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Innovation is the major driving force in organisations today. With the rise of truly global markets and the intensifying competition for customers, employees and other critical resources, the ability to continuously develop successful innovative products, services, processes and strategies is essential. While creativity is the starting point for any kind of innovation, design is the process through which a creative idea or concept is translated into reality. Managing Innovation, Design and Creativity, 2nd Edition brings these three strands together in a discussion built around a collection of up-to-date case studies.

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Product Details

  • ISBN-13: 9780470510667
  • Publisher: Wiley
  • Publication date: 5/20/2008
  • Edition description: New Edition
  • Edition number: 2
  • Pages: 592
  • Sales rank: 904,343
  • Product dimensions: 7.50 (w) x 9.25 (h) x 1.20 (d)

Meet the Author

Dr. Bettina von Stamm, a renowned expert in her field, is passionate about understanding and enabling innovation. For this purpose she has set up the Innovation Leadership Forum, part of which is a Networking group to exchange and add further knowledge around innovation. Current members contributing their innovation expertise include, BASF, Cancer Research UK, Cargill, ICI Paints, Marks & Spencer, Masterfoods, the National Health Innovation Institute, Nestle, Ordnance Survey, Smith & Nephew, Unilever and Visteon. Dr von Stamm also teaches and conducts research in design and innovation management at a number of leading universities in the US, Germany and the UK.

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Read an Excerpt

Managing Innovation, Design and Creativity

By Bettina von Stamm

John Wiley & Sons

ISBN: 0-470-84708-5

Chapter One

What are Innovation, Creativity and Design?

This chapter provides an introduction to innovation, design and creativity. It sets out the meaning of these words in the context of this book, how they fit together, and introduces some useful frameworks for the subjects.


New opinions are always suspected and usually opposed, without any other reason but because they are not already common. John Locke

Innovation, just as many other things in management and life, means different things to different people. What does innovation mean in the context of this book?

Often 'creativity' and 'innovation' are used interchangeably. However, there are fundamental differences. In fact, creativity is an essential building block for innovation. This is reflected in the now widely accepted definition of innovation equalling creativity plus (successful) implementation. Creativity alone, to come up with ideas, is not enough. To reap the benefits one needs to do something with it - history tells many tales of great inventors who were not able to reap the benefits of their labour, think of the x-ray scanner, invented by EMI but made a commercial success by General Electric, or VCRs invented by Ampex/Sony but successfully commercialized by Matsushita. Why might that be? Let's take a closer look at the two components of innovation: creativityand implementation.

Implementation - putting ideas into practice - is made up of three aspects: idea selection, development, and commercialization, and of course creativity is needed here too. What do organizations need to achieve implementation? They need processes, procedures and structures that allow the timely and effective execution of projects; implementation is about team effort. But even companies that have all the right processes, procedures and structures in place are often unable to be innovative.

Taking a closer look at creativity might help to explain why that might be. If implementation is putting an idea into practice, creativity is coming up with the idea in the first place. Creativity is an essential part of innovation, it is the point of departure. One of the big concerns for many companies is therefore how to generate more and better ideas - how to become more creative. Consider a few things about creativity:

As opposed to commonly held opinion, creativity, the act of coming up with an idea, is an inherently individual act - it is the development of an idea and the implementation where the team is needed.

Creativity has little to do with the 'flash of inspiration out of the blue'. To quote John Hunt, Visiting Professor for Organizational Behaviour at London Business School, 'Creativity is not something where someone who has never worked in that field suddenly gets this marvellous idea. Creativity is relating a concept to a particular body of knowledge. The existing body of knowledge is as vital as the novel idea and really creative people spend years and years acquiring and refining their knowledge base - be it music, mathematics, arts, sculpture or design.'

While there is generally some debate as to whether creativity is for the selected few or everyone, while certain people are more creative on their own accord than others, creativity can be stimulated and supported through training, and by creating the right work environment and atmosphere. In her research Harvard Business School Professor Teresa Amabile has identified certain characteristics that support creativity in the workplace (see Figure 1.1).

However, creativity cannot be ordered, it relies much more on intrinsic motivation, on people being enthusiastic, inspired and knowledgeable.

Finally, companies tend to require hard facts but creativity and innovation are often based on intuition. And by the way, as early as the mid-80s authors such as Peters and Waterman (In Search of Excellence) suggested that the modern American manager's over-dependence on analytic thought and quantitative analysis was a principal cause for the loss of its worldwide pre-eminence (as reflected in stagnating productivity, ageing and obsolete machinery, and inferior but more expensive products).

So implementation is about being organized and about using the methodological and systematic approach of a 'hare brain' (see Box 1.1). It needs to be structured and cannot be left to chance. Time is of the essence - you need to be fast. Creativity is less straightforward than implementation, it is not about a new process or establishing a new structure. To be creative people have to think differently. To be innovative people have to behave differently. And to be successful organizations have to employ people that think and behave differently. This is why I often define innovation as 'a frame of mind'. Creativity is about being different, thinking laterally, making new connections. It is about allowing the 'tortoise mind' to work. Creativity can be encouraged, not forced. Time is of the essence too, but in as much as creativity cannot be rushed, you need to allow it. Organizations that want to embrace innovation therefore need to find ways of reconciling the tension that lies in the juxtaposition of creativity and implementation.

While there is generally agreement on the components of innovation (i.e. creativity and implementation), there is often disagreement on what deserves the title 'innovation'. Today it seems to be fashionable to call everything 'innovation', from the redesign of packaging to the introduction of hydrogen powered cars, basically everything that used to be called 'new product development' in the past. The literature is full of attempts to categorize different levels and types of innovation and we will have a look at several below. Olson et al. (1995) for example suggest the following four levels:

New-to-the-world products (products that are new both to the company developing them and to the marketplace using them)

Line extensions (products that are new to the marketplace but not to the company)

Me-too-products (those that are new to the company but not to the marketplace)

Product modifications (existing products that have been simply modified, i.e. they are new neither to the company nor to the marketplace)

As early as 1942, Schumpeter made some observations regarding different types of innovation, which he referred to as 'discontinuities'. The two types of discontinuity he identified are, first, a competence-destroying discontinuity, which renders obsolete the expertise required to master the technology that it replaces, and second, a competence-enhancing discontinuity, which builds on existing know-how embodied in the technology that it replaces.

While building on Schumpeter, more recent literature, with minor variations, refers to four types of innovation. They are architectural innovation, market niche innovation, regular innovation and revolutionary innovation (Abernathy and Clark 1985; similar, Tidd 1993):

Architectural innovation - Innovation of this sort defines the basic configuration of product and process and establishes the technical and marketing agendas that will guide subsequent development.

Market niche innovation - Innovation of this sort is opening new market opportunities through the use of existing technology, the effect on production and technical systems being to conserve and strengthen established designs.

Regular innovation - Innovation of this sort involves change that builds on established technical and production competence and that is applied to existing markets and customers. The effect of these changes is to entrench existing skills and resources.

Revolutionary innovation - Innovation of this sort disrupts and renders established technical and production competence obsolete, yet is applied to existing markets and customers.

The categories of innovation seem closely related to the categories of design devised by Morley and Pugh (1987) and Slusher and Ebert (1992). Heany's (1983) categories of innovation (style change, product line extension, product improvement, new product, start-up business, major innovation) are also similar to the different product categories introduced earlier. Heany provides a check list for the categorization of innovations, based on six different categories, which is shown in Table 1.1.

Looking at Abernathy and Clark's definitions of innovation, one could equate their first three categories with a competence-enhancing discontinuity and the fourth category, revolutionary innovation, with Schumpeter's a competence-destroying discontinuity. A common categorization of innovation is to differentiate between (a) product innovation, the things an organization offers, and (b) process innovation, the ways in which they are created and delivered (e.g. Tidd et al. (1997)). Combining levels of innovation with different categories we arrive at the following matrix (see Box 1.2).

I have taken the liberty to provide examples, and added 'business model' though it could be argued that some of this would be covered under 'process'. It is important to understand varying degrees of innovativeness as they flourish within different processes and structures and we will come back to that in Chapter 3.

However, most of these categorizations tend to focus on the outcome (i.e. the product or service), but say little about the process, and the context which is necessary to enable innovation. An approach that focuses too strongly on process is not likely to succeed in creating a continuously innovative organization. To achieve that, existing behaviours, beliefs and mental frameworks need to be understood and shifted. It is often our expertise and experience - the things that we know to be right and that work - that prevent us from coming up with something truly new. Processes can support this shift, but on their own will not achieve it. That is why I define innovation as a frame of mind. Innovation is the art of making new connections, and continuously challenging the status quo - without changing things for change's sake.


The uncreative mind can spot wrong answers, but it takes a very creative mind to spot wrong questions. Anthony Jay

In the previous section, we talked about some characteristics of creativity. In this section we take a brief look at the origins of creativity, what kind of characteristics tend to be associated with creative people, and the creative process.

In her article 'Making sense of creativity', Jane Henry (1991) summarizes different views on the origin of creativity, identifying five sources:

Grace - this is the view that creativity comes through divine inspiration, it is something that comes to us, or not, something magic which is out of our control; it is this view that believes 'you either have it or you don't', and companies subscribing to this particular view could only enhance their creativity by hiring people who are graced with divine inspiration.

Accident - under this view creativity arises by serendipitous good fortune and various scientific discoveries have been attributed to this kind of creativity (e.g. Penicillin) - a view that is not particularly helpful to an organization striving to become more creative!

Association - under this theory creativity occurs through the application of procedures from one area to another. Lateral thinking and brainstorming are methods supporting this approach to creativity. Henry points out that we often miss such opportunities, quoting as an example Sigmund Freud's insight that a side effect of cocaine is numbing of the mouth without realizing the resulting potential as a dental anaesthetic. Following this view, companies would provide training for their staff with the aim to improve levels of creativity.

Cognitive - here the belief is that creativity is nothing special but that it relies on normal cognitive process such as recognition, reasoning and understanding. Under this view the role of 'application' is crucial, and examples given include the wide range of different filaments Edison used before coming up with a functioning light bulb. The emphasis here is on hard work and productivity, and proponents of this theory such as Weisburg (1986) point out that ten years of intense preparation tend to be necessary to lead to a creative act. As Henry puts it, 'The logic of the cognitive position is that deep thinking about an area over a long period leaves the discoverer informed enough to notice anomalies that might be significant.' Companies might like this view best - just make people work harder and the result will be creative solutions. However, the research by Amabile suggests that while a challenge is conducive to creativity, demanding too much can be counterproductive. This approach also works only if the problem has been clearly identified and it is about finding the solution. This approach is less likely to result in identifying the right questions, so it could be argued that the cognitive approach is about implementation, not creativity. Personality - here creativity is seen as a particular human ability, an intrinsic part of life and growth and Henry points out, 'Viewing creativity as a natural talent directs attention towards removing mental barriers to creativity to allow an innate spontaneity to flourish.' Given this explanation, I would find the title 'skill' much more appropriate for this view than 'personality' as the latter seems to suggest that creativity is something that we are born with.

To a certain degree, the different views as to what lies at the origin of creativity are also time dependent. For example, the view that creativity is based on 'grace' has dominated human thinking until the beginning of the last century. Only since the late 19th and early 20th centuries people have begun to entertain the thought that creativity could be encouraged and trained. It probably started in 1880 when the American psychologist William James declared, 'The only difference between a muddle-head and a genius is that between extracting wrong characters and right ones. In other words, a muddle-headed person is a genius spoiled in the making.'

And most other suggested origins of creativity make some assumption that creativity is not just something that happens to us, but that it is something that can be encouraged and perhaps even trained. But even when accepting that creativity can be learned, there are some people who are just more creative than others, and much research has been undertaken to identify what their characteristics are.


Excerpted from Managing Innovation, Design and Creativity by Bettina von Stamm Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents


Chapter I What are innovation, creativity and design?




Reading suggestions:

Some useful websites

Chapter II Innovation = creativity &commercialisation

Case Study 1 BBC’s ‘Walking with dinosaurs

Appendix I Meet the Dinosaurs

Appendix II Stages of the animation process

Appendix III Excerpt from Brand Guide

Appendix IV Awards as of 30th October 2001

Chapter III Structured processes for developing newproducts

The evolution of the new product development process

The Stage-Gate Process

Development Funnel and Product Portfolio Management

The role of the project leader

Reading suggestions:

Some useful websites:

Chapter IV A note on globalisation

Myth or Reality?


Enablers and drivers of Globalisation

Advantages of Global Innovation

The Flipside of the Coin

Obstacles to Global Innovation

How to structure for R&D in a global context?

What does Global mean in the context of new productdevelopment?

What to consider when going global


Reading Suggestions

Useful Websites:

Chapter V Innovation & branding for the web

Case Study 2 - A

Appendix I Background to the 4 founders

Chapter VI Strategy – emergent or planned, and otherissues

Strategy – planned or emergent?

Strategy and Innovation

Useful Concepts and Frameworks for Strategy Development

Design and Strategy

Reading Suggestions

Some useful Websites:

Chapter VII Branding and Innovation

What is a Brand?

Brands and innovation – a closer look

Brands and the web

Reading Suggestions

Some useful websites:

Chapter VIII The value of market research

Case study 3 Black & Decker’s Quattro

Appendix I Company History

Appendix II Capital Appropriation Request, Summary Extracts

Chapter IX Approaches to Market Research

What is it about market research?

Traditional approaches towards market research

The Future

Reading Suggestions

Some useful website

Chapter X A note on teams

Team composition

Reading Suggestions

Some useful website

Chapter XI Collaboration – innovation inmanufacturing

Case Study 4 The Lotus Elise

Chapter XII The role of prototypes

Why use prototypes?

What prototype?

Problems with prototypes

Reading Suggestions

Some useful website

Chapter XIII Collaborating for innovation

Some background

Reasons for and benefits of collaboration

What gets in the way of collaboration

How to make collaboration work

Open innovation and user-led innovation

Reading Suggestions

Chapter XIV Innovation & industry context

Case Study 5 Roche – Saquinavir

Appendix I Team members

Appendix II Drug Discovery Value Chain

Chapter XV The effects of industry and culturalcontext

Why think about context?

Understanding constraints

Contextual factors at the industry level

Contextual factors – the national level

Chapter XVI Informal networks and the management ofknowledge

Informal networks

What is knowledge?

The importance of knowledge management

The management of knowledge

Reading Suggestions

Some useful website

Chapter XVII Innovation for the environment

Case Study 6 Plastwood by Dumfries Recycling

Appendix I Alternatives to Recycling

Appendix II Recycling at BPI

Chapter XVIII Green design – clean environment or cleanconscious?

The argument for environmentally responsible design

What are environmentally responsible products?

Natural capitalism versus ‘green design’

The role of the designer

Reading suggestions:

Some useful websites

Chapter XIX Note on Intellectual Property Rights(IPR)

Types of intellectual property rights

Reading suggestions:

Some useful websites

Chapter XX Innovation in large organisations

Case Study 7 GKN –Light Composite Joint Disk

Appendix I Manufacturing Flow for the CDJ

Appendix II Summary of technical & commercial advantages andtechnical limitations

Chapter XXI Organising for innovation

The process route

Incremental versus radical – what’s thedifference?

The people route

A holistic approach to innovation

Innovation roles

Reading suggestions:

Some useful websites

Chapter XXII Venturing – beyond companyboundaries

Avenues for realising innovation

The Venture Capital Industry

Finding venture capital

Sources of external funding

Reading suggestions:

Some useful websites

Chapter XXIII Innovation in Financial Services

Case study 8 Shared Appreciation Mortgage - Bank of Scotland

Appendix I Additional Information

Chapter XXIV Innovation in the service industry

Particularities about the service industry

Design and service development

Service development – what drives success?

Suggested Reading

Useful Websites

Chapter XXV Failure, risk and measuring in innovation

What underpins success and causes failure?

The complexity framework

Is failure really failure?

Minimising risk of failure – risk management

Measuring success

Suggested Reading

Chapter XXVI Building for innovation

Case Study 9 John McAslan & Partner

Appendix I Main players involved in the design & build ofYapi Kredi Bank

Appendix II Development of the John Lewis Partnership

Chapter XXVII Company culture & architecture

Putting your work environment to work

Changes in working practices and the office environment

Change the work environment – but for the rightreasons

Suggested Reading

Some useful websites

Chapter XXVIII Outsourcing – designers in orout?

Ins and outs of outsourcing

Designers – in or out?

The case study of the MuZ Skorpion

Concluding Remarks

Reading Suggestions

Some Useful Websites

Chapter XXIX Putting all pieces into place

Case 10 The Technology Partnership

Appendix I Major Developments in the TTP Group since 1990

Appendix I Group Structure

Appendix III Financial Performance

Appendix IV The Venture Fund – article from‘Financial News’

Chapter XXX The innovative organisation

Leadership – the most critical ingredient

The role of company culture

Suggested Reading

Useful Websites

Chapter XXXI Changes in the world and innovation

The next innovation challenges

Discontinuous innovation

The balancing act

The future of business – all change

Suggested Reading

Useful Websites

Chapter XXXII Disruptive innovation

Case 11 SAM - disruptive change in executive search

Appendix I

Chapter XXXIII Managing without control?

Case 12 SAM Headhunting

Appendix I How to use the case studies

Appendix II Innovation Best Practice - achievements andremaining challenges since 2003

Appendix III Categories of Design

Suggested Reading

Useful Websites


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