Your newsletter on applied creativity, imagination, ideas and innovation in business.
Thursday 15 January 2014
Hello and welcome to another issue of Report 103, your twice-monthly (or thereabouts) newsletter on creativity, imagination, ideas and innovation in business.
As always, if you have news about creativity, imagination, ideas, or innovation please feel free to forward it to me for potential inclusion in Report103. Your comments and feedback are also always welcome.
Information on unsubscribing, archives, reprinting articles, etc can be found at the end of this newsletter.
In this issue of Report 103
- 10 Years of Report 103
- Innovation Blogger of the Year
- Financial Myopia by Ulf Löwenhav
- Cosmic Creativity (continued) Building a Creative Vision
- Hire me for a great workshop or motivational talk
- Meet Me at the Entrepreneurship Summit in Mumbai
Lord love a duck! I have been writing and sending out this newsletter for a decade as of this month! Over that time, Report 103 has grown from a very few readers to some 7000 subscribers today. Over the years, I have corresponded with 100s of readers and made friends with a handful of you (one of whom, Arthur Van Gundy, or 'Andy' to friends, sadly died a few years ago. I still miss corresponding with him). I have even done business with some of you. I believe that Report 103 is the longest running creativity newsletter or blog around. But let me know if I am mistaken!
To mark this occasion, I am going to be a little self indulgent and reflect back on 10 years of Report 103. If you don't want self indulgence, scroll down to the next article!
In the Beginning
I started Report 103 in January 2004. At the time, I was launching a company that built and marketed Jenni Idea Management software. Frankly, I was a little naive about the challenges of running such a business. And one of those challenges was that my target market was big companies. So, I had to convince people in such organisations that a small company based in a small village in a small country could provide reliable, quality software. I reckoned that one way to do that was to write a regular newsletter on creativity and innovation in order to demonstrate my expertise.
Thus, Report 103 was born with a somewhat cryptic name, which I'll explain in the next paragraph. Since then, I sold off the software business to my American and Indian partners and over the past few years have focused on writing, speaking and doing workshops -- which is much more fun. I was never meant to run a software company - but I am told I am a natural public speaker and trainer.
The Meaning of the Name
The meaning of the name 'Report 103' is simple. This newsletter has always been about creativity, imagination, ideas and innovation. The first letters of these words are CIII which is the Roman numeral for 103. The title is simply a shorthand way to say Report on creativity, imagination, ideas and innovation.
As I wrote Report 103 and worked with an increasing number of clients, I learned a great deal. One of the consequences of this situation is that I have changed my thoughts on creativity in many ways over the years. When I started this newsletter, I was a champion of creative problem solving (CPS) and brainstorming (which in its traditional form, uses elements of CPS). Jenni idea management software's functionality was based on CPS and brainstorming. I even facilitated occasional brainstorms and had done as far back as the 1980s.
But, more recently, I have come to find these methods flawed and I find it irritating that in a field like creativity, which is about questioning existing ways of doing things and trying out new ideas, many professionals insist that we must unquestioningly stick to outdated methods simply because that's the way we have been doing things in the field of creativity for 50 years.
As a consequence, if you review the archives of Report 103, you will see my changing perspectives and opinions on many aspects of creativity. Articles recently may contradict articles written years ago. But I am not ashamed of that. Indeed, I take pride in questioning processes, learning and sharing my opinion. I also like provoking people now and again.
Anticonventional Thinking and Cosmic Creativity
Combining my dislike of brainstorming with a desire to build new models for creative thinking, I developed a few years ago a method called anticonventional thinking (ACT) which I wrote about first in this newsletter. This proved to be a controversial approach in spite of being based on science and experience. After writing about ACT HERE? i presented it at conferences, seminars and workshops globally from 2011 with great success.
Last year, I set myself the challenge of developing a more spiritual approach to creativity. I have had some very good results combining meditation with creative thinking and decided to take that further and build a model.
With this goal, I developed cosmic creativity, which is actually science and experience based, but the model I share focuses on the spiritual side. It has received very good feedback from readers of Report 103 as well as participants in workshops in Belgium and Saudi Arabia (of all places!)
I am now working on a combined approach that brings together cosmic creativity and anticonventional thinking, which I have been writing about in this newsletter.
Blogged but not a Blog
A lot of people call Report 103 a blog. But technically, it's not actually a blog. It is a newsletter that is archived on the web. However, a number of blogs, magazines and business book publishers have republished articles from Report 103 in their media. As a result, my articles are appearing on blogs such as Innovation Excellence, Innovation Management, The Creativity Post and Design Taxi to name but a few. Perhaps because these blogs reprint my articles, I have been named the Innovation Blogger of the Year for 2013 (see below).
I will continue Report 103 for the foreseeable future. It is good fun to write, I've learned a lot, I've acquired a small degree of fame and I've met some incredible people like you. These are all good reasons to continue. As to what direction Report 103 may take in the future, I don't know. I do not make long range plans with this newsletter. However, I hope to continue to provide you with quality, thought-provoking articles on creativity, imagination, ideas and innovation. And I continue to value your feedback! So, do please get in touch with your thoughts, questions and even criticisms.
I am honoured to have been voted the number one innovation blogger of the past year by Innovation Excellence. Since I don't actually write a blog (see above article), this is a particularly pleasant surprise.
By Ulf Löwenhav
There are many ways of killing creativity and innovation. Maybe the most effective way is a meeting with the finance department. Finance managers will always opt for the low risk avenues, meaning little or no change.
In our backbone we may know that substantial change could be needed, but facing the finance department may be more difficult than coming up with creative strategic solutions. Faced with the power of financial prudence, innovative ideas are left hanging. It is only natural that it is difficult to provide proof that new ideas will work. It is even more difficult to guarantee the financial implications. Further, and more important, most boards and finance managers are worried about disturbing the equity markets with changes. The assumption is that markets expect a continuous growth of income and margins. This is the financial myopia.
Earnings to Market Value Correlation Is Weak
Professor Milton Friedman very cleverly addressed the issue of the purpose of business. The objective is to maximize the wealth of the business and its owners. University of Chicago may still be the temple of corporate finance theories but with the gradual advance of behavioural finance, things are changing.
The most important realisation is that there is little or no correlation between earnings and value. This means that most of the generally accepted models are falling apart. Awarding Nobel prizes to Daniel Kahneman and Robert J. Shiller is a strong acceptance for psychology in finance and it means that we are accepting that equity markets are made up of irrational individuals making decisions.
As in marketing science, we are realising that investors, just like shoppers, are more influenced by image and trust than by hard numbers. An old “truth” in marketing is that 60% is branding and just 40% is actual product or service performance. The analogue effect of this on equity markets is that if we like the image and have faith in management and strategy of the company, we will gladly invest and we see a share price increase.
EQ-Value to Market Valuation Is Strong
The conclusion of investor behaviour is important. One of the key issues in investor perception of individual stocks is corporate strategy in general and innovation as well as corporate responsibility in particular. Nobody wants to have dormant or embarrassing companies in their portfolio, irrespective of their financial performance. Subsequently, we need to educate finance managers that there is more risk in not innovating and although financial performance is important for independence and survival, it is not the most important target.
Generally, financial myopia is the short view versus the long view. With the short view, we are fighting to maintain our quarterly results while we are on a slow long road to death via a low market value. With a longer view, we take a market valuation risk, in the near term, but we do what we are expected to do by real shareholders, we create long-term value.
So Where Do We Go from Here?
As true innovation creates value, we need to be able to understand the financial language and communicate internally and externally. We will also need board corporate directors with the guts to take on the short-term view of the analysts, in order to do their job for the shareholders.
About the Author
Ulf Löwenhav, publisher of EQapital, is an expert on behavioural finance and corporate governance focusing on financial implications of innovation and corporate responsibility. Mr Lowenhav, residing in Hong Kong and Stockholm, has a background in investment banking, strategy consulting and is a lecturer in corporate finance, capital markets and corporate governance.
I do not just write newsletters about innovation. I also talk about, demonstrate and teach my unique creativity methods such as anticonventional thinking and cosmic creativity to businesses and government bodies globally. My workshops, in particular, are highly interactive, ensuring that participants do not merely attend a lecture, but that they get hands-on practice with these powerful creative techniques.
I will be speaking about Creativity at the Entrepreneurship Summit in Mumbai on 1 and 2 February. If you will be attending, let me know!
Interact with Me!
I am on the social networks and would love to connect with you there.
Join me on my professional page on Facebook.
You can also connect with me on LinkedIn.
And you can follow me on Twitter. I’m @creativejeffrey
You can find this and every issue of Report 103 ever written at our archives.
Report 103 is a complimentary eJournal from Bwiti bvba of Belgium (a jpb.com company: http://www.creativejeffrey.com). Archives and subscription information can be found at http://www.creativejeffrey.com/report103/
Report 103 is edited by Jeffrey Baumgartner and is published on a monthly basis.
You may forward this copy of Report 103 to anyone, provided you forward it in its entirety and do not edit it in any way. If you wish to reprint only a part of Report 103, please contact Jeffrey Baumgartner.
Contributions and press releases are welcome. Please contact Jeffrey in the first instance.