In a recent IBM survey of 1,500 CEOs from 60 countries, the majority of the respondents pointed to creativity as the most crucial factor for future success. Over the past decade or so, we’ve heard this sentiment reiterated in countless speeches by politicians and in the vast scholarly literature and blog chatter on the decline of U.S. creativity and innovation. Everybody seems to agree that the animal spirits of invention urgently need a shot of adrenaline.
And yet, since the late 1980s, federally funded research and development — a measure of the country’s actual investment in creativity — has declined by 20 percent as a share of America’s GDP. Private R&D spending, too, has lost steam since it brought us breakthrough innovations in technology and life sciences.
This widening gap between cultural aspirations and empirical trends doesn’t lend itself to easy explanations. But it also leaves little doubt that the sclerotic idea of the modern “corporation” continues to dampen the creative zeal of the modern worker. Today, the prevailing legal notion of a corporation still echoes the basic spirit of its earliest versions, which developed in a deeply different historical context, at a time when the corporation’s main goal was to protect and profit from tangible assets.
The idea of corporations reaches back to ancient Rome and the Maurya Empire in ancient India, and it intersects with the history of ideas such as “country” and “colony”, “property rights” and “human rights”, “God” and “government”. We find true progenitors of the modern corporation in 14th century Sweden and 17th century Netherlands.
Throughout this history, one aspect of the idea has remained constant: the corporation transcends and survives its individual members. In fact, it exists in perpetuity as a distinct “moral” or “legal” person — an abstraction substantiated only by law, a fictional “entity” created to subsume the real will of its creators. Based on the recent highly controversial Supreme Court decision in Citizens United, this abstraction even enjoys First Amendment protections of free speech.
British philosopher and legal scholar Lord Chancellor Haldane (1856 – 1928) wrote: “…a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.”
Whatever the reasons that the idea of a corporation evolved as it did, progressive corporate leaders today increasingly recognize that the idea needs to evolve further – and fast – to restore corporate creativity and innovation. The typical modern corporation creates structures and processes and a management culture focused on squeezing human talent into the matrix of business goals and realities, protocols and policies, norms and rituals. The approach reinforces and further reifies the supremacy of the abstraction over its flesh-and-blood creators. The antithesis of this paradigm is still struggling for expression in corners of corporate leadership. The emerging school of thought essentially inverts the Big Brother model for managing human beings. To allow for a freer flow of the creative process, progressive leaders are trying to embrace the idea – the possibility – of adjusting the matrix, harmonizing it with the natural thrust of human creativity.
This is a promising but nascent cultural shift, often stymied by half-measures and lip service. I’d like to think that the shift is inevitable. But that’s probably naive. Corporations that see themselves as owners and managers of human talent will not easily start thinking of themselves as vehicles for its expression. The animal spirits of creativity will probably remain in their cages for the foreseeable future. Too bad.