Finance

Why Creativity in Business Matters

“I never made one of my discoveries through the process of rational thinking”

– Albert Einstein

 

Building a modern business requires grit and a great deal of creativity. Marketing a new product, or creating items or services consumers want, beckons the entrepreneur to expand and abandon traditional business models. Giant companies like Amazon, Apple, Facebook, Tesla etc, prove a creative and ever evolving business model conquers competition, drives sales, and increases consumer loyalty.

So what’s the big deal about Creativity in Business and Why does It Matter?

The simple answer – Your Success in business counts on creative thinking

Fact is, we are living in times where companies are facing major disruptions in their markets and managers are forced to respond strategically in order to remain competitive.  According to a study conducted by IBM CEOs  “believe that — more than rigor, management discipline, integrity or even vision — successfully navigating an increasing complex world will require creativity.”

Another study conducted by Forrester Consulting and Adobe also found direct correlation between a entrepreneur’s ability to create new ways to engage the market, and the success of their companies. Over half of the companies surveyed in the study showed revenue growth due to enhanced creative practices—such as hiring interesting and unorthodox employees who foster innovation, increase brand recognition, and inspire methods of production and delivery never tried before.

“Creativity is thinking up new things. Innovation is doing new things.”

— Theodore Levitt

Good Leadership Fosters Creativity –

When it comes to problem solving, creativity and leadership can have a huge effect on the  performance of a company in various. Modern company leaders who allow freedom and creativity within their workforce see incredible dividends down the road. The most successful example, Amazon’s Jeff Bezos, created Amazon in 1994 with the mantra and philosophy: “Its easier to invent the future than to predict it.” That one line says it all. Creativity in the modern era makes or breaks companies. Small business owner’s ability to diversify ideas, products, and marketing techniques determines their success rate and bottom line. But, as Amazon proves, even well established companies use evolutionary creative business models to continue to maintain and increase their market placement.

Where do we go from here?

The simple lesson:  While ancient marketing, production, and branding methods still generate revenue,  business creativity flourishes success and helps avoid stagnation which leads to the dreaded going out of business.

Further reading on importance of creativity in business

How Senior Executives Find Time to Be Creative- (Harvard Business Review)

-Your Team Is Brainstorming All Wrong- (Harvard Business Review)

-Leading others to think innovatively together: Creative leadership (The Leadership Quarterly-ScienceDirect)

 

“Creativity takes courage. ”  ― Henri Matisse

The Secret behind Germany’s SMEs Growth, The Germany “Mittlestand”, SMEs Access to Finance

-Like elsewhere in many parts of the world, in Germany the small and medium-sized enterprises (SMEs) form the backbone of the German economy. According to KfW (Kreditanstalt für Wiederaufbau), there are approximately 3.6 million SMEs and they offer employment to more than 60% percent to the working population. (See a summary of further information on  “THE SME SECTOR IN GERMANY” by KfW) .

-Who are the Germany “Mittlestand” and what makes them stand out?  I came across an article titled ‘Introducing the German Mittlestand’ -The article describes 8 facts about the Germany’s ‘Mittlestand’ and what makes them productive. (Read on at Make it in Germany)

-What is the secret of SME growth in Germany and what can the world learn from them? An article by the Telegraph.co.uk describes a broader picture behind the success and growth of the Germany’s SME’s and how they compare with SMEs in the UK and elsewhere in the world. One of the important issues addressed in the article, is the Germany SME access to business financing which is hugely provided by institutions such as the KfW Development Bank among others.

Limited access to SME Financing is a global  problem. I’ve listened to small business owners talk about their frustrations in their businesses. Most of them talk about the difficulties they face while trying to raise business funds through bank financing. According to research, a large number of SMEs are forced to seek alternative methods of business financing. Some raise finances through external sources such family and friends due to the fact that they have limited access to bank loans. A separate article by (OECD) The Organisation for Economic Co-operation and Development, highlights other forms of alternative financing and the importance of having broad range of financing instruments available to SMEs besides just bank financing. Easy access to alternative finances as is important to in order to continuously improve on the  performance of SMEs,  innovation, employment and fuel growth, ( Read the full OECD report here)

Still on alternative SME Financing, are slowly taking a bold step to help improve access to financial Services around the world. Examples of such companies include  Village Capital and PayPal . According to Paypal, the main is to “…support social impact innovators who are making financial services more accessible to low-income individuals, families and small businesses…” (Read on here)

Toxic Business Culture, Corporate Scandals, Business Ethics

What happens when corporations put profits before customers? With all the corporate scandals happening these days, we all know the answer that question. And someone needs to act.

I am still not over the footage i watched where a passenger was forcibly dragged out United Airlines just because he refused to give up his seat. To be honest, the details of the story are shameful, horrific and sickening to the core. ( You can read all about it on Fortune and CNBC )

I also can’t get over what United C.E.O. Oscar Munoz said in a statement on Monday …“I apologize for having for having to re-accommodate these customers…” Really? That statement got me thinking. The passenger was literally singled out, dragged, humiliated and thrown off the plane. And they call that ‘re-accommodate‘? What is going on?

No need to apply communication and PR skills to sugarcoat this matter! They need to address the issue of overbooking their flights and avoid disappointing their paying customers.

Wells Fargo is still plagued by scandals. Last year, it admitted that a large number of employees had set up sham accounts to meet sales quotas. The company was ordered to pay $185 million in penalties.(Washington post)  The Consumer Financial Protection Bureau (CFPB) fined Wells Fargo Bank about  $100 million for the widespread illegal practice. The bank was also expected to pay an additional $35 million penalty to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles. (Consumer Finance) Well now those scandals over fake accounts have continued to hurt its business. (More on CFO and Fortune)

Turmoil sweeping Uber- The startup has suffered scandals in the last few days. There has been reports and accusations about bad work place culture, legal threats and sexual harrassment( more at Yahoo.Finance and susanjfowler.com)  The company was also recently accused of using secret program to track rival LYFT drivers. (More at Newsweek)

In other news, from fake news to fake investment news –Fake Investment News Could Be Here to Stay. The SEC is prosecuting online stock fraud (More on Barrons.com)

With all the pressures facing corporations, there has never been a better time for business leaders with ethics and values.  I came across an article on BW Disrupt about the importance of business ethics and why it holds the key to lasting success for any organisation. The author writes “There is no greater satisfaction than achieving success by following the righteous path, even if it means choosing the longer and harder road, because while doing so, you build a solid and unshakeable foundation for the company that guarantees long lasting success.” Read more BW Disrupt .