A recent book on mission statements found that one-third use the word "innovation". Most service businesses claim to be innovative and creative. But are they? How do you know? What is the role of creativity in business?

An article in the Harvard Business Review on leadership makes an interesting distinction between "functional" management and "management arts". Managers are taught to excel at finance, cost accounting, marketing, operations, human resources, and so on. However, negotiation, innovation, public speaking and intuition are often left off the curriculum.

To start, of the many working definitions of innovation and creativity, these represent the best thinking on the theme:

Creativity - reflects the processes that result in generating something "new", unique or original.

Innovation - reflects the process of generating something new, unique or original that leads to a viable business idea- an idea that adds "value" to the individual, organization or society.

Creativity for its own sake is not part of the business definition. Perhaps this quote by Bill Bernbach, one of the founders of DDB Worldwide says it best.

"Is creativity some obscure, esoteric art form? Not on your life! It's the most practical thing a business person can employ. Merely to let your imagination run riot, to dream unrelated dreams, to indulge in graphic acrobatics and verbal gymnastics is not being creative. The creative person has harnessed his imagination."

By harnessing your imagination you can focus on problems and opportunities in ways that lead to value-adding innovation.

This applies equally to artists and musicians. They need to focus their creativity on a canvas or on performance. Those organizations which encourage employees to contribute ideas will always do better than those that do not. The reason is simple. Innovative organizations can still fail as can innovative ideas. But innovative organizations will maximise their opportunities and find more creative solutions to their problems.

The greatest gains will come from concentrating on being more innovative - applying creativity to add value - in our organizational, marketing and management processes. The more innovative an organization, the more likely that its services and products will be innovative and profitable as a result.

Today's focus on quality is a vital aspect of innovation. However, it was misused as a tool by too many managers to create efficiencies, often at the expense of their long-term success. Innovation is not the next bandwagon to gain even more efficiencies. If you misuse "innovation", it will disappoint you.

Strive to create long-term value that contributes to the bottom line. Otherwise, we will continue to view in amazement how yesterday's profitable companies, those excellent companies, suddenly cease to exist.