Making Creativity Come True

What does it take to turn a creative idea into reality? It seems like a simple question, but truly creative ideas are tricky critters: they don’t fit well with existing ways of doing things, they create conflicts between people, and they can even cause companies to go under. And the worst part is, truly creative ideas usually fail. After all, it’s their novelty and uniqueness that make them creative in the first place, so it’s no surprise that they don’t always work. Companies (and people) famously abhor change for exactly these reasons. Sure, that idea sounds great – why don’t YOU try it out and let me know how it goes?

So what makes a particular creative idea likely to be implemented, and when are you likely to be able to see your idea turn into reality? A new study by Markus Baer of Washington University in St. Louis asks exactly that. The motivation for his research, which appears in October’s Academy of Management Journal, is the observation that people and companies generate far more ideas than they actually implement, and that it isn’t the most creative or best ideas that usually filter to the top. After all, we all remember Windows ME and the KFC Doubledown (okay, maybe that one was pretty good).

Here’s the punchline: Baer finds that ideas are most likely to be implemented when the people pushing from them are motivated (i.e., they believe in the idea) and when they have strong networks of peers and supervisors. No surprise there. What’s interesting is how the variables all come together. When an idea is particularly creative, the person pushing it has to really believe in it in order to see it realized. On the other hand, if they have strong support from their peers and supervisors, personal motivation doesn’t matter too much: even far-out and risky ideas are likely to be implemented, even when the person who came up with it doesn’t see a ton of value in pushing it forward.

The upshot is that the value of the idea might not be as important as how everyone in the company perceives it. The best ideas might not see the light of day simply because they never found the right advocates, and mediocre ideas might make it all the way to the top just because they don’t rile too many feathers along the way. So next time you’re wondering how the Back-Up Bedside Gun Rack (“Reach your shotgun from the comfort of your bed!”) made it to market, just remember: they probably had other ideas too.

And ’cause it would be too good not to share, here’s the Huffington Post’s compendium of the Stupidest Products Ever. Enjoy.

Friends With(out) Benefits

You’ve stumbled on an amazing opportunity, or maybe you’ve been working tirelessly to bring it to life. But now you need help. Who are you going to choose to help build your idea into a viable business? It’s a simple question without an easy answer: there are issues of expertise and availability, trust and goals, working styles. There’s also a wealth of research suggesting that choosing the right partners makes a world of difference for both firms and individuals.

And that’s what makes a recent study of the venture capital industry by three Harvard researchers so interesting. Paul Gompers, Yuhai Xuan, and Vladimir Mukharlyamov assembled a dataset of 3,500 early stage investors and the 12,000 deals they collaborated on. The goal was to determine what factors made investors likely to work with one another, and how that affected their financial performance.

Their first big finding is that investors prefer partners with whom they have something in common: having worked together in the past made them 60% more likely to co-invest, and having the same alma mater or belonging to the same ethnic group each gave a 20% boost. These findings are in line with a general theory in social networks known as homophily, which refers to the fact that we generally like spending time with people who are like us. Homophily governs a lot about everything from how people find friends to how firms make alliance decisions, and it makes sense: having similar backgrounds and cultures allows for more effective communication, increases the likelihood of having common goals, and cultivates trust between partners.

But it’s also dangerous. After all, as we’ve discussed in earlier posts, diversity is a big component of creativity and innovation. Homophily, by virtue of pairing similar partners together, limits access to diverse information and skills. And that’s exactly what our Harvard team finds: the odds of a startup having a successful IPO are 22% lower if the investing pair are from the same university, and 18% lower if they share a past employer. Ethnicity has no impact on performance by itself, but when a pair of investors are from the same ethnic minority their startup is 25% less likely to succeed.

What this means is choosing partners is no simple task. On one hand, we need to find collaborators that we understand and trust. On the other, we need to find partners with complementary skills and diverse perspectives. Performing well, be it on a collaborative music project or a VC investment, means balancing these two factors. And that may take some creativity.

Check out the full paper here, or the brief Economist writeup that led me to it here.