Managing Creativity at Shanghai Tang

[pic 1][pic 2][pic 3][pic 4]

[pic 5]

Organizational Overview

Shanghai Tang, the high-end emporium of luxury goods and lifestyle brand is a company with a history of approximately 20 years. The organization was originally developed to maximize on the rising trend of western tourism looking to ‘capture a piece of Chinese opportunity’. And while retailers typically need to invest several years before receiving any return on investment, Shanghai Tang was able to accomplish the feat within the first year. Rapid expansion followed overseas with retail fronts being established in cities such as New York (a fashion city powerhouse), but poor customer reception and an economic downturn across Asia (sales reduction of 40%) saw the organization exit the U.S market within 19 months.

In 2001, Le Masne was brought in and swiftly began to rebuild the brand that had lost a significant market share across Asia. In conjunction with Ooi (creative director) they developed a strategy of incorporating a Chinese flavor to the fashion line and began addressing the functionality of the clothing line in hopes that the modern take on fashion would appeal to the local masses where reports show low attraction from the local community.  And while Shanghai Tang has received acclaims through Hollywood stars and musicians, the focus for Le Masne is to develop ways to entice local customers as per a recent report from McKinsey stated that Asia is witnessing a fashion growth in its luxury goods segment.

Organizational Vision

Joining the organization from the Richemount Group with experience leading major luxury brands such as Cartier and Mercier, Le Masne’s vision follows along the lines of the original founder whereby the goal is to establish the first Chinese international luxury brand. However, his vision also extends on the above as Le Masne would also like to win appeal with Chinese customers and expand the company’s market share within Mainland China as well as other global markets all the meantime focusing on enhancing creativity within the organization to deliver collections that will propel the Chinese brand.

Challenges & Tensions

Currently, the organization is experiencing several internal challenges and tension amongst the employees, financially as well the loss of the Creative director whom anchored the balance between the designers and business professionals.  Below we look to expand on the above:  

• Lack of Acceptance in the Asian markets

Even though Shanghai Tang is currently profitable, organizational financial data has shown that they are underperforming in their local markets. In Hong Kong for example, the customer profile reveals that more than 50% of the sales are generated through foreigners rather than their local consumer with a mass appeal within the age demographic of 36-45, whereas in Mainland China, their seems to be greater local product acceptance but with a much younger demographic accounting for the majority of sales.

• Resignation of the creative director

The importance of Ooi (creative director) for Shanghai Tang and as a member of Le Masne cannot be understated.  Ooi, in conjunction with Le Masne developed the creative strategy, which has propelled the organization back into profitability by incorporating an element of Chinese culture into their seasonal collective to gain local approval but yet still appeal to foreigners looking for an eastern influence in their fashion. Further, she managed to anchor the balance between creativity and business as she was a tough critic on her designers but did provide ‘limitless coaching’ and educating moments. In fact, a designer once described her as the ‘center of the design team’.  Thus, her loss represents a significant setback, as she was a leader that the designers identified with/respected, which maintained the creative process through her constant feedback (now lost) however was still business minded as well.

• Creativity threats, lack of Internal Alignment and Challenges

The organizational dynamics between the business individuals who handle the financial, retail and production process and the design team is the largest challenge currently facing Shanghai Tang. Several designers are quoted as saying designers have their own unique style, that their creative process is being too constrained by profit focused individuals and that there is a lack of understanding in general of the creative process. This has resulted in a lack of internal alignment between employees, which in turn has boiled into heated discussions during product meetings. From a motivational frame of references and of which will be discussed; the designer’s autonomy is being threatened through multiple constraints on their designs, the feedback system that they had is now gone with Ooi’s departure. Lastly, the designers further are motivated intrinsically to create their sketches where as it seems the business is focused on profits or extrinsic motivation in their design approval process.  

Recommended Strategies to Manage Creativity

While the challenges currently facing Shanghai Tang are plenty. They can be summarized as a loss of an important team member (Ooi), lack of market share in Mainland China, and most importantly, a clash between the creative team and the business team which can be attributed to differences in motivation and personality. Thus, the presented strategies below should be used by Le Masne to manage creativity in the workplace and they rely on elements of goal setting and self-determination theories of motivation. It is important to note that this is not a comprehensive list of actions or strategies but rather a frame of reference meant to tackle the issue of managing creativity and performance by the use and understanding of motivational theories and the fundamental differences in ways of which individuals are motivated.