How Organizations Channel Creativity

by William H. Starbuck

New York University

Published in C. M. Ford and D. A. Gioia (eds.), Creative Action in Organizations; Sage, 1995, pages 106-114.

Organizations cannot obtain creativity merely by hiring creative people. Most organizations have many members who come up with creative ideas, but all organizations ignore or suppress some forms of creativity, and organizational creations often reflect the contributions of diverse individuals.

The following story shows how contrasting value systems and different skills interacted to produce two important inventions (Hounshell and Smith, 1988). In December 1926, Charles Stine, the Director of Du Pont's Chemical Department, wrote a memorandum advocating that his company should undertake "pure science work". He listed four reasons, the last and least important of which was practical applications. Three months later, after Stine had relabeled his proposal "fundamental research," Du Pont's Executive Committee gave him money for a new building and a budget for 25 scientists.

By the beginning of 1928, Stine had hired only nine scientists, including just one organic chemist. The organic chemist, Wallace Hume Carothers, moved to Du Pont because it had offered him almost twice the $3200 he had been making at Harvard. Soon after moving, Carothers told a friend: "A week of the industrial slavery has already elapsed without breaking my proud spirit. Already I am so accustomed to the shackles that I scarcely notice them. Like the child laborers in the spinning factories and the coal mines, I arise before dawn and prepare myself a meagre breakfast. Then off to the terrific grind arriving at 8 just as the birds are beginning to wake up. Harvard was never like this."

Carothers espoused the then-radical views that polymeric molecules were true molecules and that they could be incredibly large. He set out to create such molecules by aggregating smaller molecules. Within a year, he published a landmark paper proving his case. By the end of 1929, he was supervising eight men.

During the month of April 1930, two members of Carothers' group made important discoveries. Arthur Collins produced the first neoprene rubber, and Julian Hill made the first laboratory-synthesized fiber. The neoprene was an accidental by-product of efforts to purify another polymer, and it took Du Pont little time to turn neoprene into a commercial product. Carothers' group, however, played no part in this development, for Carothers was pursuing the implications of the synthesized fiber. This too had been an accident, a by-product of efforts to produce larger and larger polymeric molecules. While removing hot polymer from some apparatus, Hill observed that molten polymer could be drawn into filaments that turned into very strong yet very elastic fibers if they were stretched after cooling. However, Carothers' and Hill's efforts to produce useful fibers went nowhere at that time, and Carothers turned to other interests.

In June 1930, Stine was replaced by a new chemical director, Elmer Bolton, who believed that fundamental research ought to yield "practical applications." When Carothers was looking for new research topics in 1933, Bolton encouraged him to take another look at synthetic fibers. Carothers did so, but concluded after a time that the problem was inherently unsolvable. The goal was to produce a fiber with a high melting point and low solubility, and Carothers reasoned that these properties would make spinning impossible.

Bolton, however, kept synthetic fibers at the top of his personal priority list. In March 1934, he persuaded Carothers to make yet another stab. Carothers suggested to Donald Coffman that he try to make a fiber from an aminononanoic ester. Five weeks later, Coffman stuck a cold stirring rod into a molten polymer and observed a fine, tough, lustrous fiber adhering to the rod when he pulled it out. This was the first nylon.

All members of Carothers' group turned their efforts toward nylon. They began to repeat Coffman's work using variations of the chemicals he had used. Over the summer, they tried 81 chemicals, five of which looked promising. In February 1935, the U. S. Government granted a patent for nylon to Gerard J. Berchet, a member of the team.

Du Pont mounted a crash program to bring nylon into commercial production. This effort, which took five years, did not involve Carothers' group. The development team was headed by Crawford H. Greenewalt. The researchers working on it envisioned nylon replacing cellophane, leather, photographic film, and wool. But Du Pont's executives decided that development would progress faster if efforts focused on a single use. They chose women's stockings.

Politics and Understanding Favor Variations

Norman (1971) observed that organizations react quite differently to two types of change proposals: variations and reorientations. Variations would modify organizations' domains only incrementally, whereas reorientations would redefine those domains. Variations exploit organizations' experience, preserve existing distributions of power, and can win approval from partially conflicting interests. Reorientations take organizations outside familiar domains and they redistribute power to people who understand the new markets, technologies, and methods. Thus, reorientation proposals meet resistance from those top managers who stand to lose power because their expertise would become obsolete.

For example, for many years, NCR Corporation defined its domain as cash registers, adding machines, and accounting machines, all of which were electro-mechanical. It built a homogeneous group of top managers having expertise in this domain. In 1953, NCR bought a small computer company; and in 1959, this subsidiary developed the first solid-state computer in the world. But NCR's home-office managers acted as if the computer subsidiary was a threat. They warned that rapid expansion of computer-leasing would lower corporate earnings. Product-oriented sales managers told their sales staff, "Don't waste your time on computers. Sell posting machines." By 1968, NCR's computer hardware was lagging roughly four years behind IBM's. "We had to resist the temptation to release it prematurely," explained one executive. "NCR's late entry is opportune," NCR's chairman assured its stockholders. "Our timing is perfect." By 1971, the computer revolution had overtaken NCR. Wall Street analysts predicted that NCR could no longer compete in the computer age. NCR's top managers could not plot, let alone produce, a reorientation. Bankruptcy loomed, investors revolted, and NCR's directors finally had to replace the president (Meyer and Starbuck, 1993).

Watzlawick, Weakland, and Fisch (1974) emphasized the relativity of perception. They remarked that reorientations seem illogical because they violate basic tenets of a current cognitive framework, whereas variations make sense because they modify actions or ideologies incrementally within an accepted overarching framework. The action proposals that look sensible are ones that follow precedents, harmonize with current actions, resemble the practices in other organizations, use resources that are going to waste, fit with top managers' values, or reinforce power holders (Starbuck and Milliken, 1988; Staw and Ross, 1978).

Managerial ideologies cherish variations. Managers believe organizations should grow incrementally at their margins. According to Peters (1980: 196), the firms that managers regard as being well run "tend to be tinkerers rather than inventors, making small steps of progress rather than conceiving sweeping new concepts." Variations are often programmatic: research departments generate opportunities for complementary actions; sales personnel report on competitors' actions within current domains.

Emphasizing variations may be essential in normal situations because of gross perceptual errors. Several studies suggest that most people hold highly erroneous beliefs about their organizations and about the organizations' environments (Downey, Hellriegel, and Slocum, 1975; Grinyer and Norburn, 1975; Payne and Pugh, 1976; Tosi, Aldag, and Storey, 1973). Because misrepresentations and inadvertent biases permeate formal reports (Altheide and Johnson, 1980; Hopwood, 1972), the organizations that take formal reports seriously either get into trouble or perform ineffectively (Grinyer and Norburn, 1975; Starbuck, Greve, and Hedberg, 1978). Variations mitigate the effects of perceptual errors by keeping actions close to those that have worked in the past; incremental actions are likely to produce expected results even when the actors thoroughly misunderstand their environments.

However, variations are also inadequate (Miller, 1990). Because people choose variations and interpret results within the frameworks of their current beliefs and vested interests, perceptual errors both persist and accumulate. Because organizations create programs to repeat their successes, they try to choose variations that will halt social and technological changes. Such variations can succeed to only small degrees and briefly, of course. Organizations that stop innovating may not only find themselves confronting crises, they may lose the capacity to innovate (Hedberg, Nystrom, and Starbuck, 1976).

Hierarchies Often Impede Innovation

Hierarchies amplify these tendencies. Porter and Roberts (1976) reviewed research showing that people in hierarchies talk upward and listen upward. They send more messages upward than downward, they pay more attention to messages from their supervisors than to ones from their subordinates, and they try harder to establish rapport with supervisors than with subordinates. People also bias their upward messages to enhance good news and to suppress bad news (Janis, 1972). This bias becomes problematic because problems are much more likely than opportunities to motivate organizations to attempt changes (Hedberg, 1981).

These communication biases seem to be stronger in some firms, with one result being an increased propensity to run into serious trouble. After studying twenty firms that were facing crises, Dunbar and Goldberg (1978) concluded that the chief executives in these troubled firms generally surrounded themselves with yes-sayers who voiced no criticisms. Worse yet, the yes-sayers deliberately filtered out warnings from middle managers who saw correctly that their firms were out of touch with market realities; many of these middle managers resigned while others were fired for disloyalty.

Top managers' perceptual errors and self-deceptions are especially potent because top managers can block the actions proposed by their subordinates. Yet, top managers are also especially prone to perceive events erroneously and to resist changes: Their promotions and high statuses persuade them that they have more expertise than other people. Their expertise tends to be our-of-date because their personal experiences with clients, customers, technologies, and low-level personnel lie in the past. They have strong vested interests. Reorientations threaten their dominance, and they will catch the blame if current practices, strategies, and goals prove wrong. They socialize with other top managers, who face similar pressures.

Thus organizations tend to behave similarly to Marx's (1859) observations about societies. Marx said elites try to retain their favored positions by blocking social changes. Technological changes, which elites cannot halt, make technologies increasingly inconsistent with social structures, until the elites can no longer control their societies. For organizations, however, the issues are somewhat different: Top managers can block both social and technological changes within their organizations, but they have little influence over technological or social changes outside their organizations.

Marx said that when elites can no longer control a society, a revolution transforms the social structure. This observation also generalizes only partly to organizations. Reorientations do punctuate sequences of variations (Tushman and Romanelli, 1985), and reorientations also activate and broaden political activities. But, few reorientations transform organizational structures (Jönsson and Lundin, 1977; Normann, 1971; Rhenman, 1973). Indeed, in organizations, changing just a few top managers can produce sweeping behavioral and ideological changes (Starbuck, 1989).

Creative Solutions to Unsolvable Problems

Organizations' members regularly devote creativity to trying to solve unsolvable problems (Starbuck, 1993). Because societies promote inconsistent values, organizations' members try to pursue inconsistent goals. Also, some of organizations' overall goals encompass inconsistent subgoals. The organizational properties that support some goals conflict with the properties that support others, so organizations must take conflicting actions, and every "solution" creates a new problem.

Hierarchical dominance makes a pointed example. Western societies say hierarchical control, unity, and efficiency are good, but they also say democracy and equality are good. These societies' citizens expect organizations to use hierarchical structures to coordinate actions and to eliminate waste even though hierarchical control is undemocratic and unequal. Thus, subordinates should refuse to follow superiors' commands and organizations should oppose such insubordination. One result is that organizations' members try to create "solutions" that conceal hierarchical controls or that bring subordinates' goals into line with superiors' goals.

During the late 1940s, the solution was "democratic" management. Then after a time, many subordinates surmised that this was feigned democracy and many managers learned that democratic choices are not always profitable. During the early 1950s, the solution became for managers to show "consideration" while also controlling task activities. Then after a time, many subordinates surmised that their superiors' consideration was illusory. During the late 1950s, the solution became Management-By-Objectives, in which superiors and subordinates were to negotiate mutually agreed goals for the subordinates to pursue. Then after a time, many subordinates surmised that they had little say about their goals. During the 1960s, the solution became "participative management," in which workers' representatives were to participate in managerial boards. Then after a time, many workers surmised that managers were exerting strong influence within these boards and that the workers' representatives were gaining personal benefits from belonging to these boards. During the early 1980s, the solution became "organizational culture," by which organizations were to develop agreement about goals and methods. Then many workers resisted homogenization and after a time, many managers learned that general solidarity did not translate into operational goals and methods. During the late 1980s, the solution became "quality circles," which broadened during the 1990s into "total quality management." Then after a time, . . .

Profit maximization offers another example. Firms try simultaneously to bring in as much revenue as possible and to keep costs as low as possible. To maximize revenues, the marketing personnel ask firms to produce customized products that are just what the customers want and to make these products available just when the customers want them. To minimize costs, the production personnel seek to minimize inventories and machine downtime, so they would like to deliver the same product to every customer, or at least to produce different products in optimal quantities on efficient schedules. Thus, marketing and production personnel conflict about what to do and when to do it. Seeing unpleasant conflicts, managers try to "resolve" them. These efforts can only ease short-run symptoms, however, because the conflicts are intrinsic to the goal of maximizing profit.

Unsolvable problems evoke frustration, of course, but they also present opportunities for genuine creativity. For one thing, inconsistent goals reflect the fact that people create organizations to carry out complicated, difficult, but important tasks. These tasks justify creative effort. For another thing, it sometimes happens that someone does solve an unsolvable problem - as when Carothers' group discovered nylon. Such surprises are a major reason creativity fascinates and rewards us.


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