ae Chapter Creativity and Innovation Entrepreneurial Thought The eva of the intelligent man/woman is almost over and a new one is emerging—the era of the creative man/ woman. — Pixcnas Nov eed Objectives : 1 Toexplore the opportunity identification process To define and illustrate the sources of innovative ideas for entrepreneurs 2 3 To examine the role of creativity and to review the major components of the creative process: knowledge accumulation, incubation process, idea experience, evaluation, and implementation 4 To present ways of developing personal creativity: recognize relationships, develop a functional perspective, use your “brains,” and ellminate muddling mind-sets § To introduce the four major types of innovation: invention, extension, duplication, and synthesis € To review some of the major myths associated with Innovation and to define the ten principles of innovation JOPPORTUNITY IpENTIFICATION: THE SEARCH FOR New IDEAS domain of enteeprencurship. AS one researcher stated archer stared, — entral 10 the ity identification is central 10 1 ce Opportunity identi he questions OP WHY, TRH 0 4 ‘At its co round the questions OF WHF, when opportunities for the creat: centreprencurship revolves acound the en Mem enhortunities for the ereation of goods Scanned with CamScannerCreativity and Innovation 125 and service’ i the fature arise ivan economy, Hn ai cts wealth" Whee ec iNportunity recognition is the preys poth personal soy challenges witha we AHA meron: the opportunity dentition prowess is one ofthe pw athe cheaper at lattain of entrepreneurship research,’ To give w better perspective of this enteepre= eal Sar Tae Wlevorea to examining theereative pursuit ol kets aint THenBovaTIon pencess, These nag Ra ToPaCe ATE Keys w Viulerstding opportunity wid its development for entrepreneurs. The fcr Tae alt euttedtencur iy the identification of a "youd ideas” However the seach for good ideas is aver anys hus We EXate the sources that ean be used in this search and how an entrepreneur ean work wand the diwovery ob a goon! ile Hae Me eee aa Ruta lea. The most important arene to be avtare af ate within the grasp of our owt Anowstedge, Let us esamine some of the key! sources af innovative ideas, sources of Innovative Ideas Uorential entrepreneurs must always be alert to the opportunities that lie in the external and internal environ ines ETT TET Thy alernen wil allo geaT enEAT cate an idea from what others simply camo recognize, The following are some of the fost eTTecmveROInces of entrepremeMTaTOpPOTTTE id's Trongs signal shitts inthe current paradigm (or thinking) of the major population, Observing trends closely will pt an eutreprenct y coe WPOorcntial opportunity, Tremtsteed to be observed in society, technology economy, and xoverniient, Following aresome eaTMMples of such trends Aocietal Trends: aging demographics, health anal fimess growth, ser Technology Trends: mobile (cell phone) technology. ¢ Aicomomie Trends: higher disposable income, dual or living, commerce, Internet advances, aagescarner families, performance pressures ~ Government Trends: increased requlations, petroleum prices, tertorisny Unexpected Occurrences These are successes or failures that, because they were unanticipated or unplanned, often prove to be a major innovative STEPHSTRTTTT ON The infamous Y/LL terectistattack ow the United States isa good example of an ‘negpscted oveurrences 1 produced an intluy of innovative solutions to the newly created challenge of homeland security, (See "Entrepreneurship in Practice Ferrorisny Rgnites Creativity” on page TA.) Incongruities Incongruities occur when a gap oF dlitference exists berweet expectations and reality, For example, when Ered Smith proposed overnight mail Teliveryy he was Toll, “Hit were thar profitable, the U.S, Post Office would be doings it.” We uurned aT SMT Was TRH An incongruity existed between what Smith felt was needed! and the way tuisiness was currently conducted thus, he ereated Belg Process Needs ‘These occur when an answer to a particular need is required, Penture Spain’ that exists in the maTKeIpheCHThe TUTEPTETITT must FecoRnize aM innowative solution, or “paimkillee™ Bamples tietnde the creation af new medical devices, health foods, pharmagemicatsy am time-saying apitalists stten refer tw these needs as. innovations, Industry and Market Changes Continual shitts in the markerplace are caused by developments such ay consumer attinndess advansemtents iy Laan nlaney geomet sustics a mTCTEAATTTS TAT ATS SCTE ess oF Metin Sone ecto hea nthe heal care inlusey—hospital are has wadergone radical changes and home healthy cre anal preventie nutcins have replace hospitalization and surgery as mary toss ateas. The salth care and prove ETE cnuteprenicue nods tes WaT Ot abl seize these TTRTRTAR BOTTOM, Scanned with CamScanneree 126 Entrepreneurship: An Introduction . Demographic Changes and similar fa. These arise from trend changes in sraphic locations, of seo} ge, education, becupationss B -s, For example, as the tors. Demographic shifts are important and elena! je new em carta OPP retirees) land develop. average population age in Horida and Arizona has increased (due largely ¢0 the in ‘ment, recreational, and health are industries all have profited. Perceptual Change: 7 , hhanges are intangible These are changes thar occur in people’ interpretation of facts and concepts. Percept se ee eaNE by he but meaningful. Perception can cause niajor shifis im ideas to take place. The current MOT CT i ei revived need to be heathy and physically fit has ereated a demand for both health foes throughout the country, Another example is people's desire to better use their personal rime. industry has capitalized on consumers’ current need to “see the world” while they are youn’ and healthy, and time-share condominiums and travel clubs have increased. s a result, the travel _ Knowledge-Based Concepts These are the basis for the cre ment of something brand new: Inventions « they are the product of new thinking, new methods, and new knowledge. Such innovations often require the longest time period between initiation and market implementation because of the need for testing and modifca- tion. For example, today’s cell phone technology has advanced to include not just phone service but cameras, Internet aecess, and music. This has revolutionized the way we use different technologies today. These concepts were not thought possible just five years ago; some examples of these innovation sources are presented in Table 5.1 Table 5.1 Sources of Innovative Ideos Source Examples Unexpected occurrences Unexpected success: Apple Computer (microcomputers) Unexpected tragedy: 9/11 terrorist attack Incongruities Overnight package delivery Process needs Sugar-free products 5 Caffeine-free coffee Microwave ovens Industry and market changes Health care industry: changing to home health care Demographic changes Retirement communities for older people Perceptual changes Exercise (aerobics) and the growing concern for fitness Knowledge-based concepts Mobile (cll phone) technology, pharmaceutical industry, rabotics The Process of Knowledge and Learning ‘ognized, entrepreneurs must use their existing, know Once the sources of ideas are 1 actus that knowledge serves as the bass for interacting with the neve base could take the formbargemerat tchustry ki Prior market knowledge, pri ine, oF at helps ledge base to identify an ice. This knowledge fomer understandings identify opport- to interpret the unusual nces are uniquely valu specific inte nities.’ Every prospective sources of innovative ideas into Able to the opportunity recognition process. preneur ne 4 potential opportunity. Thus, each ind ee OE, Scanned with CamScannerCreativity and Innovation 127 THE GLOBAL PERSPECTIVE | Africa: Opportunities or Peril Due to civil unrest in parts of Africa, entrepreneurs and investors alike have heen disinclined to do business on the continent; however, a brave few have uncovered significant opportunity by being innovative in their approach to conducting business in a relatively unstable environment. With Alrica’s economy growing between 5 and 6 percent annually and its inflation dropping, companies that have been willing and able to adjust are well positioned as the climate continues to improve. Emerging Capital Partners (ECP), a private equity firm in Washington, DC, has focused on Africa since 1999 and has experienced a return of three times its initial investment on average. The firm admits that it has encountered problems, including having to exit 18 of the 48 countries in which it has made investments; however, the overall performance ofits portfolio has rewarded the company’s tenacity Following are a few of the top performers for its portfolio: * Celfel, a mobile phone company that operates in 13 countsies; ECP invested $50 milion, resulting in a $215 milion payout when it was sold five years later. * Ecobank, a banking group; ECP invested $12 million, leading to a $36 mi years. n return at the end of seven * Societe International de Plantations D’Heveas, a rubber exporter; ECP invested $14.8 million and cashed out for $48.1 million two years later. ECP emphasizes that its investors are experienced in working with international businesses, so the risk is somewhat mitigated by their prior knowledge; however, local entrepreneurs’ drive to succeed and the lack of available capital have created an ideal environment for ECP to diversity its portfolio by investing in multiple countries while negotiating terms that have allowed the firm to effectively hedge its investments. Although this environment will most likely change as other investors enter the continent, ECP’s willingness to pursue opportunities where others saw only disaster has given the firm an advantage over its competition. Source: Adapted from Mate Gunther, "Investment in Arica Starts to Pay Off” Fortune February 18,2008, om1008/02/1 Hrnaacineslfortunelgunther_afia ortuneindexim laccewed March 26,2008), Nmoney.enm Inaddition, entrepreneurs must learn from their experiences as well. Researcher Andrew C. Corbett has identified the importance of acquiring and transforming information and knowledge through the earning process. lis esearch lent credence to theories about the cognitive ability of individuals to transform information into recognizable oppor- tunities How an individual entrepreneur acquires, processes, and learns from prior knowledge that he or she has fined s critical to the complete opportunity identification process. With that in mind, we examine the imagination and creativity needed to help transform and learn from prior experiences, ENTREPRENEURIAL IMAGINATION AND CREATIVITY Ehureprencurs blend imaginative and creative thinking with a sytematc logical proces ability This combination fa key trance fanowation, In addition, potential entrepreneurs are always looking for unique opportunities to fil nee ae conve economic penta in business problems by continually asking "What 2” or “Why not Thy develop an ability tose, resize, and create opportanity where ether find only problems I has Bee said hee he a eats for developing entreprenciial vision ito recognize that problems ae to solutions what demand sehen Apna thi ole means a antec wl analyze a problem rm every pole angle: What Fear ec? How dows ie afer then? What cons are involved? Can ithe solved? Woull the marketplace pay for a solution? This isthe type of analysis that blends creative thinking with systematic analysis.* Scanned with CamScanner128 Entrepreneurship: An introduction THE ROLE oF CREATIVE THINKING ~~ = Itis impore process. Creativity the Remeration of ideas tag LANE t© fecognize the role of ercative thinking in the innovative a —AATLInat results in the improved efficiency or effectiveness of a system Torienteds it is designed 1 Wo important aspects of ereat istegirocess and people. The process is BOs On es coming wo preston: to a problem. The are the resources that determi the soTuHor Diop a solo aA e same, 2 ashe ree aa re sometimes they will adapta a ¢, but the approach that the people use will vary, For examprg, sometimes nab approaches! or one ey aes RY i [a compares these 0 ¥ will formulate a highly sinovaive solution.” Table $2 compares these wo ADORE ving the problem-solving o One study examined the validity of these two approaches for distinguishing in adaptive entrepreneurs and found their application very effective." Thus, understan entation of individuals helps develop their creative abilities. Table 5.2 Two Approaches to Creative Problem-Solving aptor Innovator Employs a di approach iplined, precise, methodical Approaches tasks from unusual angles 's concerned with solving, rather than find- Discovers problems and avenues of solutions: ing, problems Attempts to refine current practices ‘Questions basic assumptions related to current practices Tends to be means oriented Has little regard for means; is mote interested in ends Is capable of extended detail work Has little tolerance for routine work Is sensitive to group cohesion and Has little oF no need for consensus; often is cooperation insensitive to others Source: Michael Kirton, “Adaptors and Innovators: A Description and Measure,” Journal of Applied Psychology (October 1976): 623. Copyright © 1976 by The American Psychological Association, “The Nature of the Creative Process Creativity 8 a process that can be developed ad improved? Everyone is creative to some degree. However, as is the case with many abilities and talents athletic, artistic, etc), some individuals have a greater aprivode fer ote ativty than others, Also, some people have been rased and educated in an environment that encouraged thems develop thei creativity. They have been taught 70 think and act creatively: For others, the process a wee anil because they have not been positively reinforced; if they are FoTBTereative, they must leare how ta ieee 7 0 BO Enpiement tee creative process. : eae Many people corey believe tha only» pecan bs creative" Most people also assume that some peor are born creative and others are not, or that only the gift cd or highly intelligent person is eapable of generat ideas and insights. Yer, the real barriers o creative sinking aresometimns the madvenee ko phrases may not intentionally stop creative el . eae in our communications, Table 5.3 lists the ten key idea “killers” we use, People a creative idea, bur these simple, negative phrases prohibit people from thinking any further! a distinct way of looking at the ong, things that others have net Creativity is not some mysterious and rare talent reserved for a select few. Tes (© store or transfer data amonz “The creative process involves seeing relationshi is often illogical, The creative process invo iB nships am: Lee the of USB flash drives, known as thumb drives, seen > computers).!" ee Rs Scanned with CamScannereeerrearraratrcrrtressteseestesnerestecrestesnetesnairetier sttenerestisrestienette Creativity and Innovation 129 qoble 5.3 The Most Common ideo Killers —— 1 Naah | 2, “Can't (said with a shake of the head and an air of finality) | 5, ‘That's the dumbest thing I've ever heard.* | 4. ‘Yeah, but ifyou did that...” (poses an extreme or unlikely disaster case). 5. ‘We already tried thatyears ago.” | ‘Idon't see anything wrong with the way we're doing it nova" | 1. ‘Weve never done anything like that before” |g “We've got deadlines to meet—we don't have time to consider that.” 2. “it’s not in the budget” 10. ‘Where do you get these weird ideas?” ‘Saree Adapted from The Creative Process, ed. Angelo M. Biondi (Hadley, MA: The Creative Education Foundation, 1986). The creative process has four commonly agrced-on phases or steps. Most experts agree on the general nature and relationships among these phases, although they refer to them by a variety of names." Experts also agree that these phases do not always occur in the same order for every creative activity. For creativity to occur, chaos is necessary—but a structured and focused chaos. We shall examine this four-step process using the most typical sactural development. Phase 1: Background or Knowledge Accumulation Scccessful creations are generally preceded by investigation and information gathering. This usually involves exensive reading, conversations with others working in the field, attendance at professional meetings and wor shopsyand's generat absorprton of information relative to the problem or issue under study. Additional investiga- on itr bottrretated and unrelated fields is sometimes involved. This exploration provides the individual with a variety of perspectives on the problem, and ir is particularly important to the entrepreneur, who needs a basic enderstanding of all aspects of the development of a new product, service, or business venture. People practice the creative search for background knowledge in a number of ways. Some of the most helpful sxe to: (1) read in a variety of fields; (2) join professional groups and associations; (3) attend professional meet- ings and seminars; (4) travel to new places; (5) talk to anyone and everyone about your subject; (6) scan maga- zines, newspapers, and journals for articles related to the subject; (7) develop a subject library for furare reference; (8 carry a small notebook and record useful information; and (9) devote time to pursue natural curiosities."* Phase 2: The Incubation Process ‘ative individuals allow their subconscious to mull over the tremendous amounts of information they gather daring the preparation phase. This mcubation-process often, oscwrs whit tty arc engaged Hr wctrTIes totaly werelated to It happens even when they are sleeping. This accounts for the advice frequently Sten to 2 penance is Fastrated by what appears to be an unsolvable problem: “Why don’t you sleep on it?"!* Gering away from a problem and letting the subconscious mind work on it allows efeativity to spring forth. Some ofthe most helpful steps to induce incubation are to: 1) engage in routine, “mindless” activities (cutting the grass, Pointing the house); (2)exercise eegulalys43) play (sports, board games, purzles (4) think about the project or problem before fall 45) meditate or practice self-hypnosis; and (6) sit back and relax on a regular 7 sis mn Phase 3: The Idea Experience be ‘whl thet \ This pha x cvs process i often the most exciting, because tis when the idea or solution the individual soe asst erent meses ered 5 thee fat this pascal de one the average person curctae "correctly perceives as the only compom ¥ 3g aslec ent of crcativit Scanned with CamScannerEE Ii 130 Entrepreneurship: An introduction arab vthe person is busy doing something cubation process, ew and innovative ideas often emerge while the PLT ay interstate high: unrelated to the enterpris F investiga a 1 enterprise, ve Gate example, taking 2 he blue rie way oF ley Y ‘enture, or investigation (for example, 6 2 hat out of the BI asa bol she person begins £0 formulate the « deand the idea experience phase Aswith the even the ae ue a ey Spaper).!" Sometimes the idea appe: ‘i solution, Beeeeene eis £0 the individual incrementally, Slowly bue surely. th bean ae i is often difficult to determing when the incubation process © Hay, any People are unaware of moving from Phase 210 Phas : ‘ig are ways to speed up the idea experience: (1) daydream and fanta tee your hobbies, (3) work in a leisurely environment (for example, at home ins Problem on the back burner, (5) keep a notebook at bedside to record late-night oF take breaks while workin about your project, (2) prac. rd of at the office), (4) pur the * early-morning ideas, and (6) Phase 4: Evaluation and Implementation This is the most difficult step of a creative endeavor and requires a: great Perseverance. Successfull entrepreneurs ea are workable ‘ment, More importantly, they do not give up when before they successfully de entirely different direction of will discover a original one, Another important part of this phase is the reworking of ideas to pur them into final form. Frequently arvidea emerges from Phase 3 int rough form, so it needs to be modified or tested to achieve its final shape. Some of the most useful suggestions for carrying out this phase are to: (1).increase your energy Jevel with properexercise, diet yourself in the business-plaaning process and all facets of business; (3) test your ideas with le people; (4) take notice of your intuitive hunches and feelmgs;{5) educate yourself in the selling (6) Tearn about organizational policies and practices; (7) seek advice from others (friends, experts, et and (8) view the problems you encounter while implementing your ideas as challenge Figure §.1 illustrates the four phases of the creative thinking process. If a person encounters a major problem ¢ moving through the process, it is sometimes helpful ro go back to a previous phase and try again. For example, if an individual is unable to formulate an idea or solution (Phase 3), a return to Phase 1 often helps. By immersing him- of herself in the data, the individual allows the unconscious mind to begin anew processing, the dara, establishing cause-effect relationships, and formulating potential solutions. Often they will fail several Teprencurs will take the idea in an ww and more workable idea while struggling to implement the Incubation @ ——=f Knowledge |, Creative ‘Accurnulation + Process Ideas. AM Evaluation and Implementation The Critical Thinking Process igure 5.1 a ee Scanned with CamScannerCreativity and tnnovation 134 peveloping Your Creativity gasan de a mumber of things ts innpron Mean of the habits and mental locke ther eifle crea “eat will be more effective if you regularly pacing cee rmpwing section is esd to improve yay Meo assist you in developing © Your own creative talents ane of the most helpful is to hecome aware OF course, as with must processes, your develop exercises designed to increase your creative abilities, The © your awareness of some of the thought habits that limit your creativity 4 personalized creativity improvement program, recognizing Relationships “Akany inventions and innovations are a result of the invente jnng objects, processes, materials, technologies, and people Jaut juice to soft drinks to create *s ability to see new and different relationships ere", (2) i ; Examples range widely and include (1) adding ‘e*, (2) combining combustion en echnology wit wheel to rez Ii you wi h to improv your creativit helps to look for different or unorthodox relationships among the ele ments: and peopl around you, This activity involves perceiving in a relational mode. You can develop this talent by viewing things and people as existing in a complementary or appositional relationship with other things and people. Simply stated, things and people exist in the world in relation to other things and people. Creative people seem to be intuitively aware of this phenomenon and have developed a talent for recognizing new and different relationships. These relationships often lead to visions that result in new ideas, products, and services. In order to develop the ability 0 recognize new relationships, you must practice perceiving in a relational mode. The following exercise helps with this development, A CREATIVE EXERCISE Analyze and elaborate on how the following pairs relate to each other in a complementary way: nut and bolt, husband and wife, chocolate cake and vanilla ice cream, geass clippings and tomato plants, peanut butter and jelly, athlete and coach, humanity and water, winning and losing, television and overhead projectors, and manag- ion workers. Developing a Functional Perspective Ifexpandex the principle of perceiving in a relational mode helps develop a functional perspective toward things and people. A creative person rends-to view things and people in terms of how they can satisfy his or her needs and help complete a project. For example, a homemaker who cannot find a screwdriver often will use a butter knife to tighten a loose screw, or a cereal manufacturer will add fruit to its product ro create a new product line that appeals to a health-conscious marker. ; If you wish to become more innovative and creative, you need to visualize yourself in complementary relationships tothe things and people of the world. You must Ian ro Took at chem in terms of how they complement attemprs to satisfy your own needs and to complete your projects, You must begin to look at things and people in wonconventional ways and from a different perspective?* The following exercise is designed ro help you develop a functional Perspective, A Creative EXERCISE Think of and write down all of the funerions you tem): imagine for the following items (spend five minutes on * An egotistical staff member * \ large pebble * A fallen tree branch * A chair A computer “whiz kid” Scanned with CamScannerpte act any ample, « aricatenl abstractions Be are tage real wore, EOE € tally weighs 120 pounds; ary to find a person who ty cactiptive the abstracts © Stereotypare It is ironic that. nake decisions Kase on then sould Ay has two child this dese NPE the less real it Bovomes, Prolicatng ations trom Stet valual to act on the basis of a distorted pictire of realty; More importants limit a person's perception ot the real entities and possibilities in the world. Crea areecs that people must alter their thinking to enhance their creativity; only Jead to new ideas and innovations." + Prohability Thinking In their struggle to achieve security, many people probability thinking to make devisions, An overteliance on this devision-ma reality and prohibic one from raking calculated risks that may fead to ercative endeavors. Probability experts report that the predictive power of probability theory inereases in proportion to thc number of times an event is repeated. Hf a person Wi Jict the probability of rossing the number ¢ when rolling dice a certain number of times, probability hes to pred h thane ix extremely useful, However, if the’ pers wishes ro know the likelihood of rolling a 4 with one roll of the dive, the predictive ability of probabil, theory is much less valuable, lehough averages ann stereotyes vit these were data cities thar exist am the | size that the average hornetnaker is female, 38 years oh and SA lt ea Rarnime fob and 14,5 years of formal education, Hone EC | ons however the changes of suevess woud be small, In pores oe oh tae ad i‘ Fring on these abstrachons anvity expert Edward defor cow parterns of thinking also tend to rely on the theory os ing methoyh however, can dist ing at an opportunity or situation that may occur only once are just as useful, if not more useful, thos es is to practice looking at some of the s ys the following problem-solvins In the creative game, often an individual is lool a lifetime. In a single-event situation, intuition and educated guess logic and probability." One way of increasing your creative capac ations in your life as a S0/S0 game, and then begin to take some risks, Additional exercises are designed to help eliminate muddling mind-sets: * Practice raking small risks in your personal life and at work, relying on your intuition and hunches, Resp log of these risks, and chart their accuracy and consequences. For example, try to draw to an inside stra n your next family poker game, © Go out of your way to talk ro people who you think conform to a commonly accepted stereotype. © Take on a number of comples projects at work and at home thar do nor lend themselves to guaranteed any predictable results. Allow yourself to live with a manageable amount of ambiguity, Notice how you react this ambiguity. © When an idea is presented to you, first think of all the pos aspects, and finally of all the interesting aspects. # When listening to people, suspend initial judgment of them, their ideas, and their information, and simp listen. . zy making some decisions in the present. That is, do not let your personal history or your estimates abe the furure dominate your decision-making process."* © aspects of the idea, then of all the negativs ARENAS IN WHICH PEOPLE ARE CREATIVE Remember, people are inherently creative, Some ast on that creativity all of the time rere os fall sounewhere in between the two. The reality is that people aften donot Trang ereative, Fustheriore, they fail 0 recognize the many opportunities for Te Ceeanvity researcher Wallin Miler aggies that peuple » frequently overlook opportunities to be creative seins creative, and they frequent rae aac fy tat eecogniring al ofthe ways 8 which We Are or channel their creativity iro sever, different arenas: © Idea creativity solve a proble while others stifle it, as Fevogntize when or how ts’ Steativity that arise within th: otten do not recognize when tls! fe suggests that the path to ete.” be creative, People in one are jobs on a daily it organizations cup a new idea oF concept, such as an idea f aking up a new idea or concep 1 for a new product duct oF service or a Wi Scanned with CamScannerCreativity and Innovation 137 # Material creativ a photograph, # Organisation creativity: organizing aqpeoach to strocts Fe haNeits People oF projects and coming up with a new organizational form or roe ccthee ae ae (hinge. Examples could include organizing a project, starting a new type of venture, nn ae F Feorganizing a work group, and changing the policies and rules of a group. Relations! creativit ive es eae an peor rive approach to achieving collaboration, cooperation, and win-win rela Sasa The cli ae are Person who handles a dificult situation well or deals with a particular person in an especially effective manner is being creative in a relationship or ome-on-one context. # Exent creativity: producing an event suct Evens creat: producing an event such as an awards ceremony, team outing, of annual meeting. The cee- asin wompasses décor, ways in which people are involved, sequence of happenings, setting, and + neers ys changing one's inner self being open to new approaches 0 how one does things and thinking about oneself in diferent wayss achieving a change of heart or finding a new perspective or way to look at things thar isa significant departure from how one has traditionally looked at them. * Spontaneous creativity: acting in a spontaneous or spur-of-the-moment manner, such as coming up with a witty response in a meeting, an off-the-cuff speech, a quick and simple way to settle a dispute, oF an innova- tive appeal when trying to close a sale.” inventing ‘ing and building a tangible object such as a product, an advertisement, a report, oF The Creative Climate Creativity is most likely to occur when the business climate is right. No enterprise will have creative owners and managers for long if the right climate is nor established and nurtured. Following are some important character- istics of this climate: i * A trustful management thar does not overcontrol the personnel * Open channels of communication among all business members * Considerable contact and communication with outsiders * A large variety of personality types * A willingness to accept change © An enjoyment in experimenting with new ideas © Little fear of negative consequences for making a mistake * The selection and promotion of employees on the basis of merit © The use of techniques that encourage ideas, including suggestion systems and brainstorming © Sufficient financial, managerial, human, and time resources for accomplishing goals** _JNNOVATION AND THE ENTREPRENEUR entrepreneurial process, Researchers and authors in the fied of entrepre= h che renowned consultant and author, Peter F. Drucker, about the concept function of entrepreneurship. ... I is the means by which the entr 1g resources of endows existing resources with enhanced porential Innovation is a key function in the eurship agree, for the most part, wil of innovation: “Innovation is the specific Preneur either creates new wealth-produc Incovatoe the a by which entraprenenrs convert opportinitics (ies) iano marketable solutions. Ie 1a er ae Perey become catalysts for change.*” We demonstrated in the eater parts ofthis chapter tthe innongtion process seats with 2 good idea, The origin ofan idea i importants and the role of creative inking may be viral ro that developmen "A major difference exists between an idea thar arises from mere ee irch, experience, and work, More important, Pecul cproduct of extended thinking, reseat Sion ad oe ars the produ of cel hike eee avers and work More porn 2 Prospective entrepreneur must have Scanned with CamScannerOTE —— 138, prencurship: An Intotuction innovation is and dedication £0 remain ee and the perseverane’ 2 combination of the vision to create a good idea ept through implementation, “THE INNOVATION Process Mose innow 2 This process begins with opportunities” anions result trom a ik fom a conscious, parposetul search for new scious, purposetal search novation the analysis of the sources of new opportunities. Drucker has noted that, because both concept! and perceptual, would-be meaton ante eat ad ake ce a Successful innovators US ae the Tight an leit sides of heir brane They loa figures Tey lok a people. They anaytcally work one what he innovation has to be to satisfy che opportunity. Then they go out and Fook a porenial pronuct users 10 shady their expectations, values, and needs." : sful innovations aresimple 3 csigned application. In the process, they create new customers and markets. Phones) is a good example. Although this technology is highly sophisticated, it h appeals to a specific market niche: people who want their technology all in one and on the gO. Above all, innovation often involves more work than genius. As Thomas Edison once s3 spiration and 99 percent perspiration.” Moreover, innovators rarely work in more than one ares systematic innovative accomplishments, Edison worked only in the electricity field. nd carefully cused. They are directed coward a specific, clean focused. They ae direst rowed 3 Spe TT ‘as become easy 10 Us sis 1 percent For alll his Types of Innovation Four basic types of innovation exist (Table 5.6). These extend from the orally new to modifications of existin products or services. Following are the four types, in order of originality: © Invention: the creation of a new product, service, oF processoften one that is novel or untried, concepts tend to be “revolutionary.” © Extension: the expansion of a product, service, or process already in existence, Such concepts make a different application of a current idea. © Duplication: the replication of an already existing product, service, or process. The duplication effort, however, is nor simply copying but adding the entrepreneur's own creative touch to enhance or improve the concept and beat the competition. © Synthesis: the combination of existing concepts and factors into a new formulation, This involves taking « number of ideas or items already invented and finding a way that they can form a new application." Table 5.6 Innovation in Action Type Description Examples Invention Totally new product, service, or process Wright brothersairplane Thomas Edison—light bulb Alexander Graham Bell—telephone Extension New use or different application of an alteady Ray Kroc~MeDonali's ‘existing product, service, of process Mark Zuckerberg, Facebook Barry Sternlicht, Starwood Hotels € Resorts Duplication Ciatveeplation of an exiting concept Wal-Mart—department stores Gateway-personal computers Pieza Hutpizza parlor Synthesis Combination of existing conceDts and factors Fred Smith~FedEx y ‘nto a new formulation oF USE Howard Schultz, Starbucks [ee ies ist Scanned with CamScannerCreativity and Innovation 139 the Major Misconceptions of Innovation fe concept of innovation con Teer Nat ‘oma conjures up many thoughty and misconceptions; it seems that everyone has an sreptons and provide se eutails In this section, we outline some of the commonly accepted innovation sesomeprions and provide reasons why these are misconceptions and tor faets™ # Innotation & planned and predi vga are md Predictable, This statement is based on the old concept that innovation should be hott to Teseare] evelopment (R&I ir under ed for ovation is sprobtable and may beeen SD) dep ment under a planned format. In truth, innovation is . Tecbrkal specications ust be thoroughly prepared. This statement comes from the engineering arena, which Seats SOM’ Dans before moving on. Thorough preparation is good, but it sometimes takes too long, Quite cohen, it is more important to use a try/tesvrevise approach. + terocation relies on dreams and blue-sky ideas. As we have demonstrated in this chapter the creative process S extremeyy Important to recognizing innovative ideas. However, accomplished innovators are very practical people and create from opportunities grounded in reality—nor daydreams. + Big projects will develop better innovations than smaller ones. ‘This statement has been proven false titne and time again. Larger firms are now encouraging their people to work in smaller groups, where it often ss casier fo generate ercative ideas. In Chapter 3, we discussed the importance of Fteams as a method of getting smaller teams to work an innovative projects. * Technology is the drit it is nor the only one, rechnology is certain! ng force of innovati 1 success. Technology is certainly oie source for innovation, but As we outlined carlier in this chapter, numerous sources exist for innovative ideas, a driving factor in many innovations, bur ir is nor the only success factor. Moreover, the customer or marker is the driving force behind any innovation, Marker-driven or customer-based inno- vations have the highest probability of success. Principles of Innovation Potential eritreprencurs need to realize that innovation principles exist. These principles can be learned and— shea combined with oppormunity—can enable individuals to innovate. The major motivation principles are follows: © Be action oriented. Innovators alw: of innovation. © Make fl innov: ys must be active and searching for new ideas, opportunities, or sources, product, proce . or service simple and understandable, People must readily understand how the tion works. * Make the product. process, or service customer-based. Innovators always must keep the customer in mind. ‘The more an innovator has the end user in mind, the greater the chance the concept will be accepted and. used. © Scart sonall, Imowators should nor attempt a project or development on a grandiose scale, They should begin cnall and hen build and develop, allowing for planned growth and proper expansion in the right manner and at the right time. * Abn high. Imovators should aim high for success by secl ing a niche in the markerpla Innovators always should follow the rule of try, test, and revi in the product, process, or servic * Lear from failures innovations.” © Trytestirer is This helps work out any flaws Innovation does not guarantee success. More important, failures often give rise to * Follow a milestone ™ edule, Every innovator should follow a schedule thac indicates milestone accomplish milestone sched gay ean ahead or behind schedule it stil is important to have a schedule in ord ss. Although the project may to plan and evaluare the proiect ; * Reuss This principle applies more to those involved in seeking and motivating others « Reward erode acts To On be rewatded ad given the proper amount of respet Tht also mea movate. Innovative activity sn0 Scanned with CamScanner