17 April, 2014, by Kelly Cookson
Creativity and Optimism in Business
Driving small business growth through learning
Andrew began today’s seminar with the question: How often do we sit back and think about what drives economic growth? It isn’t a simple question to answer and economists have been working on it for hundreds of years.
The question to the audience is which of these fuels modern economic growth?
- International trade
- Technical innovation
- New market institutions e.g. protecting intellectual property
- New ways of moving money around
- Cultural values
The answer is that all of these conditions are necessary but on their own they are insufficient. Cultural values e.g. creativity, ingenuity, experimentation is the missing part of the puzzle.
So, what connects economic growth, knowledge and learning? Why are these important for economic growth and change? Why is learning relevant for business growth? What can business schools do to contribute to growth and change in small businesses?
Andrew tells the audience that economic growth relies more on ideas and cultural practices than economists have previously thought. Economist Edmund Phelps recognised that there are two fundamental conditions for economic change:
- Accumulation of economic knowledge – knowing what to produce and how to produce it
- Willingness to experiment – being creative
Edmund Phelps said we are all part of this “vast imaginarium” or huge system of ideas which are constantly revolving. The imaginarium is almost like a cycle made up of the following points:
- Conception of ideas
- Proposals and plans
- Selecting some of these ideas to move on with
- Evaluation of ideas by consumers
- Revision of ideas/products
Radical creative insight
Henry Ford had radical creative insight where he saw everyone owning a car in the future. He was using his knowledge of how to make cars with creative vision for the future. Nottingham based company Raleigh did the same with bicycles. Both knew how to produce something and how to refine this process to make it profitable. Both knew what people wanted and had foresight to see where the market was going in the long term.
What are the barriers to growth for small businesses?
Small business surveys consistently report that SMEs face these barriers to growth:
- Too much competition
- Too much regulation and taxation
- Lack of access to finance
- The founder is unwilling to take risks
- Can’t find skilled employees
- Lack of vision
How can we overcome these barriers? Andrew says there’s no magic bullet and it’s a slow process to engender creativity and innovation and overcome these barriers. It’s a process of accumulating knowledge.
How is Nottingham University Business School linking helping small businesses?
Business schools should be linking small businesses to the vast imaginarium described earlier. Business schools have a role to play in engendering creativity and linking imagination with experience to drive change.
Nottingham University Business School is doing this with the Growth 100 programme. Growth 100 is for business owner/directors who are coached on their leadership and supported to take safe experiments within their business. Twelve workshops take place over a nine month period geared towards how the business leader creates and manages growth covering topics such as leadership, innovation, finance, HR, sales and marketing using a combination of business theory supported by real life examples from business mentors . The programme has even been described as “an oasis of tranquillity” by participants! The key thing, says Andrew, is taking time away from the business.
Optimism in business
Tony Brooks kicked off his half of the talk with the destruction of a common way of thinking…
Success = happiness
It is common for business people and people in general to be working towards a false paradigm: if we become successful, we become happy. Actually, there is a wealth of evidence that suggests this equation is the wrong way around. Tony often sees this with his clients that when they reach their goal they often push the target further away.
Increasing your PQ
PQ is the level of positive intelligence or the amount of time your mind spends serving you rather than sabotaging you. Increasing your PQ sets you up with a positive mindset which in turn increases behaviours that encourage fun, happiness and enjoyment in what you do. Tony believes that ultimately, this is what will bring you success. Who are we to disagree with the Buddha who says: “Success is not the key to happiness, but happiness is the key to success.”
Where is the evidence for this?
The rates of depression have increased tenfold since the 1960s. 66% of this is believed to be in relating to workplace stress. The modern life is creating more and more stress all the time.
Some research has been done into positivity increasing effectiveness at work. Tony cited the example of GPs being offered sweets at work. Even this small gesture increased their positive frame of mind and this made them three times more effective at reaching diagnosis and they did this 19% faster. Sales people that are put into a positive frame of mind will outsell their coworkers by 56%.
The unconscious mind
“The mind is its own place and in itself, can make a Heaven of Hell, a Hell of Heaven.” (John Milton).
The unconscious mind acts under our radar and one of the issues with this is something coined the Chimp Paradox by Dr Steve Peters.
The practice of Mindfulness is being fully aware and this is a great strategy for dealing with a lot of the trashing that your head does to yourself. Neuroscience shows our brains are more malleable than once thought meaning the good news is you can train your brain at any time in life to be more positive.
Cognitive after imaging
People in a room playing Tetris for 3 days straight will try to arrange shapes in the world around them after they leave that room. This effect is called cognitive after imaging and it means that our brains can be trained to look for certain things. Tony thinks a lot of us in modern day life are looking for negative things. However, you can train your brain to look for positive things. Tony suggests that at the end of every day write down five good things about the day – even if it was a bad day! The five things don’t have to be big things and this exercise will train your brain to look for the positives.
Managing and dealing with people
Connection is everything. There is a strong correlation between happiness and social support. It is important not to become cut off from our social support framework. The Pygmalion effect is the phenomenon in which the greater the expectation placed upon people, the better they perform. This is a valuable concept when applied to a work situation. We often think that people need monitoring all the time but people want independence and can be motivated by this.
See also the Losada line which maps the amount of positive to negative feedback that you give to employees. The tipping point is a ratio of 3 positive to 1 negative. To develop really high performance teams, the ratio is more like 6 to 1.
Tony signs off with reinforcing his point that it is important to have a positive view in your mind, the landscape of your situation and a positive view of the people around you.