CS: GE Presentation (Immelt's Challenge in 2009)

CS: GE Presentation

Inditex Global Growth

Total Inditex Stores, and with/without Zara 

Table includes Region, Country and Year of 1st Store. Then total Inditex Stores, Zara Stores and Non-Zara stores are listed. Data was referenced from Inditex Website by EB Holmes.

	Region	Country	1st Store	2012 Total	2012 Zara	2012 Other
1	Europe	Spain	1975	1932	335	1597
2	Europe	Portugal	1988	344	61	283
3	North America	US	1989	46	46	0
4	Europe	France	1990	245	116	129
5	North America	Mexico	1992	229	55	174
6	Europe	Greece	1993	162	45	117
7	Europe	Belgium	1994	76	27	49
8	Europe	Sweden	1994	11	8	3
9	Europe	Malta	1995	11	1	10
10	Europe	Cyprus	1996	32	5	27
11	Middle East	Israel	1997	49	20	29
12	Europe	Norway	1997	5	3	2
13	Europe	UK	1998	95	66	29
14	Europe	Turkey	1998	135	30	105
15	South America	Argentina	1998	10	10	0
16	South America	Venezuela	1998	22	9	13
17	Asia	Japan	1998	78	74	4
18	Middle East	UAE	1998	53	9	44
19	Middle East	Kuwait	1998	22	5	17
20	Middle East	Lebanon	1998	35	5	30
21	Europe	Netherlands	1999	35	20	15
22	Europe	Germany	1999	78	65	13
23	Eastern Europe	Poland	1999	167	39	128
24	Middle East	Saudi Arabia	1999	118	25	93
25	Middle East	Bahrain	1999	10	2	8
26	North America	Canada	1999	22	22	0
27	South America	Brazil	1999	32	32	0
28	South America	Chile	1999	7	7	0
29	South America	Uruguay	1999	2	2	0
30	Europe	Andorra	2000	8	1	7
31	Europe	Austria	2000	16	12	4
32	Europe	Denmark	2000	2	2	0
33	Middle East	Qatar	2000	14	2	12
34	Europe	Ireland	2001	22	9	13
35	Europe	Iceland	2001	2	2	0
36	Europe	Italy	2001	304	88	216
37	Europe	Luxembourg	2001	3	2	1
38	Eastern Europe	Czech Republic	2001	16	6	10
39	Central America	Puerto Rico	2001	1	1	0
40	Middle East	Jordan	2001	13	2	11
41	Europe	Finland	2002	4	4	0
42	Europe	Switzerland	2002	17	10	7
43	Central America	El Salvador	2002	5	2	3
44	Central America	Dominican Republic	2002	5	2	3
45	Asia	Singapore	2002	18	7	11
46	Eastern Europe	Slovenia	2003	16	5	11
47	Eastern Europe	Slovakia	2003	6	2	4
48	Eastern Europe	Russia	2003	256	55	201
49	Asia	Malaysia	2003	15	6	9
50	Europe	Morocco	2004	22	5	17
51	Eastern Europe	Estonia	2004	5	2	3
52	Eastern Europe	Latvia	2004	11	4	7
53	Eastern Europe	Romania	2004	72	16	56
54	Eastern Europe	Hungary	2004	26	7	19
55	Eastern Europe	Lithuania	2004	17	4	13
56	Central America	Panama	2004	2	2	0
57	Europe	Monaco	2005	1	1	0
58	Asia	Indonesia	2005	23	10	13
59	Asia	Thailand	2005	10	6	4
60	Asia	Philippines	2005	9	6	3
61	Central America	Costa Rica	2005	4	2	2
60	Eastern Europe	Serbia	2006	14	4	10
61	Asia	China	2006	275	101	174
62	Africa	Tunisia	2006	2	2	0
63	Eastern Europe	Croatia	2007	25	8	17
64	South America	Colombia	2007	26	10	16
65	Central America	Guatemala	2007	9	2	7
66	Middle East	Oman	2007	4	1	3
67	Asia	Korea	2008	42	34	8
68	Eastern Europe	Ukraine	2008	38	9	29
69	Eastern Europe	Montenegro	2008	5	1	4
70	South America	Honduras	2008	2	2	0
71	Africa	Egypt	2008	23	4	19
72	Middle East	Syria	2009	8	2	6
73	Eastern Europe	Bulgaria	2010	23	5	18
74	Asia	India	2010	7	7	0
75	Asia	Kazakhstan	2010	7	2	0

References:

1. Inditex Timeline
2. Fashion Conquistador (Sep. 4th 2006)
3. International Expansion of Zara
4. Inditex Press Release: 1st Norwegian Store

CS: Tesco vs. other Top Grocers

2006 Sales Rank	Name	2006 Sales (USD, Millions)	Employees
1	Walmart (USA)	$344,992	1,900,000
2	Carrefour (France)	$102,770	456,295
3	Metro AG (Germany)	$79,000	274,259
4	Tesco PLC (UK)	$69,218	368,213
5	Kroger (USA)	$66,111	127,000
6	Costco (USA)	$60,151	127,000
7	Ahold Koninklijke (Netherlands)	$59,198	164,078
8	Safeway Inc. (USA)	$40,185	207,000
9	J. Sainsbury PLC (UK)	$27,932	96,200
10	Publix Supermarkets (USA)	$21,820	140,000
11	Morrison Supermarket (UK)	$21,595	93,041
12	Marks & Spencer (UK)	$13,561	70,310

Google (2009)

In 2004, Google filed the following IPO prospectus:

"We serve our users by developing products that enable people to more quickly and easily find, create and organize information. We place a premium on products that matter to many people and have the potential to improve their lives, especially in areas in which our expertise enables us to excel. Search is one such area. People use search frequently and the results are often of great importance to them. For example, people search for information on medical conditions, purchase decisions, technical questions, long-lost friends and other topics about which they care a great deal."

Do you recognize anything ironic about the last example? Facebook is now the place that anyone would turn to connect with long lost friends. Search is no longer necessarily the dominant means for finding information on the internet -- people are connected through their social networks who they can ask directly for information. Did Google's geeky projects blind it to the importance of social networking online? The following case will outline investor concerns over Google's apparent lack of strategic focus.

1. Case Summary of RM Grant 2010, Case 21: Google Inc. Running Amuck?
2. See also this Google Case.
1. Reference 1: July 19th 2009: (Source: San Jose Mercury News)By Chris O'Brien:   There are a handful of reasons people generally cite for Google's success. The power of its search engine algorithm. The elegance of a business model that matches text ads to searches. A restless, innovative culture continually striving to improve and evolve its products. Here's what always struck me about Google: its simplicity.
   
   At the start, Google did one thing phenomenally well. Its search engine was so superior that the company's name became synonymous with search itself. And its home page was, and remains, a visual model of simplicity: a sea of white space, the Google logo, a search box, a couple of links -- and no ads.
   
   That last feature remains an awesome example of restraint, forgoing what would most likely be millions of dollars in revenue to maintain an experience cherished by its users.
   The homepage aside, though, Google increasingly feels like a company running in a thousand directions at once. Over the past year, it has released a steady stream of high-profile products that seem to have little or no relation to the core identity expressed on its corporate homepage: "Google's mission is to organize the world's information and make it universally accessible and useful."
   
   The problem is that in expanding into so many different areas -- productivity applications, mobile operating system, a Web browser -- that the identity of Google itself has become muddled.
   No doubt, this all follows some clear logic from inside the Googleplex. But from the outside, it's getting harder every day to articulate what Google is. Is it a Web company? A software company? Something else entirely?
   
   This is more than just a semantic problem. That core identity helped build a bond with Google's users, whose fanatical devotion built it into the phenomenon it is today on the wave of grass-roots fervor.
   
   Recall that in its earliest days, Google did little in the way of advertising or marketing. Its success was pure word of mouth, driven by the overwhelmingly positive experience users had. Google didn't need any spin or commercials to tell you its product was great. Users testified to that fact by telling their friends how awesome it was.
   
   Because of that intense interest, Google continues to command hype for every product it launches that rivals the marketing magic of Apple. Just in the past few weeks, there was Google Wave, a new communications system. And more recently, the announcement of a new operating system.
   
   It's not just that it's hard to see how these fit into Google's stated mission.
   
   It's also that it's hard to explain to someone exactly what they are, or why they might, or might not, want to use them. Or to communicate why they are different from or better than any other things out there. How would you neatly describe Google's mobile operating system, Android, to a friend and why it's better than or different from Apple's iPhone?
   Part of the challenge, of course, is that we haven't seen either Chrome OS or Google Wave in action. But at its recent developers conference, it took a Google employee more than an hour to explain Google Wave. The average person won't invest more than just a couple of minutes trying a new product.
   
   And in the case, say, of the Chrome browser, why would we learn a whole new set of behaviors and tools when we're comfortable with our current browser options?
   And why would I take the time to learn my way around a new operating system? What is the compelling reason? I can say from my current experience of having just bought my first Mac in 14 years, I love it, but I still feel left-handed much of the time as I figure out the new commands and menus.
   
   These new products have the whiff of engineers building things for other engineers, rather than you and me. This ought to be raising some giant red flags at the Googleplex.
   If it's not, that insularity might be a bigger threat to Google's future than any challenges it faces from rivals like Microsoft and Facebook.
   
   Contact Chris O'Brien at 415-298-0207 or cobrien@mercurynews.com. Follow him on Twitter at twitter.com/sjcobrien and read his blog posts at www.siliconbeat.com.
3. Is Youtube profitable?
1. 500-1000 Million per year overhead
2. generates 250 Million in revenue
4. Is Gmail profitable? 
5. Is Google Over-diversified in its technology projects?
6. "Inside Google: The Man with All the Answers"
7. Reference 3: Google the One Trick Pony
8. Is Google Overly dependent on Add Words?
9. Google's Bermuda Tax Haven

CS: Corporate Strategy Cases

Week	1st hour	2nd hour	Read:
1: Jan 19th	Introduction	Generic Strategies	Ch. 1-4
2: Jan 26th	Walmart 2009	Value Chain	Ch. 5-8
3: Feb 2nd	Ryanair 2011	AirAsia	Ch. 9-10
4: Feb 9th	Ford 2012	Innovation	Ch. 11-14
5: Feb 16th	Nintendo 2012	International Strategy	Ch. 12
6: Feb 23rd	Zara	International Strategy	Ch. 15
7: Mar 1st	Vodafone 2011	General Electric, M&A	Ch. 16
8: Mar 8th	GE 2009	Cultural Change	Ch. 17
9: Mar 15th	HSBC	Tesco	Ch. 18
10: Mar 22nd	Tesco	Wrap up	-

Strategic Analysis Terminology

Strategy:

(source: RM Grant, 2010)

1. The means by which individuals or organizations achieve their objectives.
2. The determination of the long run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. -AC
3. A plan, method or series of actions designed to achieve a specific goal or effect.
4. A pattern of objectives, purposes or goals and the major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or aspires to be.
5. Plan of attack.
6. The essence of strategy is making choices: (ME Porter)
1. Where to compete?
2. How to compete?
7. Business Strategy: how a business competes within a particular industry or market. This is based on the attainment of a competitive advantage. aka: Competitive Strategy. Responsibility of "divisional management".
8. Corporate Strategy: defines the scope of the firm in terms of the industries and markets in which it competes. Issues include diversification, vertical integration, acquisitions and new ventures, and the allocation of resources among various business segments.
9. Emergent Strategy: Term defined by Minzberg. Adapt to changing circumstances. "The notion that strategy is something that should happen way up there, far removed from the details of running an organization on a daily basis, is one of the great fallacies of conventional strategic management." (H. Mintzberg, "The Fall and Rise of Strategic Planning" HBR 1994 Jan-Feb)
10. Realized Strategy: the actual strategy that is implemented. Only partly related to intended strategy. Mintzberg estimates that only 10-30% [I wonder how he estimates this...] is intended. Strategy is constantly adapted as a response to internal and external stimuli.
11. Strategic Fit: For a strategy to be successful, it must be consistent with the firm's external environment.
12. Strategic Principles: "pithy, memorable distillations of strategy that guide and empower employees"

Value:

1. monetary worth or a product or asset.
2. Value added: revenue - cost of inputs.
3. Value Creation: occurs by production or commerce.

Key Success Factors: Those variables that management can influence through its decisions and that can affect significantly the overall competitive positions of the firms in an industry. (C Hofer, D Schendel, Strategy Formulation: Analytical Concepts).

Value Chain Analysis

1. primary activities
2. support activities

CS: Grant 2010 Cases

7th Edition Cases

(Source: RM Grant 2010, Contemporary Strategic Analysis, 7th Ed.)

Robert M. Grant is the Eni Professor of Strategic Management at Bocconi University in Milan as well as a Visiting Fellow at Georgetown University. He is British but has taught for many years in North America at UCLA, Georgetown, California Polytechnic and University of British Columbia. He has worked with companies such as Nortel, American Express, Zurich Financial Services and Lockheed Martin. He is on the editorial boards of Strategic Management Journal, Long Range Planning, and Strategy & Leadership.

Textbook chapter (7th edition)	Cases
PART 1. INTRODUCTION: The Concept of Strategy (Ch. 1)	1. Madonna
PART II. TOOLS OF STRATEGIC MGT Goals, Values & Performance (Ch. 2)	2. Starbucks
The Analysis of Industry and Competition (Ch.s 3 and 4)	3. US Airline Industry in 2009 4. Ford and the World Automobile Industry in 2009
Analyzing Resources and Capabilities (Ch. 5)	5. Wal-Mart Stores Inc in 2009 6. Manchester United: Preparing for Life without Ferguson
Developing capabilities (Ch. 6)	7. Eastman Kodak: Meeting the Digital Challenge
Organization Structure and Management Systems (Ch. 7)	8. Procter & Gamble: Organization 2005
PART III. THE ANALYSIS OF COMPETITIVE ADVANTAGE The Nature & Sources of Competitive Advantage; Cost and Differentiation Advantage (Ch.s 8, 9, & 10)	9. Easyjet vs. Ryanair 10. Harley-Davidson, Inc. in 2009
PART IV. BUSINESS STRATEGIES IN DIFFERENT INDUSTRY CONTEXTS Industry Evolution (Ch. 11)
Technology-based Industries and the Management of Innovation (Ch. 12)	11. Raisio & the Launch of Benecol Margarine [A] & B] 12. Rivalry in Video Games 13. DVD Wars*
Competitive Advantage in Mature Industries (chapter 13)	Whirlpool
PART V. CORPORATE STRATEGY	14. Eni SpA: Building an International Energy Major
Vertical Integration and the Scope of the Firm (Chapter 14)	15. American Apparel: Vertically Integrated in Downtown LA
Global Strategies and the Multinational Corporation (Ch. 15)	16. Outback Steakhouse: Going International 17. Euro Disney: From Dream to Nightmare, 1987–94 18. Vodafone: Revisiting the Global Strategy
Diversification Strategy (Ch. 16)	19. Google 20. Richard Branson and the Virgin Group of Companies in 2009
Managing the Multibusiness Corporation (Ch. 17)	21. General Electric & Jeff Immelt 2009 22. Bank of America & Merrill Lynch
Current Trends in Strategic Management (Ch. 18)	23. W.L. Gore

CS: Exam Review

2012 Exam Format:

Case study distributed Thursday morning at 930AM before Exam the following Monday.

1. Bring unmarked case, except for highlighting.
2. Bring a calculator.
3. Some examples of case questions are shown in Appendix 2. 

 Sample Exam

Section A

15 multiple choice questions (typically five options a,b,c,d or e).


Section B

Case Study: ‘The Global Pharmaceutical Industry’ and ‘AstraZeneka's Growth Strategies’ and accompanying benchmark data for top 20 Global Pharmaceutical Companies:

From ONLY the information contained in the AstraZeneka case, please address the questions below.

You are encouraged to draw on lessons or parallels from other pertinent cases you have studied on the Programme or from the related practitioner talks series (including partially overlapping cases), as well as from theory and literature.

Question B1 Provide a critical assessment of the business environment for AstraZeneca’s Strategic Planning Director, drawing out strategic implications for the company for the period up to the end of 2008. (35 marks)

Question B2 In the light of this, critically appraise AstraZeneca’s main strategic options at the end of the cases, elaborating the strategy finally recommended. Include some consideration of corporate level options such as Mergers and Acquisitions or radical changes in terms of vertical integration in the form of much greater outsourcing. (35 marks)

Case Study Tips:

• Don't use outside material. Analyze only the data in the case.
• Present a set of consistent arguments based on concrete examples leading to a clear conclusion.

• Be creative.
• Quantify.


Strategic Analysis Checklist:

1. Is their strategy a success?
1. Generic Strategies
1. cost leadership
2. differentiation
3. cost focus
4. differentiation focus
2. Market Position
1. Market Life cycle (new? mature? susceptibility to disruption?)
2. Market Share (Natl, Worldwide). Market share up or down for more than 1 year?
3. Concentration? (Natl, Worldwide)
4. Competitor Analysis
1. Determine Competitive KPIs
1. ROE, ROCE, RoS
2. Trends across industry (cross sectional)
   
3. Trend over time (temporal)
2. 5-Forces vs. key competitors
3. Value Chain Analysis 
3. Organizational Structure and Company Culture
1. HR
2. Stakeholder Knowledge Network Analysis
3. Stakeholder analysis- Share price, Shareholder value
4. Portfolio Analysis
4. Environment (PEST)
5. KFS

Noam Chomsky - "The machine, the ghost, and the limits of understanding"

2011-2012 MBA Course List

• Full Time MBA Course Outline

Course Name	Instructor	Semester	Duration	Cases	Exam Review
Accounting	Falconer Mitchell	1a	weeks 1-4	-	Review
Macroeconomics	Jonathan Crook	1a	weeks 1-4	-	Review
Operations Management	Ian Graham	1a	weeks 1-4	-	-
Organisational Behavior	Nick Oliver	1a	weeks 1-4	-	-
Leadership Week	Eddie Cochrane	-	week 6	-	-
Ethics	Jim Hine	1b	weeks 7-10	Cases	-
Finance	Gavin Kretzschmar	1b	weeks 7-10	-	Review
Marketing	David Marshall	1b	weeks 7-10	Cases	Review
Strategy	Brad MacKay	1b	weeks 7-10	Cases	Review
Business Simulation	Simon Earp	-	week 12	-	-
Statistics(DA)	Wouter Verbeke	2a	weeks 1-11	-	Review
Strategy(2)	Chris Carr	2a	weeks 1-11	Cases	Review
Financial Analysis	Tom Brown	2a	weeks 1-11	Cases	-
	David Hatherly
Project Management	David Ponniah	2a	weeks 1-11	-	-
Management Consultancy	Jeremy Webster	2a	weeks 1-3	Cases	-
Consultancy Proj.	-	2b	April 23-June 8	-	-
High Performance Teams	Scott Kress	2b	April 15-April 20	Cases	-
B2B Marketing	Marco Protano	2b	April 23rd-27th	Cases	-

*Semester 2a features 3 option courses. Only the 3 that I took are shown.
**Semester 2b features 2 option courses. Only the 2 that I took are shown.

2011-2012 MBA Case List

BHP Billiton vs. Rio Tinto. Are they really competitors?

The single most noteworthy fact that I came across while preparing this financial analysis was that Rio Tinto and BHP joined operations for West Australian Iron Ore in 2009--after the failed attempt of BHP to acquire the rival mining firm. Both companies derive the most profit from Iron ore, so the cooperation amounts to a virtual monopoly of the region.

The presentation below was presented to the Financial Analysis class taught by T. Brown and D. Hatherly.

BHP Billiton vs. Rio Tinto

View more PowerPoint from eholmes80

New Frontiers for Professional Managers (Part 3)

What follows are excerpts from the 1956 book New Frontiers for Professional Managers by Ralph Cordiner of GE Corporation.

GE's business from a Stakeholder perspective

 "A Company like General Electric has no magic or secret source of wealth, from which it can subsidize good works. It is actually a clearinghouse of economic activity. The Company collects money from its customers, at competitive prices, in return for products and services. All this money is in turn redistributed to employees, share owners, suppliers, and others in proportion to their respective contribution to the Company's results, and also to the government's tax collectors. To the degree that education and other community activities contribute to the success of the Company and the society in which it operates, they should and do receive a share of the proceeds.

The important principle I should like to express here, in relations with customers, share owners, employees,
suppliers, educational institutions, charitable activities, government, and the general public, is that all activities must be guided by the recognition of common purposes and of the contribution that each group makes toward their achievement. Now. the modern corporation, particularly one which has such deep roots in the United States society' as General Electric, is taking an increasingly enlightened view as to what such institutions as education actually provide, and what are the Company's consequent obligations. I am certain that business must do more, rather than less, to help higher education in the years ahead. But the guiding policy must be one of equal and reciprocal obligations, with complete respect for the independence and integrity of each part. With this view, a balanced view of the claims and contributions of all who affect the Company's operations, we have a sound guide toward meeting our responsibilities to society.

An important consideration in meeting a company's public responsibilities is participation in the national defense. Like most other companies. General Electric prefers commercial, non-defense business because it is generally more open for Company-determined innovations and is more profitable. But because of the Company's unique technical capacities, it is called upon regularly to develop and produce complicated equipment and systems for the armed forces. Today, defense business amounts to about 20% of General Electric's total volume and uses an even larger proportion of its technically trained people." 

 On the Development of GE's management system:

"Up until 1939, the Company was able to operate efficiently under a highly centralized form of management. During World War II, however, General Electric began a period of almost explosive growth which caused its managers to question whether it might not be necessary to evolve new techniques of organizing and managing the Company.

From 1920 to 1939, the Company's sales volume had risen slowly from $200 million to $342 million a year. By 1943, under the pressure of war production, it rose suddenly to $1,370,000,000 a year—over a four-fold increase in four years. Postwar experience and forecasts indicated that this was only the beginning of an opportunity for continuing, rapid growth in serving the nation's demands for electrical and related products. The Company produced over $3 billion worth of goods and services last year; and if we do the job we should do of satisfying customers, this figure may well rise—as the Company has publicly stated many times—to $6 billion early inthel960's.

It is obvious that a Company with such growth characteristics, and operating on such a scale, requires a different managerial approach than the Company of the 1920's and '30's. This was, of course, recognized by Gerard Swope, who served as president during those decades when the foundations for future growth were carefully laid, and by Charles Wilson, the Company's president during the hectic, war-torn '40's. Under their leadership, I was asked to study the new problems of organizing and managing such a rapidly growing enterprise.

From the beginning of the study, it was apparent that the Company was going to require increasingly better planning, greater flexibility, and faster, more informed decisions than was possible under the highly centralized organization structure, which was suited for earlier and different conditions. Unless we could put the responsibility and authority for decision making closer in each case to the scene of the problem, where complete understanding and prompt action are possible, the Company would not be able to compete with the hundreds of nimble competitors who were, as they say, able to turn on a dime.

In addition, General Electric faced the need to develop capable leaders for the future; the need for more friendly and cooperative relationships between managers and other employees; the need to stay ahead of competition in serving the customers; and the very human need to make the work of a manager at all echelons of the organization more manageable. The work had to be made more manageable so that it could be understood and carried out by people of normally available energy and intelligence, thus leaving no requirement for the so-called indispensable man."

Theodore Levitt: Creativity is not enough

The following is an edited summary of the 1963 article by Theodore Levitt. Excerpts were taken from HBR.

Additional Articles Commentary on Innovation:

1. Innovation in Marketing (New York, McGraw-Hill, 1962). by Theodore Levitt.
2. "Managing Innovation: Controlled Chaos" by James Brian Quinn. HBR, May-June 1985 
3. "How to Kill Creativity" by Teresa M. Amabile HBR, September-October 1998 
4. "Change the Way You Persuade". by Gary A. Williams and Robert B. Miller. HBR, May 2002

Edited Summary of "Creativity is not Enough". Original text excerpts shown in quotes.

By Theodore Levitt:


"CREATIVITY is not the miraculous road to business growth and affluence that is so abundantly claimed these days. And for the line manager, particularly, it may be more of a millstone than a milestone. Those who extol the liberating virtues of corporate creativity over the somnambulistic vices of corporate conformity may actually be giving advice that in the end will reduce the creative animation of business. This is because they tend to confuse the getting of ideas with their implementation--that is, confuse creativity in the abstract with practical innovation; not understand the operating executive's day-to-day problems; and underestimate the intricate complexity of business organizations.

The trouble with much of the advice business is getting today about the need to be more vigorously creative is, essentially, that its advocates have generally failed to distinguish between the relatively easy process of being creative in the abstract and the infinitely more difficult process of being innovationist in the concrete. Indeed, they misdefine "creativity" itself. Too often, for them, "creativity" means having great, original ideas. Their emphasis is almost all on the thoughts themselves. Moreover, the ideas are often judged more by their novelty than by their potential usefulness, either to consumers or to the company. In this article, I shall show that in most cases, having a new idea can be "creative" in the abstract but destructive in actual operation, and that often instead of helping a company, it will even hinder it.

Suppose you know two artists. One tells you an idea for a great painting, but he does not paint it. The other has the same idea and paints it. You could easily say the second man is a great creative artist. But could you say the same thing of the first man? Obviously not. He is a talker, not a painter.

That is precisely the problem with so much of today's pithy praise of creativity in business--with the unending flow of speeches, books, articles, and "creativity workshops" whose purpose is to produce more imaginative and creative managers and companies. My observations of these activities over a number of years lead me firmly to this conclusion. They mistake an idea for a great painting with the great painting itself. They mistake brilliant talk for constructive action.

But, as anybody who knows anything about any organization knows only too well, it is hard enough to get things done at all, let alone to introduce a new way of doing things, no matter how good it may seem. A powerful new idea can kick around unused in a company for years, not because its merits are not recognized but because nobody has assumed the responsibility for converting it from words into action. What is often lacking is not creativity in the idea-creating sense but innovation in the action-producing sense, i.e., putting ideas to work."

Ideas alone are Insufficient:

"Why don't we get more innovation?

One of the most repetitious and, I am convinced, most erroneous answers we get to this question is that businessmen are not adequately creative and that they are enslaved by the incubus of conformity. It is alleged that everything in American business would be just dandy if industry were simply more creative and if it would hire more creative people and give them the chance to show their fructifying stuff.

But anybody who carefully looks around in any modern business organization and speaks freely and candidly with the people in it will, I believe, discover something very interesting: namely, there is really very little shortage of creativity and of creative people in American business. The major problem is that so-called creative people often (though certainly not always) pass off on others the responsibility for getting down to brass tacks. They have plenty of ideas but little businesslike follow-through. They do not make the right kind of effort to help their ideas get a hearing and a try.

All in all, ideation is relatively abundant. It is its implementation that is more scarce.

Many people who are full of ideas simply do not understand how an organization must operate in order to get things done, especially dramatically new things. All too often, there is the peculiar underlying assumption that creativity automatically leads to actual innovation. In the crippled logic of this line of thinking, ideation (or creativity, if you emphasize the idea-producing aspect of that term) and innovation are treated as synonyms. This kind of thinking is a particular disease of advocates of "brainstorming," who often treat their approach as some sort of ultimate business liberator.[ See Alex E Osborn, Applied Imagination: Principles and Procedures of Creative Thinking (New York, Charles Scribner's Sons, 1953).] 

Ideation and innovation are not synonyms. The former deals with the generation of ideas; the latter, with their implementation. It is the absence of a constant awareness of this distinction that is responsible for some of the corporate standpattism we see today. (Lest there be any confusion, it is not essential that innovation be successfully implemented to qualify as innovation. The object of the innovation is success, but to require in advance that there be no doubt of its success would disable its chance of ever getting tried.)

The fact that you can put a dozen inexperienced people into a room and conduct a brainstorming session that produces exciting new ideas shows how little relative importance ideas themselves actually have. Almost anybody with the intelligence of the average businessman can produce them, given a halfway decent environment and stimulus. The scarce people are those who have the know-how, energy, daring, and staying power to implement ideas.

Whatever the goals of a business may be, it must make money. To do that, it must get things done. But having ideas is seldom equivalent to getting things done in the business or organizational sense. Ideas do not implement themselves--neither in business nor in art, science, philosophy, politics, love, war. People implement ideas."

Creative individuals must take responsibility:

"Since business is a uniquely "get things done" institution, creativity without action-oriented follow-through is a uniquely barren form of individual behavior. Actually, in a sense, it is even irresponsible. This is because: 

1. The creative man who tosses out ideas and does nothing to help them get implemented is shirking any responsibility for one of the prime requisites of the business, namely, action; and
2. by avoiding follow-through, he is behaving "in an organizationally intolerable--or, at best, sloppy--fashion.

The trouble with much creativity today, in my observation, is that many of the people with the ideas have the peculiar notion that their jobs are finished once the ideas have been suggested. They believe that it is up to somebody else to work out the dirty details and then implement the proposals. Typically, the more creative the man, the less responsibility he takes for action. The reason is that the generation of ideas and concepts is often his sole talent, his stock-in-trade. He seldom has the energy or staying power, or indeed the interest, to work with the grubby details that require attention before his ideas can be implemented.

Anybody can verify this for himself. You need only to look around in your own company and pick out the two or three most original idea men in the vicinity. How many of their ideas can you say they have ever vigorously and systematically followed through with detailed plans and proposals for their implementation--even with only some modest, ballpark suggestions of the risks, the costs, the manpower requisites, the time budgets, and the possible payout?

The usual situation is that idea men constantly pepper everybody in the organization with proposals and memoranda that are just brief enough to get attention, to intrigue, and to sustain interest--but too short to include any responsible suggestions regarding how the whole thing is to be implemented and what's at stake. In some instances it must actually be inferred that they use novel ideas for their disruptive or their self-promotional value. To be more specific:

One student of management succession questions whether ideas are always put forth seriously. He suggests that often they may simply be a tactical device to attract attention in order to come first to mind when promotions are made. Hence, ideas are a form of "public relations" within the organization.[See Bernard Levenson, "Bureaucratic Succession," in Complex Organizations: A Sociological Reader, edited by Amitai Etzioni (New York, Rinehart & Company, 1961).]

It should be pointed out, however, that something favorable can be said about the relationship of irresponsibility to ideation. The generally effective executive often exhibits what might be called controlled momentary irresponsibility. He recognizes that this attitude is virtually necessary for the free play of imagination. But what distinguishes him is his ability to alternate appropriately between attitudes of irresponsibility and responsibility. He doesn't hold to the former for long--only long enough to make himself more productive."

Psychological Characteristics of Creative People:

"The fact that a consistently highly creative person is generally irresponsible in the way I have used the term is in part predictable from what is known about the freewheeling fantasies of very young children:

• They are extremely creative, as any kindergarten teacher will testify. 
• They have a naive curiosity which stumps parents with questions like: "Why can you see through glass?" "Why is there a hole in a doughnut?" "Why is the grass green?" It is this kind of questioning attitude that produces in them so much creative freshness. Yet the unique posture of their lives is their almost total irresponsibility from blame, work, and the other routine necessities of organized society. Even the law absolves them from responsibility for their actions. But all sources testify to childrens' creativity, even Biblical mythology with its assertion about wisdom issuing from "the mouths of babes." More respectable scientific sources have paralleled the integrative mechanism of adult creativity with the childhood thought process that "manifests itself during the preschool period--possibly as early as the appearance of three-word sentences..."[See Stanley Stark, "Mills, Mannheim, and the Psychology of Knowledge," mimeographed (Urbana, University of Illinois, 1960)]

Clinical psychologists have also illustrated what I call the irresponsibility of creative individuals in Rorschach and stroboscopic tests. For example:

One analyst says, "Those who took to the Rorschach like ducks to water, who fantasied and projected freely, even too freely in some cases, or who could permit themselves to tamper with the form of the blot as given, gave us our broadest ranges of movement."[ G.S. Klein, "The Personal World Through Perception," in Perception: An Approach to Personality, edited by R.R. Blake and G.V. Ramsey (New York, The Ronald Press, 1951). For more on "the creative personality," see Morris I. Stein and Shirley J. Heinze, Creativity and the Individual (Glencoe, Illinois, The Free Press, 1960).] 

In short, they were the least "form-bound," the least inhibited by the facts of their experience, and hence let their minds explore new, untried, and novel alternatives to existing ways of doing things.

The significance of this finding for the analysis of organizations is pointed up by the observation of another psychologist that "the theoreticians on the other hand do not mind living dangerously."[ Herbert Feigl, "Philosophical Embarrassments of Psychology," American Psychologist, March 1959.] 

The reason is obvious. A theoretician is not immediately responsible for action. He is perfectly content to live dangerously because he does so only on the conceptual level, where he cannot get hurt. To assume any responsibility for implementation is to risk dangerous actions, and that can be painfully uncomfortable. The safe solution is to steer clear of implementation and all the dirty work it implies."

Easy Commentary from Without: 
"It is to be expected, therefore, that today's most ardent advocates of creativity in business tend to be professional writers, consultants, professors, and often advertising agency executives. Not surprisingly, few of these people have any continuing day-to-day responsibility for the difficult task of implementing powerful new business ideas of a complex nature in the ordinary type of business organization. Few of them have ever had any responsibility for doing work in the conventional kind of complex operating organization. They are not really practicing businessmen in the usual sense. They are literary businessmen. They are the doctors who say, "Do as I say, not as I do," reminiscent of the classic injunction of the boxer's manager, "Get in there and fight. They can't hurt us."

The fact that these people are also so often outspoken about the alleged virulence of conformity in modern business is not surprising. They can talk this way because they have seldom had the nerve to expose themselves for any substantial length of time to the rigorous discipline of an organization whose principal task is not talk but action, not ideas but work.

Impressive sermons are delivered gravely proclaiming the virtues of creativity and the vices of conformity. But so often the authors of these sermons, too, are "outsiders" to the central sector of the business community. Thus, the best-known asserters that American industry is some sort of vast quagmire of quivering conformity--the men who have turned the claim into a tiresome cliché--are people like William H. Whyte, Jr., author of The Organization Man,[ New York, Simon & Schuster, 1956.] who is a professional writer; Sloan Wilson, author of The Man in the Gray Flannel Suit,[ New York, Simon & Schuster, 1955.] who was a college English professor when he wrote the book; and C. Northcote Parkinson (more on him later), also a professor.

Actually, it is not totally fair to condemn this gratuitous crusade of consultants, writers, professors, and the like. American business appears generally to benefit from their existence. Harm is done, however, when the executive fails to consider that the very role of these men absolves them from managerial responsibility. It is hard to accept uncritically the doleful prophesy that so many U.S. companies are hypnotically following each other in a deadly conformist march into economic oblivion. It is hard to accept the tantalizing suggestion that their salvation lies so easily in creativity and that from this will automatically flow profit-building innovation. Perhaps the source of these suggestions should be kept in mind."

Whining and Complaining:

"Ideation is not a synonym for innovation, conformity is not its simple antonym, and innovation is not the automatic consequence of "creative thinking." Indeed, what some people call conformity in business is less related to the lack of abstract creativity than to the lack of responsible action, whether it be the implementation of new or old ideas.

• The proof of this is that in most business organizations, the most continually creative men in the echelons below the executive level--men who are actively discontent with the here and now and are full of suggestions about what to do about it--are also generally known as corporate malcontents. 
• They tend to be complaining constantly about the standpat senility of the management, about its refusal to see the obvious facts of its own massive inertia. They complain about management refusing to do the things that have been suggested to it for years. 
• They often complain that management does not even want creative ideas, that ideas rock the boat (which they do), and that management is interested more in having a smoothly running (or is it smoothly ruining?) organization than in a rapidly forward-vaulting business.

In short, they talk about the company being a festering sore of deadly conformity, full of decaying vegetables who systematically oppose new ideas with the old ideologies. And then, of course, they frequently quote their patron saint, William H. Whyte, Jr., with all his misinformed moralizing and his conjectural evidence about what goes on inside an operating organization. (Whyte's fanciful notions of such operations have recently been demolished by the careful studies of the veteran student of social organization W. Lloyd Warner in his The Corporation in the Emergent American Society.)"

Why Doors Are Closed

"The reason the creative malcontent speaks this way is that so often the people to whom he addresses his flow of ideas do, indeed, after a while, ignore him and tell him to go away. They shut their doors to his endless entreaties; they refuse to hear his ideas any longer. Why? There is a plausible explanation.

The reason the executive so often rejects new ideas is that he is a busy man whose chief day-in, day-out task is to handle an ongoing stream of problems. He receives an unending flow of questions on which decisions must be made. Constantly he is forced to deal with problems to which solutions are more or less urgent and the answers to which are far from clear-cut. It may seem splendid to a subordinate to supply his boss with a lot of brilliant new ideas to help him in his job. But advocates of creativity must once and for all understand the pressing facts of the executive's life: Every time an idea is submitted to him, it creates more problems for him--and he already has enough.

My colleague, Professor Raymond A. Bauer, has pointed out an instructive example from another field of activity. He notes that many congressmen and senators have the opportunity to have a political science intern assigned to "help" them. However, some congressmen and senators refuse this "help" on the grounds that these interns generate so many ideas that they disrupt the legislator's regular business."

Making Ideas Useful 
 

"Yet innovation is necessary in business-and innovation begins with somebody's proposal. What is the answer for the man with a new idea? I have two thoughts to offer:

1. He must work with the situation as it is. Since the executive is already constantly bombarded with problems, there is little wonder that after a while he does not want any more new ideas. The "idea man" must learn to accept this as a fact of life and act accordingly.
2. When he suggests an idea, the responsible procedure is to include at least some minimal indication of what it involves in terms of costs, risks, manpower, time, and perhaps even specific people who ought to carry it through. That is responsible behavior, because it makes it easier for the executive to evaluate the idea and because it raises fewer problems. That is the way creative thinking will more likely be converted into innovation.

It will be argued, of course, that to saddle the creative individual with the responsibility of spelling out the details of implementation would curb or even throttle his unique talent. This is probably true. But this could be salutary, both for him and for the company. Ideas are useless unless used. The proof of their value is their implementation. Until then they are in limbo. If the executive's job pressures mean that an idea seldom gets a good hearing unless it is responsibly presented, then the unthrottled and irresponsible creative man is useless to the company. If an insistence on some responsibility for implementation throttles him, he may produce fewer ideas, but their chances of a judicious hearing and therefore of being followed through are greatly improved. The company will benefit by trying the ideas, and the creative man will benefit by getting the satisfaction of knowing he is being listened to. He will not have to be a malcontent any more.

Deciding Factors:

This is not to suggest that every idea needs a thoroughly documented study before it is mentioned to anyone. Far from it. What is needed will vary from case to case depending on four factors:

• The Position or Rank of the Idea Originator in the Organization: How "responsible" a man needs to act for an idea to get a hearing clearly depends on his rank. The powerful chief executive officer can simply instruct subordinates to take and develop one of his ideas. That is enough to give it a hearing and perhaps even implementation. To that extent, talk is virtually action. Similarly, the head of a department can do the same thing in his domain. But when the ideas flow in the opposite direction--upward instead of downward--they are unlikely to flow unless they are supported by the kind of follow-through I have been urging.
• Idea Complexity: The more complex and involved the implications of an idea, and the more change and rearrangement it may require within the organization or in its present way of doing things, then obviously the greater is the need to cover the required ground in some responsible fashion when the proposal is presented. But I do not suggest that the "how to" questions need to be covered as thoroughly and carefully as would be required by, say, a large corporation's executive committee when it finally decides whether to implement or drop the suggestion. Such a requirement would be so rigid that it might dry up all ideas because their originators simply would not have the time, competence, or staff help to go to that much effort
• Industry Attributes: How much supporting detail a subordinate should submit along with his idea often depends on the industry involved and the intent of the idea. One reason there is such a high premium put on "creativity" in advertising is because the first requisite of an ad is to get attention. Hence "creativity" frequently revolves around the matter of trying to achieve visual or auditory impact such that the ad stands out above the constantly expanding stream of advertising noise to which the badgered consumer is subjected. To this extent, in the advertising industry, being "creative" is quite a different thing, by and large, from what it is, say, in the steel industry. Putting an eye patch on the man in the Hathaway shirt is "no sooner said than done." The idea is virtually synonymous with its implementation. But in the steel industry, an idea, say, to change the discount structure to encourage users of cold, rolled sheet steel to place bigger but fewer orders is so full of possible complications and problems that talk is far from being action or even a program for action. To get even a sympathetic first hearing, such an idea needs to be accompanied by a good deal of factual and logical support. 
• Audience Considerations: Everybody knows that some bosses are more receptive to new ideas than others. Some are more receptive to extreme novelty than others. The extent of their known receptiveness will in part determine the elaborateness of support a suggested new idea requires at its original stage.

But, equally important, it is essential to recognize that the greater the pressures of day-to-day operating responsibilities on the executive, the more resistance he is likely to have to new ideas. If the operating burden happens to fall on him, his job is to make the present setup work smoothly and well. A new idea requires change, and change upsets the smooth (or perhaps faltering) regularity of the present operation on whose effectiveness he is being judged and on which his career future depends. He has very good reason to be extremely careful about a new proposal. He needs lots of good risk-reducing reasons before he will look at one very carefully.

What his actual requirements are will also depend on the attitudes of his superiors to risk taking and mistakes. In one company I am familiar with, the two most senior officers have a unique quality of enormous receptivity to novelty--sometimes the wilder the proposal, the better. The result is that new ideas, no matter how vaguely stated or extreme, get sympathetic and quick hearings throughout all levels of the company. But this is a rare organization for two reasons.

1.  The chairman is now about 40 years old. He became president when he was 28, having been selected by his predecessor as the heir apparent when he was about 24. He vaulted quickly from one top job to another, never really having to spend very much time "making good" in the conventional sense in a difficult day-today operating job at a low level. Virtually his entire career was one of high-level responsibility where his ideas could be passed down to a corps of subordinates for detailed examination and evaluation. These experiences taught him the value of wild ideation without his having to risk his rise to the top by seeming to suggest irresponsible projects. 
2. The present president of this same company came in as a vice president, also at 28, and directly from an advertising agency. His career experiences were similar to the chairman's.

It is easy for both of these men to be permissive, in part because they have never really had to risk their climb up the hierarchical ladder by seeming to shoot wild. They always had teams of subordinates to check their ideas and willing superiors to listen to them. Anybody who has not had this history or conditioning will find it extremely hard to change once he gets very far up the corporate pecking order.

In short, a permissive, open, risk-taking environment cannot be created simply by the good intentions of the top management. The reason is either that high-level executives who have got to their top posts by a lifetime of judicious executive behavior are incapable of changing their habits or that, if their habits are changed, their subordinates will not believe they really mean it. And in lots of small ways, they see the justification of their disbeliefs."

Need for Discipline:

"Writers on the subject of creativity and innovation invariably emphasize the essential primacy of the creative impulse itself. Almost as an afterthought they talk about the necessity of teaching people to sell their ideas and of stimulating executives to listen to the ideas of subordinates and peers. Then they often go on casually to make some "do-gooder" statement about the importance of creating a permissive organizational climate for creative people. They rarely try to look at the executive's job and suggest how the creative genius might alter his behavior to suit the boss's requirements. It is always the boss who is being told to mend his ways. The reason for their one-sided siding with the creative man is that they are often hostile, just as he is, to the idea of "the organization" itself. They actively dislike organizations, but they seldom know exactly why.

I think I know the reason. It is that organization and creativity do not seem to go together, while organization and conformity do. Advocacy of a "permissive environment" for creativity in an organization is often a veiled attack on the idea of the organization itself. This quickly becomes clear when one recognizes this inescapable fact: One of the collateral purposes of an organization is to be inhospitable to a great and constant flow of ideas and creativity.

Whether we are talking about the U.S. Steel Corporation or the United Steelworkers of America, the U.S. Army or the Salvation Army, the United States or the U.S.S.R., the purpose of organization is to achieve the kind and degree of order and conformity necessary to do a particular job. The organization exists to restrict and channel the range of individual actions and behavior into a predictable and knowable routine. Without organization there would be chaos and decay. Organization exists in order to create that amount and kind of inflexibility that are necessary to get the most pressingly intended job done efficiently and on time.

Creativity and innovation disturb that order. Hence, organization tends to be inhospitable to creativity and innovation, though without creativity and innovation it would eventually perish. That is why small, one-man shops are so often more animated and "innovationary" than large ones. They have virtually no organization (precisely because they are one-man shops) and often are run by self-willed autocrats who act on impulse.

Organizations are created to achieve order. They have policies, procedures, and formal or powerfully informal (unspoken) roles. The job for which the organization exists could not possibly get done without these rules, procedures, and policies. And these produce the so-called conformity that is so blithely deprecated by the critics of the organization and life inside it.

 
Parkinson's Flaw:

It is not surprising that C. Northcote Parkinson and his Parkinson's Law enjoy such an admiring following among teachers, writers, consultants, and professional social critics. Most of these people have carefully chosen as their own professions work that keeps them as far as modern society lets anyone get from the rigorous taskmaster of the organization. Most of them more or less lead a sort of one-man, self-employed existence in which there are few make-or-break postmortems of their activities. They live pretty much in autonomous isolation. Many of them, I suspect, have avoided life in the organization because they are incapable of submitting to its rigid discipline. Parkinson has provided them a way in which they can laugh at the majority, who do submit to the organization, and feel superior rather than oppressed, as minorities usually do.

It is also not surprising (indeed it is quite expected) that Parkinson himself should be anything but an organization man--that he is a teacher of history, a painter, and, of all things, a historian on warfare in the Eastern Seas. This is about as far as you can get from the modern land-bound organization. Parkinson's writings have in recent years brought him into such continuing contact with business that he has now decided to go into business himself. In doing so, he has proved the truth of all that I have been saying: The business he has decided to enter is, of course, the consulting business!

Parkinson is very entertaining. The executive who cannot laugh along with him probably is too paranoid to be trusted with a responsible job. But most of today's blithe cartoonists of the organization would be impoverished for material were they not blessed with an enormous ignorance of the facts of organizational life. Let me put it as emphatically as I can. A company cannot function as an anarchy. It must be organized, it must be routinized, it must be planned in some way in the various stages of its operation. That is why we have so many organizations of so many different kinds. And to the extent that operations planning is needed, we get rigidity, order, and therefore some amount of conformity. No organization can have everybody running off uncoordinated in several different directions at once. There must be rules and standards.

Where there are enough roles, there will be damn fool rules. These can be mercilessly cartooned. But some rules which to an expert on ancient naval history look foolish are far from foolish if he bothers to learn about the problems of the business, or the government, or whatever group the particular organization is designed to deal with.

Creativity-->Innovation

"All this raises a seemingly frightening question. If conformity and rigidity are necessary requisites of organization, and if these in turn help stifle creativity, and furthermore if the creative man might indeed be stifled if he is required to spell out the details needed to convert his ideas into effective innovations, does all this mean that modern organizations have evolved into such involuted monsters that they must suffer the fearful fate of the dinosaur--too big and unwieldy to survive?

The answer to this is no. First, it is questionable whether the creative impulse would automatically dry up if the idea man is required to take some responsibility for follow-through. The people who so resolutely proclaim their own creative energy will scarcely assert that they need a hothouse for its flowering. Secondly, the large organization has some important attributes that actually facilitate innovation. Its capacity to distribute risk over its broad economic base and among the many individuals involved in implementing newness are significant. They make it both economically and, for the individuals involved, personally easier to break untried ground.

What often misleads people is that making big operating or policy changes requires also making big organizational changes. Yet it is precisely one of the great virtues of a big organization that, in the short run at least, its momentum is irreversible and its organizational structure is, for all practical purposes, nearly impenetrable. A vast machinery exists to get a certain job done. That job must continue to get the toughest kind of serious attention, no matter how exotically revolutionary a big operating or policy change may be. The boat can and may have to be rocked, but one virtue of a big boat is that it takes an awful lot to rock it. Certain people or departments in the boat may feel the rocking more than others and to that extent strive to avoid the incidents that produce it. But the built-in stabilizers of bigness and of group decision making can be used as powerful influences in encouraging people to risk these incidents.

Finally, the large organization has an organizational alternative to the alleged "conservatizing" consequences of bigness. There is some evidence that the relatively rigid organization can build into its own structure certain flexibilities which would provide an organizational home for the creative but irresponsible individual. What may be required, especially in the large organization, is not so much a suggestion-box system as a specialized group whose function is to receive ideas, work them out, and follow them through in the necessary manner. This would be done after the group has evaluated each idea and, preferably, spoken at length with its originator. Then when the idea and the necessary follow-through are passed on to the appropriate executive, he will be more willing to listen. To illustrate:

• An organizational setup that approximates this structure has been established in the headquarters Marketing Department of the Mobil Off Company.[See Bernard Levenson, "Bureaucratic Succession," in Complex Organizations: A Sociological Reader, edited by Amitai Etzioni (New York, Rinehart & Company, 1961).]
• A similar approach exists at the Schering Corporation under the name Management R&D. Its purpose is to nurture and develop new ideas and new methods of decision making.[See Victor M. Longstreet, "Management R & D," HBR July-August 1961.]
• Another suggestion which takes less solidly tangible organizational form in practice has been made by Murray D. Lincoln, president of Nationwide Insurance Company. He makes a plea for the notion of a company having a Vice President in Charge of Revolution.[New York, McGraw-Hill, 1960.]

Beyond these, the problems and needs of companies differ. To this extent, they may have to find their own special ways of dealing with the issues discussed in this article. The important point is to be conscious of the possible need or value of some system of making creativity yield more innovation.

Some companies have greater need for such measures than others have. And, as pointed out earlier, the need hinges in part on the nature of the industry. Certainly it is easier to convert creativity into innovation in the advertising business than it is in an operating company with elaborate production processes, long channels of distribution, and a complex administrative setup.

For those critics of and advisers to U.S. industry who repeatedly call for more creativity in business, it is well to try first to understand the profound distinction between creativity and innovation and then perhaps to spend a little more time calling on creative individuals to take added responsibility for implementation. The fructifying potentials of creativity vary enormously with the particular industry, with the climate in the organization, with the organizational level of the idea man, and with the kinds of day-in, day-out problems, pressures, and responsibilities of the man to whom he addresses his ideas. Without clearly appreciating these facts, those who declare that a company will somehow grow and prosper merely by having more creative people make a fetish of their own illusions."