Illustration: Mick Wiggins

Editor's note: Earlier this year,IEEE Spectrum explored what individual engineers could do to foster creativity [see August, "The Creative Engineer"]. This month we look at what managers and companies can do to reap the benefits of productive creativity within their organizations.

Six years ago, the brass at ArvinMeritor, an auto components supplier in Troy, Mich., realized their product development pipeline was running dry—instead of new and innovative ideas, their engineers were turning out small, incremental advances to existing products. Hoping to jump-start creativity, the company hired a consulting firm to host a series of "innovation" workshops.

Each three-day workshop involved a half-dozen employees drawn from a variety of departments, including engineering, manufacturing, and legal. More than just free-form discussions, the workshops looked at a specific technology, and then outlined concrete steps to move that technology to real products. Having perspectives from different business units was key, says Nathan Clark, senior project engineer. "It's easy to get trapped by what you know," he says. "People who don't know all the limitations of a certain area might offer out-of-the-box perspectives."

As ArvinMeritor, which today employs 32 000 workers in 27 countries and had US $8 billion in sales last year, conducted more workshops, "employees began to think more creatively in their everyday jobs," Clark says. The results were staggering: the average number of potentially patentable ideas rose sixfold, from fewer than 70 per year from 1992 to 1997 to more than 400 per year from 1998 to 2002.

In The Push for new products and profits, more companies are exploring how to harness the creativity of their engineers, even within the admittedly regimented corporate structure. "The types of problems engineers encounter today are more narrowly focused," says Jonathon N. Cummings, an assistant professor of management at the Massachusetts Institute of Technology, in Cambridge, and an expert on corporate innovation. "As engineers become more specialized, they become less inclined to communicate with those outside their specialties. So while there's higher incremental innovation, [overspecialization] may lower the rate of truly new innovations."

One way companies can get around this issue, he says, is to rotate engineers through different jobs, "which exposes them to a broader range of ideas and perspectives."

Creativity germinates best with nurturing and positive stimuli—all too rare in settings that stress immediate results, uniformity, and motivation by fear and competition, say Jeff Mauzy and Richard Harriman. The two have spent the last couple of decades observing what makes a creative workplace while working at Synectics, a Cambridge, Mass., consulting firm, and they outlined their findings in Creativity, Inc.: Building an Inventive Organization (Harvard Business School Press, Boston, 2003). Their advice: eliminate fear (which makes people less curious) and precipitous judgment (which shuts people up).

Workers' fears may be rooted in job insecurities or in a desire not to be ridiculed. "Recognize how much fear is in the company or room—once it's openly acknowledged and validated, people can deal with it," says Mauzy. "Employees also have to be taught to start their evaluations [of others' ideas] without harsh judgment and not be immediately negative." He suggests videotaping meetings to give participants a sense of how they interact: "A single naysayer in the room can make everyone feel dumb for being too accepting."

Company leaders and managers need to embrace and enforce these attitudes, says David Blakely, a senior project manager who directs technology-based projects at IDEO, a firm headquartered in Palo Alto, Calif., that helps companies create products and develop business practices. "Meetings should have a facilitator to encourage wild ideas, but also [to help the group] stay focused and to guard against negativity," says Blakely. "Have well-defined rules for etiquette, the most important being to defer judgment. An idea that at first sounds wrong may lead to thinking that provides a breakthrough."

Medical instrument maker Gyrus ENT LLC, in Bartlett, Tenn., adopted IDEO's communal strategy when it began revamping its line of instruments for ear, nose, and throat surgery. Gyrus hired IDEO to fill in gaps in expertise. Alongside electrical engineers and software programmers, IDEO brought in behavior specialists to participate in the design process.

Before writing a line of code or designing a single element, the engineers, programmers, and behaviorists sat in on surgical operations and brainstormed with surgeons. The surgeons advised the engineers on such issues as handgrip position, motion control, and the position of LEDs on a console. The resulting Diego Surgical System tripled Gyrus's market share for that product segment.

Companies Are Also Finding that giving engineers more autonomy and "percolation time" stimulates their creative juices. Mauzy cites the policy at 3M Co., in St. Paul, Minn., that lets employees spend 15 to 20 percent of their working hours on personal projects that might lead to new company products. The thinking is that a labor of love can spark "eureka!" moments in other areas besides the task at hand.

"People with the most passion are the most creative, because they want to find a way to get it done and will transcend the roadblocks that dissuade other people," says M.W. ("Mickey") Mantle, the chief operating officer of Gracenote, an Emeryville, Calif., firm that designs music recognition technology for cataloging CDs.

Passion is an elusive trait, Mantle admits. Years ago, while working at another company, he was told by upper management to make his department "more creative." So he set aside a room with toys and games for his staff, and he hired wacky speakers to teach seminars.

Meanwhile, though, other managers were pressing him to keep productivity up. Mantle's plan flopped. "It taught me a valuable lesson: you can't impose creativity." These days he hires employees who are already excited about their work, rather than trying to instill passion by fiat.

Peppering the workplace with incentives like free food, a cool décor, and the occasional motivational seminar may strengthen existing collaborative cultures. But "all the colored walls and free food won't matter" if people are bored, says MIT's Cummings. "If problems are interesting and the company is clear in communicating where it's heading, that's what will get people excited." In addition to giving engineers more discretion in the problems they choose, he suggests using "more engineers in the bleeding-edge projects, which are often reserved for the star engineers."

Incentives should support the work's importance. Gracenote trains its engineering staff to move their ideas through the patenting process, offering stock options for completing various stages. Mantle cites the cautionary tale of Robert B. Ingebretsen, the digital audio inventor who never got around to filing patents.

The oversight cost him millions when other companies went on to make products, like the compact disc, that incorporated his designs. "The patent applications just sat on his desk for years," says Mantle. "Many engineers have good ideas, but they ignore the steps to protect them. Our system sets an example that patents and documents are important and that no idea is too trivial. Not everything has to be the laser."