Thinking: contrary to popular belief, creativity can thrive under the appropriate level of control.

AuthorDavila, Antonio
PositionINFORM

According to received wisdom, if you want creativity, you must forget about control. Control is about following plans, correcting deviations, setting boundaries and rewarding people for achieving objectives. By contrast, creative people excel only when they can express themselves with few restrictions around them, when their goals change as they discover new ideas and when they are allowed to follow their passions.

I would argue that this long-held belief that creativity and management control do not mix at all is untrue. My colleague, Angelo Ditillo, and I have spent the past four years studying creative teams in the fashion industry. This project has found that management control systems do play a crucial role in shaping the creativity of designers. But, in order to understand how we as management accountants add to settings where creativity is key, we must change how we view our contribution.

Traditionally, management accounting concepts have focused on controlling how plans are implemented. Teams and individuals have targets that emerge from the planning process, while financial managers analyse any deviations from the plan and recommend remedial action. This command and control perspective dates back at least a century it's embedded in how the management accounting function works.

In highly creative industries, we need to take a different approach. When you examine design departments in fashion companies, there are no clear targets concerning their main output. Actually, this output evolves as the design of the collection progresses. Boundaries are present, but they are subtle, so as to avoid constraining freedom. Designers are driven by intrinsic motivation and their compensation consists simply of a flat salary. Does it mean mat mere is no room for management accounting?

Surprisingly, perhaps, management accounting does play a key role here. We identified two types of control systems. The first is what we call a directional system, which sets...

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