The Default of Faultlines: The US Debt Ceiling, Creativity, and Performance

The Default of Faultlines: The US Debt Ceiling, Creativity, and Performance

Posted Jan 15, 2012

The big news story all year has been about lack of agreement- our government appears paralyzed by a dysfunctional congress (as President Obama has called it) to come up with any solution to solve the US budget problem. We saw the drama play out earlier this year with the debt ceiling showdown and now with the payroll tax dilemma. The real takeaway for most people, though, is that if Congress can't be creative, how can the rest of us mere mortals who work ‘regular' jobs be creative? And if Congress is stymied, we know that similar logjams to creativity must be happening on a daily (no, hourly!) basis. Now, the question becomes, what impedes groups from getting a creative decision?

A paradox in understanding creativity is that we know, for instance, that the old saying ‘two heads are better than one' has some merit, as psychologists have found support for this notion and also that diversity of opinions leads to more creative solutions. At the same time, however, the more divergent the options, the more likely conflict will result. How can we solve this conundrum then? Our research, based on 254 managers, suggests some things about creativity and performance that may not only tell us why Congress doesn't seem to work, but may shake up our preconceptions about creativity leading to enhanced performance.

We studied groups with various divisions or splits (which we call faultlines) based on different demographics. It seems that the groups that had distinct faultines were also the most likely to actually come up with creative solutions to whatever problem they faced. This makes sense because these groups were essentially made of smaller subgroups competing for the ‘best' idea. The problem we found, however, is that increased creativity and greater performance of the group didn't go hand in hand, as one might expect. Why not? Because while the groups generated a lot of cool ideas (creative) they were fighting amongst themselves over these ideas in order to have their own ideas be the ‘winning' choice. Sound familiar? So another way to look back at the Congressional debt ‘flop' is that the ideas themselves for solving our national budgetary problem may be creative (Congress is better at coming up with ideas than you might think!) yet, the problem is none of these ideas will be fully implemented since in our system of government, no one (not even President Obama) serves as a ultimate ‘decider' of which creative path to follow. Intense competition, then, can drive creativity but kill ultimate performance - choosing one of those creative ideas and implementing it.

While this analysis might help us understand why Congress doesn't work, we know most businesses don't operate this way. Usually, somebody has to make the call and pick whatever creative plan (or plans) arise from a group. What managers should be aware of is that 1) there is no one-to one correspondence between creativity and business performance, and 2) you need to have mechanisms in place to ‘make the call' when a creative group can't decide between competing plans or solutions. Finally, a good manager needs to recognize when so-called healthy competition between groups turns to unhealthy conflict, when plans compete against one another and there is little chance a group will come up with a plan (unless you help them out).