Part of it is in the "big C" and "little C" forms of creativity. When we're trying to get an innovation and change the world, we're talking about an innovation that we all recognize and that the market recognizes. Sometimes there's a lot of creativity involved. For example, for Microsoft to move the early Windows from the old DOS framework was a big innovation; it took a lot of creativity. But after that, moving to different colors and shapes and adding icons are little changes, sort of line extensions to the big change. All of these things are important; all are innovations, but some require more risks, and some take a collection of many more creative frameworks being broken all at the same time.

Q: Is it fair to say that the business' goals may change, but the need for creativity is constant?

A: Here's a way to think about it. I asked a friend of mine, Jordan Peterson, who was then a professor of psychology at Harvard University, whether he saw a relationship between learning and creativity. His immediate response was that learning was nothing more than a creative encounter with the unknown.

I took it to heart and began to see it everywhere. For example, if a company realizes its strategy isn't working or that its cost structure isn't profitable, then we have to create ideas that might change things, try them out, experiment to find out if something will work. If it doesn't, we create an alternate solution, whether a small change or big change. Then we work on that. So we are constantly looking at our environment and trying to understand how it works and how we can respond to it. That's the process of, on the one hand, creating these new possible solutions and, on the other, increasing your learning.

The more flexible you are, the easier it is for you to say, "I can get a solution. Let me spread my attention and look at this from different perspectives. Let me tolerate the ambiguity of not knowing something a little longer," rather than having to get a quick answer. These are all psychological operations that underpin what we call creativity.

Q: What can business-technology executives do today to start making their groups more creative?

A: First, take risks yourself. Serve as a model. When you think of how cultures change—because that's what you're doing if you want people to increase their own creativity—you have to change the climate, the risk, and the perceptions of people. By beginning to take your own risks, you say, "I am ready to take a risk in front of you."

Another thing is to listen to the staff. I mean everyone on the staff, not just your favorite people or the people who report to you. If someone comes in with an idea, let them know you hear it, that you understand their idea. Paraphrase the idea as you understand it. Talk about why it might be a good idea. Every idea has positive aspects, so acknowledge them: "Yes, I can see how that might help here." If you have issues with it, rather than kill the idea by saying, "But we could never afford it," involve the person who has the idea in helping to solve the issues. Try saying: "How can we find the money for something like this?" Maybe they have an idea. You're turning it into the possibility of forward movement. Be careful when you sense reasons why an idea's not going to happen. When you do that, you tend to automatically point out the flaw in the idea. That, in turn, deflates the person and kills the idea. But sometimes later—I'm guilty of this myself—you realize it wasn't a bad idea, but you were reacting in the moment.

Q: What else can executives do to boost IT creativity?

A: You can begin increasing the autonomy of the people in your department. You can't just all of a sudden say, "We're all going to be free here." It's too much, and nobody's going to believe it. Somebody's going to do something you wish they hadn't, and you're going to say something, and then cynicism sets in. Instead, little by little, start giving more freedom to your people. Let them take on the whole problem. Instead of saying, "Here's the problem, and this is how I want you to address it," say, "Here's the problem. Can you get a solution for me?" This challenges people to bring out their own creativity. It will also challenge you to hear their solutions and accept them more.

Another way is to recognize the risks people are taking. If they're doing a good job—and your business is growing or moving into new markets or doing something other than what it was doing yesterday—everybody is really inventing stuff all the time. So recognize that people are doing good work and they're taking risks and wrestling with the unknown. Everybody sees the errors, but nobody ever says, "We've been doing good work, addressing things we never had before. I think it's great how we've been working together and taking risks, and we've been making progress, which is a result of the creativity we're putting into this job."

Q: Let's turn to some of the companies you identify in your book as creative: 3M, furniture maker Steelcase Inc., and medical equipment manufacturer Guidant Corp. What do they do that others don't?

A: There are some threads that run through all of them. One is that all of these companies have decided purposely to become more creative. Another is that they've all studied what creativity is and what innovation is. And they all have many experiments going on, not just one.

Another common thread is that they tend to respect the intelligence of all their employees, and they try to make changes so that every person in the company can be creative. For example, there's a statistician on the West Coast who's trying to gather ideas from people in a company anonymously through a computer. One of the things he found statistically is that janitors had just as good ideas as VPs. But in the corporate social milieu, of course, the janitors don't get heard. These companies—3M, Steelcase, and Guidant—all seem to recognize that ideas can come from anywhere. They try to make the structural support systems that allow those ideas to surface and be heard. Steelcase was totally ad hoc. Everybody knew each other, but there was no major project. At the other extreme was Guidant, where this was corporately decided: "We're going to approach it from top down and bottom up, and purposely do everything." 3M, of course, has been creative since it was born, so they didn't try to start anything there, but just worked on keeping it going.

Q: Sounds good, but how do you actually do it?

A: Let's take 3M. They have a corporate policy of letting all employees apply 15% of their time to a project of their choosing. They don't have to justify it to their boss, and the company provides the financial backup. Of course, management assumes these are working toward the ideas of 3M. That is, my 15% is doing something for 3M, but I'll decide what it is, and I have the autonomy to go out and do it, and I don't have to justify it.

Some of what that does is breed the ability of people to say, "I can do something here. My ideas are important and recognized."

3M did something else to make sure ideas don't get stopped at every level. It gave 90 grants of $50,000 each to people who couldn't otherwise get their ideas funded by their departments. They're sort of entrepreneurial grants.

Q: Another point you make in the book is the need to make failure acceptable. But isn't this yet another good idea that's in fact very difficult to put into practice? What are these creative companies doing about it?

A: 3M tries to encourage and make it OK to fail. Bill Coyne, who used to be 3M's senior VP for R&D (he's now retired), is on record as saying that over 50% of the company's products fail. He tells a story about a guy who got an idea that maybe you could use sandpaper to shave with. Coyne says the business failed, as you might guess, but the guy was still there 20 years later, still working away in his job and it was perfectly all right.

Lew Lehr, a 3M engineer, was working on surgical draperies. These are pieces of paper that are sticky on one side. You drape the paper across the body and cut through it. He was trying to make a business of it, but it was going south. When his supervisor told him to drop the project, Lew argued and asked if he could continue until the inventory was gone. The supervisor agreed. But Lew didn't bother to tell the factory to stop making the draperies until he had enough to cover another dozen experiments, one of which worked. Today surgical draperies are a $2 billion business for 3M.

Q: How about Guidant? What are they doing right?

A: Guidant was originally five small entrepreneurial health-device manufacturers of things like stents and pacemakers, and they merged into a larger company. When I met the executives, they employed 5,000 people, and they were worried that the company was becoming another large, hierarchical organization. They wanted to see how they could retain their entrepreneurial character. So they looked at other companies—3M, Sony, Motorola, Mitsubishi—to see how they innovate. They saw there was a top-down approach. But Emerson Martlage, a Guidant VP, decided they needed a bottom-up approach, too. He said there was a serious danger of losing the core of creativity, which is in the hearts of the people. Somehow, he said, Guidant had to get to that core, or it wouldn't retain its curiosity and creativity.

One project he undertook was to buy a two-day training program on how to know who you are as a person and what's important to you, ethically and philosophically in the world. The program also covered how to start the right conversations, the ones that will change things. Everyone in the company took that course.

Then the top 800 people in the corporation got a second course on how to listen and how to act on what you hear. The goal was to flush up everything from conversations that aren't just around products, but also on how to run the company and what the company should be.

Another bold step was to create "brush-fire teams," entrepreneurial ventures where 5% to 10% of a person's time would be spent on, say, a high-density capacitor that will work more efficiently and that Guidant could put in its pacemakers. Management picked a couple of people who had energy and were entrepreneurial and told them to go pick the rest of the team. Management said, "Your job is to build the highest-density capacitor we can get," and they let those people go. Management supported them with money, training, and help, if needed, busting through a corporate wall or getting a manager or someone else they wanted on the team. But basically management stayed out of their face. Luke Cristiensen, who was the head of one of the teams, said that in roughly 15 months, they moved from behind the competition to ahead of it and were accelerating away from the pack.

Q: How about Steelcase? You seem to like their approach to creativity.

A: Steelcase displayed almost all the same characteristics, but in a very ad hoc way. Management said, "We're trying to do a lot of key change here. We're moving from selling furniture to understanding the environment in which work happens." They asked themselves: Given that our clients have to change their jobs daily, to work or collaborate, how do we build spaces for them? So now Steelcase is selling space, not just furniture.

Jim Keane, who was then chief strategic officer and is now CFO, had a couple of projects going, including one called "open exchange." It was to make visible knowledge about what you're doing. The experiment involved the top floor—maybe 150 to 200 people were on one floor, and this included the president. They took away the walls and rearranged the desks. They still had enough privacy; it wasn't like an open office. There were areas, but they were arranged with coffee areas strategically located because everybody drives on coffee. They arranged the desks so you couldn't get to a coffee area without going on a kind of drunken walk past other people's desks.

They augmented that with a second experiment, which they called "displayed thinking." Normally, Jim said, when you're working on a project, your most important stuff is on your desk, in piles and in files. The experiment was to give everyone a whiteboard and tell them to write on the board the projects and concepts they were wrestling with. So on your drunken walk over to the coffee bin, you'd see what other people were thinking about. Plus, it was considered good form to stop and say, "I see what you're working on. Did you know that Bill over there is working on something related?"

The last piece of the project involved a wall on which they displayed a picture of every person, from the secretaries through the directors. With the photos was information about who the person is, what he or she is particularly interested in, and how the person likes to be approached. It was an effort to bring everybody—even the shy ones—into this continually throbbing exchange of information.

Q: In your book you talk about information flow and how it supports creativity. What should that mean to business-technology executives who want to support their organization's creativity?

A: At Synectics we're interested in the question of how you can get every person in the company to view an apple the way Newton did—I mean with that level of readiness and openness. How do we get employees to think, "I can see the significance of it. I am open enough and creative enough to wrestle something big out of every experience that happens"? Newton hopped between things. He was a mathematician by training, but he also studied astronomy; he understood politics; he was erudite; he knew how to write and talk to people; he studied history; he knew what was going on with Galileo and Copernicus. In short, he was steeped in his field and surrounding fields. Then that apple whizzed by his head. And he was open enough to wonder for a moment what that had to do with something he had been considering.

What does this mean for us? First, information flow in a company is important. For example, if your information-structure designers know the corporate business model, they're going to be able to structure information much closer to that business model. If your finance guy, who has to decide how to invest the company's money, understands where the market is coming from, what's coming from new-product development, and what the technologies are, he'll be better able to allocate the company's investments strategically. So if everyone in the company could become aware of what else is going on, each person could think more for the company. They could just add their little piece. Part of that is making information accessible. If I've got a biologist who is deep in the biology department, how do I push information by that person? How do I get him or her to see what the customers are going on, what the research people are picking up from the doctors and the hospitals, and so on? That biologist would be richer for the company and be able to be broad enough and succinct with his ideas; he would be able to make the connections from this sort of surround to his own domain.

We still don't know what percentage of that information with contributing editor Peter Krass.

Q: Why does anyone need creativity in today's business-technology environment? A: We tend to look at what I call "big C" creativity-like, have we invented the new G4 lately, or are we knocking the socks off our competitors in the market with something new and exciting. Everybody's looking for the big breakthrough. Meanwhile, they're going about their lives, making up each day as they go along, as the market shifts, as the office environment shifts, as the politics in the office shifts. And they're applying "little C" creativity all the time. But they look at this "big C" breakthrough and think, "I've never done that; I'm not very creative," and they lose heart. Instead, if people can learn to focus on the small stuff, they'll recognize themselves as creative beings and creativity as being a part of everything. If we recognize that, just like fitness, this is all the time, everyday, then when it comes time to apply creativity toward major change, we're more fit and able to do it.

Q: In your book, you distinguish between creativity and innovation. What's the difference?

A: Creativity is the ability to get ideas and to be flexible and open to your environment. Innovation, on the other hand, is the application of creativity. It's trying to change the world, whether it's a little world or a big world, or simply a change in your office. Change and action come from the act of innovating. So innovation is one of those things that gets into the world and the world accepts. Creativity doesn't necessarily mean you have to innovate, but it's from creativity that ideas are born before you can begin to think of innovation.

Q: Are there times when creativity becomes less important? It seems all the energy in IT for the last year or so has been less focused on innovation than on simply cutting costs.

A: On the small level, creativity is going on all the time. We're looking for ideas on how to cut costs, and that should be specific domain knowledge, and what percentage should be of the surrounding environment, or what percentage should be that total random-access information, like the apple that shakes everything up as it goes through. I'm interested in an information system that could do something like that—stir the brains of everybody in the company, yet continue to push them to excel and to grow.