ENI920

CREATIVE
ENTREPRENUERSHIP

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TODAY’S OBJECTIVES ARE:

To understand basics of:

 Entrepreneurship process, Nature of

Entrepreneurial Start-ups.
New Business Formation/New Business
Failure.
Concepts of Creativity & Innovation.

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Definition of Entrepreneurship

An Entrepreneur

One who
Organizes, Manages and Assumes Risk
of a Business or Enterprise

Merriam-Webster

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Entrepreneurship

Entrepreneurship is a mindset

 Opportunity-focused
 Innovative
 Growth-oriented

Can you add additional

Characteristics and/or Attributes…
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The Entrepreneurship Process

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The Nature of Entrepreneurial Start-ups

 An entrepreneurial venture brings

something to the marketplace.

 Three primary characteristics

1. Innovative
2. Value-creating
3. Growth-oriented

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New Business Formation

 Entrepreneurs use identifiable milestones to

measure their progress:
Deciding to start a business
Researching the concept
Preparing for launch
Securing the first customer
Obtaining the business license
And other activities which signal the business is in
operation

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New Business Failure

 Not all entrepreneurs succeed in growing

their start-up into an established business.

 Survival has been attributed to sufficient

capital, having employees, and the
entrepreneur’s intention in starting the
business.

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So we Need to Distinguish
Between:

Creativity & innovation

Ideas & opportunities

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Creativity: What is it???……

“The ability to create and innovate has been

observed throughout history and even though the
fundamental tools may have changed the ability
has been prevalent in every civilisation”
(Hisrich, Peters and Shepherd, 2005, p. 8).

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Entrepreneurial creativity

Entrepreneurial creativity
=
Individual’s creativity F
(sociocultural environments)
X
entrepreneurial action
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Entrepreneurial creativity
includes:
 Creation of something that is not usually
seen in the context of the business
 Expansion of opportunities for a creation
 Synthesis of separate elements into a
different product, idea, or service
 Modification of an already known creation in
order to develop a different concept
 Imitation combined with adaptation of an
already known creation in order to adjust it
to a specific need or demand.
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Two views of Creativity

The Elite View

V’s
The Developmental
View
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The Elitist View…

 Getting New & Valuable Ideas

 A Rare Talent
 Creating Great Works of Art or Scientific
Discoveries
 Unable to be Taught
 Not Relevant in My Job/ Organization
 A Lonely Individual Process

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The Developmental View…

 Available to Everyone
 Evident in Personal & Modest Insights
 Released Through Training &
Development of Personal Potential
 Within the Scope of All Jobs
 Encouraged or Discouraged Within
Groups According to their Climate

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 Creativity: Nature or Nurture?

 Let’s look at the field of music:

 If we want to be great musicians what do we
need?
 A good “ear” – which may have some biological origin
 Talent – again, an innate trait.
 But also THEORY, STUDY, PRACTICE, PRACTICE,
PRACTICE!
 If I am super-talented through natural chance, I may
become a great pianist – but only if I study hard
 If I am not super-talented but I study hard, I may not be
the greatest pianist in the world, but I can certainly
become competent – and even make a living from it.

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Creativity: Nature or Nurture (2)

 If business creativity depends on nature, then only

a few of us can operate in that sphere.
 Result – business grinds to a halt!
 Luckily, we know, from experience and from
research that we can learn techniques which
support creativity.
 So, we may not all be creative business gurus who
come up with fabulous ideas while sitting in our
armchairs
 BUT
 We can apply creative techniques and thinking
processes which help us develop new ideas and
keep our businesses flexible and successful.
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Which View Do You
Agree With?

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The Reality…..

 Creativity Is Not Exclusively for ‘Elite’

People
 It Can be Developed in All Persons
 Creativity is a Personal Problem-solving
Process of a Non-routine Kind
 It Can be Learned, Practiced & Successfully
Applied by all – in Every Walk of Life

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CREATIVITY AND ENVIRONMENT

 One prominent and inherent element of

creativity that is recognized by all
researchers in the field is that it functions
through a combination of both person and
context
 One principal factor that is both tangible and
intangible, prevalent and most important in
stimulating creativity in different
environments is ‘support’, which is reflected
in financial resources, technology,
managerial support, etc.
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CREATIVITY AND ENVIRONMENT

 Support that is hidden or unspoken can

influence creative ideas because
entrepreneurs and/or their employees may
consider the environment intolerant of
these ideas or devoid of supportive
resources to implement them.

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 Why is Creativity Important?
 All business sectors seek novelty
 Consumer products
 Media
 Fashion
 Travel
 Even seemingly conventional sectors respond to
novelty, e.g. medicine seeks new formulations of
existing drugs.
 Note that some novelty may be “better”, e.g. better
medicine, some is simply a response to the desire for
something new, e.g. fashion.
 So, a continual drive for novel developments
suggests that creative thinking is key to success.
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Creativity

“There is no doubt that creativity is the most

important human resource of all. Without
creativity there would be no progress, and
we would be forever repeating the same
patterns”
(Edward de Bono).

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 De Bono’s creative process

1. Generating knowledge and awareness

 Reading, learning, researching, finding out about the
world in general and the area in which you wish to
operate
2. Incubation
 Time for reflection
3. Idea generation
 Using your own knowledge and creative thinking
techniques e.g. brainstorming, to create ideas
4. Evaluation and Implementation
 Choosing your idea and making it work!

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 So What is Creativity?

 “Creativity is… the ability or quality

displayed when solving unsolved
problems, when developing original and
novel solutions to problems others have
solved differently, or when developing
original and novel… products” (Parkhurst,
1999).

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Solutions?

 What do we mean by solutions?

 In this context, it could mean
 new processes to help us do something better
 new ways of using existing products
 new services to supply to new or existing
customers etc.
 New ways of thinking about things!

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For a creative atmosphere:

 Creativity is enhanced when people have

some but not too much freedom.
 Allow for trial and error and discuss these
experiences with the staff in order to learn
from them; experiences stimulate creative
ideas by freeing the mind.
 Reflect on new linkages, possible new
combinations, original solutions that are
being contemplated by the people in the
business.
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For a creative atmosphere(Cont’d)

 Suspend or minimize judgment on

originality or creativity exhibited by your
staff.
 Include creative, open-minded people in
your business: they are inclined to be more
adaptable, and more prepared to consider a
range of alternative approaches and to
challenge the status quo.

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For a creative atmosphere(Cont’d)

 Provide your staff with opportunities to

search for outstanding ideas or solutions,
encourage breakthroughs in different
segments of your business, allocate time
for creative work; appraise and reward
people that produce such breakthroughs.
 Include creative thinking games and
assignments at your staff meetings.

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What Stops Business Creativity?

Barriers are understandable, but nevertheless can

prevent or slow the development of new ideas:

• Fear – change is always frightening.

• Risk – am I risking my established business?
• Convention – we’ve always done it this way.
• Self-doubt – if it’s that good, surely somebody else
would have made it by now?
• Fear of failure

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 So… If Creativity is
Solving Problems…
What Is An
Innovation?

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 What is innovation?
“When an enterprise produces a good or service or
uses a method or input that is new to it, it makes a
technical change. The first company to make a
given technical change is an innovator. Its action is
innovation.”
Schmookler (1966)

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 What is innovation?
“Innovation by definition must be successful in the
market. “The test of innovation, after all, lies not in its
novelty, its scientific content, or its cleverness. It lies
in its success in the marketplace.”
Drucker (1993)

It is the creativity of an entrepreneur that results in

invention [creation of new knowledge] and innovation
[application of knowledge] to create new products,
services or processes.
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Drucker presents seven sources of innovative opportunity that
should be explored by entrepreneurs when starting an
entrepreneurial business.
 An unexpected success or failure could be a potential
opportunity
 Discrepancy between reality and how it is interpreted by others
can create an innovative opportunity
 Innovation based on the ‘missing link’ between the need and
what is done to respond to that need
 Changes and shifts in industry or market structure are
opportunities for an innovative product, service or business
approach 4-34
Drucker presents seven sources of innovative
opportunity that should be explored by entrepreneurs
when starting an entrepreneurial business (Cont’d)

 Changes in the population’s size, age structure,

composition, employment, level of education and
income can create innovative opportunities
 Changes in perception, general assumptions, attitudes
and beliefs are unique opportunities for innovations
 Advances in knowledge can create new products and
new markets.
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 Disruptive and Sustaining
Innovations
 Christensen (1997), identified two types of
innovations:
 Disruptive innovations involve a new value
proposition by which new markets are created.
 Sustaining innovations are best thought of as
improvements to existing products, processes or
markets.

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Innovation

 Types of Innovation
 Breakthrough
 Fewest number of innovations.
 Establishes the platform on which future innovations in
an area are developed.
 Should be protected by patents, trademarks, and
copyrights.
 Technological
 Occurs more frequently; not at the same level of
breakthrough inventions.
 Offers advancements in the product/market area.
 Needs to be protected.

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Innovation (cont.)

 Ordinary
 Occurs most frequently.
 Extends a technological innovation into a better
product or service or one that has a different market
appeal.
 Usually come from market analysis and pull, not
technology push.

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Innovation (cont.)

 Defining a New Innovation (Product or

Service)
 Newness can be:
 In the consumer concept.
 A change in the package or container.
 Slight changes or modifications in the appearance of
the product. (Industrial market)
 Companies also add products to their product
line that are already marketed by other
companies; products are new to the
manufacturer but not the consumer.

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Innovation (cont.)

 Classification of New Products

 Consumer’s Viewpoint: is based on the
disrupting influence that use of the product has
on established consumption patterns.
 This approach is consistent with the
marketing philosophy that “satisfaction of
consumer needs” is fundamental to a
venture’s existence.

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Continuum for Classifying New
Products

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Innovation (cont.)

Firm’s Viewpoint
Distinction can be made between new
products and new markets.
Situations with a new technology and a new
market are the most complicated and pose the
highest degree of risk.

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The best practices that can assist entrepreneurs in creating
an advantage out of a new innovation are:

 Analyzing opportunity for identification of the potential

customers’ interest in using the innovation.
 Modifying the innovation so that it will be simple and
clearly focused on a specific need.
 The ‘elevator effect’ – innovations should be determined
as if they needed to be introduced to an investor while
going up in an elevator: very short, simple and clear.

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The best practices that can assist entrepreneurs in creating
an advantage out of a new innovation are( Cont’d)

 Innovations targeted and appealing to a small and

focused market require limited amounts of money from
the founder; as the market and demand grow, the
business will be able to use its resources, networks and
expertise to fine-tune its processes and stay ahead of
the emerging competition.
 Innovators aim at market leadership, i.e. dominating a
niche, being the leading business for a
product/service/process, etc.

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 • Innovation =
Invention +
Commercialization

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Creativity Exercise

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