This episode is about the financial impact of creativity to an organization. What is the ROI in creativity and innovation? Does it matter if employees are creative? Is it worth investing in training to help people be more creative? Learn the five levels of employee creativity, the financial impact they have on the organization, and why creativity training is worth the investment.
What You’ll Learn
- Five levels of employee creativity and the financial impact they have
- Why creativity training is well worth the investment
- Examples of companies who saw huge returns after creativity training.
The Deliberate Creative™ Training is designed to provide the creativity skills employees need to move to a higher level of creativity. An in-depth training can move employees up a level and over time they can become amazing assets to the organization’s innovative approach resulting in thousands of dollars of increased revenue or decreased expenditures.
- Episode 78 with Roger Firestien
- Epstein, R., Schmidt, S., & Warfel, R. (2008). Measuring and Training Creativity Competencies: Validation of a New Test. Creativity Research Journal, 20(1), 7-12.
- The Deliberate Creative on C-suite Radio
- Leave a review on iTunes
Feel like reading instead of listening? Download the free transcript or read it below. Enjoy!
Transcript for Episode #092: What is the Return on Investment in Creativity?
Amy Climer: Welcome to The Deliberate Creative Podcast Episode 92. In today’s episode, I talk about the financial impact of creativity to an organization. This topic comes from a listener who asked what the ROI or the Return on Investment of creativity might be. How does it affect an organization if employees are more creative? Is it worth investing in training to help people be more creativity? I would say yes, and let me explain why.
I developed a model to help explain the impact that comes from being creative, particularly from deliberate creativity. Before we get into that, let me clarify something about creativity. If you are a regular listener to this podcast, you probably already know this, but let me just make sure it is crystal clear. Creativity is both a skill and a process. It is not an inherent trait or an inborn talent that we come out of the womb with. This is a process that can be learned and developed with training and practice, and we build skills to be better at implementing that process and be more creative together.
When individuals and teams use a deliberate creative process, they actually develop the ability to innovate on demand. This means that they could help increase revenue or decrease expenses for an organization. Companies have seen annual changes in the millions of dollars based on new ideas and new innovations that have come from employees. It requires being intentional and being deliberate in order to get there. When I say deliberate, what I mean is that you are deliberating using a creative process.
Five Levels of Employee Creativity and Their Financial Impact [00:02:22]
Let me talk about this model, why you need to bother with being more creative, and what is the ROI that you might get from helping your employees become more creative. If you happen to be in front of a computer or able to look online, you can see this model while we are talking through it. You will find the model at www.climerconsulting.com/092. If you are driving or walking your dog or something, you can look it up later and I think you will still be able to visualize it. I will try to explain it well so that you can imagine it in your head.
If you cannot see the model, imagine five levels going from top to bottom or bottom to top. I am going to walk through each of these levels and explain the impact on the organization. Each of these levels will describe an employee in the organization or could describe a team or actually could describe the entire organization. But for the example today in this episode, I want to talk about an individual employee.
Stagnating Creative [00:03:30]
I am actually going to start with the second to bottom level. That level I call the Stagnating Creative. This is the employee who has become stagnant in their creativity. They might be thriving in other aspects of their work, but they do not actually strive to be creative. They do not really think a whole lot about creativity one way or the other, and really they are having neither a positive nor a negative impact on innovative changes in the company. However, their loss potential could be rather expensive to a company.
I think many employees are at the stagnating level. They are kind of neutral when it comes to creativity. They are not really for or against it, they just have not really given it a lot of thought so I kind of consider them stagnant. Again, they might be thriving in other aspects of their work, but not when it comes to creativity. I am going to give them a financial value and because they are having neither positive nor negative impact, we are just going to say zero. This is level zero Stagnating Creative.
Sabotaging Creative [00:04:41]
If we go down a level to a lower level of value, that is what I call the Sabotaging Creative. Because these individuals are actually sabotaging creative efforts. They tend to be the ones who quickly shoot down ideas in meetings. They talk about how things have always been done. They work to maintain the status quo, particularly, when it comes to anything too creative. I do not believe that these people are always being malicious or evil or bad, they might not even intentionally realize that they are sabotaging creative efforts. But the unintentional impact of their reactions leads to a loss of revenue.
Let’s say, for an example, that they stop an idea that had the potential to generate $50,000 in new income for your company. Their behavior which stopped that creative idea just cost the company $50,000. I am going to refer to 50,000 as 1x. In this case, we are talking about -50,000 so I am going to refer to that as -1x. This person just lost the company $50,000 because they are sabotaging creative ideas. That is a Sabotaging Creative. That is at the very bottom. We move up one, we had the Stagnating Creative, which I just talked about.
Accidental Creative [00:06:09]
We move up one more level, we are now at level 3, that middle level. This is what I call the Accidental Creative. The Accidental Creative is someone who strives to be creative yet they do not always know how to do that. They really value creativity so they try various approaches, they use their intuition. Sometimes they have success that leads to positive changes. But because they do not know enough about creative process or being deliberately creative, they do not have a repeatable process. So their success tends to be somewhat accidental.
In this case, I want to use that same figure, $50,000 and we are going to call the Accidental Creative that their success is 1x. In this example, they might bring in $50,000 of new revenue or they might save the company 50,000 in expenses because of their ideas or because of ideas that they have helped champion. That is the Accidental Creative.
Achieving Creative [00:07:16]
Moving up one level, now the fourth level up is the Achieving Creative. The Achieving Creative has a clear deliberate process that they use both for themselves and with their colleagues. If they are a part of a team, if they are a team leader, they are using this process with their team. Because they have a process that is reliable and repeatable, they are able to more consistently be creative and produce innovative results. The impact on the organization can be at least twice as much as the Accidental Creative. We will call that 2x, so in this case, that impact might be $100,000.
Amazing Creative [00:07:56]
After the Achieving Creative, at the very top level is the Amazing Creative. The Amazing Creative is the one who is impacting not only the people they work directly with, but also other parts of the organization. I think of them as like the creative evangelists where they teach others throughout the organization how creativity works, and they help teach a deliberate creative process. Because of the impact they are having throughout the organization, their impact is at least triple that of the accidental creative. In this example, that impact might be $150,000 or 3x.
Once somebody gets to one of the two levels — the Achieving Creative or the Amazing Creative — that is what I call the Deliberate Creative level. If I had a company with 100 employees and every employee was at one of those Deliberate Creative levels, either Achieving or Amazing, wow! I would be thrilled! Probably it is not that common, although, perhaps at a highly creative organization, maybe a place like Pixar, then maybe that is happening.
I want you to think about where you might find yourself. Are you a Sabotaging Creative, Stagnating, Accidental, Achieving or Amazing? My guess is if you are listening to this podcast, you are probably not at the lower Sabotaging level. You are probably at least an Accidental Creative in the sense that you are probably striving to be more creative. Maybe it is still kind of in that accidental phase where sometimes you have a process, but you do not really quite know it that way. Sometimes you have some successes, sometimes you do not, but you are not really sure why you do not. I would think that many of you also might be at the Achieving, maybe even at the Amazing level.
One thing that I have found, however, is that when I am talking about this model with organizations or really any model like this where people place themselves on various level and it is like okay, the ultimate goal is to get to the top level, is that people tend to place themselves higher than, perhaps, I would place them as someone who is more objective. Keep that in mind and have a bit of a humbleness when you are thinking about where you might be. It is probably very easy to point to other people within the organization to figure out who might be at the sabotaging level, who might be at the stagnating level.
Examples of Companies Who Saw Huge Returns After Creativity Training [00:10:31]
Let’s talk about some specific examples. I want to start with an example you may have already heard because Roger Firestien, who was a guest on Episode 78, gave a great example, one that I have heard many times. It is almost legendary in the world of creativity and creativity trainers. But he talked about an example where a team at a General Motors plant in New York had this problem, a manufacturing issue. I will not go into all the details. You can go listen to Episode 78 to hear the whole story.
The team, basically, was able to use the Creative Problem Solving Process. Through that process, they came up with a solution to the idea which saved them $40,000 a week. The problem was costing them $40,000 a week, they implemented this idea which cost a couple of dollars, it was super cheap, and they ended up saving $2 million a year. I have no idea how much that creativity training cost that company, but it was worth it because I know it was not $2 million. That is an example of how understanding the process and being able to deliberately apply it to a context can have amazing results that you just could not expect in any other way.
There is a study that came out in 2008 where a group of city employees in Orange County, California, they sent half of the city employees to a creativity training. Eight months later, the city officials reported nearly $600,000 in new revenue and $3.5 million in innovative expenditure reductions. Meaning, they did not have to lay off many people. They attributed that financial gain to new ideas generated by employees after their creative training. Not only were they learning the process, but the other thing that was happening was the training actually helped change the culture to be more open to new ideas. So you are less likely to have the Sabotaging Creative who is going to shoot down ideas from the get go.
An example with one of my clients; a couple of months ago I was working with a Woman in Gender Studies program that was part of a statewide program at 16 different universities around the state. Due to budget cuts, they were going to be losing the director of the program who helped all 16 of the different universities stay more connected and help the programs be stronger across the state.
The director was retiring and so she personally was not going to be so impacted by this change. She was not really losing her job in that sense, although she did care deeply about the program, but everyone else who was staying they knew they would not get a new director because of budget cuts. They were trying to figure out how could we still maintain the quality, maybe even increase the quality, even without having a director which they really had become used to that. That was something that they really relied on her.
I facilitated the Creative Problem Solving Process for them and what ended up happening is they came up with many ideas that they were able to implement. I actually ran into the director after she had retired — actually ran into her in the grocery store, of all places — and she talked to me about how they had become so much stronger as a team. The new ideas were helping them maintain the quality of their programs. They had increased confidence in the organization.
What was so cool was to see that because of these budget cuts, there was a lot of anger and frustration. And once they had gone through the Creative Problem Solving Process and were able to be more deliberately creative, they were more open, they had more confidence, they were more excited, they were actually looking forward to what might come ahead, and they were not so angry. You probably know there is all this great research out there about how when we are in a good mood and we are feeling good about our work, we are feeling confident that we actually do better work. And when we are angry and bitter and frustrated, we end up not performing as well. That was sort of an unintended impact of the Creative Problem Solving Process and helping that team be more deliberate around their creativity.
Those are a couple of examples, both financial examples and also kind of some unintended positive impacts that creativity training can have.
Why Creativity Training is Worth the Investment [00:15:24]
The original question was what is the return on investment in creativity? Is it actually worth spending the time to help employees become more creative? Is it worth investing in the training? I would say hands down, yes. The numbers that I gave you; the 50,000, 100,000, 150,000, those are based on some of the research and some of the examples. But that is going to vary based on the size of your organization. If you are a huge global organization, those numbers might actually be a little small. If you happen to be a small nonprofit with just a few employees, those numbers might feel really big. Insert whatever numbers make sense to you, chances are the creativity training is going to be less than what your return is going to be.
Depending on what kind of training you are looking for and who it is for, it might be $5,000, it might be $50,000, but let’s say it is $50,000. Let’s say you implement a training program for $50,000 with a bunch of your employees. One employee moves up one level in the scale that I shared with you. They move from an Accidental to Achieving Creative and they went from $50,000 to bringing in $100,000, you have now just broke even. More likely, you are going to have multiple employees who are going to move up at least one level. That return on investment is going to be huge. It may end up being something like that happened at the GM plant where one small change saves $2 million a year. That story is actually not that unusual.
But here is the challenge with creativity. It is a risk. Creativity is all about the unknown and so you never know. You do not know what is going to happen. What I am laying out here is basically just this is probable, this is very likely, and there are so many different factors that can go into whether an organization is creative and innovative and you can learn about a lot of those in other episodes on this podcast. I think the bottom line answer is that yes, creativity training is worth the investment.
Thank you so much to the listener who sent in the question. I really appreciate that. I hope that this is helpful for you. If there is anything I can do to help your organization be more creative, if you are looking for training to help your employees move up to becoming a deliberate creative, let me know. You can find me online at www.climerconsulting.com/092 where you can find the shownotes. I will put in there a link to the research studies that I mentioned. If you are someone who enjoys digging into the research you can find there. I will also put a visual of the model there so you can see that as well.
Thank you so much for listening to The Deliberate Creative Podcast. If you have not done so already, please head on over to iTunes or Google Play and give this show a review. I love to see your reviews. It helps other people find the show and it definitely helps me know that you are listening. More importantly, if you have a question about creativity in teams, send me an email. My email is email@example.com and I will try to answer your question in a future episode.
Thank you so much. Have a wonderful, creative week. Bye.
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