The phrase ‘creative destruction’ was coined by Joseph Schumpeter (an economist in the 1930-40’s) and describes in broad terms how the old is constantly being replaced by the new.
By way of example, Alan Greenspan, former head of the US Reserve Bank, eloquently depicted the creative destruction principle by describing how the creative lining of the aluminium soft-drink tin destroyed the former omnipresent steel soft-drink tin. From a contemporary perspective, we can think of many other examples, like the USB replacing the CD, and the creative changes in data transfer consigning the facsimile to the dust bin of yesterday.
In these kind of transitions, whole economies are affected and businesses rise and collapse, with concomitant losses and changes in employment and ways of life. The changes are seldom seamless and resistance can come in many forms – including procedural and regulatory. By way of illustration, the rules around workplace change, restructuring and redundancies; and liquidation of companies and takeovers. Of course, these changes can give rise to tension, conflict and protracted disputes.
When taking a broad perspective on the change in the creative destruction process, we are taken back to analysis of fundamentals. For example, change emanates from difference – i.e. if there is no difference there is no change. Importantly, however, without differences humanity begins to stall; and so differences are essential to human progress.
Where differences are reconciled, change occurs and the next chapter begins. Where differences are not reconciled, however, tension may begin to mount, conflict arises and disputes are often notified (a dispute is characterised as the formalisation of a conflict). In practice, once conflict and disputes are manifest, dispute clauses in contracts are often invoked and/or proceedings are formalised in courts and tribunals. History, practice and experience shows that this play-out can be costly – in terms of time, human cost and financial cost.
Looked at from an alternative viewpoint, however, an interesting irony may emerge.
Change to ‘what-is’ is engendered by creativity. Creativity and change, however, are often resisted or stymied by the status quo. Yet it is those invested in the status quo that can be most at risk. So what drives the resistance?
In their enlivening discussion of resistance within organisations, Foster and Kaplan in their book Creative Destruction: Why Companies that are Built to Last Underperform the Market – And How to Successfully Transform Them (1) argue that resistance is often not overtly determined in the form of risk/benefit analysis. Rather, they argue that the cause can, and often is, embedded in invisible architecture that causes ‘cultural lock-in’. The cultural lock-in and adherence to ‘what-is’ – i.e. ‘the way things are done around here’ – is driven by ‘mental models’ that give rise to control systems that inhibit or preclude ‘challenges to the status quo’ and ‘diversity of opinions’. And it can get worse, because when dialogue doesn’t happen and failure begins (or in some casesdestruction), those that dare to challenge the status quo can become the ‘lightening rods of blame’.
To return to the irony mentioned above, creativity is most often the progenitor of difference and change. On the other hand, resistance is embedded in the antithesis of creativity – inflexible systems and structures, mental models and processes built around certainty and predictability.
If our awareness of this phenomenon is raised, and valid for our situation, how can we be ‘creative’ in overcoming it? How do we create the environment for open thinking and value creation?
It is an age old adage in life that if you want to go somewhere the first thing you’ve got to know, or work out, is where you are. In a personal sense this can equate to asking: ‘Who am I (what are my values and what do I stand for)’, and ‘Where am I (in all aspects of my life)?’. From an organisational or work sense, similar questions can be asked: ‘Who are we, and what is our culture – i.e. our values, beliefs and norms?’; and ‘What do we do and who we do it for?’.
In considering the latter and the organisation culture, Kenneth Cloke challenges our thinking by positing: “You can’t change [organisational] culture if you can’t talk about it!”(2)
In a contemporary organisational sense in the post Covid epoch, this challenge is particularly apposite in all areas of our polity – e.g. in Government and the challenges of climate change; in health and changing demographics; and in business and changing global markets and geopolitical alliances.
And so here is a challenge/opportunity to consider: If we know where the locus of resistance is, can we ‘creatively’ challenge the processes (the dialogue) existing within the relevant systems to destroy the inhibitors (i.e. the inflexible systems) to change?
The answer to this question is unequivocally ‘yes’. Designing and implementing the necessary interventions, however, requires careful planning.
- Richard N. Foster and Sarah Kaplan,Creative Destruction: Why Companies that are Built to Last Underperform the Market – And How to Successfully Transform Them(Doubleday 2001) 16-19.
- K.Cloke, & J. Goldsmith, Resolving Conflicts at Work (Jossey-Bass, 2001) p.20.