Creative destruction

‘Every act of creation is an act of destruction,’ mused Pablo Picasso. Another way of putting of it would be: ‘You can’t make an omelette without cracking a few eggs.’


‘Every act of creation is an act of destruction,’ mused Pablo Picasso. Another way of putting of it would be: ‘You can’t make an omelette without cracking a few eggs.’

‘Every act of creation is an act of destruction,’ mused Pablo Picasso. Another way of putting of it would be: ‘You can’t make an omelette without cracking a few eggs.’

When the great artists of the late 19th and early 20th centuries weren’t uttering profound truths, sleeping with each other’s girlfriends and uttering yet more profound truths while sloshed on absinthe, they studied the aesthetic approaches of their artistic forebears and then figured out how to start afresh and be absolutely modern.

In the business firmament during that time, the lawyer and academic Joseph Schumpeter – who was unlucky enough to be appointed as Austria’s minister of finance in 1919 as the country careered into an economic mire (the Alistair Darling of his age) – came up with the notion of ‘creative destruction’. The theory goes along the lines that as successful companies grow and form a monopoly, competition doesn’t occur through pricing but through innovation. New entrants come into a market and effectively blow away the old guard because what they offer is more innovative and marketable than previous products, services and methods of distribution. Inevitably, those new entrants to the market form monopolies of their own and are therefore destined to lose their competitive edge. And so the cycle of usurpation continues.

Always different, always the same

The pace of change at the moment is remarkable and the need for creativity in business is coming to the fore. Peter Ilic, the founder of Little Bay Restaurants, is a good example of someone who has recognised the importance of doing something a little different. He has pepped up customer numbers by introducing the idea of ‘pay what you think it’s worth’. Trusting in human kindness has paid off as customers are spending more.

Creative thinking of this type can raise the profile of your business as competitors go on the defensive. But it isn’t as easy as it sounds, and the process of evaluating innovative ideas might entail facing up to painful truths about your company. For instance, you may have to deal with staff who are underperforming, or rethink a particular service. It comes down to asking the questions: ‘What’s core to the business? What sells? How can I make this better?’ And then the key is not to dither and delay but to act swiftly.  

Angus MacSween, the CEO of Iomart, has taken his company through various incarnations before finally shaping it into a managed hosting and continuity services business. After years of toil and tough decisions, Iomart is finally delivering the goods.

If you’ve been in business for any length of time, you’ll know that a company invariably starts to find its feet once the business plan has been thrown out of the window. As a growing business, the capacity to be flexible, innovative and able to change direction at a moment’s notice is a real strength.

Be sure to use it.

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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