New methods to achieve leadership in an age of change, creativity, and innovation

Written task for the competition for scholarships for Master of Science program at RIT / ACMT

Florijan Veneruzzo 5/20/2013

Contents
Introduction ............................................................................................................................................ 2 Creativity and innovation ........................................................................................................................ 3 Complexity theory and creativity ............................................................................................................. 3 The edge of chaos ................................................................................................................................... 4 Disorganized creativity ............................................................................................................................ 4 Creativity, organization and leadership.................................................................................................... 5 Dichotomies of creativity ......................................................................................................................... 6 Conclusion............................................................................................................................................. 10

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Introduction
To be able to define the methods and styles of leadership of an organization in the context of creativity and innovation is essential to first delineate the concepts in terms of innovation and creativity. Following the above we must also define creativity, determine the kind of creativity, from which emerges and its associated dichotomies (dual nature). Clearly defined environment in which to achieve quality decisions determines the definition and description of leadership. Leadership is a multi-disciplinary skill, and as such it is influenced of a number of scientific fields and the result is always a synergy of skills and knowledge. It is not possible to determine the exact style of leadership and put it in the framework of absolute values, but only the way in which way, the main targets to be focused on, because the market, or better - the space where the organization is manifested and the organization itself is a living organism that is constantly evolving and changing. This opinion has a strongpoint in scientific research and conclusions are made from data taken from several kinds of scientific fields from sociology, strategy, complexity theory, contingency theory, management, etc. following a creative way of leading an organization.

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Creativity and innovation

The term "creativity" is often identified with the term "innovation" and vice versa, but between these two concepts are fundamental differences. By a broader understanding of creativity, creativity is more than just the foundation of innovation, while innovation can be defined as the implementation of creative ideas.

This is supported by Von Stamm, who claims that: "If the implementation is to convert an idea into practical work, the creativity flowing along with the idea in the first place. Creativity is an essential part of innovation, it is a starting point. "

Analogously, Gurteen defines creativity as: "Generating ideas, while innovation consists in turning these ideas into action through the selection, improvement and implementation."

In general, the relationship between creativity and innovation stems from the belief by which internal business processes are very similar to exterior. Since the industrial sector are very often characterized by changes in type of innovation that is the result of technological change, due to some kind of "technological innovation chain" must be transmitted in the same sequence within the organization and to imagine a sequence of events whose boost creativity and innovation effect. In other words, creativity will be converted into innovation, based on these ideas, creativity is input and innovation output (Vicari).

Similarly, creativity is the production of ideas, innovation is the result of the selection process, which aims to separate the good ideas from the bad. The moment you are selected ideas that will work from their use will erupt innovation. This way of thinking is not applicable to the organization.

Complexity theory and creativity

The research of creativity within the organization has its roots in the theory of complexity. Creativity is a complex phenomenon, and as such it is essential for all systems. Complexity Theory studies the complex adaptable systems. Complexity Theory is a multidisciplinary science that involves an element of discipline that can be very different from each other, for example, systems theory, cybernetics, chaos theory, cognitive science, computer science, ecology, economics, linguistics, philosophy, social science, management, etc. Complex Systems (CAS) are made up of different elements with non-linear relationship, even that, according to Holland, CAS are living complex systems that have the feature of adaptation.

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Thus, we can describe the CAS as the sum of active elements and links organized in a way to let the adjustment. CAS is a system that goes beyond the time limit, adapt and organizes itself without supervision or management. Adaptive capacity is achieved through information processing and construction of a models (Vicari). The most important goal for the elements of a system's adjustment, that they are constantly finding new ways, thus creating an extremely dynamic systems where small changes can result in unpredictable results or the "butterfly effect." They are located between the simplicity (infinitely near stillness of the mechanism) and unpredictability (infinitely close to losing control).

The edge of chaos

The beginning of complexity theory, which stresses the importance of creativity for every adaptable system is defined as "the edge of chaos." Evolution leads to CAS in the area between order and disorder called among scientists engaged in the theory of complexity as the "edge of chaos". This area is only where life can flourish. Excessive order causes death due to fossilization, too much clutter causes death by destruction. At the edge of chaos, the boundaries change constantly alternating between stagnation and anarchy - destruction without end. Thus, the edge of chaos is an area where there is no order or disorder. This is an area of creativity, but also destruction. Following this principle we have to accept the permanence of opposite concepts, such as, for example, order and disorder, creativity and destruction, life and death. A necessary shift from a culture of thinking. Things do not exclude themselves, do not cancel with each other, but are living together, added and integrated, to create a dynamic equilibrium, and the mess has to accepted as something necessary for creativity.

Disorganized creativity
Enterprises can achieve the edge of chaos through unorganized creativity. Similarly, the principle of innovation proposed by Schumpeter, who explains the principle of innovation that creates change "as a permanent storm destroying creativity." CAS, and also organizations which are active elements are autonomous to the extent that they can decide for themselves on a local level, the results may contain one sequence of a deviant amplificative system or through a positive feedback loop. Many creative activities that occur within the enterprise are created exactly this way. Therefore, it is necessary to abandon the idea that success comes from order and stability: the life and innovations are generated inside the edge of chaos - between formal and informal structures. Creative disorganization can be intensified by a sequence of three different directions: - Organizational structure, - Leadership styles, - Management.

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In the case of organizational structures, it is necessary to create one flat structure, a lateral coordination and decentralization of decisions. In the case of leadership styles, it is necessary to develop a entrepreneurial spirit, not to be afraid of mistakes and not to be afraid of conflicts, but to use them. In the case of management, it is important to use technology to develop individual and group creativity.

Creativity, organization and leadership

In any system characterized by a high degree of creativity, there are various innovative processes in which innovation can develop - innovation is the result, and the creativity is the state and it can be said that a high level of creativity, inevitably generates innovation. By analyzing the impact of creativity in management, precisely what managers must possess (skills) depending on the complexity of the environment and competition in which there are companies with respectable competition, the table below shows the skill and style of leadership must rule in management organizations. Table 1. The complexity of the environment, market competition and management
environment low complexity high complexity

Low
market

Decisions based on intuition Lack of complex managerial models and methods intuitive leadership

Skill customization context

Adaptive leadership

competition

Deep analysis and understanding of the problem

Skill constructing and creating new models

High

The use of managerial methods and models

Creative leadership

Planning leadership

Source: De Toni, Comello, 2004.

Consequently, the survival of the organization depends on its ability to stimulate innovation and creativity, and running an organization analogous to today conditions is keeping control of creativity and innovation. Creativity in the company becomes an instrument that makes it possible to confront the complexity of the economic situation. 5|P a ge

Creativity implies that both systems are capable to self develop without external influence, so we can say that a system is creative in case when he is able to develop in a unknown unpredictable and undefined way. In other words, it is not possible to predict the behavior of a system by observing only its input. Once the creative entities or individuals are identified, organizations and systems can generally define the creativity in the organization in relation to personal creativity. Creativity of the organization is not related to individual creativity and is not the sum of individual creativity rather than is the result of organizational condition. Following this tought to the conclusion - the relation between personal and organizational creativity is not closely related, and in accordance with this conclusion, organizations can classify the sequence of possible combinations between individual creativity and creativity in organizations. The first element of creativity arises from the difference between the managerial skills (hard skils / soft skils) Soft skils are creativity, leadership, communication and learning abilities. Hard skils have ability in production, finance, marketing, etc. Creativity is therefore a nonspecific ability that adds other traditional managerial abilities. Everyone possesses creativity in varying quantities and it can be improved. Creativity is the ability to find suitable solutions to a problem that can be useful and correct. And yet, the creative solution is the one that was found outside the already well-known framework and used from someone else and implies the use of lateral and divergent thinking. By definition lateral thinking is divergent thinking, and can be described as the ability to overcome problems that are not clearly defined and structured as they are traditional." (Bertone)

Dichotomies of creativity
Given the previously stated that the survival of a company depends on the ability to innovate and stimulate creativity and analogously management organization in the present circumstances, for managing creativity and innovation, it is necessary to bear in mind the dichotomies of creativity. Creativity is an evolutionary process characterized by the ability to change in a way that is not determined a priori. The concept of evolution was discussed by R. N. Foster and S. Kaplan from McKinsey consultants company: "Companies have to be converted in a way that they enhance the ability of evolution, rather than ability to act." They believe that this is possible only if "bypassing" certain dichotomies such as for example: - Discontinuity and continuity, - The contrast between the creation and performance, 6|P a ge

- But also between convergence and divergence and ultimately, - Control and freedom of action. Good managing dichotomies and recognizing areas where and to what extent any creativity can be used to reach the conclusion that this mean and good leadership. Since the edge of chaos ranging from complete order, who causes the death by fossilization, a complete disroder which leads to destruction without end, the interval, following the reasoning can be divided into nine basic situations in which an organization can be located. These "situations" are respectively: idle; simple, competition, negotiating, intersecting, serious, obstructed, surrounded and desperate. In any given situation exist a certain kind of dichotomy of creativity, a certain kind of leadership have to be taken and ultimately some kind of strategy.

Figure 1. Possible market situations between the "edge of chaos"

Source: author, 2013

The defined area of creativity is separated using dichotomies of creativity that are organized concentrically, but here are shown linear, which ranges from: discontinuity - continuity, creation execution, divergence - convergence and freedom of action - control..

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Figure 2. Dichotomy of creativity on the "edge of chaos

Source: author, 2013 Figure 3. Markets and relations between the "edge of chaos

Source: author, 2013

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Table 2. Interrelationship of leadership, goals, dichotomy of creativity and potential market situation
POSSIBLE MARKET SITUATIONS
IDLE SIMPLE COMPETITIVE NEGOTIABLE INTERSECTING SERIOUS OBSTRUCTED SURROUNDED DESPERATE

TYPE OD LEADERSHIP ACCORDING TO MARKET SITUATIONS

UNITY LEADING WITH SUBSIDIARY ELEMENTS RUSHING THE BACKGROUND RELYING ON DEFENCE RELATIONSHIPS ENHANCEMENT KEEPING BASIC FUNCTIONS KEEPING TO A TRACED DIRECTION BLOCKING ALL OUTPUTS PROCLIMING THAT THE END IS POSSIBLE

DICHOTOMIES OF CREATIVITY
DISCONTINUITY CREATION DIVERGENCY FREEDOM OF ACTION CONTROL CONVERGENCY EXECUTION CONTINUITY

ACTIONS AND THINKING RELATED TO DICHOTOMIES AND LEADERSHIP

activities aimed to disorder radical innovation entrepreneurial orientation development of new models problem solving and setting flexibility priority of action over analysis ex post logic breaking the problem barriers escape from the established models synthetic model influencing people to be responsible opportunities for errors targeting of risk the importance of diversity compliance with formal procedures reducing errors risk reduction importance of uniformity priority analysis over action managerial routing ex ante logic well-defined problems analytical model use of tested models problem solving effectiveness activities aimed to order innovations aimed to increase

ORGANIZATIONAL TARGETS
projects supporting the development exploring new paths urgency from the bottom organizational structure utilization of achieved knowledge routines that improve effectiveness

imagination

balance

rationalization

Source: author, 2013

Explanation of this concept shown above requires further study and model testing, but it is also evident (that I had mentioned in the introduction), a complex condition related to creativity and innovation require an adaptable style of leadership with particular attention to the nature of creativity and applicability of creativity which implies the use of creative methods that are often nonstandard and solving problems that are not well defined. Bearing in mind the above, it can be a guideline that can be used for orientation to lead in the age of change.

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Conclusion
In almost every style of managing, there was no indication to lead in faith of good1 man and what defines a good man. Maybe it's because of human nature that for the big rush of technical perfectionism the theory has become so much concise and accurate to the present time and the way of doing business must specify absolutely everything, but even if is not all stated (in this case, I mean attitude of flexibility in promoting the goals and behaviors od employee within an organization) in the world today there is a lack of understanding or misinterpretation and it leads to follow ideas that are not quite realistic.

I would even dare to say that the lack of interest in anything other than maximizing profits and extreme use of resources creates a favorable ground for the hierarchy (formal and informal) within a single company or better to say - some kind of management were experienced as "the only truth" and measure for values within a system. Organizations ultimately grow and develop as an informal microenterprises that interact.

The basic point of my thinking is balance. Balance in all segments, which does not include an extremely flexible enterprise that goes like a leaf in the wind of market trends, but the balance in the utilization of resources, use of human resources, directing the strategy given the current market situation, that in long-term - harmonize relationships within and outside the company, to make such a concerted company grow, creating new good and accumulating capital.

I think that organizations that are not oriented toward adaptable leadership and are not prone to redesigning the environment in which they function without forming strategies as seen from this perspective, certainly theyll always trot behind trends and therefore - most of them will follow to be not adapte, unprofitable, and often on the verge of extinction. GREED IS NOT GOOD.

Good in moral aspect is that which is humane, brings goodness, has value for people and sapient beings and leads to proper development and progress. Sometimes a synonym of this is "beautiful deeds". The ability to make good is a characteristic for moral excellence. Source: WIKIPEDIA

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