“How does it happen that one firm seems to catch fire while another goes flat? To that question, I’ll share with you just a few of the key findings from discussions we had in this specific firm…”

I recently returned from a visit with an award-winning firm in the Northeast who lost some of its top younger talent to competitors. To its credit, the principals committed to regain their innovative ways—and to attract new talent to the firm. With a strong platform to build on, they arguably have as good an external reputation as a firm can have. Moreover, they have a solid financial base with a management infrastructure that can give a boost (leveraging the power of an idea) into the marketplace. They are very well connected to the client community.

Nevertheless, there is a predicament. Upon close examination, this firm lost some of its youthful, energetic talent due to internal cultural elements that brought unwanted characteristics into the mix of the firm. The studio atmosphere in this firm lacked the inspiration formerly present and failed to nurture their creative staff as well as a driving sense of mission and belief in the absolute meaningfulness of their work. This did not happen overnight. Gradually, almost imperceptibly—the firm lost its spirit that drove innovation.

How does it happen that one firm seems to catch fire while another goes flat? To that question, I’ll share with you just a few of the key findings from discussions we had in this specific firm.

1. While the firm possessed strong ethical values, there was little internal communication between generations on these values. Therefore, there was a lack of shared ethical values.

2. The design of the firm’s own workplace failed to bridge its diversity of generations and the need for an energetic flow of communications. People were not circulating in the interior spaces in ways that would foster shared ideas and brainstorming. Partners were in a separate area—the power wing—insulated from the studios.

3. There were numerous sacred cows built into the financial culture of the firm.Open book financial management was never implemented. And although the partners had talked about it, they reached the erroneous conclusion that many employees would “just not understand” certain elements of the business. The sacred cows became failure costs built into the budget. The firm unintentionally budgeted to fail—-that is—-to lose top younger talent.

4. The firm possessed a power-based hierarchy rather than knowledge-based empowerment of all employees.

Today we see that the firm has decided to address these areas to become a stronger place to work and to nurture young, hot talent. I believe they have a good chance of succeeding because they made these commitments:

1. Cultivate values inside the firm that fit their vision. The vision will not change—nor should it in this case—but the firm will recognize creative achievements within a new organizational structure that stresses communication and value propositions internally as well as externally. And open book management will provide a feedback loop that measures what the firm values.

2. Continually question how they communicate, mentor, and lead internally.They set up a new Intranet with an active chat room. And too, they are moving to a new office design—open and centered around the true meaningful work of the firm—rather than around transparent power structures.

3. They are evaluating their ownership structure—and looking for a transition. There are forces and behaviors that they want to encourage sustaining their creative, innovative cultural ambitions. They understand that there is no silver bullet to build their desirable, innovative culture—still they are committed to that innovative culture and to gradually doing what is necessary to foster enduring creativity.

Increasing a firm’s creativity can be achieved through establishing a vision and a value system that supports innovation in both individuals and teams. The underlying driver is connectivity to the changing client base and then putting in place the ongoing spatial and human ingredients for success. While no two firms are alike, there are inner dynamics that provide guidelines for all firms to dramatically increase creative performance.