As an ideation speaker, I talk a lot about creativity and idea generation, as these are some of the most important skills I learned during my time as Head of Creativity and Innovation at The Walt Disney Company. More specifically, I focus most of my efforts on showing people how to make their business creative and idea driven.

What I don’t speak about as much is why your business needs to be creative. Quite honestly, I don’t broach this topic frequently because it feels so obvious: creativity isn’t a luxury, it’s a necessity! Whether you create magical children’s films and theme parks, or you do corporate accounting, creativity and innovative thinking are what allow your business to stand out from the competition and succeed.

Yet as obvious as this may seem to me, every single day I read story after story of businesses that are failing to think creatively, ultimately sending them down a path of destruction. It’s as if they are actively wanting to go out of business, ignoring the warning signs that the status quo is about to shift, and that they are woefully unprepared for the twists and turns of the industry ahead.

With that in mind, I think it’s important to take a step back, and explain why creativity and innovation are so essential in business. Because without this understanding, you’ll never be able to leverage the massive competitive advantage that comes to those that build a culture of creativity.

Ready to see why I’ve chosen to dedicate my life to helping organizations embrace innovation and creativity? Let’s dive in…

Creativity Lets You See the Future

Several years ago, a professor named Thomas Kinney conducted a study on the history of the transportation industry between 1890 and 1910. Part of his discovery was that there were over 13,000 businesses in the U.S. wagon and carriage industry in 1890.

Now, keep in mind that this was over 5 years after Carl Benz introduced the world’s first automobile. This seems strange, right? Wouldn’t all of these businesses have realized that the automobile was about to create massive disruption in their industry?

As it turns out, the answer was no. Almost none of these 13,000 companies survived. Even though they had seen the automobile, they didn’t want to believe this was the future. In fact, it was dismissed as a novelty. A fad. Something that would be reserved for society’s elite. And so, they continued with business as usual, making parts and accessories for a technology that – with Henry Ford’s introduction of the Model T in 1908 – would soon be obsolete, sending them into bankruptcy and out of business.

So, why could Ford see a future that so many other business owners could not? Simple – he allowed his brain to think creatively. Anyone using pure logic to evaluate starting an automobile company at that time more than likely would have dismissed the idea. Automobiles were expensive. They required fuel that wasn’t yet abundant. They needed smooth roads that weren’t yet available. And of course, in many areas they weren’t even technically legal yet.

But for Henry Ford, creative thinking outshined pure logic. Ford realized that people didn’t care about their horses or their buggies or their automobiles. They cared about freedom and having the means to travel easily and conveniently to explore the beautiful countryside of America. Ford used his creative thinking and imagination to depict a future where everyone could get from point A to point B without so much as breaking a sweat. And with this creative, innovative future in his mind, he worked backwards to create a product that could make this future a reality. In the process, he built one of the most successful companies of all time.

Creativity Crushes the Competition

As you may have heard, there was quite a bit of drama at the 2019 Academy Awards (and no, I’m not talking about the dramas being celebrated on stage).

Streaming giant Netflix made history that year with its original film Roma, which was the first streaming-only film to be nominated for the Best Picture award. In fact, Roma actually racked up 10 nominations in total. And while the binge-kings had plenty to celebrate, many movie industry traditionalists cried foul.

AMC and Regal Cinemas, the two largest movie theater chains in North America, refused to show Roma as part of their “Best Picture” movie marathons. Steven Spielberg came out against the movie (and streaming) as well, saying that streaming films “…deserve an Emmy, but not an Oscar. Once you commit to a television format, you’re a TV movie.” By this he meant that Netflix movies have no place at the Academy Awards.

Why would Netflix’s beautiful (and deserving) film be so harshly criticized? Simple: the movie industry does not want to embrace the inevitable future of their business.

This is certainly not a phenomenon that’s exclusive to film. Every single company in every single industry on earth faces this challenge at one point or another. Sears, the largest retailer in the world for many, many decades, filed. Kodak, the first company to invent the digital camera, sat on their invention out of fear it would cannibalize their profitable film sales. And you know what happened to them…

Netflix added over 25 million new subscribers in 2018, bringing their worldwide total to 140 million (now over 207 million in 2021). Just to give you a basis of comparison, it took HBO 40 years to add 25 million subscribers to its service.

The tide is turning. Streaming services are growing in record numbers and have begun generating award-winning content. It’s now a matter of when, not if streaming will dominate the movie industry, because they chose to find creative new ways to serve the industry, new ways that have allowed them to crush their competition in the process.

Creativity Allows Businesses to Lead with Purpose

When describing Apple, Steve Jobs once famously said:

“Apple is about people who think ‘outside the box,’ people who want to use computers to help them change the world, to help them create things that make a difference, and not just to get a job done.”  

Nowhere in there does Jobs mention profitability benchmarks or quarterly targets. Apple has always been clear: we use our creativity to make things for people who think and act differently. That’s our purpose. And if this aligns with your own purpose, chances are you’re reading this post on an Apple product.

As Simon Sinek said in his Ted Talk and groundbreaking book Start with Why, “People don’t buy what you do, they buy why you do it.” Yet many brands still work backwards. They approach everything with a “profit-first” mentality, determining which parts and features can drive costs down the most and capture the largest profits. And while this strategy may have worked for some period of time in some industries, that window is closing rapidly.  

To succeed in this era, businesses need to lead with purpose, not profit. And the only way to do this is to embrace a culture of creativity. By allowing your teams to dream and think about all the good they can bring to the world, the true purpose of why your company exists will forever shine brightly.

Creativity is the Ultimate Competitive Advantage

Businesses that allow creativity to flourish find themselves at the top time and time again. They see the future of industries (or dream up entire new industries out of thin air). They crush even the mightiest of competitors in battles that would make David v. Goliath seem evenly matched. And they build cultures that allow them to lead with purpose and create connections with consumers that are as strong as their ties with their closest friends and family.

Creativity is no longer a luxury in business–t’s an absolute necessity. So, start finding the tools you need to build a creative culture today, so that you can prepare for an incredible future tomorrow.