CHAPTER 3Developing Entrepreneurial creativity and innovation

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Chapter outline

Part IWhat is Creativity?Process of CreativityBarriers to CreativityHow to generate creative ideas?Characteristics of creative individual

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Entrepreneurial Creativity – Five action areas

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Entrepreneurial Leadership

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Creativity, Innovation & Entrepreneurship

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‘Creativity’ A "new" idea is a

combination of old elements. ‘It is your ability to combine

ideas in a unique way or to make useful associations among ideas.’

"There is virtually no problem you cannot solve, no goal you cannot achieve, if you know how to apply the creative powers of your mind, like a laser beam, to cut through every difficulty in your life and your work."Villa College

Don’t believe in experts!!!!!!!!!!

“TV will not be able to hold onto any market it capturers after the 1st six months. People will soon get tired of staring into a box every night”

- Daryl F. Zanuck, head of 20th Century Fox in 1946

“That’s an amazing invention. But who would ever want to use one of them?”

- US President Rutherford B. Hayes after participating in a trial tele-converation between Washington & Philadelphia in 1876

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The Whats

What is it? What are the components? What is the process? What stops it? What helps it? What are the steps to develop?

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‘Creativity’;

“the ability to bring something new into existence”

“involves the development of UNIQUE & NOVEL responses to problems / opportunities”

“ability to combine ideas in a unique way” “the ability to make or otherwise bring into

existences something new, whether a new solution to a problem, a new method or device, or a new artistic object or form”

“new and useful”Villa College

‘Creativity’;

Creative solutions are more than ideas, they must work in the real world.

A creative solution has 3 attributes,

It is NEW

It is USEFUL, in that it solves the problem

It is FEASIBLE, given the messy real world constrains like time & money

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‘Entrepreneurial Creativity’ can be defined as ;

coming up with innovative ideas and turning them into value-creating profitable business activities

Entrepreneurial creativity = creativity × entrepreneurial action

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Some Well known definitions

‘Creativity involves development of unique & novel responses to problems & opportunities’

– Schermerhom, Hunt & Osborn, 2003

‘Creativity is the ability to produce work that is novel, high in quality and appropriate’

- Sternberg, Kaufman & Pretz, 2002Villa College

Why Creativity is essential for Entrepreneurs?

It’s the starting point of invention or spotting an opportunity

Creativity provides entrepreneurs to develop an ability to see, recognize & create opportunities where other find only problems

Let entrepreneurs to analyze a problem from every possible angle

Essential for survival, growth expansion & most importantly for building competitive advantage

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From ‘Creativity’ to ‘Innovation’

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Entrepreneurial Creativity in Individuals

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Components of Creativity

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The Process of CreativityIncubation

Knowledge Accumulation Ideas

Evaluation & Implementation

Creative Process

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Creativity & creative thinking

Creativity Bringing into existence an idea that is new

Creative thinking

An innate talent that you were born with OR a set of skills that can be learned, developed and utilized in daily problem solving

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Barriers to Creativity

Barriers to Creativity

Personal Beliefs Fear of Criticism

Over-Management

Stress

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Blocks & Blockbusters to creativity

Making assumptions Check assumptions

Following the rules Breaking the rules

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Blocks & Blockbusters to creativity

Over reliance on logic Using imagination & intuition

Fear of failure Risk taking culture

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Conceptual Blocks

Mental obstacles that constrains the way the problem is defined & limit the number

of alternative solutions thought to be relevant

Conceptual Blocks

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Lateral Thinking

‘Lateral thinking’ is concerned with generation of new ideas. It is also concerned with "breaking out of the concept prisons of old ideas.”

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Vertical Vs. Lateral ThinkingVertical Thinking Lateral Thinking

Chooses Changes

Looks for what is right Looks for what is different

One thing must follow directly from another

Makes deliberate jumps

Concentrates on relevance Welcomes chance intrusions

Moves in the most likely directions Explores the least likely directions

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Unlocking your Creativity – get away from ‘old’ ideas by Brian Tracy  

Admit when you are wrong Face up to mistakes Be flexible with new information Be willing to cut your losses

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5 Rules of Creative Thinking1. Don't let assumptions stifle your capacity

2. Discipline yourself to take time to look for alternatives

3. To get solutions, you must create an atmosphere where you

and others are comfortable expressing new ideas (even if you

make mistakes by coming out with bad ideas), an atmosphere

where ideas are not immediately evaluated and attacked

4. To open up true creativity, you have to shed inhibitions and

move from left-brain – dominated by numbers toward right-

brain  – the original thinking

5. If you are working on a problem and getting nowhere, leave it

for a while and let your subconscious – your depth mind – to

take overVilla College

Characteristics of Creative Individuals

1. Remarkably humble & proud at the same time

2. Passionate about their work, yet can be extremely objective about it

3. Brave to try new things

4. Open minded & willing to accept criticism

5. Have a combination of playfulness & discipline or responsibility & irresponsibility

6. Have high self-control

7. Goal directed, deliberate & considerate in making any decision

8. Willing to take calculated risksVilla College

Techniques of generating creative ideas

Brainstorming Forced Analogy Do It Mind Mapping Nominal Group

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Mind Map

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The Six Thinking Hats

The Six Thinking Hats proposal analysis tool invented by Edward de Bono is particularly useful for evaluating innovative and provocative ideas

The method is a framework for thinking and can incorporate lateral thinking

The Six Thinking Hats tool:○ encourages Parallel Thinking○ encourages full-spectrum thinking○ separates ego from performance.

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Each 'Thinking Hat' is a different style of thinking

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White Hat

With this thinking hat you focus on the data available. Look at the information you have, and see what you can learn from it. Look for gaps in your knowledge, and either try to fill them or take account of them.

This is where you analyze past trends, and try to extrapolate from historical data.

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Red Hat

'Wearing' the red hat, you look at problems using intuition, gut reaction, and emotion. Also try to think how other people will react emotionally. Try to understand the responses of people who do not fully know your reasoning

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Black Hat

Using black hat thinking, look at all the bad points of the decision. Look at it cautiously and defensively. Try to see why it might not work. This is important because it highlights the weak points in a plan. It allows you to eliminate them, alter them, or prepare contingency plans to counter them.

Black Hat thinking helps to make your plans 'tougher' and more resilient. It can also help you to spot fatal flaws and risks before you embark on a course of action. Black Hat thinking is one of the real benefits of this technique - many successful people get so used to thinking positively that often they cannot see problems in advance. This leaves them under-prepared for difficulties

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Yellow Hat

The yellow hat helps you to think positively. It is the optimistic viewpoint that helps you to see all the benefits of the decision and the value in it. Yellow Hat thinking helps you to keep going when everything looks gloomy and difficult

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Green Hat

The Green Hat stands for creativity. This is where you can develop creative solutions to a problem. It is a freewheeling way of thinking, in which there is little criticism of ideas.

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Blue Hat

'Blue Hat Thinking' stands for process control. This is the hat worn by people chairing meetings. When running into difficulties because ideas are running dry, they may direct activity into Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking, etc..

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Chapter outline

Part IIWhat is Innovation?Types of innovationSources of innovation Barriers innovateDevelopment of innovation & creativity

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Invention Vs. Innovation – synonyms???? Invention

-‘An invention is a new configuration, device, or process’

-is the creation of new products, processes, and technologies not previously known to exist

Innovation ○ ‘An innovation is associated with the development

of a new or better product or process○ is the transformation of creative ideas into useful

applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services

○ Doing things differently Villa College

Invention Vs. Innovation – synonyms????

Invention Innovation

Extreme end of a development of a new product or process

Associated with the development of a new or better product or process

All inventions are not commercially viable

Innovations are more commercially viable

A product of ‘research’ More than just invention

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Innovation defined………

‘The means to break away from established patterns’ - Henry Mintzberg (1983)

‘The specific tool of entrepreneurs, that means by which they exploit change as an opportunity for a different business or different service’

- Peter Drucker (1985)

‘The prime tool entrepreneurs use to create or exploit opportunities

- Michael Porter (1990)Villa College

Creativity & Innovation

Creativity Bringing into existence an idea that is new

InnovationThe practical application of creative ideas

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The relationship??????

“Creativity is the starting point whether it is associated with invention or opportunity spotting. The creativity is turned into practical reality (a product) through innovation. Entrepreneurship then sets that innovation in the context of an enterprise (the actual business)which is something of value” - Bolton & Thompson (2000)Villa College

Relationship between innovation & Entrepreneurship

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The Struggler The Innovator

The Stagnator The Copier

Innovation & Creativity

Entrepreneurship

Source : Entrepreneurship & Small Business – Paul Burns

High

High

Low

Low

The Value of Innovation The balance between adapting and

revolutionizing

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The Process of Innovation

Opportunity

Delivery of Innovation

Opportunity evaluation

InnovationVilla College

Types of innovation

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Invention Extension

Duplication Synthesis

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7 Sources of Entrepreneurial Opportunities for innovation by

Drucker Internal 1. The unexpected – the unexpected success, the

unexpected failure, the unexpected outside event2. The incongruity – between reality as it actually is and

reality as it is assumed to be or as it “ought to be”3. Innovation based on process need; any inadequacy in a

business process that is taken for granted4. Changes in industry structure or market structure that

catch everyone unawares  

External 5. Demographic changes caused by things like wars,

migrations, medical developments 6. Changes in perception and fashion brought about by

changes in the economy 7. Changes in awareness caused by new knowledge

Do’s & don’ts on innovation by Peter Drucker

DOs Analyze the opportunities Go out to look, to ask, to listen Keep it simple, keep it focused Start small – try to do one specific thing Think big – aim at market leadership

DON'Ts Don't try to be too clever Don't diversify, don't splinter, don't try to do too many

things at once Don't undershoot, or you will simply create an

opportunity for competition Don't try to innovate for the future Villa College

5 stage approach to purposeful, systematic innovation by Peter Drucker

1. Start with the analysis of opportunities (inside the firm & its industry & in the external environment)

2. Look at the financial implications, but also talk to people, particularly customers & analyze how to meet the opportunity

3. An innovation must be simple & has to be ‘focused’

4. To be effective, start small. Take an incremental approach

5. Aim at leadership & dominate the competition as soon as possible in the particular area of innovation

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Barriers Blocks and Limiting Beliefs Switch To Positive Attitude

Negative Attitude

The tendency to focus on the negative aspects of problems and expend energy on worry. Seek the inherent opportunities in the situation.

Fear of Failure Fear of looking foolish or being laughed at. Failure is a necessary condition of and a stepping stone to

success.

Executive Stress

Not having time to think creatively. The over-stressed person finds it difficult to think objectively at all. Unwanted stress reduces the quality of all mental processes.

Managing day-to-day operations is important, but it is new game changing breakthroughs that will launch company into new markets, enable rapid growth, and create high return on investment.

Following Rules

A tendency to conform to accepted patterns of belief or thought – the rules and limitations of the status quo.

Some rules are necessary, but others encourage mental laziness. "Every act of creation is first of all an act of destruction." – Pablo Picasso

Making Assumptions

Many both conscious and unconscious assumptions restrict creative thinking.

Identify and examine the assumptions you are making to ensure they are not excluding new ideas. Challenge assumptions.

Over-reliance on Logic

Investing all your intellectual capital into logical or analytical thinking – the step-by-step approach – excludes imagination, intuition, feeling or humor.

"Innovation is not the product of logical thought, although the result is tied to logical structure." – Albert Einstein

What prevents people from being creative or innovative?Adapted from Effective Innovation: How to Stay Ahead of the Competition, John Adair

Barriers to Innovation

Organizational Personal or Individual

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