Creativity and innovation: the neglected distinction

The creative dynamic between McCartney and Lennon produced some of the greatest music of the last century (Source: Getty)

Pro-active, synergy – the inanity of modern corporate vernacular is irritating to many of us. But a number of more established terms are also being misused in business today. The interchangeable usage of “creativity” and “innovation” is a prime example, and confusion may even impede the implementation of new ideas. So what’s the difference?


In the early twentieth century, economist Joseph Schumpeter contended that invention was the exercise of the creative impulse. Innovation, on the other hand, involved working out how such inventions could be used, and discovering new means for producing them.

In other words, creativity is easy but fruitless in itself, while innovation is difficult, but potentially rewarding.

It is convenient for managers to advocate and host “brainstorming” sessions. Ideation feels productive, is free, and as professor Vijay Govindarajan pointed out in the Harvard Business Review, it “does not create tension with the core business.” Indeed, actually executing business ideas stretches resources and is often an expensive, protracted and laborious process. “Companies think they are good at execution,” he adds. “But generally, they’re good at execution in their core business; the capabilities making that possible are poisonous for innovation.”


If it costs nothing to use our creative faculties, an innovative product, service or management style should make money. Take patents. Research by Kurt Saunders, professor of business law at California State University Northridge, indicates that between 40 and 90 per cent of patents are never used or licensed by their owners during their terms. Creative ideas should only be considered innovative when they answer a question someone has actually asked.

Moreover, innovation is a game of trial and error, and failure is a necessary by-product. This is something which top companies understand. PwC’s most recent Global Innovation 1,000 report illustrates that there is no statistical relationship between the amount which top companies plough into research and development (R&D), and their sales growth or gross and net profits. And still, R&D spending has remained buoyant among these firms, increasing as a percentage of revenue in 2015 despite falling profits.


If creativity is just one cornerstone of innovation, many consider communication a vital component in the iterative process as well. Discussing ideas in diverse groups is thought to be a particularly effective way of nurturing innovation. A survey by the Economist Intelligence Unit found that 81 per cent think that, if their firm increased investment in improving the communications skills of staff, the company’s ability to innovate would be “significantly increased”.

But communication may only be a catalyst in certain circumstances. A group is more likely to come up with innovative solutions if you limit its size to three or four people, Frog Design’s David Sherwin told The Atlantic. “When we lose track of time in group discussion, we are often crafting an enjoyable group experience at the cost of surfacing everyone’s unique perspectives and voices,” he said. “We risk filling the time with consensus, rather than exploring divergent, multi-disciplinary viewpoints. It is in the friction between these views that we explore new patterns of thought.”

Two people may be even better. Lennon and McCartney, Matisse and Picasso – in Powers of Two, Joshua Wolf Shenk argues that “world-changing things” require the work of just two minds, pushing against each other to realise their full potential, while larger groups may cause dynamic, creative tension to dissipate.

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