Alexandra Smart on balancing creativity and commerciality

Alexandra Smart shares insights on innovation and sound business practices, with practical advice for fostering creativity while maintaining financial stability

In today’s rapidly evolving business landscape, the ability to balance creativity with commercial acumen has become a critical skill for leaders across industries. This delicate equilibrium between creativity and commerciality is not just a luxury for creative industries; it’s becoming an essential component of success for businesses of all sizes and sectors.

Alexandra Smart, a prominent figure in Australian fashion and business, embodies this balance of creative vision and commercial savvy. As the co-founder and former managing director of the luxury brand Ginger & Smart, Ms Smart navigated the complex world of fashion entrepreneurship for two decades. Her journey from startup founder to industry leader offers valuable insights for business professionals seeking to foster innovation while maintaining financial stability.

Ms Smart’s experience spans the evolution of business education and practice in Australia. From her early days as an AGSM MBA student in the early 2000s to her current role as an executive coach and advisor, she has witnessed and contributed to significant shifts in how businesses approach creativity and entrepreneurship.

Ms Smart discussed her story with Dr Juliet Bourke, Professor of Practice in the School of Management and Governance at UNSW Business School for The Business Of, a podcast from UNSW Business School. In their conversation, Ms Smart shared insights into the critical balance between creativity and commerciality, and how these elements interplay to drive business success. She also offered actionable advice for leaders looking to infuse their organisations with creative thinking while maintaining a strong commercial foundation.

The evolution of entrepreneurial thinking in business education

Ms Smart’s journey as an entrepreneur began in the early 2000s when she was studying for her AGSM MBA. At that time, business education focused primarily on managing large organisations. Ms Smart recalled her experience: “Back in 2002, you were being taught when you’re doing an MBA to run a large organisation – a Telstra, a Qantas. I decided in my final six months to do my final project on how to build Ginger & Ms Smart the startup. So we wrote the business plan and when I presented it, I was marked down pretty dramatically because I had, frankly, missed the brief.”

This experience highlighted the gap between traditional business education and the needs of entrepreneurs. However, the landscape changed rapidly. “Two years later, I was asked to come back and speak to the graduating class – of 2004 it must have been – and I was asked to speak about entrepreneurialism. What does that mean? And how does that set you apart? And why organisations should think like that and why, individually, the audience should think like that,” she said. “So in a very short period of time, that thinking changed.”

The three Cs: Creativity, commerciality, and culture

In her conversation with Dr Bourke, Ms Smart introduced the concept of the “three C’s” – creativity, commerciality, and culture – as essential components for business success. “You’ve got the creative thinking on the one side, which is all about openness and moving fast and dynamism and making quick decisions and having a short and long-term vision and being able to, you know, conserve cash, but also spend where you need to and thinking out of the square,” she said.

Read more: Novelty vs commercial viability: what makes entrepreneurs successful?

“And then you’ve got the commercial reality of business, which is you’ve got to be good at budgeting, you’ve got to be good at risk and governance and requirements and tax and all the sort of Ms Smart things that you need in a business, because if you don’t have those aspects then you don’t often have a business.”

Ms Smart emphasised the importance of culture in supporting both creativity and commerciality. Underscoring both of these aspects, she said a culture that supports both is critical. “That supports the commercial reality, but also the capacity to be creative, to think innovatively, to think big, to think outside the square that allows innovation,” she said.

The importance of balancing creativity and commerciality

Ms Smart stressed the need for businesses to strike a balance between creative and commercial thinking. She observed, however, that many organisations tend to focus heavily on the commercial side: “What I see typically in organisations is that they lean too far to the right. They’re all about the series side, the risks, the finance, the processes, the systems. In fact, that’s proven that 95% of what we think about in business is on the right-hand side of commerciality, and most organisations don’t give space for what’s required around, let’s call it innovation, let’s call it entrepreneurialism, let’s call it creativity,” she said.

Instead, she argued that finding this balance is crucial for business success. When space is given for both sides of that way of thinking, she explained that this is when businesses find an edge and that’s when they can move forward and succeed. “That’s when they attract the right people. That’s when they attract the right consumer. That’s when they widen their scope and they start and continue on a trajectory to being winners to being high-performing organisations,” she said.

The Australian fashion landscape

Ms Smart also highlighted Australia’s unique position in the fashion industry and observed that Australia “punches above its weight” in designer fashion. “There’s more Australian designers in this country at that sort of mid-to-luxury end, than there are in Paris, London, Milan, anywhere around the world,” she said.

She attributed this to the creative spirit in Australia and the willingness of consumers to support local designers. “There’s a lot of creative spirit here, there’s a lot of creativity and there’s an audience that, you know, perhaps it’s becoming very difficult in the retail market right now, but there’s been an audience here in Australia and a consumer who’s been prepared to support the Australian designer industry.”

Ms Smart's experience with the Melbourne Fashion Festival provided her with firsthand insights into the unique relationship between Australian designers and consumers. She noted the enthusiastic response of Australian consumers to local fashion. "I sit on the board of the Melbourne Fashion Festival, so I see that in action, where the consumer comes to see those fashion designers on the runway, and they're just so welcoming and so responsive to designer fashion. There's a really interesting dynamic here in this country. I can only explain it that the consumer here is willing to support and interested,” she said.

Read more: Three paradoxes luxury brands face in the digital era

The future of retail and fashion

There are a number of challenges facing the retail and fashion industries – particularly in the current economic climate, according to Ms Smart, who offered a candid assessment of the difficulties businesses are facing. "I think we're in a very difficult retail environment right now, across the board, but especially in designer fashion. Cost of living is real and often that sector is hit hard and hit first," Ms Smart observed, highlighting the vulnerability of the fashion industry to economic fluctuations.

In response to these challenges, she emphasised the importance of understanding and focusing on core customers: "I think the key now is to get really good from a niche perspective, to really understand who your core customer is, and to talk to her and to be on top of what it is that she's looking for."

This customer-centric approach, according to Ms Smart, is crucial for brands to differentiate themselves in a crowded market. She stressed the importance of clear communication and brand positioning: "Because it's incredibly hard to break through often, there's a lot of noise, and unless you're singular about what it is that you stand for and how you're different, and why you're different, and how you're going to talk to her, then you just get lost in a sea of at all," she said.

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Practical tips for infusing creativity and commerciality

Ms Smart offered practical advice for organisations looking to balance creativity and commercialism:

1. Restructure meeting agendas. Ms Smart suggested allocating equal time to commercial and creative topics in meetings. “Make it half and half because that’s demonstrative, that’s saying ‘We value as a leadership team or a board, or an organisation - we value the hard stuff and some of the softer stuff’. And when you start to build the agenda around that, you’re prioritising both in a way that makes difference,” she said.

2. Prioritise people. Ms Smart advised putting people-related topics at the top of meeting agendas: “By putting people at the top of the agenda, it sends a very strong message about what’s important to the organisation and what can often happen is the really interesting dynamic questions and decisions come out at that level and then flow into the more commercial reality agenda items.”

3. Use roundtable meetings. Ms Smart also introduced the concept of “round or rectangular meetings” to foster creativity. “When you sit at a rectangular table, you often have someone at the top of the table, it’s often the boss and you’re just reporting in ‘We’ve done this, we’ve hit those KPIs, you know, we’re ticking our action items’. And that’s great, and you need those meetings,” she said. “But creativity comes out is more at roundtable meetings where there’s less hierarchy, there are conversations across the table, there are multiple items to discuss and there’s a sense of camaraderie around the table, because no one is pulling the leadership or the hierarchy card and all ideas are good ideas.”