CH 3

3
Chapter
CREATIVITY AND INNOVATION

IN ENTREPRENEURSHIP
OFPS Entrepreneurship 3e All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2013 1– 1
LEARNING OUTCOMES
 At the end of this chapter, you will be able to:

– Define the creativity
– Explain the creativity process and techniques
– List the characteristics of a creative individual
– Provide the deﬁnition of innovation
– Explain the types of innovation
– Elaborate on the principles of innovation
– Explain the importance of creativity and innovation
– List the strategies to encourage creativity and
innovation

DEFINITION OF CREATIVITY
 Creativity is defined as the tendency to generate or

recognize ideas, alternatives, or possibilities that may
be useful in solving problems, communicating with
others, and entertaining ourselves and others.
 Creativity is the ability to come up with new ideas and to

identify new and different ways of looking at a problem
and opportunities.

DEFINITION OF CREATIVITY
 A process of assembling ideas by recombining elements

already known but wrongly assumed to be unrelated to
each other.
 This definition has several key elements that are worth

considering:
 Process: Creativity is also a process (implying, among
other things, that it is more like a skill than an attitude, and
that you can get better at it with practice).
 Ideas: Creativity results in ideas that have potential value.
 Recombining: The creative process is one of putting things
together in unexpected ways.
REASONS WHY PEOPLE ARE
MOTIVATED TO BE CREATIVE
1. Need for novel, varied, and complex stimulation.
2. Need to communicate ideas and values.
3. Need to solve problems. In order to be creative, you need to be able

to view things in new ways or from a different perspective.

CREATIVITY PROCESS
Opportunity & Problem Recognition
Immersion
Incubation
Insight
Verification & Application

STEPS IN CREATIVITY
PROCESS
 Opportunity or Problem Recognition: A person discovers that
a new opportunity exists or a problem needs resolution.
 Immersion: The individual concentrates on the problem and

becomes immersed in it. He or she will recall and collect
information that seems relevant, dreaming up alternatives
without refining or evaluating them.
 Incubation: The person keeps the assembled information in

mind for: a while. He or she does not appear to be working
on the problem actively; however, the subconscious mind is
still engaged.

STEPS IN CREATIVITY
PROCESS
 Insight: The problem-conquering solution flashes into the
person's mind at an unexpected time, such as on the verge
of sleep, during a shower, or while running. Insight is also
called the Aha! Or Eureka! Experience.
 Verification and Application: The individual sets out to prove

that the creative solution has merit. Verification procedures
include gathering supporting evidence, using logical
persuasion, and experimenting with new ideas.

CREATIVITY TECHNIQUES
Brainstor
ming
DO IT
Ishikawa PDCA
(Fishbone)
Technique
OFPS Entrepreneurship 3e
Cycle
All Rights Reserved
DO IT TECHNIQUE
 The DO IT acronym stands for the four steps in Olson's

process:
 Define the problem.
 Open your mind and apply creative techniques.
 Identify the best solution.
 Transform.

ISHIKAWA (FISHBONE)
TECHNIQUE
 The fishbone diagram technique combines brainstorming and
mind mapping to discover the cause and effect relationship of
an underlying problem.
 It is often used in manufacturing and product development to

outline the different steps in a process, demonstrate where
quality control issues might arise and determine which
resources are required at specific times.

ISHIKAWA (FISHBONE)
TECHNIQUE

PDCA CYCLE
 PDCA cycle is an iterative process for

continually improving products, people, and
services. It became an integral part of what is
known today as Lean management.
 The Plan-Do-Check-Act model includes
solutions testing, analyzing results, and
improving the process.
 For example, imagine that you have plenty of
customer complaints about the slow response
rate of your support team. Then you will
probably need to improve the way your team
works to keep customers satisfied. That is the
point where PDCA comes into play.
SWOT ANALYSIS
 SWOT analysis is a strategic planning technique used to

help a person or organization identify strengths,
weaknesses, opportunities, and threats related to
business competition or project planning.

CHARACTERISTICS OF A
CREATIVE INDIVIDUAL
Persisten Self- Independ

ce confidence ence
Attraction to Tolerance of Intuitiven

complexity ambiguity ess
Have broad Drive to

interests
Energetic
achieve
DEFINITION OF INNOVATION
 Innovation is the implementation of new ideas at the individual,

group or organizational level.
 A process of intentional change made to create value by
meeting opportunity and seeking advantage.
 Process: Innovation is a process (implying, among other things, that it can
be learned and managed).
 Intentional: That process is carried out on purpose.
 Change: It results in some kind of change.
 Value: The whole point of the change is to create value.
 Opportunity: Entrepreneurial individuals enable tomorrow's value creation
by exploring for it today: having ideas, turning ideas into marketable
insights and seeking ways to meet opportunities.
 Advantage: At the same time, they also create value by exploiting the
opportunities they have at hand.

TYPES OF INNOVATION
 There are four distinct types of innovation, these are as

follows:
• Invention - Described as the creation of a new product, service or
process. Something that has not been tried before.
• Extension - The expansion of an existing product, service or
process. This would mean that the entrepreneur takes an
existing idea and applies it differently.
• Duplication - Copying (replicating) an existing product or service
and then adding the entrepreneurs own creative touch. In order
to improve it.
• Synthesis - A combination of more than one existing products or
services in to a new product. or service. This means that several
different ideas are combined in to one new product or service.

INNOVATION PROCESS
1) Analytical planning – Carefully identifying the product or

service features, design as well as the resources that
will be needed.
2) Resource organization – Obtaining the required
resources, materials, technology, human or capital
resources.
3) Implementation – Applying the resources in order to
accomplish the plans.
4) Commercial application – The provision of value to
customers, reward employees, and satisfy the stake
holders.

PRINCIPLES OF INNOVATION
Be action- Start
oriented
Aim high
small
Follow a
The rule of try, Learn from milestone
test and revise failures schedule
Reward Work, work

heroic activity and work
IMPORTANCE OF CREATIVITY
AND INNOVATION TO AN
ENTREPRENEUR
Create new products and services
Reduce cost
Add competitive value for the entrepreneur
Increase quality
Increase performance

FROM CREATIVITY TO
ENTREPRENEURSHIP

STRATEGIES TO ENCOURAGE
 Strategies for an Entrepreneur

 Recognize personal abilities
 Change one’s perception
 Adopt positive attitude
 Challenge assumptions
 Dare to fail
 Make time for creative and innovative thinking

STRATEGIES TO ENCOURAGE
 Strategies for an Organization

 Encourage ideas
 Provide creative time
 Have a submission system
 Always keep track of current trends
 Combine need and technology
 Implement an incentive program
 Have good communication

TUTORIAL
 Define creativity and innovation.

 Briefly explain 5 steps that involves in creativity
process.
 Describe any 3 creativity techniques.
 Identify 4 types of innovation.
 Discuss the innovation process.
 Explain any 2 strategies to encourage creativity
and innovation for an entrepreneur and
organization.


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3

CREATIVITY AND INNOVATION

 At the end of this chapter, you will be able to:

OFPS Entrepreneurship 3e All Rights Reserved

 Creativity is defined as the tendency to generate or

 Creativity is the ability to come up with new ideas and to

OFPS Entrepreneurship 3e All Rights Reserved

 A process of assembling ideas by recombining elements

 This definition has several key elements that are worth

1. Need for novel, varied, and complex stimulation.

2. Need to communicate ideas and values.

3. Need to solve problems. In order to be creative, you need to be able

OFPS Entrepreneurship 3e All Rights Reserved

Opportunity & Problem Recognition

Verification & Application

 Immersion: The individual concentrates on the problem and

 Incubation: The person keeps the assembled information in

OFPS Entrepreneurship 3e All Rights Reserved

 Verification and Application: The individual sets out to prove

OFPS Entrepreneurship 3e All Rights Reserved

 The DO IT acronym stands for the four steps in Olson's

OFPS Entrepreneurship 3e All Rights Reserved

 It is often used in manufacturing and product development to

OFPS Entrepreneurship 3e All Rights Reserved

OFPS Entrepreneurship 3e All Rights Reserved

 PDCA cycle is an iterative process for

 SWOT analysis is a strategic planning technique used to

OFPS Entrepreneurship 3e All Rights Reserved

Persisten Self- Independ

Attraction to Tolerance of Intuitiven

Have broad Drive to

 Innovation is the implementation of new ideas at the individual,

OFPS Entrepreneurship 3e All Rights Reserved

 There are four distinct types of innovation, these are as

OFPS Entrepreneurship 3e All Rights Reserved

1) Analytical planning – Carefully identifying the product or

OFPS Entrepreneurship 3e All Rights Reserved

Reward Work, work

Add competitive value for the entrepreneur

OFPS Entrepreneurship 3e All Rights Reserved

OFPS Entrepreneurship 3e All Rights Reserved

 Strategies for an Entrepreneur

OFPS Entrepreneurship 3e All Rights Reserved

 Strategies for an Organization

OFPS Entrepreneurship 3e All Rights Reserved

 Define creativity and innovation.

OFPS Entrepreneurship 3e All Rights Reserved

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