This article was first published in the July/August 2017 international edition of Accounting and Business magazine.

Business leaders face a wide range of challenges – from disruptive technologies to new business models. For many organisations, just making incremental improvements to current activities won’t be enough to ensure survival, but then the alternatives are often uncertain and difficult to quantify. Are cautious accountants and compliance cultures killing creativity? Are contemporary approaches to governance, risk and regulation, and the attitudes of regulators and the profession, helping or hindering transformational change?

We are born with a drive to connect and learn. Too often, education and employment stifle creative potential. They constrain and limit, rather than inspire and liberate. People learn acceptable answers and corporate slogans. Too rarely are they encouraged to seek their own solutions.

Many practices in the business world reflect past views, and having to follow them can prevent people from exploring new approaches. Corporate policies and practices should encourage innovation and entrepreneurship. But boards don’t often place importance on qualities such as independence, intuition and non-conformism, or reward critical or imaginative thinking.

Today’s leaders may have earned their spurs when expectations were different and possibilities fewer, yet they still think they know best. They may claim to have a more strategic perspective, but many of them are preoccupied with internal issues. Front-line staff may be closer to customers and the market, and are often earlier adopters of new technologies than those at the top of the corporate tree.

Are your colleagues aware of their limitations? Do they experiment and question assumptions? 

The philosopher Sir Karl Popper warned of the enemies of the open society. Enemies of the open company are excessively concerned with order. They are slaves to particular models, reluctant to empower others.

The freedoms

There are a number of essential freedoms for liberating latent potential. 

  • Support your staff and allow them to work and collaborate in ways that allow them to be creative.
  • Encourage people to be open about problems, learn from mistakes and failure, and build on achievements. The computer animation studio Pixar blossomed because candour and constructive questioning were highly valued. People actively searched for solutions and better approaches.
  • Celebrate diversity. Many boards are intolerant of variety: markets fragment, customers seek bespoke responses and new channels emerge, yet directors still try to insist on a dull uniformity. Single solutions are imposed. No wonder so many creative ideas originate outside of the workplace. Differences of opinion can be healthy and spark innovation.
  • Avoid rigidity and bureaucracy. Well-networked organisations can support co-creation and grow organically. Collaboration can speed up adaptation and spur innovation. The chemist and novelist CP Snow warned of a divide between science and the humanities with the emergence of two distinct cultures. But perhaps another division emerging is that between those who think in a logical way and prefer order, and those who are tolerant of uncertainty. The latter favour variety and look for links, patterns and relationships. Throughout history breakthroughs have been caused by outsiders who challenged orthodoxy. Boards should look beyond the usual suspects. Allowing creativity can unleash energy and stimulate imagination.
  • Nurture entrepreneurial flair so that you can develop and commercialise creative ideas at prices pitched so that enough people will buy to generate a profit. To have a dream can be inspiring, but a relevant and affordable offering can provide an income. In business, both thinking and doing are required. We need aspiration and achievement.
  • Review corporate policies and practices. Business leaders should consider where creativity and entrepreneurship are most needed. What should they be applied to and why? What is their value to customers?

The requirements for effective corporate leadership and successful entrepreneurship are converging. In some contexts they may soon overlap and be almost indistinguishable. 

Professor Colin Coulson-Thomas FCCA has advised directors and boards in over 40 countries. See his publications on the Policy Publications website