Individualism promotes creativity and innovation -- the lifeblood of most corporations -- but it's not terribly popular. Instead, many companies look for employees who embrace the organization's culture and play well with others. This all-for-one-and-one-for-all structure may feel secure to those who live within it, but it stifles individualism and could cost the company its edge over competitors.
Collectivism vs. Individualism
Much of corporate America embraces the collectivist model -- a lot like a football team. Each person has an assigned position with well-defined duties, and the coach, or the boss, calls the plays. Everyone works for the good of the team, no matter what the personal cost. The polar opposite, individualism, gets a lot of bad press: lone-wolf syndrome, self-centered attitude or sheer anarchy. But that’s not accurate. Individualism can devolve into chaos without central direction, but individualism in a vertical formation, where each team member is vying for results to move upward, can be very effective. It’s more like a track team, where individual accomplishments add up points for the whole team.
Individualism and Creative Ideas
Professors Barry Staw from the University of California Berkeley’s Haas School of Business and Jack Goncalo from Cornell University decided to challenge the conventional wisdom that collectivist organizations are more productive and that individualistic structures promote conflict. In a study published by the University of California Berkeley in 2006, they gave two groups of students surveys designed to influence their mindset toward either collectivism or individualism. Then they divided the students into collectivist and individualist groups and instructed them to be creative in determining how to use a commercial space vacated by a restaurant. The individualist groups presented a greater number of ideas and twice as many non-restaurant ideas as the collectivist groups.
Individualism and Product Innovation
In a separate study published in 2011 by the National Academy of Sciences, University of California Berkeley Economics Professors Yuriy Gorodnichenko and Gerard Roland created a growth model to predict how companies with a collectivist culture would fare in competition with companies with an individualist culture when producing goods. They found that individualistic entrepreneurs produced higher-quality goods because they derive higher monetary rewards plus increased social status from producing a superior product. While the collectivists had an advantage with well-established products, the individualist-oriented companies outperformed them when it came to the production of new, innovative products.
Efficiency vs. Creativity
Gorodnichenko and Roland found that a collectivist structure provides for greater efficiency because it’s easier to get approvals and move from conception to production when a larger group of people participate in decision-making and decisions reflect consensus. An individualist atmosphere, however, is more conducive to creativity because it rewards personal achievements like new inventions, scientific discoveries or innovative artistic designs, and individualist companies tend to allocate more personnel resources to innovative activities.
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