Obviously businesses do not operate like an artists' commune. Business involves deploying finite resources to achieve goals in a competitive environment to make money. That is something creative people understand.
The manager's job - the impresario's job - is to preside over the company's efforts to jam so the business runs really well.
The challenge is to manage creative people so that the output is fruitful. The challenge is not to have an open environment and simply let them do whatever they want.
You would not let your kids do whatever they want. So the challenge is to create accountability in a non-mechanistic way. You cannot come in with a clipboard and check off boxes and figure out why something has not been done on schedule.
The conventional asset-allocation method is like sheet music. It is prescribed, it has right answers and wrong answers and it sounds about the same every time. But jamming is different. Jamming is when you make the music. When you improvise and adapt to conditions. When you are creative.
Jamming - which follows rules but not individual notes - gives you a different result each time, depending upon the players and the conditions in which they find themselves. It is adaptable to changing conditions.
You need judgment, you need to utilize conventional resource-allocation analysis, you have to work backward from estimations of the market to the current investments and you have to do some benchmarking of your product and its potential against your competition.
In a large pharmaceutical company, where it's a big bet, you're going to need finance people to be involved in the decision-making because the investment can run into the hundreds of millions of dollars. You're going to have to run scenarios. You might even need agreement from the C.E.O. to make that type of decision. If it's an incremental, low-cost decision in a marketing-oriented company, it may be a very different set of stakeholders a lot further down in the organization.
The larger the price tag, the more you have to adopt what I call the postmodern management approach. What I mean by that is that you have to use everything when you make a decision.
In a corporate context, companies have to try very hard to oppose the enticements of conventional wisdom. They must aim for the leaps, which means that companies have to do more than simply manage their knowledge, which is composed of the insights and understandings they already know. They also have to manage the knowledge-generation process. It's not just about, "Oh, we're going to create a data warehouse and we are going to invent a computerized filing system to get at all the stuff we know."
Companies have to take risks to get new knowledge, in a manner similar to how jazz musicians take risks when they go after a new approach to a tune or a performance.
It takes creativity at every stage to make the discontinuous leap from one level of knowledge to the next. These discontinuous leaps of understanding lead to insights that in turn lead to value creation.
Coca-Cola can get really fresh output because it is getting people who are outside the traditional model and they are combining ideas in very novel ways.
The mark of the developed intellect is that it could accommodate two contradictory ideas at the same time.
The traditional model for a company like Coca-Cola is to hire one big advertising agency and essentially outsource all of its creativity in that area. But Coca-Cola does not do it that way. It knows how to manage creative people and creative teams and it has been quite adept at building a network that includes the Creative Artists Agency in Hollywood, which is a talent agency.
The impresario function is about intervening with the company's more administrative management structure. It is about trying to establish a sense of boundaries and budgets and milestones and so forth on a project that does not necessarily lend itself to milestones. It is about translating between the intimate interior environment of the creative work team and the company's need to make money. And finally, it is about positioning the fruits of the creative process in the marketplace and selling them.
People must get respect for their new ideas.
In the end it is the musician who actually plays the notes. The impresario - or the project leader - is only there to make sure that happens. That is a very different type of management mind-set.
The impresario functions as a bridge and a translator. He or she is a bridge between the creative point of view - which is often very focused on the creative task itself - and the resource-allocation process. The impresario has to make certain the funds and people required to get that task completed are available.
You are able to create an environment so that the creative process can take place and that you can get people to perform at their highest levels.
Ultimately, the impresario must know when to simply get out of the way.
A large part of the impresario's job has to do with maintaining and communicating standards of performance. Knowing how to set those standards - which are often more subjective than analytical - means knowing how to communicate the difference between something that is great and something that is just O.K.
You are able to monitor and police your standards of quality once you have defined them.
The head of a record label sets up structures, but he also defines the sound of the label, which is to describe what is desirable, what fits and what is quality for that label and then to create an environment where that sound can thrive.
The C.E.O.'s job in a creativity-driven company is to be an impresario, not a manager.
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