate strategy process (38 percent compared with 18 percent of all other respondents). Furthermore, 97 percent of these respondents view their companies’ processes for developing corporate strategy as consistent, compared with 59 percent of others. Executives also say these companies spend more time developing strategy, review strategies more frequently, and are much better at eliminating barriers to implementation.

Slow and steady doesn’t win

In both the boom of the mid-2000s and the financial crisis that followed, many companies did not (or could not) make critical portfolio choices and trade-offs. This may be why so few—just 19 percent of all respondents to this survey—say their companies have a distinct process for developing corporate strategy (Exhibit 1). Nearly a quarter, however, think their companies should engage in corporate strategy development on an ongoing basis (as opposed to episodically), compared with only 8 percent who say they currently do so (Exhibit 2). The small group of respondents at the effective-developer companies is ahead of the pack: 19 percent say their companies currently review corporate strategy on an ongoing basis.

A similar pattern emerges with regard to the amount of time a company’s senior-executive team actually spends—and ideally should spend—on developing corporate strategy in a typical year. No more than one in seven respondents say their companies’ senior leaders currently spend more than 15 percent of their time on this activity, but nearly three times as many describe that as the ideal time commitment. Among respondents at effective developers, a quarter say senior leaders currently spend more than 15 percent of their time on corporate strategy development.

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To read the complete article, please click here.

About the Authors

The contributors to the development and analysis of this survey include Michael Birshan, a principal in McKinsey’s London office; Renee Dye, a consultant in the Atlanta office; and Stephen Hall, a director in the London office.