ENTREPRENEUR AND CREATIVE THINKING

Creative thinking is the generation of ideas that result in improved efficiency or

effectiveness of a system. It is the specific thought process that improves the ability to be
creative. It is the ability to think of original, diverse and elaborate ideas.

Since it is the process of exploring multiple avenues of actions or thoughts, it leads to

multiple solutions to the problems. The process remains the same but the approach the
people use will vary.

Critical factors associated with the creative thinking are:

 Recognize dominant ideas that polarize perception of problem

 Searching of different ways of looking at things
 Relaxation of rigid control of thinking
 Use of chance to encourage other ideas.

Creative thinking leads an entrepreneur to seeing the opportunities before anybody else.
Ordinary people either:

 Don't see opportunity at its nascent stage eg emerging technology, innovation

 Don't care and don't take serious once an opportunity is seen
 Don't understand even when it has become successful (What's really going on? How
can a person become a millionaire for just recycling newspapers?)
 Don't move fast enough, waits until it is late.

Through creative thinking, entrepreneurs have the ability to fix these flows through:

 Foreseeing the opportunities before anybody else

 Explore ignored markets or unmet needs
 Understand the industry's value chain
 Move fast into the business

CREATIVITY, INNOVATION AND INVENTION

Creativity

Creativity is the process of developing an original product, service or idea that makes a
socially recognised contribution. Moreover, novel combination of old ideas can also be
considered as creativity.

It is the ability to bring something new into existence from either existing or new idea. The
entrepreneurs needs new ideas to set up new ventures.

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Sources of innovative and creative ideas

 Present and potential consumers

 Existing companies
 Raw material providers
 Distributers and retailers
 Research and development
 Existing employees

The process of creativity

Creativity is a process that can be developed and improved, the creative process involves
four steps, namely:

1) Background or knowledge accumulation: Successful relations are generally

preceded by investigation and information gathering, which involves;
a) Extensive reading,
b) Conversation with others working in the field,
c) Attendance to the professional workshops.

This exploration provides the individual with variety of perspectives on the

problem.

2) The incubation process: This Process occurs while creative individuals are
engaged in activities totally unrelated to the subject or problem. It happens even
where they are sleeping. Getting away from the problem and letting the
subconscious mind work on it allows a creativity to spring forth the, steps to induce
incubation are as follows:
a) Engage in routine
b) Mindless activities eg cutting the grass, painting the house.
c) Exercise regularly.
d) Play (sports, board games, puzzles).
e) Meditate.
f) Set back and relax on regular basis.
3) The idea generation: this is most exciting stage; it is when the multiple ideas and
solutions are generated. These ideas are brainstormed to assess their feasibility. An
average person incorrectly perceives this as the only component of creativity.
4) Evaluation and implementation: this is the most difficult step and requires a great
deal of courage, self discipline and perseverance. In some cases the entrepreneurs
will take the idea in entirely different direction or will discover a new or more
workable idea while struggling to implement the original idea.

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 In some cases entrepreneurs will take the idea in an entirely different direction or
will discover a new and more workable idea while struggling to implement the
original idea.
Another important part of this phase is the reworking of ideas to get them into final
form.

Characteristics of creative people

1. Bright but not necessarily brilliant.

2. Good at generating different ideas within short period
3. Have positive image of themselves
4. Sensitive to the environment
5. Motivated by challenging problems (result oriented)
6. They are flexible to changes
7. Value their independence and do not have strong needs for group approval.
8. Have a positive image about themselves
9. Value their independence

THE CREATIVE CLIMATE

Creativity is most likely to occur when the ‘climate’ is right. No entreprise will long have
creative owners and managers if right climate is not established and bringing up.
Some of important characteristics of ‘right climate’ are:
1. A trustful management that does not over control the personnel.
2. Open channels of communication among all members of the business
3. Considerable contact and communication with outsiders
4. A large variety of personality types
5. A willingness to accept change
6. An enjoyment in experimenting with new ideas
7. Little fear of negative consequences for making mistakes
8. The selection and promotion on the basis of merit
9. The use of techniques that encourage ideas, including suggestion systems and
brainstorming
10. Sufficient financial, managerial, human and time resources for accomplishing goals.

TRIARCHIC THEORY OF INTELLIGENCE FOR CREATIVITY

The Triarchic theory of intelligence was formulated by Robert Sternberg attempting to

understand the human intelligence in terms of distinct components rather than a single
ability.

a) Analytical thinking
This is the ability to judge the value of one's own ideas to evaluate their strength and
weaknesses and suggest ways to improve them. This is done through learning new
information, making judgements and problem solving by comparing and evaluating the
results.
(Analyze, critique, judge, compare, evaluate, assess)
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b) Practical thinking
This is the ability to apply the intellectual skills in everyday context and to sell creative
ideas. This is done by adapting to an environment, shaping and changing the
environment.
(Apply, use, put into practice, implement, employ)

c) Synthesis (Creative) thinking

This is the ability to sense and generate creative ideas from different sources, applying
learned materials to novel situation, inventing and designing solutions using acquired
knowledge. This is also the adaptation of unique situations. (create, invent, discover,
imagine if, suppose that, predict)

Innovation

Innovation is a key function in the entrepreneurial process. It is the process by which the
entrepreneur converts opportunities into marketable ideas. It is the means by which they
become catalyst for change. Innovation helps the business house of to survive when the
wind of change hits the market.

Most innovation results from a conscious, purposeful search for new opportunities. This
process begins with the analysis of the sources of new opportunities.

Successful innovators use both the right and left sides of their brain i.e

 They look at figures,

 They look at people
 They analytically workout what innovation has to be in order to satisfy the
opportunity
 They go out and look for potential users of the product to study their expectations,
their values and their ideas.

Innovation is the successful exploitation of new ideas incorporating new technologies,

design and best practice. This can be achieved on either:

a) The introduction of new good or a quality of good.

b) The introduction of new method of production
c) The opening of the new market
d) The utilisation of some new source of supply of raw materials or intermediate goods
e) The carrying out of some new organizational form of the industry.

In the rush to market, ordinary people might forget that:

 No one ever buys a compass; they buy a sense of direction.

 Not a drill bit, but round holes.
 Not loudspeakers, but sound.
 Not pest traps but fewer pests. 
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We don’t buy products; we buy the value of products. We buy the sum of benefits that
products deliver. The same is true everywhere in business. No one ever invests in a new
venture. They invest in returns on investment. Not funding for a project, but potential
competitive advantage.

Most innovations result from a conscious, purposeful search for new opportunities.

 It starts with the analysis of new opportunities.

 The innovators go out to work, listen and ask
 Analytically work out what the innovation has to be in order to satisfy the
opportunity
 Go out and look potential users to study their expectations, values and needs.

Types of innovation

1. Invention: The creation of new product, service or process that is untried.

2. Extension: The expansion of a product, service and process already in existence
3. Duplication: The replication of an already existing product, service or process. The
duplication effort, however, is not simply copying but adding the entrepreneur's
own creative touch to enhance or improve the concept to beat the competition.
4. Synthesis: The combination of the existing concept and factors into the new
formulation. It involves taking a number of ideas or items already invented and
finding a way, so together form a new application.

Sources of innovation

1. Unexpected occurrence: These are success or failures that were never anticipated
but often end up proving to be a major innovative surprise to the entity.
2. Process needs: These exists whenever a demand arise for the entrepreneur to
innovate and answer a practical need eg microwave, oven, fast track busses.
3. Industry and market changes: Industry and market are always undergoing
changes in structure, design, or definition. Entrepreneurs need to conform to these
changes.
4. Demographic changes: Arise from trend changes in population, age, education,
occupations, geographic locations etc. An entrepreneur required to change in line
with these factors.
5. Perceptual changes: These changes occur in people’s interpretation of facts and
concepts. Perception can cause major shift in ideas to take place eg exercise aerobics
6. Knowledge based concepts: These are the basis for creation or development of
something new.
7. Incongruities: these occur whenever the gap or differences exist between
expectation and reality. It is the discrepancy between what is and what should be.
One place to look for incongruity is in your own customers, their complaints and
unmet wants are all the hints you need.

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MYTHS OF INNOVATION

MYTH 1. INNOVATION IS PLANNED AND PREDICTABLE:

This myth is based on the old concept that innovation should be left to the research and
development department under a planned format. In truth, innovation is unpredictable and
may be introduced by anyone.

MYTH 2. TECHNICAL SPECIFICATION SHOULD BE THOROUGHLY PREPARED

Through preparation often takes too long. Quite often it is more important to use a
try/test/ revise approach.

MYTH 3. CREATIVITY RELIES ON DREAMS AND BLUE – SKY IDEAS

Accomplished innovators are very practical people and create from the opportunities left
by reality not day dreams.

MYTH 4. BIG PROJECTS WILL DEVELOP BETTER INNOVATIONS THAN SMALLER ONES.

This myth has been proved false time and time again. Larger firms are now encouraging
their people to work in smaller groups, where it often easier to generate creative ideas.

MYTH 5. TECHNOLOGY IS DRIVING FORCE OF INNOVATION AND SUCCESS.

Technology is certainly one source of innovation, but it is not the only one. Moreover, the
customers or market is the driving force behind any innovation. Market driven or customer
based innovations have highest probability of success.

MYTH 6. GOOD IDEAS ARE RARE

This assumes that good ideas are already exhausted, thus there is no way you can get
something new. The reality is that new ideas are everywhere, if you watch a six years old
child, invents a lot of things in one hour. The problem with adults life demand conformity
and we sacrifice our creative instincts in favour of social status.

MYTH 7. BOSS KNOWS MORE THAT EMPLOYEES

A fallacy in work place is that senior staff are better at everything than the people who
work for them. This is false, to rise into power needs good political judgement, yet
innovation requires a willingness to defy convention.

MYTH 8. INNOVATION IS ABOUT NEWEST THING

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This is not true because sometime the innovation is incremental, innovation improves the
existing ideas and technology to get something better not existed before.

MYTH 9. INNOVATION IS A SOLO ACTIVITY.

People think that innovation is solely done by the genius people only. The truth is
innovation is done by any person who is willing to improve his or other people’s
inventions.

MYTH 10. INNOVATION CANT BE TAUGHT

People think that innovation is the birth right of some people and cannot be impacted to
others. The truth is that innovation is taught even though not like how math or Germany
language taught, this is teaching people how to think but not what to think, this unleashes
their innate capacity for innovation.

MYTH 11. INNOVATION IS TOP DOWN

People think that the higher the place of the person in the office is directly proportional to
the innovation he possesses. The manager is more innovator than a gate keeper. But the
whole thing is that as you approach the customers the more likely you need to be
innovative. This is to say the cashier or the get keeper needs to be innovative that the
director who is somehow distant from the entity’s customers

MYTH 12. YOU CANT FORCE INNOVATION

It is true that you can’t tell others to start innovating electricity or a bulb and expect to get
something from that. But instead you can create an environment that encourages curiosity
and therefore promote engagement and innovation

PRINCIPLES OF INNOVATION

 Be action oriented: Innovators must be active and searching for new ideas,
opportunities or sources of inventions.
 Make the product, process or service simple and understandable. People must
readily understand how innovations work.
 Make the product, process or service customer based. Innovators must keep the
customer needs in their minds.
 Start small: Innovators should begin small and then build and develop, allowing for
planned growth and proper expansion in the right manner and at the right time.
 Aim high: Innovators should aim high for success by seeking and hide in the market
place.
 Try, test and revise: The innovators should be persistent and always think of the
innovation flaws and change.
 Learn from failures: Innovators use failures as experience and cornerstone to their
new innovations.
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  Follow the milestone schedule: It is important to have schedule of planning and
evaluation purposes.
 Reward heroic activities: Innovative activities should be rewarded and respected.
 Work, work, work: It takes work, not genius to innovate successfully.

INVENTION

Innovation is different from invention. Invention is discovery of new methods and new
materials while innovation is the utilization of invention to produce new and better quality
of the product that gives greater satisfaction to users and greater profit to the
entrepreneur.

The inventor gives the idea and the innovator implements the idea for economic gain. The
innovator (entrepreneur) commercially exploits the invention produced by him or other
person.

Applying creative thinking in problem solving

Creativity is the process of becoming sensitive to problems, deficiencies, gaps in

knowledge, missing elements and so on, identifying the difficult, searching for solutions,
making guesses or formulating hypothesis about the deficiency, testing and retesting these
hypothesis and possibly modifying and retesting and finally communicating the results.

ENTREPRENEUR DECISION PROCESS

a) Identify and evaluate the opportunity:

This is the quite difficult task, it involves constant search for need and capitalise from it
before anyone else.

How to reveal opportunities:

1) Mr X has decided to build a hostel after he heard about the complaints from students
about poor service and high cost of current hostels.
2) Jan Koum and Brian Acton are the founders of whatsapp messenger, formal
employees of yahoo. After Jan and Brian left yahoo they applied for jobs at facebook
but rejected. Then founded the whatsapp in 2009 and sold it to facebook for
usd19.3bil. This is an example of opportunity seen and worked upon by these two
guys.
b) Develop a business plan:

A good business plan should be developed to exploit the opportunity revealed above.
Business plan is important in developing the opportunity, determining resource required,
how to obtain these resources and how to successful manage the venture.

c) Determine the resource required:

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The amount of resource needed for the opportunity must be determined; this starts with
the appraisal of the entrepreneur’s present resources. Acquire the resources needed in
timely manner.

d) Manage the enterprise:

After resources are acquired they must be employed as implementation of business plan.
The business plan works as the control system. The variables are to be controlled and the
problems monitored for the venture growth.

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