As part of RBC Thought Leadership’s deep dive into the Creative economy, Disruptors podcast hosts John Stackhouse and Trinh Theresa Do talked to Ajay Agrawal, the founder of the University of Toronto’s Creative Destruction Lab (CDL), about the importance of goal-setting, how to recognize success and why everyone has the potential to be part of the creative process.


Ajay, tell us about the goals you had in mind when you created CDL?

The term “creative destruction” was lifted from a book by Joseph Schumpeter. The idea was that entrepreneurs have an important role to play in reimagining how to produce the goods and services for human flourishing. Universities are magical places. People get to do research and explore how nature works in all kinds of fields. But much of the research ends up in technical peer-reviewed journals that few people read. So the idea was, “What can we do to liberate those insights in ways that can benefit humanity?”

How do you see creativity and destruction working together?

Schumpeter referred to entrepreneurs as a “perennial gale of creative destruction.” Without entrepreneurs, capitalism would lead to a small number of very large firms that would grow and grow and collapse in on themselves because they became ossified. Entrepreneurs bring creativity. They think about how to solve problems differently, more efficiently, with more ingenuity.

How do you teach creativity in a business school?

People think of creativity and innovation as a virtue. In other words, the more innovation, the better. But innovation is a cost, creativity is costly. We start with, “What’s the objective and what’s the most efficient way we can achieve that goal?” That sounds really easy, and it’s surprisingly hard. Many organizations tell me about their innovation programs and I’ll say, “What’s the goal? How do you know if you succeed?” You’d be surprised how many can’t answer the question.

Is that because creativity is difficult to measure?

Yes—if you don’t have a goal. Universities are really important institutions because they’re an environment for people to be creative and innovate with no application in mind. Curiosity-driven research is very important for an overall research ecosystem. But to bring that into a commercial setting, it’s really important to have a goal so you can give creativity some direction.

How do you define creativity?

The process of developing solutions to problems that are better than the existing solutions.

Is creativity different in tech companies than in other businesses?

The businesses that I work with are usually very small and often pre-revenue. They don’t have all the bureaucracy a larger organization has. The creativity in these small firms is in the latitude they have to explore a very wide search space, often without a lot of bureaucratic limitations.

How can a large organization embed more creativity into its culture?

There are three key things. Step one, set a really well-defined target or goal. Step two is to give people the resources they need to explore solutions to the goal. Sometimes people need some time. If they’re expected to keep doing their full-time jobs, it’s hard to have the mental space they need to explore areas outside of their initial domain of expertise. Also, some financial resources—not a lot. Being lean often creates a better environment for innovation because they have to think about how to solve the problem without buying their way to the solution.

The third thing is a way to recognize success along the way. At CDL they have check-in meetings every eight weeks. You can’t set a goal and not have lots of little intermediate milestones because people would just get lost in trying to achieve the final goal.

Is there a difference between creativity and innovation?

I think of creativity as a process and innovation as an outcome. Coming up with the clever types of solutions to build that innovation, we think of that as the creative process.

Can goals be limiting to creativity?

Goals can be a great energizer to creativity, because the minute you set constraints, the creative mind gets to work on “How do I achieve the goal, conditional on these constraints?'”

How has the crisis challenged different approaches to creativity?

The primary distinction has been not being able to work shoulder to shoulder with people, and a lot of creativity requires collaboration. We used to have a lot of great solo inventors, the Leonardo da Vincis, Renaissance people who were polymaths. But as fields have become more complex, to really understand the frontier of the field, you need to collaborate across multiple people who are experts in different areas. It’s very hard to be an expert across multiple fields now. In COVID, the biggest thing has been learning to do all this collaboration online.

What are some of the secrets to collaborating virtually?

Collaboration, particularly among really smart people, can often lead to frictions. They have a competitive spirit and they have very strong opinions because they’ve developed a lot of self-confidence in becoming experts. Online communication can be very efficient, but you can lose a lot of the camaraderie-building that happens in person.

In the before-times, you would go for lunch and have some downtime and that would create some lubrication to help you deal with the frictions when you get back to work. So we try and create times that feel a little bit more like a lunch break.

Is creativity innate in certain people, or something that can be developed by anyone?

Everybody has the potential to play a role in the creative process. That said, it’s not a free ride. Every role requires developing the muscle to play that role. So anybody can play soccer, maybe not at an elite level, but you can play. But even if you have a predisposition to be a defensive player, you still have to develop the muscle, the skill set to play that role.

This interview was edited and condensed for clarity.


This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.