Read an Excerpt
Chapter One: Chaos and The Garage
One must nurture chaos inside oneself to give birth to a dancing star.
-- Friedrich Nietzsche, Thus Spoke Zarathustra
Chaos is associated with the unorganized state of primordial matter before the creation of distinct and orderly forms. In The Garage, everyone is still connected with this primordial state of creation and inspiration. The Garage captures chaos. The Garage nurtures chaos that gives birth to a dancing star.
The Garage is about the constant flux of new ideas, new technologies that result in new products and services. Work in The Garage is fun, inspiring, immediate. It is something that everyone can be proud of and feel involved in. The Garage is a place where creativity and innovation are the highest priority; where bureaucracy is banished; and where ideas are implemented fast.
This garagelike mentality has frightened the ranks of corporate executives, with their orderly empty desks at the corporate tower. For them, business is structure. They look at business as a rational venture. They indulge in formulating mission statements and strategies. They admire competencies and master plans. They are turned on by budgets and numbers. They want to rein in chaos through structures and procedures. Traditional business focuses on following procedures, not on generating new ideas; it focuses on the distant future, not on speed; it focuses on protection, not on sharing information. More generally, traditional business is tied to the status quo and not creating something new. As a result, things get done -- rationally, mechanically, hierarchically -- at a snail's pace.
At the same time, within the same ranks, there is a growing fascination with the innovative spirit of The Garage. Oh, if we could infuse passion into the rational nature of business-as-usual. If we could only marry chaos with structure. Big with small. Planning and control with entrepreneurship. If we could only be truly creative.
Tochi Yamada, head of R&D at Glaxo SmithKline, illustrates this paradox for the pharmaceutical industry. The Financial Times quotes him as saying, "We have to be big and small at the same time. I had to design something that would take advantage of scale. But we know for a fact that big can sometimes mean bad. So we had to design something that could also maintain agility and entrepreneurial spirit." The same paradox also applies to Cisco. As the Financial Times observed, "Can a company that has doubled its payroll...maintain the entrepreneurial culture...?
Or, like IBM in the late 1970s,...is Cisco vulnerable to new and more nimble competitors?"
To address this paradox, corporations need creativity, not just as an occasional exercise but as a force at the heart of the company. Corporations need to capture the spirit and focus of The Garage. They need to unleash hidden creativity. In fact, not only companies but entire countries and their governments need to be concerned about creativity. The Economic Creativity Index reported by the World Economic Forum for the first time in 2000 is closely related to economic growth. In 2000, the United States came out on top of the list, due to its pace-setting innovation, but it was closely followed by Finland and Singapore.
But creativity for what? Achieved by whom? Done how? What is creativity, anyway?
The Encyclopaedia Britannica, www.britannica.com, defines creativity as "the ability to make or otherwise bring into existence something new, whether a new solution to a problem, a new method or device, or a new artistic object or form." In their book Corporate Creativity, Alan G. Robinson and Sam Stern define corporate creativity as follows: "A company is creative when its employees do something new and potentially useful without being directly shown or taught."
So creativity is about "something new" and "useful." And that new thing can be just about anything in just about any sphere of human activity. In business terms, "creativity" can generate anything ranging from a small idea that improves a process or procedure to a radical new innovation. So it appears that creativity does not necessarily have to be a groundbreaking invention or a breakthrough in the way business is done. It does take innovation, however -- that is, creativity made useful. And it needs to be original.
Webster's dictionary defines "original" as "of or relating to a rise or beginning: Initial, primary, pristine." Creating something original means reconnecting with the chaos discussed earlier. We like the term original because it suggests tracing a concept back to its origin and then asking "what if?" about the assumptions that have grown up around the concept. The beauty of the term original, of course, is that it also describes products and ideas that are completely new. Webster's second definition of the word supports this meaning too: "taking independent rise: having spontaneous origin: not secondary, derivative, or imitative." Creativity can also lead to new ideas that completely redefine how an organization can operate, can do business, can sell itself.
THREE CASES: BLUE, W, NTT DOCOMO'S I-MODE
Let's take a look at several examples of innovative products and initiatives. Each one has unleashed the hidden creativity of a fairly large and traditional company.
Blue is a new credit card launched by American Express in September 1999. Ho-hum, you say, another AmEx card. Zzz.
But no! Blue is new; Blue is different. It starts with the name: "Blue." Not "the Blue Card," just "Blue." From the stodgy inventor of the Gold, Platinum, and Black cards comes an evocatively named credit card designed especially for the lifestyles of the young and Internet-savvy. The brand is positioned as "modern and hip -- yet accessible" and "possessing confidence and a smart irreverence." In a market saturated with identical products, Blue stands out; within only six months of its launch, the new card was boasting more than a million cardholders, half of which were new American Express users.
So what is Blue? Blue offers all the features of the typical high-end credit card: no annual fee, a low annual percentage rate, a rewards program, and business accounts. But according to AmEx, Blue also has "stunning looks and brains too."
The brains, and creativity, come from the Smart Chip on every card: Blue is the first credit card to offer this feature. Right now this Smart Chip is giving Blue members added convenience and security for online transactions. By using an inexpensive SmartCard Reader, Blue shoppers can pay for online purchases with a simple swipe of the card. Special software enables Blue members to insert their cards into the Reader, go online, and pay with a single "Complete Purchase" button at the checkout of their favorite e-commerce site.
Okay, you say, the Internet purchase feature is neat, but is it really enough to justify the hoopla? Honestly, not yet. But Blue is still an exciting and important new offering, for two reasons: first, it positions itself as much more than a credit card -- it sees itself as an embodiment of a new lifestyle and new values. Second, Blue is designed for the future. Its future potential is far more exciting than its present capacity: the Smart Chip can be updated to include as many other functions as can be imagined. According to AmEx, "no matter how fast the world changes, Blue will help you keep up." In fact, in June 2000, AmEx launched a contest among Java developers -- with a first prize of $50,000 -- to find the most innovative new applications for Blue's Smart Chip. Who knows what they will have come up with by the time you are reading this book?
A division of Starwood Hotels, which also operates the Sheraton, the Westin, and the Luxury Collection, W is redefining the hotel experience for Generations X and Y. W's plans include more than twenty hotels by the end of 2001 in key cities from New York and Los Angeles to Honolulu and Sydney.
W represents a new and creative approach to hotels for the business traveler. Before W Hotels, people who traveled on business had severely limited choices in accommodations. There was the usual efficient-but-dull business hotel chain, like the Marriott, where every room looks the same and smells the same (have you ever noticed?). There was also the very expensive, typically traditional five-star hotel with its Louis XIV decor and arrogant staff. Despite acquisitions and refurbishments galore, the hospitality industry had not seen an original new brand launch in decades.
But now W has set out to define its own category in the hotel industry: "The much ballyhooed W brand incorporates the urban boutique concept popularized by design maven Ian Schrager, but also maintains an MTV-hip, New Age sophistication about it with an eye on attracting the laptop-toting, high-tech business traveler." How's that for a customer target definition?
Indeed, at the core of W's offering is an understanding and responsiveness to the customer that is surprising. The Internet generation want more than just a business hotel when they travel. They also want the experiences and amenities that have come to define their lifestyle. They don't want just a pool and a few weight machines -- they want the first-rate health club facilities they have at home. They don't want just fast check-in -- they want fast Internet connections. They don't want just promises of quality service -- they want a different attitude in a hotel staff: down-to-earth, yet hip, and genuinely concerned with meeting their needs. And they want a cool bar; not surprisingly, W's food and beverage profit margins are 40-50 percent, which is very rare in the industry. At W, the employees wear black, in tune with the aesthetic of their customers, and are trained to answer the phone not by saying, "Room Service," or "Housekeeping," but by saying, "Whatever, whenever." Just as W's clientele is reshaping the norms of business, so W is reshaping our expectations of hotels.
NTT DoCoMo's i-mode
Let's switch gears now and take a look at a service that has become the envy of telecommunications providers worldwide. The i-mode service offered by Japan's largest mobile telecommunications provider, NTT DoCoMo (formerly NTT Mobile Communications Network), was introduced on February 22, 1999. The service experienced rapid growth and surpassed 10 million users on August 6, 2000 and 20 million users in February 2001. Within two years, 15 percent of the Japanese population was using i-mode. More than tens of thousands of official Web sites and independent sites were available. Soon hundreds of companies provided information services through i-mode -- sixty-seven firms had initially signed up.
DoCoMo's i-mode is a third generation mobile phone technology that provides continuous connection with the Internet via mobile phones. Personal users can access a wide range of interactive online services, including mobile banking for dozens of major banks, news and stock updates, telephone directory services, ticket reservations, online book sales, restaurants and karaoke information and booking, network games, and much more. Future business uses will include data exchange between sales managers and headquarters, streamlining the business operations of an enterprise. The service can also be used to exchange e-mails with computers, personal digital assistants, and cellular phones. The e-mail address is simply the cellular number followed by the DoCoMo URL, and e-mail is instantly displayed because i-mode is always on.
The i-mode system is also extremely attractive for Internet content providers (small or large) who simply add their fees to the subscribers' cellular phone bills collected by NTT DoCoMo. In 2000 DoCoMo collected 9 percent as a commission charge. For example, the Cybird Company, a small Japanese firm, has become highly profitable by offering more than fifty services to mobile users while discontinuing its unprofitable Internet site for personal computer users. One of the services charges 85,000 subscribers 300 yen a month for reporting the wave conditions on the Japanese coasts. Bandai Company, a toymaker and inventor of the Tamagotchi Virtual Pet, has signed up 1.3 million users to embellish their cell phones with screensaver images of popular musicians and cartoon characters.
NTT DoCoMo executives point out that a major reason for i-mode's success is its simplicity. Another reason is that it is a lifestyle product that is extremely popular among Japanese teenagers. To appeal to the target segment, NTT DoCoMo mobile phones look like toys and allow the display of several cartoon characters (Mitemite Kun, Monta, Pipi, Momo Chan, and others) on the i-mode terminal standby screen.
With Sony, NTT DoCoMO reached an agreement to combine i-mode and Playstation technologies. With Disney, NTT DoCoMo reached an agreement to provide a daily Disney character screen saver. With Dentsu, Japan's largest advertising agency, NTT DoCoMo established an advertising agency for i-mode-based advertising.
As Elliott Hamilton, senior vice president at the Strategis Group, an e-data resources firm, noted: "Other wireless carriers, handset vendors, and software providers can look to i-mode as a successful benchmark to be emulated in their own country."
AN OVERVIEW OF THE FRAMEWORK OF THE BOOK
The Garage is the prototype of the creative organization. It is the spirit of The Garage that must resonate within the entire organization and shake it into action. As we have shown in Chapter 1, this spirit includes capturing, nurturing, and managing chaos to harness corporate creativity.
The figure shows the framework of corporate creativity used in this book. To build its own garage, the company needs three key elements and activities that make creativity work within it: the bizz, the buzz, and the stuff. These elements -- and how they interact -- will be discussed in detail in Chapter 2.
To create the right relation between the bizz, the buzz and the stuff, The Garage needs a broad-based mission about corporate creativity (or what we call "The Blueprint of The Garage") as well as specific implementation tools for infusing creativity into every project and initiative (or what we call "The Toolbox of The Garage"). In Chapter 3, we present both and show how the blueprint and the tools are used as essential strategy, recruiting, resource, and communication devices.
Moreover, The Garage needs organizational taskforces (or what we call "The Mastercrafts of The Garage") that work cross-functionally in bringing together the bizz, the buzz, and the stuff. Mastercrafts cut across organizational silos and departments (such as finance, accounting, legal, marketing) to plan and execute creative projects of the organization in line with its blueprints. Mastercrafting is not a set of rigid rules or procedures. Rather, it is an iterative creativity-optimizing process and a set of guidelines for channeling creativity in practical and effective directions.
We discuss the following three Mastercrafts. The Technology Mastercraft employs its skills and expertise to leverage technology cross-functionally for the purpose of harnessing corporate creativity (Chapter 4). The Branding Mastercraft employs branding skills and expertise to make sure that the organization manages its branding initiatives and external and internal communications creatively (Chapter 5). The Mastercraft of Customer Experience Management is the science and art of managing the interface with customers in a creative way (Chapter 6).
Mastercrafts are indispensable creative forces of an organization. Without managing them appropriately, the organization does not harness all of its creative capabilities. Clearly there are other "crafts" in a business organization including finance, accounting, legal, marketing, and so on. They are important for the day-to-day functioning of an organization. And they do involve creativity -- here and there. However, they are not mastercrafts because they do not manage the intersection between the bizz, the buzz, and the stuff and therefore do not leverage creativity and innovation across the entire organization. Unfortunately, most organizations have finance, accounting, legal, and marketing departments but lack these critical Mastercraft task forces.
Finally, in Chapter 7, we examine some of the key concepts of traditional management -- mission, strategy, competence, implementation, and empowerment -- and show how they need to be refocused to be valuable for corporate creativity.
HOW THIS BOOK WORKS
At the beginning of each chapter you will find a short story -- or what we're calling a "business parable." A parable is a short fictitious story that illustrates a moral attitude or a religious principle. While our parables don't touch on moral or religious issues, they are meant to illustrate some important principles: in our case, principles about business.
Our parables are meant to be read partly for pleasure and partly for learning. Their purpose in the book is manifold -- to illustrate some of the concepts to be discussed later in each chapter, to provoke thought and questioning, and, we hope, to engage the reader through enjoyment. All the stories are set in a business environment, and they all deal more or less explicitly with the business issues discussed further in each chapter. Every story is written in a different genre -- you will find a vampire story, a love story, a murder story, a fairy tale, and a couple of interior monologues that may sound familiar to you. You will find characters that you may recognize: an idealistic consultant, a manager at a corporate retreat, a world-weary business traveler, a corporate vampire who exists only to suck the life out of his employees. Some of the settings will be familiar, too: a hot young start-up that's just been acquired by a corporate conglomerate; a company rebranding itself after a series of mergers; a firm struggling to keep in touch with its customer base; and the interior of a 747 aircraft.
With these stories, we hope to demonstrate a deeper point about creativity and human understanding -- that is, that there is more than one way to convey ideas and more than one way to gain access to the spirit and the imagination. Business has traditionally limited itself to the world of the intellectual and the analytical, yet there is no reason that business should restrict itself to a single mode of communication and insight.
With this in mind, we have also commissioned photographer Gail Anderson to create photographic images for each of the parables. The visual is an extremely important mode for creativity and insight, and one that business has not used to its fullest potential. Human memory is largely a visual phenomenon: many of our memories come back to us as "snapshots" or visual markers of scenes we have experienced. For this reason, the photographs in the book focus on critical scenes and images that serve as icons for the parables' content.
The final component of the book is its Web site, www.BuildYourOwnGarage.com. On the site you will find updated information about the content of the book, added value in the form of various new content (including creativity tools and new cases of best practices), and more about business parables.
In sum, you are getting more than just a book: you are getting a multimedia experience of creativity. Enjoy.
Copyright © 2001 by Bernd H. Schmitt and Laura Brown