At SXSW this week, one speaker nailed a talk about managing creatives–and how you can promote creativity in your own company.

It’s the fourth day of SXSW Interactive, and though the throngs of geeks and enthusiasts are getting tired, it didn’t stop a handful of them from lining up to see Patricia Korth-McDonnell, partner and managing director of design firm Huge, talk about chaos and creativity.

About 150 people crammed into a small conference room at the Marriott Hotel in downtown Austin to hear what the veteran Huge employee had to say about building a company culture that fosters creativity.

While most of her talk was directed at companies in creative industries, the principles she outlined are certainly worthy of consideration by any startup looking to increase innovation. The fast-talking Korth-McDonnell gave it to the audience straight: here’s what’s worked for Huge, and what’s failed.

Creating Creative Freedom

Korth-McDonnell joined Huge, headquartered in Brooklyn, New York, when the company was just 15 employees (it now boasts over 800).

She told the audience that as the company’s headcount grew and it took on more clients, the creativity of the company dwindled.

“We just had this epiphany,” she said. “We asked ourselves: what were we doing at 50 employees that worked and what are we doing differently now?”

One answer was to stop trying to quantify and over-process creativity. All they needed to do was build a process that gave employees truly enough space to be creative.

“Once you have your mission, something to create, you have to let your people just go with it,” she said. “You have to give them five days to get weird–to just go to outer space and back with their ideas. Then you regroup and move on the best ideas.”

Part of this is training employees–and yourself–to stop being “precious” about ideas.

“Ideas die. You might have a brilliant solution for a problem, but if it isn’t the right problem, the problem the client is asking you to solve, it doesn’t matter. You can’t make it a personal mission,” she said.

Creative Accountability

The most interesting part for me was hearing how Kroth-McDonnell handles accountability–often a hairy problem for those managers not used to more outside-the-box thinkers.

One solution: at Huge, she said, current projects are constantly circulating through the office.

“We often call in someone to defend their work, and the person usually has no idea it’s coming,” she said. “When you have a culture where, at any moment, someone else can pick at you, call your bullshit, and ask why–it makes the work better.”

Competition and Bonding Among Employees

Here’s one that’s perennially controversial in companies: Korth-McDonnell says competition among employees will bring out their creative side.

“The way to love your brother at Huge is to be tough on him,” she said, adding sugar coating some professional flaw or lack of commitment will only make the coming wrath of top executives worse. “Sugar coating doesn’t help someone grow into a better anything.”

But within this tough-love approach has to be, well, the love part.

“You also have to have true friendship there. You have to build human relationships,” she said. Otherwise, she said, you’ll just have people being nasty to each other.

Beware the Burnout

While those of you who aren’t in the creative industries may feel that creative-types have this infinite wealth of energy to innovate, Kroth-McDonnell said just the opposite.

“At Huge, we rarely have the same people on the same project for more than 9 months. It just doesn’t work,” she said. “There’s a wall you hit as a creative human and you have to move on. No magic pep talk can cure it, just move on.”

She encouraged owners and leaders to be mindful of this wall, and build in breaks for employees.