Business Studies Grade 12 HEAD FOR SUCCESS Business Studies Grade 12

Topic 4: Creative Thinking TERM 1 Topic 4: Creative Thinking

CREATIVE THINKING INTRODUCTION: Business enterprises are under constant pressure to outperform their competitors. In order to maintain market position, business enterprises need to find effective and creative solutions to problems. Before advanced problem solving techniques can be applied, the difference between decision making and problem solving has to be understood.

CREATIVE THINKING The difference between decision making and problem solving. DECISION MAKING: PROBLEM SOLVING: Often done by one person of members of senior management who makes it authoritarian. It is the practice where a number of existing alternatives are considered and a choice will be made of which one will be the best solution. Forms part of problem solving, because in each step of the problem solving cycle, decisions must be taken. Consists of three steps, namely: Identify the problem. Consider possible solutions. Make a decision. It requires creative thinking in a process where alternatives are evaluated after research on the problem is done. Is executed by a group op people and is more inclusive than decision making. It encourages creative thinking to find innovative solutions. Consists of 8 basic steps, namely: Define the problem. Identify alternative solutions. Evaluate the alternative solutions and choose the best solution. Formulate / develop a strategy / action plan. Implement the strategy / action plan. Monitor the strategy. Evaluate the process.

CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: All people and business enterprises experience problems. The problem solving cycle is a problem solving tool that is used to solve problems. The process comprises eight steps which can be presented in a cycle diagram – it is presented as a cycle, because the process can be repeated if the problem is not solved by working through the process the first time.

Define the problem / find the possible causes of the problem CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: The problem solving cycle STEPS: DESCRIPTION: Step 1: Identify the problem Regardless of what crops up, you must know what the problem is and understand it thoroughly before it can be resolved. This is a critical step because it focuses on the solution process. Write down what is the symptoms of the problem. Obtain opinions from as many people as possible to address the problem from different angels of view. Obtain as much information as possible about the problem. Step 2: Define the problem / find the possible causes of the problem If you have sufficient knowledge about the problem you have to define the problem as specifically as possible. Write down all the possible reasons for the problem.

CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: The problem solving cycle STEPS: DESCRIPTION: Step 3: Identify alternative solutions Generate a list of potential solutions through applying creative thinking techniques, such as brainstorming, the force field analysis or the Delphi technique. There is usually more than one possible solution to the problem (some better than others) but all possible solutions should be considered that the most feasible strategy can be developed. Step 4: Evaluate the alternative solutions and choose the best solution Develop a set of criteria that the solution must meet to solve the problem in terms of the: Costs and time involved. Probability of success. Risks involved. Degree of resistance or acceptance by employees. Keep in mind that different solutions may cause other problems, therefore, each must be carefully considered and investigated before a decision on a specific strategy / solution is made.

Formulate a strategy or action plan Implement the strategy CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: The problem solving cycle STEPS: DESCRIPTION: Step 5: Formulate a strategy or action plan This strategy is the plan of action to solve the problem and require further investigation before a decision can be made. Teamwork will help to formulate the best possible strategy. When a range of possible solutions are identified and developed, there should be decided on one strategy which, according to the opinion of the team, would be the best solution. Create a Gantt chart to indicate tasks, employees responsible for the respective tasks and deadlines. Step 6: Implement the strategy The solutions that were developed in the previous steps of the problem solving process are now put into action. The steps in the implementation of the strategy should be planned. Ensure that the necessary resources (financial, people, time, equipment, etc.) to implement the strategy are available.

Evaluate the problem solving process CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: The problem solving cycle STEPS: DESCRIPTION: Step 7: Monitor the strategy This step involves comparing actual results with desired results and deciding which strategies worked and which strategies did not. Check whether the implemented strategy solved the problem. If not, or whether the effect was not as effective as you thought it would be, go back to step 3 and develop a different strategy. Step 8: Evaluate the problem solving process Whether the strategy was successful or not, it is still important to evaluate the whole process that was used to determine the strategy. Through the evaluation it can be determined whether the procedure was effective or perhaps it can be made even more effectively. The following can be determined during evaluating: Lessons to be learned from the problem. Can these lessons be used in other areas of the business? Was there perhaps a better / cheaper solution? During the evaluation, the input from everyone involved in the process, were obtained.

CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: Some examples of problems/challenges that may occur in the business environment. MICRO ENVIRONMENT: MARKET ENVIRONMENT: MACRO ENVIRONMENT: Lack of or change in mission and vision. Business risks Inefficient organisational culture. Procurement, storage and distribution of resources. Difficult employees. Negotiations with unions. Strikes, etc. Urbanisation which leads to the depopulation of rural areas. Supplying of credit to consumers. Demographic issues. Consumers’ bargaining power. Insufficient stock supply form suppliers. Intermediaries that increases the cost of distribution. Services by intermediaries who do not meet expectations. Strong competition. Consumer protection such as debt counselling. Inflation / Interest rates / Exchange rates. New technology. Infrastructure not being maintained. Rising costs because of e.g. e-toll. Lack of fuel. Poor electricity supply. Weather changes. Increase of people in informal settlements. High unemployment rate and other socio-economic issues. Increased demand for environ-mentally friendly products.

Pro-active problem solving CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: Advanced problem solving skills Pro TECHNIQUE: DESCRIPTION: Involving others Problems may fall outside the business’ scope of expertise. Management can then make use of consultants. Working in teams Some problems are too complex to be dealt with by individuals. Dividing employees into problem solving teams is a creative problem solving technique with several advantages, including: Viewing the problem from different perspectives. Having access to a broad base of knowledge, skills and expertise. Obtaining a careful analysis of the problem. Pro-active problem solving Pro-active problem solving means to anticipate problems and to prevent them form occurring. This strategy will ensure that resources are not wasted on problems that could have been prevented.

Intuitive decision making CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: Advanced problem solving skills TECHNIQUE: DESCRIPTION: Intuitive decision making Problem solving teams are often required to make a decision or solve a problem when time and information is limited. In such cases, problem solving teams must rely on their intuition, common sense and past experience. SWOT analysis A SWOT analysis forces management to analyse the enterprise’s strengths and weaknesses. This helps management to anticipate problems and prevent them from occurring.

CREATIVE THINKING ACQUIRING ADVANCED PROBLEM SOLVING SKILLS: TECHNIQUE: DESCRIPTION: PESTLE analyses The PESTLE analyses assesses a business’ position in terms of: Political (what happens on political level? E.g. tax regulations, labour laws); Economic (What happens in the economy? E.g. economic growth, unemployment, cost of living); Social (What happens on social level? E.g. cultural norms and standards, health, population growth); Technological (How does technology influence the business? E.g. What new technology is available?); Legal (What changes to laws is there? E.g. import and export laws, labour laws); and Environmental factors (What happens in the environment? E.g. global warming) and will help management to anticipate problems in terms of these factors. The PESTLE analyses is suitable for bigger business enterprises.

CREATIVE THINKING* What is Creative Thinking? APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: What is Creative Thinking? To offer anything new or to think original. Creative thinking can help entrepreneurs to come up with better ideas than their competitors. Existing products can be improved through creative thinking. It also assists to develop innovative marketing strategies. Problems can be solved through creative thinking.

CREATIVE THINKING* APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Creative thinking can be developed by the following: Think constantly on what is happening around you and question decisions made by other people. Listen to what others say. You can use what is said and with a few changes, you can develop it into a useful product or business idea. Write down the ideas you have. Constantly ask questions about something you take for granted. People tend to do things the same way. Break away from this ‘habit’ and try something else. Do not be afraid to make mistakes. Surround yourself with creative people. Assume that there is more than one method to tackle issues.

CREATIVE THINKING* APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Creativity is not just required from the owner / management: Encourage employees to develop new ideas. Encourage creativity as an approach to all situations. Stimulate and develop employees to be more creative. Welcome flexibility and innovative ideas from employees.

CREATIVE THINKING* The role of creative thinking in problem solving: APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: The role of creative thinking in problem solving: Creative thinking plays an important role in the success of a business and promotes the moral of the workers. Creative thinking skills are important to find a variety of options to solve problems in the business. Essential for a successful and sustainable business in a competitive business world. Development of ideas, formulation of plans and problem solving requires an element of creative thinking skills.

CREATIVE THINKING* Routine thinking against creative thinking: APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Routine thinking against creative thinking: Routine thinking: The management team assume that the future will be the same as the past. Problems are therefore undertaken in the same way as in the past with the expectation that different results will be obtained. Nothing new is tried, because the point of departure is: we have always done so and changes will only bring problems. Creative thinking: Break away from routine thinking and use lateral thinking through discussing of the problems, even if the solution does not seem feasible. Try something else to address problems through innovative and new thinking.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Business’ challenges are becoming more complex due to the influences of the external business environment such as improvement in technology, etc. and therefore the management teams of businesses must put in more effort to understand and implement more complex techniques to solve challenges. The most appropriate technique or combination of techniques should be applied to handle a specific problem / challenges.

Forces against a decision CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: The force field analysis The force field analysis examines all the forces for and all the forces against a decision. The force field analysis is prepared on a grid: State the problem or the decision that needs to be made in the middle. The forces for a decision are listed in the left column and the forces against a decision are listed in the right column. A weighting from 1 to 5 is assigned to each force, where 1 indicates that the effect of the force is weak. Calculate the total score for each column. Forces for a decision: Problem statement/ Decision to be made. Forces against a decision Score:

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: The chair technique The chair technique involves two people sitting on chairs facing one another. The person sitting in one chair has to identify all the advantages concerning a particular choice or problem. The person sitting in the other chair must identify all the disadvantages regarding the problem or choice.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: The Delphi technique The Delphi technique involves obtaining the opinions of experts without the experts having to meet in person. These experts help to create ideas and explaining them to reach consensus to make informed decisions. Pre-compiled questionnaires are used to gather information and opinions to receive feedback from different people. These opinions / information are then processed to determine the best possible solution.. The idea behind this technique is that people in groups talking about a problem, do not have the same impact as when individuals separatly have to answer questions about it It is a time-consuming technique that increases expenses due to increased administrative costs.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: The Delphi technique The process is as follows: Identify the problem, design a questionnaire about the problem and ask the participants to submit any possible solutions to the problem. Each group member completes the questionnaire individually and anonymously. The response of the people is analysed at a central venue. A copy of the processed results of all respondents, are given to each group member, after which the group members (respondents) again completed a questionnaire after the results of the previous questionnaires have been studied. This response is then analysed again, etc.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Brainstorming This technique is often used in problem solving when the business’ management team wants to get a group / team involved in the process. Brainstorming promotes creative thinking and creative problem solving by encouraging idea generation without participants criticising the ideas of fellow participants. One of the biggest advantages of brainstorming is that participants build on one another’s ideas. Group members can come up with ideas without fear of criticism, and team members can build on each other’s ideas. It can be an effective and motivational technique, but it must be properly managed by a facilitator to ensure best results.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Brainstorming The following three aspects are essential if brainstorming is used as a problem solving technique: all the people in the team / group must contribute positively, free imagination. and judicious criticism of other group members’ suggestions. As a result of technological improvements, an E-brainstorming session ca be held in which group members share their ideas online.

CREATIVE THINKING Brainstorming work as follows: APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Brainstorming Brainstorming work as follows: The facilitator explains the definition of the problem to the group(s). Once everyone in the group understood the definition clearly, a time limit is set in which the problem should be solved Group members exchange ideas and it is written on a flipchart by each group leader. The facilitator encourages all group members to participate and ensure that no one’s idea / suggestion will be criticised, because it will discourage group members to come up with ideas. When the time has expired, or if no one has any more ideas, the flip charts are put up in front of the room. Similar ideas by different groups are grouped together by compiling a new list and the ideas are refined. The group evaluates the ideas and arrange them in order of how successful they think each idea will be.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: SCAMPER Suited as creative thinking technique in the process of developing new and improved products. Think for instance how cars, cell phones, etc. have changed through the years. Manufacturing enterprises mainly use this technique to develop new products and improve existing products. SCAMPER is the acronym for the following techniques: Ask questions related to the each of the following: Substitute Which part of the product can be substituted by something else to remove the problem/create an improvement. E.g. parts, equipment, raw materials, workers Combine Which people/processes can be combined to eliminate the problem / create an improvement. Current product’s various functions, technologies, equipment. E.g. Nowadays cell phones have different functions for example: personal communication, sms, camera functions, games, etc.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Adapt What can be changed to eliminate the problem / create an improvement? E.g. a toothbrush working with a battery. Magnify/ modify What can be modified / magnified to create an improvement? E.g. new car models that differ from previous models in terms of form. Put to another use How else can this problem be solved? E.g. can this product be marketed overseas? For what other purposes can the product be used? E.g. a bench that change to a bed. Eliminate What will happen if parts of the problem / process / product are eliminated? E.g. original cell phones came out with an aerial on top of the phone. Modern cell phones have an inbuilt antenna. Rearrange/ reverse What if the problem was approached from another angle? E.g. a jacket worn on both sides.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Nominal group technique This technique is used to eliminate the disadvantages of group discussions. In a group there is usually one or a few people taking over, while other members are passive because they do not have the confidence to express opinions Give each participant in the conversation on problem-solving, a card on which any possible solutions to the problem can be written. This is anonymous cards, which means nobody writes their name on it. Take in all the tickets and hand it out to other participants. Each person reads the possible solution(s) on the card in his / her hand aloud. The facilitator writes down all the proposals for all to see. All the proposals are discussed with regard to pros and cons and then the most suitable solution is chosen, after all proposals are ranked. The final choice can be done by secret ballot where each member anonymously votes for the best solution.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Forced combinations Hand out paper with an object, slogan, words or picture imprinted on it to each participant. Each person gets a different object, word, picture or slogan. Example: one gets a picture of an elephant, the following participant receives a paper with a calculator imprinted on it, the next a slogan ‘We can’, etc. There may therefore be a great variety, according to the problem that must be dealt with. Write down the problem that must be dealt with so that everyone can see it. Everyone should then use the picture, object, word or slogan on the paper as symbol to create possible solutions to the problem. Write down all the possible solutions and choose from them the best solution.

CREATIVE THINKING APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Empty-chair technique Similar to the chair technique, except that only one person is involved. The person spoke to the ‘fictitious person’ on the empty chair. This technique stimulates the person’s thinking. It helps for better understanding of the problem, because you need to explain it to ‘someone else’. You give possible solutions aloud to ‘someone else’. Psychologists says some people find it easier to utter their problems and grievances when no one is hearing them. What was “said” are recorded by the ‘speaker’ for future use.

CREATIVE THINKING It is diagrams portraying ideas / concepts. APPLYING CREATIVE THINKING TO COMPLEX BUSINESS PROBLEMS: Mind maps It is diagrams portraying ideas / concepts. It can be used to develop new ideas, solve problems, show notes to exchange orders, serve as a summary in studies, etc. This technique works as follows: Decide on the central problem and find a word / picture that describe it. This word / picture form the core of the map. Break the central problem in main ideas and write them down on the main branches of the map. Divide the main ideas in sub-ideas and indicate it on the smaller branches of the map. (The main and sub-ideas can be assessed through a brainstorming session). As far as possible single words must be used to indicate the main- and sub-ideas. Colour and different forms can help to indicate the ideas logically.