Psychology of Creativity and

Innovation - Ch. 02 10/10/2020 1

 We are all confronting a global innovation challenge.
 The world is in the midst of a new wave of economic
development with entrepreneurship and innovation as the
catalysts.
 The managerial mindset must become an opportunity-driven
mindset, where actions are never constrained by resources
currently controlled. We call this the “innovative mindset.”

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 Developing a corporate innovative philosophy provides a number of
advantages:
1. This type of atmosphere often leads to the development of new products
and services.
2. It creates a workforce that can help the enterprise maintain its
competitive posture.
3. It promotes a climate conducive to high achievers and helps the
enterprise motivate and keep its best people.

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 This is a point in time when the gap between what can be
imagined and what can be accomplished has never been
smaller.
 It is a time requiring innovative vision, courage, calculated
risk-taking, and strong leadership.
 It is simply answering “The Innovative Challenge of the 21st
Century.”

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 Innovative thinking goes beyond the mere creation of
business.
 “Ideas come from people. Innovation is a capability of the
many.”
 Innovative thinking is an integrated mindset that permeates
individuals and organizations.

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Innovation, Creativity, and Entrepreneurship
 Creativity is typically described as the process of generating
new ideas.
 Innovation takes creativity a step further by being a process
that turns those ideas into reality.
 Innovation is the process by which entrepreneurs convert
opportunities (ideas) into marketable solutions.

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Types:
 Product innovation is about making beneficial changes to physical
products.

 Process innovation is about making beneficial changes to the

processes that produce products or services.

 Service innovation is about making beneficial changes to services that

customers use.

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Methods:
 Invention: the creation of a new product, service, or process, often one
that is novel or untried; revolutionary.
 Extension: the expansion of a product, service, or process already in
existence.
 Duplication: the replication of an already existing product, service, or
process adding the entrepreneur’s own creative touch to enhance or
improve the concept to beat the competition.
 Synthesis: the combination of existing concepts and factors into a new
formulation.

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Trajectories:
 Radical innovation is the launching of inaugural breakthroughs such
as personal computers and overnight mail delivery.
 Incremental Innovation refers to the systematic evolution of a product
or service into newer or larger markets. Examples include the typical
improvements and advances in current products and services.
 Disruptive Innovation goes beyond radical innovation and transforms
business practice to rewrite the rules of an industry. In other words, the
business practice of an entire industrial sector could be changed
radically.

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➤ Innovation Is Planned and Predictable

➤ Technical Specifications Must Be Thoroughly Prepared

➤ Big Projects Will Develop Better Innovations than Smaller Ones

➤ Technology Is the Driving Force of Innovation Success.

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 Learning how to innovate effectively entails managing
knowledge within the organization and offers the
potential to enhance the way the organization
innovates.
 How an organization acquires, processes, and learns
from the prior knowledge that it has gained is critical to
the complete innovation process.

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 Entrepreneurship: a dynamic process of vision, change, and
innovation. It requires an application of energy and passion towards
the creation and implementation of new ideas and creative solutions.
Essential ingredients include the willingness to take calculated risks—
in terms of time, equity, or career; the ability to formulate an effective
venture team; the creative skill to marshal needed resources; the
fundamental skill of building a solid business plan; and, finally, the
vision to recognize opportunity where others see chaos, contradiction,
and confusion.

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Innovation - Ch. 02 10/10/2020 12
 Generation “E”
Nearly 80% of would-be entrepreneurs in the United States
are between the ages of 18 and 34.

 I = f (i) states that innovation is a function of the innovator.

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 Characteristics:
Determination and Perseverance Goal Orientation
Achievement Drive Tolerance for Failure
Internal Locus of Control High Energy Level
Tolerance for Ambiguity Creativity
Calculated Risk Taking Vision

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 The quest for new venture (business enterprise)
creation as well as the willingness to sustain that
venture is directly related to an entrepreneur’s
motivation.

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PC = Personal Characteristics

PE = Personal Environment

PG = Personal Goals Expectation/ Intrinsic/Extrinsic

Outcome Rewards
BE = Business Environment
Comparison
PC PE PG

Decision to Behave Entrepreneurial Entrepreneurial Firm

Entrepreneurially Strategy Management Outcomes

BE IDEA

Implementation/
Outcome
Perception

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 Venture creation is a lived experience that, as it
unfolds, forms the entrepreneur. In fact, the creation of
a sustainable enterprise involves three parallel,
interactive phenomena: emergence of the
opportunity, emergence of the venture, and
emergence of the entrepreneur. None are
predetermined or fixed, they define and are defined by
one another.
Psychology of Creativity and
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 Trends
 Unexpected Occurrences
 Incongruities
 Process Needs
 Industry and Market Changes
 Demographic Changes
 Perceptual Changes
 Knowledge-Based Concepts

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 Individuals are Born to Innovate
 Innovators Must be Inventors
 Fitting the Innovator’s Profile
 Innovation is Being Lucky
 Innovators are Gamblers

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 Sources of Stress
Insulation
Addiction to the Innovation
Perfectionist Syndrome
Achievement Orientation
 Managing the Stress
Network
Refresh Yourself
The Personal Touch
Gain New Perspectives
Delegate
Exercise
Psychology of Creativity and
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Managers must assume certain ongoing
responsibilities:
Frame the Challenge
Absorb the Uncertainty
Define Gravity

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