THE CREATIVE ORGANISATION AND KNOWLEDGE MANAGEMENT

　　The organisational cultural change required to facilitate the focus, development and application of organisational knowledge should include the development of an environment where innovation and creativity operate together.

　　While these two are somewhat intangible, a recent illustration of culture development is the way creativity is part of the culture at Google: ‘Is creativity fun or should it be? … fun works and work is more productive when it is fun … as a result, companies that integrate fun, creativity, and work are best able to attract and retain peak performers in an economy that promotes and rewards the rapid and constant changing of jobs.’ (7)

　　Companies are driving towards creativity and innovation. Trends suggest that the knowledge economy is rapidly being transformed into the creativity economy. As more high-level knowledge work is outsourced to less developed countries, companies in the US, Europe, and Japan are at the next level of generating economic value from creativity, imagination, and innovation.

　　Organisations are facing the need to change quickly and dramatically in order to survive, recognising ‘the need for greater product and service innovation to keep pace with technological and societal advances and compete with the growing power of companies in China and other developing countries, rather than focusing on ways to improve efficiency and cut costs. Today’s companies are rewiring for creativity.’ (8)

　　The characteristics of creative organisations correspond to those of individuals. Creative organisations are loosely structured. People find themselves in a situation of ambiguity, where assignments are vague, jobs and roles overlap, tasks can be poorly defined, and much work is done through teams.

　　Variety is important, and managers strive to involve employees in a varied range of projects, so that people are not stuck in the rhythm of routine jobs, and they drive out the fear of making mistakes that can inhibit creative thinking.

　　Creative organisations have an internal culture of playfulness, freedom, challenge, and grassroots participation. They harness all potential sources of new ideas as sources for knowledge management (9). These strategies allow the freedom to discuss ideas, and as projects are seen as long term, resources are allocated without immediate payoff.

　　This creative approach, as with any other policy around new product development, has to be incorporated into the overall company/business strategy. It must also be aligned with a knowledge management strategy, which a company should have in order to gain the value evolving within the idea generating process, as well as the knowledge that emerges. This allows creativity to lead to innovation and, in addition, to product or service development and delivery.

　　In terms of the value to be gained, the strategy also needs to include the process of valuation, and the valuation methods and perspectives used to evaluate need to be considered.

　　As accountants, you will need to understand that knowledge – its management, optimisation and valuation – requires focus if it is to be the basis of market success or failure. It is already an area that is being measured in terms of its contribution to the existence of an organisation, and it is therefore a critical success factor, if not already an unrecognised core competence. Talent and knowledge are an organisation’s capabilities and abilities. Talent as capability and knowledge as ability, requires management.

　　Fearghal McHugh lectures on ACCA strategy papers at BPP

　　References

　　1. Kew, J, Stredwick J, Business Environment, 2008

　　2. Bartlett, C, Helping Managers to assess the value of human capital, Business the ultimate resource, 2008

　　3. Kennedy, C, Guide to the Management Gurus, 2007

　　4. Underwood, J, Overcoming the Difficulties of Managing a Virtual Organisation,Business the ultimate resource, 2008

　　5. Bowen, R, Making recognition and reward a whole person experience, Business the ultimate resource, 2008

　　6. Kim, C, Mauborgne, R, Value Innovation, Business the ultimate resource, 2008

　　7. Yerkes, L, Creating Fun in the Workplace, Business the ultimate resource, 2008

　　8. Daft, R, Innovative Technology in the workplace, New Era of Management, 2nd edition, 2008.

　　Other reading references:

　　. Campon, C 2007, Managing resources competitively, Understanding strategic Management

　　. Price, C, Re-organising the firm without destroying it, Business the ultimate resource, 2008

　　. Prusack, L, Knowledge in organisations (Kew, J, Stredwick J, Business Environment)

　　. Nordstrom, K, Meaningful Leadership, Business the ultimate resource, 2008

　　. Sadler, P, Finding and keeping top talent, Business the ultimate resource, 2008

　　.Stewart, T A, The wealth of knowledge intellectual capital and the twenty-first century organization, 2008

　　. Storey, J, Quintas, P, Knowledge Management and HRM, 2001 (Kew, J, Stredwick J, Business Environment, 2008)

　　. Zobhar, D, SQ: Investing in Spiritual Capital, Business the ultimate resource, 2006.