August/September 2005

There has been a lot of debate in recent years about measuring the ROI of creativity in business. Ian Rose weighs in:

The Measurement of Creativity

By Ian Rose

Organizations have not measured creativity for two reasons. First, because of the perceived amount of effort it would take to develop a measurement system and maintain it over time. Second, in most cases, no one in senior management ever asks for this "evidence of effectiveness." Therefore, if the key players are not asking: "Why aren't you measuring?", why then should precious resources be allocated to what is essentially a non-issue?

This is just as well. Many managers are not equipped to recognize creativity when they see it, let alone measure it. They are paid to get the problem solved; the focus is on the result, not on how the result was achieved. There is often little time to think back after the project, to determine what was done to achieve the result, and what else could have been done to do it better. Instead, it is off again to the next problem.

The most obvious measure of creative ideas is how many of those received are actually implemented. The average US corporation receives less than 4,000 ideas a year from its employees, and implements less than 4% of the ideas submitted. Most corporations do not even have a mechanism to review the ideas and get responses back to the workers in any manner other than a form letter. Even if they do have a better mechanism, they still need to be careful. You get what you measure. If you measure the number of ideas in the suggestion box, you will end up with lots of ideas in the suggestion box. The fact that employee suggestion programs exist at all may imply that organizations have no easy way to capture suggestions in the ebb and flow of day-to-day operations.

Other measures that appear useful tend to be only partial measures, and should be interpreted carefully. The number of patents applied for and received, the percentage of sales protected by company patents - these are output measures for processes, not measures of outcomes that matter. Like measuring productivity through counting the number of memos issued, these methods measure the wrong thing and can generate misleading conclusions.

Bottom-line results may be the best measure of an organization’s ability to tap the creative capacity of their people, but there is often no proof that these results did not derive from some other cause. All this suggests that you need to have a certain amount of faith in the connection between creativity, innovation, and the bottom line. Is faith a word in your organization’s vocabulary? And how would you measure it!?

This leaves just the intangible measures. Does the company encourage new ideas and diversity of opinions? If so, how is this evidenced in the processes and structures of the organization and in the behaviors of individuals? Do employees feel valued? Are they listened to? Do their opinions matter? Do they have a say in the way work gets done? Are their talents fully utilized? Are they willing to share ideas without worrying about who gets the credit? Are they encouraged to take risks? Are they rewarded for good efforts that fail as well as those that succeed? Are mistakes seen as learning experiences? Can they “fail-forward?”

Employee morale is the biggest clue. You can walk into a company and know whether or not people are enthused about the future. One measure is what employees talk about at lunch - are they so excited about what they are doing that it is all they talk about - or do they discuss office politics!? One participant referred to it as the “smiles per hour” test! However, whether or not people are happier in their jobs because of the creative opportunities is impossible to quantify.

You need at least some members of the executive ranks who believe that creativity is valuable, and that to be a successful company you have to be committed to fostering an innovative mindset in the workforce. They need to be real advocates of the "intellectual capital" concept; if you were to add up all your capital investments in order to sell the company, it would be worth a lot more than those investments. That is the value that your people bring to the equation, and the value is a lot higher if those people happen to be creative.

Any other kinds of measures are suspect. Creativity is not a continuation or exploration of an existing trend. It is a leap, a discontinuity. Measurement is the comparison of something you do not know with something you do know. It requires tangible evidence, time frames, and results. Creativity and innovation do not conform to typical measures, and their true value may be missed by attempting to capture them in typical cost-benefit models. It is said that what gets measured gets done. But the more you try to measure creativity as a stand-alone item, the more it will be dampened. If you measure it, you are in essence “grading” it, and that implies that some will fail to “measure up.”

Another problem with measuring creativity in an organization is that being creative is never an “assignment” or an “objective” on its own. It is an attribute - just like integrity, value and trust - and is not tangible; thus it cannot be measured by processes developed to measure "things." Creativity is in the background, not in the foreground. You do not measure creativity as such: you measure the result produced and you deduce the amount of creativity based on how unlike the results of ordinary thinking the end product turns out to be.

There is often more controversy around the measurement of processes than there is around their importance or their effectiveness. This applies to creativity as much as to anything else. Some participants felt that measurement should be done, but there is no real urgency to do it. It would be incredibly expensive, and the accuracy would almost always be questionable. Even if the most stringent measurement tools were applied and the results were accurate, those who were "true believers" in the value of creativity would still believe, while the others would still feel that the figures were somehow concocted. In other words, if the data did not match with their biases, they would not believe them anyway.

This may all appear quite confusing and messy, but the process should be unclear. Precise measures squelch creativity. There can be percentage goals around some measures, but not everything that counts can be counted; not everything that can be counted counts. The kinds of statistics that are usually generated offer superficial answers to hard questions. Organizations that believe in creativity do not need to measure its worth.

The findings of Ian's ongoing research have been utilized by many of his clients around the world, including Aventis, 3M, BP, Clorox, Merck and Shell. Summary reports from six ongoing research projects are available for purchase.

* Recreating the Organization
* Valuing Intellectual Capital (and managing organizational knowledge)
* Fostering Creativity and Innovation
* Improving the Effectiveness of Corporate Training (and learning)
* Measuring the Value of Training
* Innovative Techniques in Executive Development

Click here for details.