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How Creativity and Innovation Decrease as a Company or Organisation Grows and Ages


Employees at all levels need to question policies and procedures in order for creativity and innovation to flourish

There is no such thing as an uncreative or un-innovative company or organisation. The mere fact that they still exist and are operating is testimony to a certain level of creativity and innovation. Without any creativity or innovation, the company would go out of business very quickly. But organisations do become less creative and less innovative over time. This is how that happens.


Creeping formalisation

As an organisation grows and becomes older, it becomes more formalised – it develops policies, procedures, standard operating procedures, rules and even regulations to govern life in all parts, functions, divisions, departments and sections of the company. These are intended to make life easier for everyone – they become the ‘right way of doing things around here’.


This frequently happens when the question is increasingly asked “What did we do last time we faced X situation?” For example, “What did we do the last time somebody asked to extend their maternity leave?” Whatever was done last time is reviewed and that, or an amended version of it, tends to become the ‘policy’ or the ‘procedure’ to be followed in future. The next time somebody asks this question, the now written policy is pulled out and they are told this is what we do in these circumstances in this company.


By their very nature, support services or functions such as HR, Finance, Health & Safety, etc, develop their own ‘proper way of doing things’ – they create policies, procedures, and the “right way” of doing things for situations related to their department. The Finance department will create policies to control how cash payments are recorded, how orders for materials from operational units should be handled, how invoices should be paid, etc. All of these are necessary to ensure the smooth operation of the company and that it doesn’t stray into illegality by accident.


Similarly, the HR department will develop policies and procedures to ensure effective recruitment; that employees do not take more leave than they are entitled to; what is to happen when a staff member goes sick; etc. Most organisational policies are designed to ensure consistency and good governance.


Core operational units become enslaved to the so-called ‘support units’

However, for those in the operational units – those who conduct the company’s or organisation’s core work, they end up feeling that they are practically ‘slaves’ to the so-called “support units”. Whatever they attempt to do, one or more of the support units will have a form to be filled out and signed, counter-signed, recommended and approved by numerous people both inside and outside their unit. The more policies and procedures produced, the more bureaucratic the company or organisation becomes. As the organisation or company grows and expands, it becomes more bureaucratic and weighed down by policies and procedures.


Inevitable bureaucracy?

After a number of years, whatever needs to be considered or done in the organisation, there is a policy or procedure to cover it. Nobody has to think of a solution because “there must be a policy or procedure” about the situation. There is no requirement for creativity because there are policies and procedures! And even if someone tries to propose a new way of doing something, they are quickly told that “that is not the way we do things around here”. Over time, not only are people not required to think creatively or innovatively, they are discouraged from doing so. When someone tries to do something differently, they are told “we tried that before – it won’t work. The proper way is to …” It seems that the organisation itself has become a mechanism to protect the tried and trusted ways of doing things.


In short, the organisation has become ‘bureaucratic’ – and bureaucracy is one of the main barriers to creativity and innovation. Through a natural and organic process of aging, organisations tend to become bureaucratic.


Moving from bureaucracy to creativity and innovation

To break out of this bureaucratic cycle and malaise, top management needs to explicitly support employees at every level in the organisation to feel empowered enough to question every policy and procedure they are faced with. If a policy or procedure is still ‘fit for purpose’ – if it still meets the need it was designed for and that need is still relevant, then the policy survives – for now. If it is not ‘fit for purpose’ – if it has outlived its original purpose, then it needs to be discarded or replaced. Only then will the organisation start to think again and seek new ways of doing things. Only then will it stop the loss and decrease in creativity and innovation and once again become an increasingly creative and innovative company.


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