Afraid to Innovate

The fear associated with creative development can often be devastating to an enterprise.  As a case in point “G.M.’s biggest failing, reflected in a clear pattern over recent decades, has been its inability to strike a balance between those inside the company who pushed for innovation ahead of the curve, and the finance executives who worried more about returns on investment” (New York Times, December 5, 2008). Clearly the fear of loss of near term profit was the primary obstacle to developing a creative idea into an innovative product.  As further evidence of GM’s addiction to short-term gain, once GM got into the SUV market—which by the way lagged the competition by five years—it was “reluctant to shift from big profitable vehicles to building small, less profitable cars, even when gas prices spiked” (New York Times, December 5, 2008).  GM had the ability—their engineers were involved in hybrid technology in the 1970’s—but it lacked the will to invest in the development of innovative products.The fear of loss of profit and growth in the near term trumped the need for sustaining viability and progress.   This mindset (among those in authority) likely permeated the culture and was likely evident in many practices throughout the corporation.

Point eight of Deming’s 14-points specifically speaks to the importance of ridding the organization of fear. For many, this point of Deming’s runs smack against common belief and practice.  Many practices of management (e.g. rank-and-yank system of performance management, incentive-based compensation systems, annual performance/merit review, management by the numbers) rely on fear as a management tool.  What better way to get someone’s attention!  For movers-and-shakers, fear is the tool to count on to shake up people and get them to move. There’s nothing like the prospect of being hung in the morning that gets peoples’ attention!

Some may argue that this depiction is all wrong; that in fact it is reward, not fear that is used to motivate others.  As Alfie Kohn has repeatedly shown the promise of reward carries along with it the prospect of no reward (i.e. punishment)—two sides of the same coin. If you do this then you will get that unavoidably implies if you don’t do this you won’t get that.

So if we are incentivizing others to action, what are we bringing about?  Many believe these practices promote productivity and stimulate creativity.  Unfortunately, as Kohn’s research shows, the overwhelming scientific evidence—not to mention case after case illustrating failure—is in support of just the opposite.

If we believe fear instills creativity then we should raise our children in an atmosphere of fear so that they will be creatively productive individuals in society.   Given the common belief that fear ignites creativity, you would think we’d want fear-laden leaders, not fearless leaders!  Also successful entrepreneurs would be fearful, not fearless.  If fear was so powerful an antecedent to productivity and creativity, then why is it bad to be overcome by fear?  Why is it a good idea for people to get past their fear, to overcome it? We must continue to think critically.

Fear freezes us and inhibits creative thinking, thus promoting risk aversion not risk taking—the antithesis of the mindset necessary for creativity and innovation.  That is fear is more likely to move us to maintain stability—to keep the status quo—than to creatively break with tradition.  In short, fearful people—needing to control things—resist change and avoid uncertainty.  Wanting to remain in the realm of the familiar are thus less likely to embrace breaking from what is known.

In an organization fear is not necessarily experienced directly as fear, but rather by a general sense of insecurity and mistrust.  Moreover the longer we experience a fear-laden atmosphere the more sensitive we become to fear and thus the more we can be overcome by it.  When this happens our perspective is limited and correspondingly so too are our alternatives.  Essentially, as a result, the probability of discovering creative solutions is diminished, and so too is progress.

Moreover, within organizations fear tends to cause people to hide unfavorable facts and information.  Who wants to be the bearer of bad news in an insecure untrusting environment?  When people are fearful for what might happen—especially to them—their actions tend to be toward not rocking the boat or going against the tide.  Feeling insecure, they tend to want to keep things as they are.

Of course at times fear leads to aggression against the feared.  However this mustn’t be interpreted as productivity, risk taking or creativity.  It is merely a stimulus-response mechanism exhibited by all animals.

GM is not a special case it is just one example among many.  Yet despite the failures caused by fear of short-term loss, many continue to be lead by it.  Except for a select few, could it be the fear of loss of quarterly profit is cause of the general absence of innovation in many corporations?

This state of affairs is quite troubling given the need for creativity and innovation for the continued viability of an enterprise. In light of this need merely setting and communicating an objective for innovation won’t suffice.  What could leaders do to facilitate a creatively productive organization?

10 thoughts on “Afraid to Innovate

  1. I think you have to compare the automotive industry with the music media business.

    If you took a mechanic from 1910, one hundred years ago, and transported him to now. he would still be able to work on most modern cars, the only thing that might fox him would be electronic engine managment systems (even modern mechanics have a problem with this) the rest he would recognise or comprend and not be too taxed by.

    By the same token if music media followed the same pace we would still be using old 78 vynl discs or at best 45 s. We probably would not yet have seen tape decks, CDs and DVD’s and Ipod etc and the other developments of the past 5 years would have been shear fantasy.

  2. No doubt different industries show considerably different commitment to innovation, as well as a corresponding different commitment to the long-term. That said, there are companies within industries that do lead the pack (Toyota comes to mind in the auto industry, Apple in the computer industry, SAS in the computing industry). Perhaps the difference is framing creativity & innovation as an expense versus as an investment.

  3. Commitment and funding of innovation is critical; simultaneously maintaining profitability is just as important; so as to be able to fund the innovation. Both elements have to go hand in hand within an organization. The challenge is to figure out the balance between investing in innovation and maintaining positive cash flows. Similarly, neither fear nor rewards work exclusively, an appropriate combination is needed; more so there is need to have the right people in the right slot from the CEO downward, each employee at their own level having a vision and a desire to excel is needed. Plus compensation should be tied for the Sr. Management with not only their quarterly numbers but with the measurement of launch of innovative and successful products over a duration of a 12 month interval. A review of successful innovative companies makes this very clear.

  4. Agree it does take a commitment to invest (i.e. fund) in creativity and innovation. As Alfie Kohn explained through his research (see Punished By Rewards) punishment and reward are two sides of the same coin–can’t do one without the other. Any short-term focus will likely negatively impact investment given that creativity and innovation are about the long-view. Thus those in authority must be committed to the long-view, which is more than a year out (how long did HDTV take from idea to product? or how long did Toyota work on the Prius before it was marketable?).

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