CREATIVE
DESTRUCTION- Theory &
Practice
Ernest Abaho
[email protected] +256701105998
June 2022
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The theory and its assumptions
• General context and meaning;
• …… a process through which the introduction of
something new creates the expiry of whatever existed
before it.
• The term is used
• Economics
• corporate governance
• product development
• technology
• marketing.
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Assumptions
• Developed by Joseph Schumpeter in the 1950s. The theory assumes
the following;
• The economy is based on the principles of supply and demand, where competition has
an influence on market prices.
• The economy is capitalistic
• Capitalism is a constantly changing, dynamic, and innovative process in which a set of
new ideas and processes challenge the existing ones (the status quo) and change
existing paradigms.
• Economic growth is driven by innovation
• Innovation leads to chaos which can be the result of obsolete or not very innovative
products
• Innovation makes companies to close and some workers become irrelevant
• Negative outcomes of change bring along new solutions
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Some living examples
• Social media straining traditional media
• Photography companies whose business was greatly replaced by smartphone
incorporated companies;
• Traditional watches increasingly becoming replaced by smartwatches;
• Tablets and kindles replacing conventional printed books;
• Music streaming services (spotify, apple…) replacing digital shopping of music
songs or albums;
• Video streaming services replacing DVDs.
• Online education affecting education structures
• Anti-aging technologies
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Its relevance in modern management
• Creative destruction accounts for over 50% of productivity growth.
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Threats to creative destruction as an opportunity
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Class exercise
Identify a company in Uganda and assess it potential to
disrupt the operations of its sector and the
opportunities it can start with
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CREATIVE PROBLEM SOLVING
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Rationale of CPS
• It brings competitive advantage
• It brings organisatonal efficiency
• It facilitates new product development
• It fosters technology productivity
• It helps in responding to client calls for
product improvement and quality
assurance
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What a problem is?
• Ask the class
• Focus on organization/Business
• Hint on the sources/causes of such problems
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…..and Creative problem-solving (CPS)?
• Dealing with obstacles and challenges is a routine in
management life, and business.
• To improve your products, services, communications,
and interpersonal skills, and for you and your
organization to excel, you need to encourage creative
thinking and find innovative solutions that work.
• You thus must generate lots of potential solutions and
possibilities.
WHILST
• Evaluating those options and choosing the most promising one.
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Core Principles of CPS
• Balancing Divergent and convergent thinking
• Asking problems as questions to generate rich information by asking
closed questions to elicit short answers.
• Avoiding judgment.
• Focus on "Yes, and," rather than "No, but."
• "Yes, and" encourages people to expand their thoughts, which is necessary
during certain stages of CPS. Using the word "but" – preceded by "yes" or
"no" – ends
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Approaches to CPS
• Using the problem checklist, “go wild” and 5 whys
• Applying to work related problems
• The SCAMPER model
• Design thinking
• Brainstorming (Plethorating)
• Reverse brainstorming
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Using the problem checklist, “go wild” and 5
whys
• Why are things happening/not happening?
• Who is responsible?
• What is happening? What should happen?
• When are things happening?
• Where are the things happening?
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Applying to work related problems
•Student task;
Identify a problem at your place and
propose solutions
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SCAMPER
• This technique assumes that everything new is a variation of something
already in existence.
• SCAMPER is an acronym, and each letter indicates a different method .
• S = Substitute
• C = Combine
• A = Adapt
• M = Magnify
• P = Put to Other Uses
• E = Eliminate (alternative is Minify)
• R = Rearrange (alternative is Reverse)
• To use SCAMPER you start with identifying the problem
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Key questions under the SCAMPER
approach
• S: What to substitute in my process of selling?
• C: How do I blend selling with other activities?
• A: What to copy or adapt the selling process of another person or
company?
• M: What do I put more weight on or magnify when selling?
• P: What other uses can I put my selling to?
• E: What do I eliminate or make easier in my process of selling?
• R: How do I change, reverse or reorder my manner of selling?
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How will you apply the
SCAMPER method to solve your
personal problems?
Discussion question
Brainstorming- (Osborn, 1953)
• Sharing particular ideas within a group about a
certain problem and or plan
• It has a number of rules namely;
• Focus on quantity of ideas
• NO criticism
• Encourage wild ideas
• Combine and improve ideas
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Problem reversal
• Using opposite perspectives to solve problems
• It focuses on going against the norm
• Common ideologies;
• turning it around
• Look at the glass “half empty” vs. “Half full”
• inside-out
• back to front.
• Question for discussion:
• Identify a management problem and analyse it using problem reversal
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Key skills in CPS
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Revision question
Why do some organisations find it difficult to practice CPS?
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