Winston Churchill is credited for having once said ‘never let a good crisis go to waste’. This principle is relevant not only to politicians who have embraced it over the last couple of months, but also to the corporate world. Indeed, the crisis triggers an opportunity, if not an obligation, to re-imagine the way business is conducted. And if the chief duty of leadership teams is to create value, creativity ought to have a vital role to play in that process.
The authors of the Harvard Business Review article ‘Great Strategy Requires Creativity’ (2019) identify four pillars of creativity for corporates when defining their strategy: contrast, combination, constraint and context. Contrast looks for pieces of conventional wisdom that are potentially ready to be turned on their head (e.g. unbundling of equipment and services); Combination looks for new connections between products or services – including through partnerships – to develop novel client solutions (e.g. hardware and software); Constraint seeks to turn competitive disadvantages into opportunities (e.g. online sales to go around the lack of a distribution network); Context looks for analogies from different industries or disciplines.
Picking up on the last point, what can creative industries such as the unforgiving world of fashion design teach industrial technologies companies about creativity? Interestingly, fashion guru Jean-Paul Gaultier’s ‘lessons in creativity’ perfectly match the four pillars introduced in the aforementioned study. Elsewhere, Marc Jacobs, the American fashion designer, states in an interesting MasterClass series that ‘looking for inspiration is a way of life’. He explains that creative processes are excruciatingly disciplined as the constant, obsessive search for inspiration is followed by extensive research, conceptualization, new product development and a gruesome refinement process towards perfection against tight deadlines. Only if that creative process is successfully repeated over years can it have a lasting impact on a brand. According to Anna Wintour, Editor-in-Chief of American Vogue, ‘If you are an overnight sensation, you can be yesterday’s news in no time. Whereas building something slowly and carefully that has value and quality, that is what is going to have legs’.
The gap between the fashion industry and the industrial corporate world is not as large as it seems. The fashion industry can be defined as ‘all the companies or individuals involved in the creation, production, promotion and sale of items that (a) have novel and specific aesthetic and functional properties, (b) trigger psychological reactions related to desire and need and (c) are adopted by a group of people for a limited amount of time’. As such, it squarely encompasses industrial technologies groups. Pursuing this analogy and reflecting on the lessons learned from the fashion industry, there appears to be an opportunity to embed creativity more forcefully and explicitly in business systems so that it becomes a creator of value across all the functions of an enterprise, from strategy and R&D to capital market transactions, the selection of acquisition targets, M&A deal structuring, human resources and investor communication. As a form of problem solving, creativity may even deserve to be considered as a business system of its own.
Creativity ultimately contributes to the attractiveness of a corporate brand from the perspective of all stakeholders. Employees, suppliers, customers, joint venture partners and government agencies ascribe some value in being associated with a strong brand. From an equity positioning perspective, the ultimate goal is to achieve the status of a luxury brand: ‘Of course it is expensive, but I have to have it.’ When that premium is observed in trading and transaction valuation multiples in the industrial technologies world, it is an expression of true value creation.