How to build a creative culture in your company

“At the edge of chaos, the states are maximally novel while still connected to states in the ordered regime, and thus are most likely to manifest the combination of novelty and utility that is the hallmark of creativity”

- Dr. Robert Bilder, UCLA

I've based this post on a report and guide Ran Shahar and I made toward the end of 2015 for Plarium. While we focused on game companies, The ideas and suggestions are for any company who wants to create a nurturing creative environment.

INTRO

People use the word creativity and mean many things. Usually they try to describe an elusive quality of their product ot a team. Sometimes they just need a cool buzz word.

When I hear that words thrown into the room, I immediately think about the first conversation Bilbo and Gandalf have in "The Hobbit":

 “Good Morning!" said Bilbo, and he meant it. The sun was shining, and the grass was very green. But Gandalf looked at him from under long bushy eyebrows that stuck out further than the brim of his shady hat.

"What do you mean?" he said. "Do you wish me a good morning, or mean that it is a good morning whether I want it or not; or that you feel good this morning; or that it is a morning to be good on?"

"All of them at once," said Bilbo. "And a very fine morning for a pipe of tobacco out of doors, into the bargain.

...

"Good morning!" he said at last. "We don't want any adventures here, thank you! You might try over The Hill or across The Water." By this he meant that the conversation was at an end.

"What a lot of things you do use Good morning for!" said Gandalf. "Now you mean that you want to get rid of me, and that it won't be good till I move off.”

― J.R.R. Tolkien, The Hobbit

 (That this dialogue also pops into mind when people say the word innovative. I we will keep that for another post, or rather rant.)

So before diving into the ways you can create “a creative organization”, we should explain what it is.

 

WHAT IS CREATIVITY?

According to the dictionary, Creativity is the he use of the imagination or original ideas, especially in the production of an artistic work.

synonyms:    inventiveness, imagination, innovation, innovativeness, originality, individuality. 

When we say we want to apply creativity in the workplace we need another definition to help us, and we will use the words of Ed Catmull The president of Pixar, to do it.

Creativity involves large number of people from different disciplines working together to solve many problems. Creativity can not be forced but can be fostered by creative culture and creative employees. 

Great examples for companies with creative culture include: Pixar, Valve, Riot Gaming, , Blizzard, Wargaming. In Israel you can find Jelly Button as a good example. 

 

ORGANIZATION MODEL

To create a creative culture, you need to have the infrastructure for it. This needs to be a top to bottom commitment. Creating a creative culture means aligning all the functions to the ideals. It means making sure the values of the company reflect it. This means the whole organizational structure has to support it.

One model that you should look at is McKinsey 7-S model of organization elements. This model deals with the three hard elements, and four soft elements. Together, these elements support the Corporate Culture and helps it grow.

These hard elements are:

 http://www.mindtools.com/pages/article/newSTR_91.htm

http://www.mindtools.com/pages/article/newSTR_91.htm

  • Strategy: the plan devised to maintain and build competitive advantage over the competition.
  • Structure: the way the organization is structured and who reports to whom.
  • Systems: the daily activities and procedures that staff members engage in to get the job done.

The soft elements are:

  • Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
  • Style: the style of leadership adopted.
  • Staff: the employees and their general capabilities.
  • Skills: the actual skills and competencies of the employees working for the company.

When we talk about a creative culture, we talk about making sure all the 7-S are there to support it.

 

WHAT IS CULTURE

A Culture is a common identity and sense of belonging. It is established by shared assumptions, values and ways of expression.

At the core of every company there are base assumptions and beliefs. The company creates values and norms based on them. When all these are set, they will manifest themselves. This manifestation will appear in: work environment, rewards to employees, customs and other symbols.

In other word:

It’s not enough to say you have are a creative culture. If your employees are sitting in a white, brightly lit open space with cubicles, then you don't. If you have a "play zone" and candies in the kitchen, but the management team doesn't understand why, then you don't. External symbols without true believes in creativity means nothing and will do nothing.

 Jelly Button creates space for each "Tribe" with a specific style

Jelly Button creates space for each "Tribe" with a specific style

 

TYPE OF CULTURE

There are four major culture groups. We will set them on a basic graph.

The X axis runs between Internal Focus to External Focus. The Y axis runs between System/Control to Individual/Flexibility.

Each group has its set of characteristics:

Group culture (such as non profit) is an Internal Focused culture, leaning toward Individual/Flexibility.

It is characterized by:

  • Teamwork & Cohesion
  • Participation & Open Discussion
  • Empowering Employees to Act
  • Considering Ideas and Concerns

Hierarchical Culture (such as operations) is an Internal Focus culture , leaning toward System/Control.

It is characterized By:

  • Control & Centralization
  • Formalization & Routines
  • Structure , Stability & Order

Performance Culture (such as marketing) is an External Focus culture, leaning toward System/Control.

It is characterized by:

  • Competitive & Results oriented
  • Objective Setting & Direction
  • Efficiency & Productivity

Creative Culture is an External Focus culture, leaning toward Individual/Flexibility.

It is characterized by:

  • Innovation & Change
  • Creative problem solving
  • Expansion & Growth
  • Initiative, Flexibility, Open Discussion, Risk Taking

In the image below we can see where some well known brands and companies are on this graph.

IMG_1052.PNG

 BENEFITS OF A CREATIVE CULTURE

This is what Professor James L. Heskett from Harvard Business School has to say:

An effective culture can account for 20-%-30% of the differential in corporate performance when compared with “culturally unremarkable” competitors.

These 20%-30% come from cost reduction and increase in revenue. But how does it happen?

An effective creative culture reduces costs in:

  • Monitoring -  Employees become more efficient and productive. There is no need for monitoring by management and monitoring systems.
  • Turnover - Where knowledge is lost, and the productivity drops every time the employee is about to leave. Turnover also creates replacement costs. In addition other employees perception of company is harmed  .

An effective creative culture increase revenues through:

  • Initiative - Where internalized values are guiding the employees, they act by their own initiative. Their interests are aligned with the goals of the organization. This solves the Principle Agent Problem (mismatch of interests).
  • Creativity (finally) - The true competitive advantage of design companies. Creativity is what generates superior products and enables companies to face changing markets environment.   
IMG_1061.PNG

MAKING CREATIVITY HAPPEN

Let's get down to business - how do we make it happen?

One of the most creative companies out there today is still Pixar. Its core believes and ideas are relevant to any company, not just those in the Entretainment business.

According to Ed Catmull: the first ideal of the perception, is that creativity must be present in every level of the organization. When that happens, the company can avoid the natural tendency to minimize risks.

A company should create an environment that nurtures cooperation. It should remember that creative people, who core responsibility is to develop successful products, need freedom to act. 

Manegment nurtures creativity by their actions. It is also nurtured through an environment that allows the right people to interact and act. A nurturing environment is more than colorful walls and action figures. It has to start with the physical design of the spaces the people are going to work in. When the design of the workplace is done right, it creates intersectional thinking, and a creative culture can emerge.

“Intersectional thinking, ideas that come from left field, are not readily visible. They come from an almost random intermingling or collision of unrelated thoughts, and are difficult for competition to see. This represents the heart of radical and explosive innovation, and is the key to creating a modern day Medici Effect.”

- The Medici Effect, Frans Johansson

HOW MANAGEMENT SHOULD ACT?

A game company has to look at its activities, environment and employees through the lens of video games culture. Video games culture, like video games design, is inspired by references.

Game culture Stereotypes are used as cultural references and inspiration for creating game design. These references affect the way the environment is dressed. The dressing and design of the environment helps inspire the employees. 

Please remember! While gamers culture is mostly a stereotype perpetuated by the media, it is a crucial references source that support creativity in games companies. However Gamers stereotype should never be used to describe our users.

 Blizzard offices

Blizzard offices

HOW SHOULD YOU DESIGN THE THE WORK ENVIRONMENT?

An environment which is generic and formal will not nurture new ideas and collaboration.

A colorful and energetic environment, with variety of spaces will manifest creativity. The spaces should include dedicated working spaces according to the type of work that is done in it. The work environment of developers is inherently different than the one used by concept artist. The needs of the writing team is different than those of the Animators.

Create spaces that allow different departments within the same team to meet and collaborate. You should also design an inviting atrium  where members from different teams can meet, talk and share ideas. 

Beware: even an optimal interior design will not drive creativity in an  adverse culture!

 “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn't really do it, they just saw something. It seemed obvious to them after a while. That's because they were able to connect experiences they've had and synthesize new things.”

- Steve Jobs

 The atrium at Pixar. 

The atrium at Pixar. 

HOW HR SHOULD RECRUIT AND ACT?

HR should aspire to bring into the fold people who are part of the gamers culture. This should be true for developers, designers, artists, accountants, statisticians etc. In a game company, Gamers should have an advantage over non gamers in the recruitment process.

By recruiting these kind of people, you will create common point of references. In turns you will allow better flow of communication and the sharing of ideas. 

“HR role is to build and strengthen the unique set of organizational capabilities that give an organization its competitive advantage”

- (Dave Ulrich, Ross School of Business)

HR should provide training on creative thinking techniques. They should offer enriching activities such as lectures and challenges. This will create the fertile ground for healthy communication. Once you create that, creativity and innovation will grow.

Remember that creative employees are self motivated. They value challenge, freedom and autonomy. Creative employees are “trouble makers”. They always ask questions, they are curious, they challenge the status quo. Creative employees explore new possibilities to achieve defined goals.

Last, Cherish those employees who show creativity and innovation. Reward them, but make sure you understand how to reward them. Monetary incentive is not the answer.

  www.bia.ca/articles/InnovationAStrategicHRImperative.htm  

www.bia.ca/articles/InnovationAStrategicHRImperative.htm 

SO WHAT MOTIVATES CREATIVE EMPLOYEES?

“Creativity can not be generated by financial incentives or forced by sanctions.”

- Peter Drucker Management Guru

The most up to date research tells us that monetary incentives is not teh most effective one. It will not push creativity forward, as a research done by Professor Dan Ariely, and his colleagues shows. In fact they showed that bonuses actually reduce productivity. (Read his latest book "Payoff: The Hidden Logic that Shapes Our Motivation" to learn more)

 What is a powerful incentive? Having meaning in the work they do.

When employees understand how their work affect the client, or affect the world, they enjoy meaningful work. This is what makes them come to work and do their best.

Apple's mantra, that they are creating products that improve the world, is not lip service. That is the core belief of Apple and their employees. That is why their employee are willing to “suffer” the hard work that takes place there.

Another motivation is the opportunity for growth. Employees want to work for great managers who can teach them new things. They want to work on projects that will challenge them and allow them to improve. People want to increase their knowledge and their values in their eyes and in society’s eyes.

Align the value of the company with those of the eployees. Remove monitoring system. Create room for flexible schedule. This will increase their self motivation, and will get them to do the work better and faster.

IMG_1106.PNG

Another great incentive is to make sure you listen to employees opinion. Make sure they know you see their ideas as important and as a possible contribution to innovation. You should never create a product by a committee. You should invite everyone to share ideas. You should make employees know someone is listening. You should make sure they know that their ideas might be incorporate. That is real incentive and a way to create a feeling of ownership.

Last incentive is play activity. Lowest in the list, still important and one of the tools that is should not be abused.

If the company is hiring people from games culture, or from a fundamental close culture, then creating playful activity is a must. Game stations, social event that are themed around gamers culture, are the needed R&R for those employees.

Watch Dan Pink talk about motivation.

 

CASE STUDIES

We already talked about the Pixar’s campus and some of the things we can learn from it.

Now it’s time to look at other game companies.

Valve:

Employees: 330

 The most desirable employer in video games for 2014 

“telling them (employees) to sit at a desk and do what they are told obliterates 99% of their value” 

(The valve handbook)

Culture:

  • The company is steered by the quality of their employees and the culture
  • Flat structure and peer culture
  • Flexibility with vacations
  • Teams are formed based on projects, employees choose the projects they want to work on.
  • Employees are encouraged to share details about their projects with other employees.
  • Every function has a say in game design
  • There is an issues where more popular employees have more influence. This might not be effective in larger organizations

Environment:

  • Employees sit where they want,the furniture has wheels so employees can take their desk and move around.
  • Employees move few times a year.

 HR and recruitment:

  • Hiring is made when an employees identify a need for a new recruit.
  • They form committee with other employees to search the new hire. 
  • No need for approval from corporate hierarchy since there isn't one.
  • After an interview, a consensus decision is made based on fit to the culture,
  • valve is looking for generalists (skilled at broad set of fields) who are also experts (also best in one field).
  • Payment is a combination of fix base and bonuses which are determined by peer review.
  • Once a year all employees are going together on a vacation arranged by the company.
 Valve various spaces

Valve various spaces

 

Riot:

Employees: 1000

4th spot in “25 best tech companies to work for in 2013”

Culture

  • Decisions on projects are made by consensus.
  • Teams presents their project progress to the whole company.
  • Employees are encouraged to assume greater personal responsibilities.
  • Employees are gamers and passionate about it but it might be more difficult to less extrovert or new employees to be heard.
  • Work schedule is flexible and there is an unlimited flexible vacation time: they trust the employees not to abuse it, but people might be working long hours and even in weekends.
  • Performance is not measured by hours in the office but by the ability to meet the stated objectives and collaborate with teammates.

HR and Recruitment:

  • Employees may receive up to 200 hours of training, this includes subjects not directly related to their function.
  • Twice a month, employees have play nights where they play video and board games.
  • They hire employees who are gamers, curious, self learners and can deal with failures.  

More information:

Riot Secret Sauce 

The hard realities of working at Riot

Riot Games is the Place to be

 Riot Games social spaces  

Riot Games social spaces  

Blizzard:

Employees: 4000

The 3rd most desirable employer in video games for 2014

Culture:

  • Strong commitment to company tradition, brands and quality of games released.
  • Promotion is done from within the company.
  • Emphasize on seniority and loyalty, create a class of long time employees who do not do much work and engage in-office politics.
  • Employees are required to work long hours.
  • Geek culture is promoted
  • Employees are rewarded with a sword after 5 years of employment, and shield after 10 years.

More Information:

Work for the love of the Game

Inner Geeks values at Blizzard

 Blizzard various locations

Blizzard various locations

 

NEGATIVE STUDY CASES

While there are many examples for bad companies, I've decided not to delve into them. I wanted to  keep the focus on good examples. However I will say this:

Companies with adverse culture to creativity can be large and profitable, but their performance is not optimized because of their culture. They actually fail to shift when the markets changed. EA’s move to social and mobile, Zynga’s move to mobile are both good examples.

 

CONCLUSION

Creating a creative culture is not a simple task. While there are many good points that companies can adopt freely, in the long run that is not enough. You must hold Creativity as a higher value. You must make sure it percolate throughout the company.

 Successful organization puts themselves “on the edge of chaos”, where they gain the ability to allow ideas and solutions to emerge from employees interactions and diverse workforce.

While not everyone can build an office according to the ideas laid out here, there is still a lot that you can do with any given space. Once you are set to create a creative culture, the work environment will follow.

HR’s task in creating the culture is crucial as they are the gatekeepers. They determine who will be part of the company. A well made scrutiny and clear values will help bringing the right women and men in.

You can start building a creative culture right now. It's a matter of priorities and commitment.

 

I would love to hear about your experiences with creative cultures. What worked for you. What doesn't work. What are the challenges that you see? Comment below and let's start a conversation about this.