In the Information Age We Need Brain-Based Enterprises

Nearly 30 years ago, Fred Moody and Bill Gates recognized that the basis of competitive advantage had fundamentally shifted from the agrarian age to the industrial era to the information superhighway, when it was said that Microsoft’s only factory asset is the human imagination. The corresponding shift is from what I call Brawn Based Industries (BBIs) to Brain-Based Enterprises (BBEs).

Research shows that our brains absorb five times more information every day as compared with people in 1986. At a personal level, we must be consequentially at least five times better at using “swimming with information” rather than “drowning in data”. During our leisure time every day, we each process 34 gigabytes, or 100,000 words. In such a world, strategy changes from a long-range plan to a flexible posture, where the half-life of knowledge is in freefall, and success depends on creativity as a key input and innovation a key output. “Adapt, innovate or die” has never been truer in an age of exponential information growth and discontinuity.

Enterprises based on brainpower therefore need to understand higher order business questions of leadership, innovation and creativity to stay ahead. Questions such as:

1. Where does creativity and imagination come from at a personal level? How can you make collective creativity work? What part do tools and techniques for divergent and convergent thinking play in the mix?
2. What kind of leadership is required to make innovation and creativity “business as usual” in your enterprise?
3. What ensures creativity turns into innovation? What stops it?
4. What are BBEs really doing beneath the veneer?
5. How do culture and structure support or limit innovation and creativity? What can we do about it? How may we become a genuine learning enterprise?

We will briefly address some of these questions in this article.

Is Everyone Creative?

The short answer to the question is “yes”. However, not all creativity is what I call “good creativity”. In business, good creativity is defined by ideas that are novel, appropriate and feasible such that they turn into sustainable innovations rather than next week’s fads. While we are all creative, we need to channel our good ideas into sustainable innovations. Random creativity is the stuff of some entrepreneurs who don’t manage to find a market for their ideas.

Pure creativity is fine, but it is the stuff of pure artists who have no concern for an outlet for their creativity. Issues such as timing can radically affect the degree to which an idea turns into an innovation. Witness the example of the Sinclair C5 environmentally friendly scooter. The idea was possibly 30 years ahead of its time, much in the same way that Da Vinci “invented” the helicopter some 400 years before the technology existed to realize his invention. It helps to have some definitions:

Creativity is the thinking of novel ideas

Innovation as the conversion of a novel idea into a profitable or sustainable product / service or process

Is Creativity the Enemy of Strategy?

Some people fear that creativity is the enemy of strategy. This is perhaps not too surprising, when one considers some might say the 2008 world recession was caused by the over-zealous application of creativity to financial services. I’d argue this was not a case of mindful creativity, rather a case of mindless gambling. In a world where market dominance is no longer dependent on size or speed to market, the ability to continuously innovate is key and depends on the ability to be agile and even antifragile. Creativity sits beneath these qualities as a core competence for a disruptive world.

A good business strategy therefore allows for responsiveness and agility, and this requires creative responses to opportunities which are consistent with the general direction of travel. It also requires the consideration of the appropriateness of ideas rather than just novelty per se. A bad strategy either fails to respond or, worse, still flip-flops around to every fad that appears on the horizon. The result is there is no focus in what the enterprise does. Good creativity is needed at all levels to help BBEs flex their corporate synapses and corpuscles to respond to a VUCA (Volatile, Uncertain, Complex and Ambiguous) world.

How Do You Lead a BBE?

“With thought and care is my starter on this!” Many creative people refuse to be managed, but they can be led. This is what Dan Pink talks about when he discusses the alignment of passions with purpose. Embedded in this short sentence is a huge mass of complexity around finding what gets people out of bed in the morning to come to work at your enterprise and, more importantly, what keeps them coming over the long-term. How then do you design work as an experience that gets the best out of your people and which engages them to give their best?

There can be no single HR strategy for the motivation of intelligent people. But in general we look to the higher order categories on Maslow’s triangle and to Leadership Strategies toward the more consultative end of Tannenbaum and Schmidt’s Leadership Style continuum. Virgin is a good case study in this sense, in so far as they have cracked the engagement and leadership issue in their enterprises. Leading Innovation, Creativity and Enterprise features an exclusive interview with Sir Richard Branson where he describes aspects of The Virgin Way.

How Do You Structure a BBE?

We need a much more organic / biological outlook on organization development than an industrial / process model if we are to create enterprises which think, learn, adapt and respond to a changing environment. I compare an industrial approach to one that is more biological, drawing the analogy with how bees create complex structures with simple organization. As we computerize businesses and commerce in general it seems we are in danger of returning to industrial algorithms for getting things done which do not align with the hugely complex organisms we are as human beings.

Just today while writing this, I suffered the indignity of phoning the tax office to get a form to send my corporation tax in, to be told that I could not have the form without a special code. Trouble was, the reason I called them was because they had not sent the code in the first place! I pointed out the Kafkaesque nature of the problem, yet the “assistant” was only able to repeat the algorithm and tell me they were unable to do anything but “what the system required”. Clearly HMRC is some way from being a BBE, having handed its brain over to a robot!

That said, the BBEs I’ve interviewed may have the same amounts of information and intelligence, yet they use it to superior value. I studied the examples of Metro Bank, Innocent Drinks, Ingentis etc. to gain practical insights into how these ideas translate into everyday practice. In a world where we have all the data we need to do amazing things, the job of leaders and those they lead is to convert that data into information with utility and value to those who need it.

Feed Your Mind … and the Rest Will Follow

It’s one thing to be personally creative. Quite another to create a culture where creativity and innovation are embedded into the “corporate corpuscles” of the enterprise. Part of that individual and collective mindset concerns the ability to embrace failure. In Virgin’s case Richard Branson says he has lost count of the times he heard his new ideas would not succeed. Having won a prize for my work on leadership I learned from Richard that we shared parental encouragement to always keep trying. In Richard’s case he says:

“My mother taught me that I should not focus on past regrets, so with regards to business I don’t. My teams and I do not allow mistakes or failures to deter us. In fact, even when something goes wrong, we continue to search for new opportunities”

Three Takeaways

1. BBEs are not just concerned with encouraging individuals to bring their minds, bodies and souls to work. They make collective creativity and innovation work at the enterprise level.

2. BBEs do this by encouraging a culture of intrapreneurship, and through the use of formal and informal strategies and tools for divergent and convergent thinking.

3. BBEs often manage to pull off the clever trick of making a large enterprise feel like a small one, where people can combine their passions with a purpose. To do complex things in a large enterprise the organization design principle of simplicity must be used.

Peter Cook leads Human Dynamics, offering Business and Organisation Development. He also delivers keynotes around the world that blend business intelligence with parallel lessons from music via The Academy of Rock. Author of and contributor to eleven books on business leadership, acclaimed by Tom Peters, Professors Charles Handy, Adrian Furnham and Harvey Goldsmith CBE.  His three passions are science, business and music, having led innovation teams for 18 years to develop life-saving drugs. 18 years in academia and 18 + years running his businesses. All his life since the age of four playing music. His latest book Leading Innovation, Creativity and Enterprise is published by Bloomsbury.

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Peter Cook

Peter Cook Leads The Academy of Rock, providing keynote events on business leadership and music, from his background as a leader of innovative science teams, teaching MBA’s for 18 years and running his consultancy businesses Human Dynamics and The Academy of Rock Find his books and online learning programmes via his websites or on Amazon – Twitter @AcademyOfRock