Room for a new way of thinking

disRUPTION - Room for a new way of thinking, Corinna Voß

Destruction does not have to be bad – it can also bring about positive new things. The courage to break with the existing and familiar is actually the most important prerequisite for renewal and innovation. Creative destruction does not just drive the economy; it drives the entire world.

Saying that Joseph Alois Schumpeter had a sparkling personality would be an understatement. Born in 1883, he served as a professor of economics and dueled with a librarian to secure better teaching materials for his students. A financial policymaker, he appeared in public with prostitutes and married the daughter of his mother’s building concierge. He went bankrupt while working as a banker during the global economic crisis. He held Austrian, then German, and finally American citizenship. Schumpeter lived a cosmopolitan lifestyle and was a highly intelligent and self-confident, yet self-deprecating man. He continually reinvented himself. Perhaps it took a person of his disposition to develop an economic theory that still remains influential after nearly eight decades; namely the concept of creative destruction. Schumpeter popularized this term and idea, maintaining that innovative entrepreneurs succeed by introducing new production methods, processes and products to the market, and in doing so, oust and destroy existing structures. Within a capitalist framework, every economic development is based on this process. Destruction is necessary because it paves the way for the new. Joseph Schumpeter’s theory explains the success of economic innovators and unconventional thinkers ranging from James Watt (the steam engine) and Henry Ford (the assembly line) to Steve Jobs (Apple) and Elon Musk (Tesla, SpaceX, Hyperloop). Today, in the age of digitalization, creative destruction – recently rebranded as ‘disruption’ – is more relevant than ever. Those who rest on their laurels and choose to ignore change will quickly be left in the dust. Promoting constant innovation has become a key task for companies and organizations. Their success and strength are no longer necessarily reflected in the number of employees they have or the amount of revenue they bring in; instead, they lie in their openness to innovation and ability to adapt to changing framework conditions, says organizational psychologist Adam Grant. According to Grant, companies need nonconformists, or born disruptors, who provoke change, question the status quo, and thereby drive innovation. These kinds of people are rather difficult to find among job-seekers, though. They prefer to found start-ups and try to conquer the world on their own terms, following their own ideas. The business models they create are often based on the idea of disruption. ‘Creative destroyers’ such as Apple, Tesla and Amazon have followed the principle of disruption to great success. The ‘losers’ left behind in their wake are outmoded business models and established corporations. However, said corporations can also stand to ‘win’ if they establish innovation management that invites employees to think and speak openly, gives them room to make mistakes and systematically promotes creativity. The underlying concept is that there’s a little non-conformist in every employee. It just has to be unleashed!

200 discarded ideas behind each successful one

However, simply enabling open brainstorming and dialog is not enough for companies. Their employees need to be provided with processes that allow them to think innovatively to begin with, so that they can really make a difference to the company. Established processes too frequently prevent employees from continually reinventing the wheel, so to speak. It is better to merely stipulate framework conditions and ensure that employees can devote their time and energy to what’s truly important: new and innovative ways of thinking. More and more companies are turning to a special method to do so: design thinking, the brainchild of Stanford engineering professor David Kelley. Kelley is the Faculty Director and Co-founder of d.school (a.k.a. the Hasso Plattner Institute of Design at Stanford), which has campuses at Stanford and in Potsdam, Germany. According to Kelley, design thinking is not just a method, but also a state of mind. Where does ‘design’ come in? For many ‘normal’ employees, creatives come across as kind of a mystery. Employees are categorized as either being ‘creative’ or not. The common opinion in many companies is that creativity can’t be taught. Creatives are considered cool, ‘in’; they deviate from the norm in their mannerisms or some other tangible way; they think, speak and argue differently from the majority of employees, and thereby act as disruptors. And companies need these kinds of disruptors. The idea behind design thinking is to release as much creative potential as possible within all participants involved in an innovation project in order to systematically resolve complex problems or tasks. Grant recommends assembling teams of people from different departments and with different types of expertise. Once assembled, they need to put themselves in their customers’ shoes. What do their customers expect from the product or service? Where does their attention lie in particular? Once the team has determined (to the best of their ability) what the customer wants, they can proceed to the brainstorming phase. At this point, anything goes: The team members’ imaginations are given free rein. Design thinking is all about breaking down mental barriers and blurring boundaries, such as economic and technical ones. The main idea is to collect any and all ideas, without judgment. “It’s incredible what people who don’t think they’re creative at all can achieve,” says Adam Grant. Once they’re released from all obligations, even the most rational, logical thinkers can become bubbling founts of creative ideas. Usually, the process ultimately yields results that can be further expanded. There’s no guarantee for success when it comes to this method. However, design thinking can be a useful technique for facing challenges in an efficient and promising way within an environment marked by complexity and rapid changes. Companies that rely on design thinking try to keep pace with the best innovations – which is definitely positive. “Design thinking helps to permit errors and experimentation over the long term. If you want to destroy the old and create the new for customers, then a transparent error management and learning culture is indispensable,” says Corinna Voß, Innovation Facilitator at TÜV Rheinland.

Following evolution’s lead

Joseph Schumpeter named and popularized the concept of creative destruction 75 years ago with his work ‘Capitalism, Socialism and Democracy.’ The underlying principle, though, dates much further back – it is virtually elementary, and can be seen in many facets of life. Anytime something new comes into the world, it invariably follows some kind of destruction and new beginning. Schumpeter recognized this pattern in the history of evolution, for instance: “The establishment of new, foreign and domestic markets as well as the organizational development of the workshop and factory into the corporation illustrate the process of an industrial mutation – if I may invoke that biological expression – that incessantly revolutionizes the economic structure from the inside out, ceaselessly destroying old structures and creating new ones.” Every plant, animal and ultimately person is the product of the destruction and reorganization of genes, even if this takes place at random. Moreover, the impulse towards creative destruction also seems to be an inherent trait for humans: Think of a child that brings the tower they have just created from building blocks crashing back down to the floor. This is not only an act of destruction, but also creates room to start a new construction. Tearing things down and building new things up is exciting – keeping existing things in place is not. This also applies to the fields of economics and politics: Systems that insist on the status quo for too long incite calls for change and attract the attention of disruptors. That’s what digitalization, Donald Trump, and Brexit have in common. Only time will tell whether a given act of creative destruction will have good or bad consequences, and reveal who will suffer and who will benefit. However, this process represents the only true way to innovate.

Picture Credits: © TÜV Rheinland AG