There’s no doubt that at the core of innovation lie also creativity and an enterprising and inventive spirit. However any creative spirit, in order to be productive, above all from the economic and business standpoint, has to be set within an organisation capable of exploiting its positive features, of channelling it in the right direction and of not wasting its good ideas but, on the contrary, of leading them towards a goal. Unsteadily balanced within companies, creativity lies at the root of many innovations and ultimately the success of many firms.

Therefore the relationships between creativity in companies, the organisation and corporate culture to be found in the same are to be understood fully in order to see why some of them are successful and others are not.

This is what two university researchers and a business consultant have done: Baek-Kyoo Joo (from Winona State University in Minnesota, USA), Baiyin Yang (from Tsinghua University in Beijing) and Gary N. McLean (from McLean Global Consulting in St. Paul, Minnesota), in their Creativity and Human Resource Development: An Integrative Literature Review and a Conceptual Framework for Future Research newly published in the Human Resource Development Review.

The assumption on which the authors base is that creativity in companies has increased in the past two decades due to the whirlwind changes in the corporate context and on the markets, just like the explosion in the knowledge-based economy. However, in order to understand how nowadays creativity and organisation come together and the results they achieve, it is important to obtain diagrams for interpretation and analysis.

The article therefore discusses the history and change in interpretations and research into creativity based on three viewpoints: the personal characteristics of those working in the company, the perspectives of the context in which the companies operate and the prospects for integration between creative drive and organisational patterns. Empirical literature published between 2001 and 2012 is therefore examined to produce an important and useful summary of the methods whereby it is possible to understand in full how and why creativity can operate successfully in companies.

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Creativity and Human Resource Development: An Integrative Literature Review and a Conceptual Framework for Future Research

Baek-Kyoo Joo, Gary N. McLean, Baiyin Yang

Human Resource Development Review, July 2013.

He is an industrialist in the clothing sector, an international success story in Italian production. He has a factory in a fourteenth-century village near Perugia. He dedicates time every day to reading a book, declaring himself to be a great fan of Yourcenar’s Memoirs of Hadrian and Plato’s dialogues on Socrates, the memoirs of Marcus Aurelius and Gramsci’s Prison Notebooks, Saint Benedict who taught us to be strict and gentle, a demanding master and a loving father, and Kant, awed “by the starry sky above me and the moral law within me”, the lesson in tolerance of Frederick II  and the passage from the Bible in which the prophet Ezekiel asks the sentinel how long the night is, receiving the answer that it is not long or short but dawn is breaking.

His name is Brunello Cucinelli and to those who interview him (La Stampa, 15 June) he demonstrates the importance of a great cultural passion for success in business. It takes culture in fact in order to be competitive. Technical culture (production and products) and general culture (contexts, visions of the future, the soul of those who produce and those who consume goods and services). Innovation is in fact expressed through technologies. Yet technologies are none other than a thought which links mental processes to manual skills. It is the actual long history of business in Italy which documents how the key to success lies still in the extraordinary capacity of product ranges to adapt to the changes in needs, cultures, customs and consumption of the various groups of the public, on markets which are constantly changing.

Cucinelli, as a “humanist” entrepreneur, is the umpteenth demonstration of the accuracy of the definition of a great historian such as Carlo M. Cipolla on the Italian aptitude “to make fine things, which everyone likes”. It is also necessary to have, deep down in one’s personal identity, the colours of Titian, the heresies on the light of Caravaggio, the unprejudiced curiosity of Giordano Bruno and Galileo, the moral passions of Leopardi and the painstaking research of Giulio Natta (even without explicit awareness of the exact cultural references) in order to be able to create growth for companies whose competitive rationale is based on style, culture and quality.

“Technology is equal to thought”, wrote in fact Il Sole24Ore in its review a few months ago (4 November 2012) of the republication, by Bollati Boringhieri, of A History of Technology edited by Singer,  Holmyard, Hall and Williams in 1954, a “classic” which still has a lot to say. What? For example that the science education of the new generations does not coincide with simple technical training, that technology is closely related to science, placing it within the dimension of “applied research”, and that the capacity for specialisation is definitely necessary, but without forgetting the essential nature of the general vision. As every good philosopher of science knows (and as the fanatics of technology forget).

It is important therefore to discuss openly technologies, the greater spread of scientific culture and more prolific relations between university education and the needs of the labour market, i.e. of companies. Without forgetting in fact the testimony of Cucinelli (and the corporate histories of Olivetti and Pirelli, to extend the range). Without falling into the trap of the opposition between scientific culture and humanistic culture, yet if anything storing up the experience gained in France’s grandes écoles where engineers have, among the compulsory subjects for study, philosophy, drama and writing. General thinking in fact, in order not to be technical but good technologists, able to think of a machine, its production effects, the relations with those who adopt it, the economic, social and environmental spin-offs. Something the Italian Politecnici also know well. Culture is business, just as business is culture.

Innovate or die. This is an (extremely) brief possible description of the condition of a great part (although not the whole) of Italy’s industrial system. It is no secret that there is a lack of innovation here, for many reasons, and it is necessary to understand the action to be taken in order to bridge the divide which separates us from industry which has instead made innovation its strong point. Starting for example from the concept of “open innovation” as coined by Henry Chesbrough, whose book Open Business Models: How to Thrive in the New Innovation Landscape was recently published in Italy.

Chesbrough is executive director of the Center for Open Innovation and professor at the Haas School of Business of the University of Berkeley in California. Above all he has succeeded in merging theory and practice in order to provide new guidelines for managers and businessmen.

Open innovation, therefore, i.e. the idea whereby, in a world where the sources of knowledge are increasingly distributed and diffused, good opportunities have to be grasped outside of the company in order to drive growth. In other words, according to Chesbrough, businesses of all sizes have to learn how to manage a process of innovation “open” to outside stimuli, capable at the same time of exporting those ideas which internally would not be put to good use. Obviously however tools and examples are needed in order to move from theory to practice.

This is exactly what Chesbrough explains in his latest opus. Open Business Models: How to Thrive in the New Innovation Landscape  – 280 pages in the Italian edition – contains two things: a series of useful tools for understanding the hurdles and risks of the “process of opening” of a company to innovation and a series of examples of firms who have already gone down this road. Thus there is mention of CR Firenze, Ferrovie dello Stato and SIA/SSB (which received an innovative boost from the change of some executives in Europe) or of Intesa Sanpaolo (forced to change by the change in the company structure) and also Almaviva, Elsag and Xerox (which innovated, sharing the risks with customers) and small firms like EDRA and Loccioni (which changed in order to stand apart from and compete with companies much bigger than them). Other cases discussed are those of STMicroelectronics, Fiat, Brembo and Tiscali, and Finmeccanica.

A book therefore to be read from cover to cover, and put into practice, starting from the unique features of Italian firms.

Open. Modelli di business per l’innovazione

Henry Chesbrough

Egea, 2013.

Italy’s industry is losing competitiveness and production levels in all sectors are lower than those prior to the recession. With the exception of food and pharmaceuticals the scale of the loss of production is now worrying. Alongside the effects of the economic situation there is also the historic decline in textiles and footwear and also those of key sectors such as electronics and cars. Against this type of background, which undermines the foundations of the actual business culture in Italy, a single question arose some time ago: what can be done?

Among the answers special account is to be taken of that which comes from a group of eight researchers from Banca d’Italia who in a newly published study on the evolution of the Italian industrial system propose three lines of action in order to attempt to raise the fortunes of the Italian production system.

Antonio Accetturo, Antonio Bassanetti, Matteo Bugamelli, Ivan Faiella, Paolo Finaldi Russo, Daniele Franco, Silvia Giacomelli and Massimo Omiccioli, in their Il sistema industriale italiano tra globalizzazione e crisi [“The Italian industrial system – globalisation and crisis”], start from a basic observation: in 2012 industry produced 257 billion of added value, employed 4.7 million people, is a “fundamental source of innovation and competitiveness” (with over 70% of expenditure on research and development in the private sector) and has “a decisive role in balancing accounts with other countries”. Therefore we cannot stand by and watch.

This led to proposals. First of all to make a selection, i.e. act on the mechanisms of allocation of resources from less productive companies and sectors to the more productive ones, from manufacturing where the competitive pressure from developing countries is not sustainable to other more advanced and complex ones. A task which involves a review of the system of social buffers and active labour policies, the review of the capacities of the financial system and the overhaul of corporate taxation. Secondly the costs sustained by Italian companies should be reduced (energy, bureaucracy, infrastructure and public services are the main culprits). Thirdly, industrial policies have to be made less invasive and fragmentary, which means in fact targeting actions better, staking on a growth in size, on R&D and also on restructuring of public activity of support for internationalisation.

Of course these are proposals condensed into 70 pages of reasoning, figures and graphs, but they are clear ideas. That which is needed in order to start to understand more.

Il sistema industriale italiano tra globalizzazione e crisi

Antonio Accetturo, Antonio Bassanetti, Matteo Bugamelli, Ivan Faiella, Paolo Finaldi Russo, Daniele Franco, Silvia Giacomelli, Massimo Omiccioli

Banca d’Italia, Questioni di Economia e Finanza (occasional papers), 193, July, 2013

True knowledge, according to Giulio Giorello, one of Europe’s most respected philosophers of science, is like Ulysses, “a poet who had the courage to navigate by different constellations than those of known biases”, the goal of which is “to establish a sort of new agreement, an original alliance between those who develop knowledge nearly to the limits of our capacity to reason and those with a stubborn drive to understand the secrets of philosophy and the arts” (see Corriere della Sera, 11 July). In other words, an agreement between scientist and artist, an example of “polytechnic culture” in the very Italian brand of the best humanism, a synthesis of various forms of knowledge as taught by Piero della Francesca (both an extraordinary mathematician and great painter), Leon Battista Alberti, Leonardo and so on, right up until the controversial trend of the twentieth century when the humanities and the sciences would separate and we would see the rise of the unbearable concept of “the two cultures”. Now, though, it has come time to reunite these two forms of knowledge in order to find solutions to the complexity of the Great Crisis, which has placed traditional paradigms of production, trade and consumption into doubt and has forced us to seek better environmental and social sustainability in economic development.

This is the new challenge of the culture of enterprise, to have a strategy for discovering new points of view and original ways of creating jobs and wealth, to become familiar with the processes that are more typical of scientific research (i.e. forming hypotheses, finding confirmation, submitting the hypotheses to tests of “falsifiability” as popularised by Karl Popper, moving on towards new syntheses, and so on ad infinitum), and to engage in the production of goods and services with a careful eye on change, transformation and new forms of equilibrium. Culture of enterprise as a culture of metamorphosis.

Along the way, there will be a need for engineers, chemists, physicists, biologists and mathematicians in numbers much greater than Italian universities are able to produce each year – Italian businesses would need 40,000 more individuals with “technical” degrees such as these – but also a need for philosophers who are able to make sense of the complexity and for humanists able to work with the hallmarks of modern art and to recognise changes in relationships, needs, dreams and their symbols. In other words, we need philosophical engineers just like those that the best in Italian education was traditionally able to provide to Italian businesses, research labs, the markets and the world. Indeed, this is the reasoning behind the decision made some time ago by Politecnico di Milano and Politecnico di Torino – two schools that have trained some of the best Italian executives – to offer sophisticated philosophy courses and to work together with businesses and science foundations, as well as with a great cultural institution like Piccolo Teatro in Milan, on a series of initiatives that have been given the name “Teatro Scienza” (Science Theatre): an exploration of knowledge and theatre.

There are, in fact, words that point to these surprising synergies, words such as “laboratory” used in reference to theatre, education, research and manufacturing: the Piccolo laboratory; the Politecnico laboratory; the Pirelli laboratory. Think, design, do, tell.

This is innovation. Not new technology, but a new way of thinking, a new point of view, new relationships of meaning and story telling. A way of thinking that results in new technologies and makes use of them. Knowledge and tools. The work of philosophical engineers and of the manufacturers who hire them. A “polytechnic Ulysses”.

What do we have to do in order to move on? This is a question being asked with increasing frequency by businesses, organisations and the public at large, and one for which there is no single, simple answer, but rather an answer in multiple parts that includes both technical aspects and a culture of doing business and of living in today’s society.

What we need are tools to help us think differently, tools such as “11 idee per l’Italia” (11 ideas for Italy), which has recently been published by Marsilio and features a foreword by Aldo Bonomi, who writes, “For me, what you hold in your hand is, first and foremost, a collection of trails to the future.” Trails to be followed both by businesses and by the economy in general, all of which start from one observation: what we are dealing with is no mere crisis, but rather an historic division. It’s no longer enough to think in terms of mere growth, but rather of development (something which is much more complex and intriguing).

Venturing forth in this direction with ideas that could up to the task is a group of authors in a class by themselves (in the sense that they all have careers that go beyond just writing) offering up 11 proposals on as many issues, some unusual, in the realms of society and the economy. Take, for example, these ideas: to recycle unused warehouses and other industrial sites for cultural events (Mario Brunello); to test new models of housing in prisons while also giving inmates some extra education (Aldo Cibic); to shift from collective bargaining agreements to individual agreements between employer and employee (Gigi Copiello and Luca Vignaga); to take advantage of major events as drivers of economic development both locally and nationally (Roberto Daneo); to rationalise the actions of local government, along with examples of where this has already been done (Silvia Fattore); to rationalise the fashion industry in Italy to make it more efficient and cost effective (Maria Luisa Frisa); or to work towards greater financial efficiency for Italy’s museum network through better financial management (Guido Guerzoni). But the book also contains proposals on how to “save” Italian banks by tying them to the construction industry through social housing (Massimo Malvestio), how to better “promote” Italy by abandoning stereotypes and looking more towards the nation’s real production (Davide Rampello), how to reuse food waste and give rise to a new segment of manufacturing (Andrea Segrè), or, finally, how it would be possible for Italy to get back to conducting scientific research (Ester Zito).

What results is a dense, stimulating overview in no more than 140 pages showing what could be done to brighten Italy’s outlook on the future, from the economy to culture, from production and the territory to entrepreneurship applied in new and better ways.

In all of this, there is another important passage from Bonomi’s foreword where he speaks of the need to take a close look at the business leaders, at their difficulties and their demands for change, so that they themselves can change and become a new type of leader, one that is able to “take on the burden of transition”.

11 idee per l’Italia

various authors, foreword by Aldo Bonomi

Marsilio, June 2013

The ability to innovate and to increase knowledge in today’s marketplace are two skills that make a business stronger, particularly in the economy we are now experiencing in which standing still is becoming the same as losing ground.  But how are we to innovate and increase our knowledge? First and foremost, we must also ask ourselves if innovation and knowledge methodologies are the same for all, regardless of the type of business involved in the given process of change.

In their study “The relationship between innovation, knowledge, and performance in family and non-family firms: an analysis of SMEs”, published in June in the Journal of Innovation and Entrepreneurship, three researchers at Washburn University (Topeka, Kansas) – David Price, Michael Stoica and Robert J. Boncella – explore this aspect of management of the culture of enterprise.

The study looks into the relationship between innovation and knowledge in both family and non-family businesses and on the impact that this has on business performance and on the approach to making business decisions and is based on an analysis of data on 430 small and medium-sized enterprises (SMEs) in a range of industry segments.

The three authors reached a conclusion that might, at first glance, seem obvious, i.e. that innovation and knowledge can truly be sources of competitive advantage for all businesses, but particularly for SMEs. But true success arises from the delicate balance between business administration, a spirit and culture of enterprise, employee engagement, and a focus on technologies and the marketplace. Knowledge, in and of itself, is not enough, nor is innovation detached from the business in which it is to be applied.  Not to mention the fact that, as the authors explain, each business, and each business owner, is able to come up with a unique synthesis of knowledge and innovation, even when starting from the same knowledge base as other businesses and business owners. Perhaps it is here that we see the spirit of a business, in its ability to create something new out of something that already exists.

The relationship between innovation, knowledge, and performance in family and non-family firms: an analysis of SMEs

David Price, Michael Stoica & Robert J. Boncella

Journal of Innovation and Entrepreneurship, June 2013

It’s called “innovation capital”, a synthesis of people skills, cutting-edge technologies, and infrastructure, and it’s a determinant factor in a nation’s productivity level and it’s ability to compete internationally. It is also yet another area in which Italy is lagging behind the rest of Europe, according to a study just published by McKinsey (as reported in Corriere della Sera on 28 June). We do have innovative, competitive enterprises thanks to our flexible (“resilient”, adaptive to change, economists would say) culture of enterprise, which is recognised around the world, and our manufacturing (machinery automation, food and agriculture, fashion and interior design, automotive, chemicals and rubber) is one of the best worldwide. And yet Italy has, for some time now, been struggling to post any significant growth, and our “production excellence” is having a hard time keeping businesses and the nation as a whole competitive in today’s rapidly changing marketplace. Why? Because of our lack of “innovation capital”.

The McKinsey study explains that 16% of innovation capital is made up of public and private-sector investment in high-tech infrastructures (such as broadband). Then at 60% of the total there is “knowledge capital” – research and development, software, architecture and design, marketing and advertising, financial innovation, culture spending, and so on. Finally, 24% is in the form of “human capital” – university education, career training and investments in organisational improvement. Within the sixteen nations (U.S., U.K., Sweden, Germany, France, Spain, Italy, Denmark, etc.) analysed as part of the McKinsey study, all of this innovation capital is worth a total of 14 trillion dollars. This rich “economy of the intangible” accounts for 42% of their GDP and grew at a rate of 4.6% annually from 1995 to 2007. Of these three types of capital, the one that provides the greatest return is human capital, coming in at 40% greater than the return on knowledge capital.

Over the extended period from 1995 to 2007, innovation capital accounted for 53% of the growth in productivity, so it clearly played a crucial role. But Italy lagged behind, with production increasing by just 0.5% annually, as compared to growth in Germany of 1.7% and 2.8% in the U.K. Why? Looking at the various nations individually, we can see the differences more clearly. In Italy, innovation capital came in at just 25% of GDP, whereas it totalled 34% in Germany, 35% in France, 40% in the U.K., and 51% in the U.S. “Italy isn’t investing in the future,” was the assessment of Leonardo Totaro, managing director of McKinsey for the Mediterranean region. There is no emphasis on innovation. Education and know-how is being ignored (as can also be seen in the latest figures on investment in research and development, which reached just 1% of GDP, whereas public funding for cultural initiatives at the national, regional and local levels fell from €7.5 billion to €5.8 billion in 2012). In other words, Italy is becoming dumber, less innovative, less productive and less competitive.

So we are seeing a trend of increasing marginalisation that needs to be turned around through reforms that place the emphasis on innovation capital, and on human capital in particular – something that Italy has a wealth of, but is unable to take full advantage of. And how? McKinsey shows us the way: remove barriers to international investment (that brings in research and innovation); stimulate businesses and organisations that conduct research, including through tax incentives; better protect patents and other intellectual property rights; facilitate new business, and nurture a robust culture of enterprise based on the recognition of merit. In other words, innovate to grow. We’ve known the formula for some time, so now we have to make it a part of public policy.

Say goodbye to traditional factories, but not just yet. The end is near and very real, and may be nearer than we think according to some experts, particularly if we consider what is being called “the third industrial revolution”, i.e. that of digital manufacturing. Of course, what’s at stake is not just the future of manufacturing, but also its very culture and the way we think about work and production. It will be a near future for some, distant for many, but definitely one to be studied and better understood.

The latest effort by Chris Anderson – journalist, author, technologist, and editor-in-chief of WIRED until 2012 – is a particularly important read that describes how the next industrial revolution came about and how it is expanding with the arrival and spread of technologies such as 3D printers (i.e. that “print” objects in much the same way as a traditional printer prints on paper). But Makers – The New Industrial Revolution is not just a story of new technology. It is, above all, the story of how this technology could play the same role as the steam engine that brought about the first industrial revolution, but with a difference. This time, Anderson says that individual creativity could again be placed at the heart of the debate surrounding the culture of enterprise.

But Anderson is, first and foremost, a great storyteller, so the book begins with an autobiographical introduction about the work he did in his garage, transforming bits of metal into high-precision components, before moving on to a series of examples of the use of new technologies in design and manufacturing. This ranges from projects such as the Tesla high-performance electric vehicle and Local Motors’ crowd-powered automotive design to 3D Robotics’ remote-controlled drones and Italy’s own Arduino, a microcontroller that promises great things for the ICT world.

Makers is a fascinating, visionary work to be read by those looking to better understand how the very culture of making things could change with the rise of “democratised manufacturing”, i.e. the ability for individuals to produce and sell things using the Internet and new technologies, thereby revolutionising the world of industrial manufacturing as we know it.

Makers. The New Industrial Revolution

Chris Anderson

Random House Business, 2013.

Whether male or female, an entrepreneur is always an entrepreneur, in the sense that the spirit of enterprise at the heart of production and innovation and the various financial targets to be reached are always the same, regardless of the gender of the person running the business. Businesspeople are just that, people that do business. Nonetheless, what can differ between the sexes are the personal relationships, the mood, the interpretation of the role of the business leader, and the various circumstances that surround the actions that are taken. The culture of enterprise changes depending on who is leading the company, along with all that follows in terms of performance, both financially and in the marketplace. To better understand this, we need – as far as possible – to compare the experience and context of a variety of organisations.

The debate rages on. Of course, this comes at the expense of the rhetoric on male and female styles of business, but to the benefit of a more accurate view of business.

Contributing to the debate are two studies published one right after the other. A Bank of Italy study has shown that, in terms of profitability and productivity, and even accounting for the size of the organisation and the industry, there appears to be no significant difference between a male-led business and a female-led one. Shortly after, a work by Bocconi and Universitat Autònoma de Barcelona explains that, when a female managing director is able to interact with other women on the board of directors, a sort of chemistry arises that can increase profits by as much as 18%.

The first of these conclusions was reached by Domenico Depalo and Francesca Lotti (both with the Bank of Italy’s Research Office) in their study entitled “Che genere di impresa? Differenziali di performance tra imprese maschili e femminili” (Business gender? Differences in performance between male and female businesses), which looked at both the leading literature on the matter of “gender differences” and at cold, hard numbers based on the financial statements and related ratios (data obtained from Infocamere) of various types of businesses.

However, in their study “Gender Interactions within the Family Firm” (to be published soon in Management Science), Alessandro Minichilli and Mario Daniele Amore (Bocconi’s Department of Management & Technology), together with Orsola Garofalo (Universitat Autònoma de Barcelona), reach a different conclusion: When the managing director is a woman, companies with a female-dominated board of directors post an average increase in profits of 18%. Alternatively, an increase in the presence of female directors from the 25th to the 75th percentile represents a 12% increase over the average firm profitability. The three researchers in this case reached this conclusion by way of a complex study of family-run businesses with annual revenues of at least €50 million.

Of course, this leaves out what numbers alone cannot fully show us, i.e. the unquantifiable approach to business management – the intangibles that every business leader worthy of his or her position brings to the organisation. But then again, we’re talking about something that has nothing to do with numbers and everything to do with the intrinsic qualities of the individual, regardless of gender.

Che genere di impresa? Differenziali di performance tra imprese maschili e femminili

Domenico Depalo, Francesca Lotti

Bank of Italy, Questioni di economia e finanza (Occasional papers), 184 – June 2013

Gender Interactions within the Family Firm

Alessandro Minichilli, Mario Daniele Amore, Orsola Garofalo

Management Science (soon to be published).