Why creativity is more profitable than productivity

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Humans are about creativity – machines are about productivity

There is a lot of talk these days about the impact that computers are having in the workplace. Similar to robots taking the jobs of assembly line workers we are witnessing computers take the jobs of administrators, bookkeepers and any one else whose primary task is to move information around. This evolution shouldn’t surprise us and yet many entrepreneurs are not taking advantage of these changes to easily grow their business. I think there is a simple reason for this and it’s based on a principle that at one time needed to be taught and now is simply baked into every business that offers a product or service to the market.

When I was first started my career, every business book, seminar, coaching session, etc. was focused on how to be more productive – how to do more with less. You could buy any number of customized day-timer packages that allowed you to very carefully allocate your time so you could maximize it. Every task fit into a box with a time slot. Today productivity is a built in tool that that any business can use but doesn’t always chose to. The ability to do more with less has been made possible because of software and a business is now only limited by its ability to understand how different software applications can integrate with each other to streamline processes that historically have been managed by people. Software has moved the focus from productivity to creativity.

Creativity is a top line exercise

Change can be hard for any one but can be especially hard for a business. If a business is profitable it can impossible to explore new ways of delivering products and services to customers because a business will not want to risk what might be working. For businesses that are prepared to invest in creativity the rewards can be worth the risks. A business that improves the experience for a customer, or provides more value than what is offered by competitors will find itself grabbing marketshare very easily. Creativity involves finding new ways to do something that don’t currently exist. The reward for creativity is an increase in revenue – new revenue.

Productivity is a bottom line exercise

It’s common for me to see businesses that could care less about their costs when times are good and over-focus on costs when times are tough. As I have worked with entrepreneurs in difficult situations for more than two decades I can attest to a simple fact: a business will not create generate more revenue by cutting its costs. Managing costs is an important exercise and the largest cost a business has is the cost of its people, and more specifically, their time. Productivity involves improving existing processes to increase results. The reward for being productive is a reduction in costs or preservation of revenue.

As an entrepreneur you want your team focused on using their creativity to solve problems and you want your technology focused on capturing, transferring and producing information. You should be paying people to find and solve problems for your customers and your business.  Businesses that are able to deploy people that have a creative focus on problem solving will find themselves becoming market leaders. Businesses that deploy people who have a focus on productivity will see their marketshare erode away. Productivity is a given today but creativity can still be arbitraged.

A staff member that can reconcile your A/R, A/P and bank accounts is not as valuable as a staff member that can help you find opportunities to manage your cash flow better. A staff member that takes an order from a customer, punches it into a POS machine and gives them a receipt is not as valuable as a staff member that can build a relationship with your customer and find a unmet need (which leads to new revenue opportunities). If you want your business to be profitable you need to focus on creativity.

Being a productive business is like playing defence. Maybe you advance your team down the field but your most likely result is that you stay in the same place. Being a creative business is like playing offence. Maybe you stay in the same place but your most likely result is to move your team down the field. Productivity has no real upside and creativity has no real downside. You only need to ask yourself two questions:

  1. What is the best result that can come from being more productive?
  2. What is the best result that can come from being more creative?

Remember, creativity can produce disproportionate value while productivity will produce proportionate value. If you want to grow your revenue find new ways of solving the problems your customers and your business has.

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