Contemporary and General Managerial Issues
Managing Creativity and Innovation: Issues and Applications


In the new economy, characterized by the information revolution, that ultimately will lead the world into knowledge based economy, business successes are increasingly dependent on the abilities of people to innovate and create new value proposition in the marketplace. Indeed, many researchers argued that innovation and creativity can lead to competitive advantage of a firm in today business environment (Zornada, 2006; Higgins, 1995; Hernard & McFadyen, 2008). It is argued that intellectual capital is becoming more crucial for the success of a firm (Read, 1996). Besides, it is also argued that creative ideas can be used to shape the industries or markets a firm is operating in (Reckhenrich, Kupp & Anderson, 2009). Judging from the advantages and importance of creativity and innovation in workplace, this paper will present the literature review as well as the application of these concepts to real workplace. Yuan Shang Restaurant, one of the firms where the author had worked before, will be used for discussions and theories applications purposes.

Creativity and Innovation Defined

Creative Management is not a new term today anymore. The literature on creativity and innovation is found to have increased a lot in the recent years. Generally, creativity management is often referred to the methods used to enhance the production and applications of new ideas, for new value offering or problems solving purposes in an organization (Berman & Kim, 2010). From that, creativity is often perceived as the factors in which if properly applied, can lead to innovations within a firm, which ultimately bring new and beneficial business models, products or services offerings, marketing management or even new business philosophies for a firm (Harper & Becker, 2004). In fact, as argued by Heunks (1998), innovation and creativity is indeed more important to the success of a small firm. In short, it is not hard to find literature arguing that creativity and innovation has been becoming more important in the new business environment today.

Inhibitors for Creativity and Innovation

Theories and Literature Review

Judging from the importance of creative and innovation efforts or work in workplace today, it is surprising and hardly understood why many businesses today have not been treating such issue seriously. There are too many inhibitors to creative and innovative efforts in organizational context. In this section, the many reasons on why creativity and innovation is not being embraced in an organization will be discussed.

Lack of understanding on the importance of creativity and innovation. It is found that in many organizations, the importance of creativity and innovation, as well as how creative and innovative works can be used to enhance company profitability and growth is ignored. People simply do not realize that the business environment is changing, and is still working from a traditional paradigm. Instead of creating new ideas to revolutionarize the industry a firm is operating in, management is more likely to engage in cut costs behaviors, or in fire fighting behaviors in dealing with the complexities of competitive industry landscape.

Lack of knowledge – do not have the tools or methods to direct creative work in workplace. Even in the event that the senior management is aware of the importance of creativity and innovations to a company, they do not really know how to direct and encourage creative works, and not to mention to use the creative ideas for delivering profitable innovations to the marketplace. The tools and the management philosophies of encouraging creativity are hardly investigated by the management. Perhaps this is due to the relatively new ideas in the past decade that creativity and innovation are essential for competitive advantage of a firm.

Inappropriate leadership style. Leadership style will also stifle generation of creative ideas in workplace. For example, autocratic leadership style will likely to prohibit employees to think deeply and widely to enhance company performance. Instead, everything is done in accordance with the leaders’ opinions and ideas. As such, ideas from different people, different perspectives are not being accepted or considered.

Irrelevant or lack of support systems. It is widely acknowledged that creativity and innovation must be nurtured, cultivated and directed. Without proper support system, it is almost impossible for an organization to create creative and innovative works in workplace. For example, common barriers to creative work in organization include, reward system that punish people when they did wrong, a company policies that discourage risk taking, rigid organizational structure, no training and development to enhance the skills and competencies of staffs and etc.

Easy-going environment. Easy going environment may be good for a firm in the short run, but it will stifle creativity in the firm, unless conscious and concentrated efforts have been performed to direct creative work in an organization. When the industry is not competitive, probably to due monopoly power enjoyed by a firm or caused by governmental regulation and protection on certain firms or industries, creativity is often neglected.

Applications of Theories to Real Work Experience

By working in Yuan Shang Restaurant, I found many inhibitors that had presented the flow of good ideas, and subsequently the application of creativity and innovation in the organization to bring the restaurant to greater growth and profitability.

Management/ owner are not ambitious in expanding the business. In Yuan Shang Restaurant, it is found that management just treats the business as a cash cow, without really thinking hard to expand the business or to improve the business performance from time to time.

Lack of awareness on the importance of creativity and innovations to a firm. Management does not really think creativity is important. The management prefers to stay within their comfort zone, and to adopt traditional and ‘prudent & proven’ ways to do certain things in a business.

Management engages in fire-fighting mode instead of thinking deeply and strategically to improve the services provided by the firm. In fact, management has been busy dealing with the complexities of managing the business operations from time to time and thus lack the free time to think deeply and strategically on what is the most critical issues to be solved and handled immediately.

Management only thinks from a single/ individual perception. The management exhibits an autocratic leadership style, whereby he will arrange and control how the works are to be done in workplace. Thus, all the practices and policies are implemented in accordance to the management ideas and individual perceptions. Many situations in businesses are not being considered from the team work or employees perceptions.

People in the restaurant is lacking of understandings on the importance of creativity and innovation to the business. Actually, not all barriers to creativity and innovation should be blamed towards management. Other people working in the restaurant have their own agenda. People just want to get a living from working in the restaurant, and do not want to make troubles by suggesting new ideas, that may cause them to work more and harder in the future. People are also risk adverse, and not willing to take the risk to try out new ideas passionately.

Employees’ ideas are quickly turned down. In even that employees have good suggestions on how to change the work practices or company policies for more efficient operation, their ideas are quickly turned down. Management only trusts their own ideas, and believes that lower level employees do not know anything about managing business.

Opportunities for Creativity and Innovation

Theories and Literature Review

As discussed above, there are many benefits to be reaped from establishing proper management system and style that encourage creativity and innovation among workforce. However, these are not understood and being practiced by management today. In order to enhance, encourage and promote creativity efforts in workplace, several factors must present. As shown in Table 1, all the individual, group, organizational and environmental factors play a part in affecting creativity and innovation in workplace.


Table 1: Factors leading to creative and innovative work and ideas in organization.



Although creativity and innovation is dependent on several factors, they can be directed and cultivated in workplace. Thus, with conscious and concentrated efforts and measures to lead and direct creative and innovative work, a firm can become more creative and competitive. In this part, it is shown how creativity and innovation can be directed and managed in individual and organizational levels.

As shown in Table 2, there are various methods to encouraging creativity and innovation among individuals. Generally, a review of the exiting literature on methods to direct and improve individual creativity often started with awareness that creative and innovative efforts can be directed. It can be facilitated with tools. Certain habits practiced by certain people tend to lead to more creative ideas. Then, creativity can be enhance by: seeing things from different perspective, learn new skills and knowledge often, mix with different people, expose to new situations, learn how to use human mind effectively, involve deeply in problem solving issues, always having a curious mindset, as well as using tools to facilitate generation of creative ideas.


Table 2: Methods to encourage creativity and innovation among individuals.



On the other hand, from the organizational perspectives, creativity and innovation can be directed and nurtured via several methods as shown in Table 3. As shown below, in order to embrace creativity and innovation in organization, the company values, policies and strategic orientation must specifically address the issues on Creativity Management and using Innovation for Competitive Advantages. Everyone share the responsibilities to become creative individuals. Of course, leadership style that encourages creativity is highly important. Team work should be encouraged (in appropriate manners). The various dimensions of human resources policies and practices must be adjusted to encourage generation of creative ideas from workforce. On the more subtle level, organizational culture that embraces creativity and innovation can be cultivated. Risk taking behaviors (rational and calculated) should be encouraged. Not only is that, creative ideas should not be sponsored by people inside the firm. Researchers also found that customers’ feedback can contribute a lot to new creative ideas.


Table 3: Methods to encourage creativity and innovation in organization.



Applications of Theories to Real Work Experience

Using all the methods above, there are many opportunities where the performance of Yuan Shang Restaurant can be enhanced through encouragement of more creative ideas and innovations in the restaurant. These opportunities are explained as follow.

Apply creative leadership in order to innovate the business model and value offerings to customers. When a leader learn to be more creative (i.e., adopting those methods that able to increase personal creativity as shown in Table 2 above), they can bring many effective and profitable innovation to the firm. This is particularly true for management in Yuan Shang Restaurant. If they can see things from different perspectives, reject the traditional practices as the best practices, listen more to employees, and being more ambitious to think deeply how to innovate the business model (i.e., organizational structure, system, restaurant operations and value delivery process) and value offerings (i.e., new products or services). In fact, this is not hard, by studying how other successful restaurant has been doing; management can already copy and improve their ideas to be applied in the restaurant, which will immediately bring more profits to the restaurant.

Educating employees to become more creative and empowered them to solve problems. In true management, employees should be empowered, and daily operation tasks should be delegated. By teaching the employees how to think creatively, how to apply tools to solve problems, and train them to handle issues creatively, management can free their time to focus on the truly important issues they should concentrate on. This will prevent them from constantly engage in fire-fighting mode, and lose sights on those strategically important issues. This will allow them more time to think. Besides, as employees had become more creative, they can sponsor useful ideas – that will probably highly useful in increasing company revenues, lowering the cost structure, strengthen company competitive advantages, and produce company reputation in marketplace. All these are possible if the employees in Yuan Shang Restaurant are taught how to think creatively, probably through informally planned training program every weekends, to teach them how they too can become a creative knowledge worker.

Use of team work and relevant team structure for problem solving. As there are evidences that diversity and proper arrangement of team work can enhance creativity, the employees can organize meetings to share ideas, to provoke each others to generate ideas, and to discuss how to solve problems in workplace, or how to enhance company performance. Best ideas should be adopted and rewarded. When that is done, many of the issues that trouble the restaurant from time to time can be solved creatively.

Delivering the most impactful innovation that will drive the growth and expansion of the business in the long term. For Yuan Shang Restaurant, one of the key issues is the paradox of low cost or differentiation. Yuan Shang Restaurant is a differentiated restaurant, where the dishes provided are nicely prepared and delicious. However, the price is higher. Besides, during the peak time, there are many customers dining in the restaurant for a long time (ordering, waiting, sitting, waiting, eating, waiting for bill and chatting), leaving many others waiting outside the restaurant. This causes lost of revenue. Thus, the biggest innovation that can change all these immediately is to adopt a 1 hour per meal system for that restaurant. For this, the operation procedures must be rearranged. Each customer is only allowed a maximum of 45 minutes to dine in the restaurant (considering that only 20 minutes are required for them to finish their food, and often, less than 15 minutes). To do so, before the customers entered the premises of the restaurant, their order must be taken, then immediately leaded to the empty seat. They must be served with the beverages immediately as well (as their order had already prepared when they are waiting outside the restaurant).  Within 10 minutes, their food will be served (by having efficient supply chain and more cook in the kitchen). When the food is served, they will be asked for the last call – if they need anything extra. If they want to order more, food will be served again in 10 minutes. Then, approximately 35 minutes after they enter restaurant, even before they asked for the bill, the bill will be handed to the customers. Processing of the bill will only need around 5 minutes. Approximately 40 minutes after they enter the restaurant, those customers waiting outside will be leaded to stand besides the table to wait to be served. This will often create pressure for the existing customer to leave. Overall, as long as the customers are served with nice food, and if the pricing can be reduced, while the staffs serving these customers are friendly, customers will not be offended. This enables the restaurant to deliver special foods at low price, through high turnaround time, particularly at the peak time. If operated correctly, this will surely enhance the restaurant brand name as the provider of delicious food at the speed of fast food restaurant.


Overall, this paper had shows that creativity and innovation is critical to the success of a firm. However, there are many inhibitors toward generation of creative ideas and application of innovations in workplace. There are many methods to solve these issues. There are many opportunities on how creativity and innovation can be embraced and encouraged. With proper methods, creativity can be directed and nurtured. All these methods will contribute many new opportunities for a firm, as shown in the case study illustrated above.

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