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CHAPTER 3. CREATIVITY AND INNOVATION: KEYS TO
1. Explain the differences among creativity, innovation, and entrepreneurship.
2. Describe why creativity and innovation are such an integral part of entrepreneurship.
3. Explain the 10 “mental locks” that limit individual creativity.
4. Understand how entrepreneurs can enhance the creativity of their employees as well as
their own creativity.
5. Describe the steps in the creative process.
6. Discuss techniques for improving the creative process.
7. Describe the protection of intellectual property through patents, trademarks, and
Part 2: Class Instruction
Introduction
One of the tenets of entrepreneurship is the ability to create new and useful ideas that
solve the problems and challenges that people face every day. As Chapter 1 discussed,
entrepreneurs can create value in a number of ways. For example, entrepreneurs invent
new products and services, develop new technology, discover new knowledge, improve
existing products or services, and find different ways of providing more valuable goods
and services with fewer resources.
Creativity, Innovation, and Entrepreneurship
LO 1
Creativity is the ability to develop new ideas and discover new ways of looking at
problems and opportunities. A study conducted by the U.S. Small Business Administration
reports that small companies produce 16 times more patents per employee than their
larger rivals. The secret is to apply creativity and innovation to solve problems and exploit
opportunities that people face every day.
Innovation is the ability to apply creative solutions to problems and opportunities that
enhance or enrich people’s lives. Entrepreneurs succeed by thinking and doing new things
or old things in new ways. Some create innovations reactively in response to customer
feedback or changing market conditions, and others create innovations proactively,
spotting opportunities on which to capitalize. Innovation is evolutionary, developing
market-sustaining ideas that elaborate on exiting products, processes, and service.
Entrepreneurial innovation encompasses not only new products and service, but also new
business models.
Entrepreneurship is the result of a disciplined, systematic process of applying creativity
and innovation to needs and opportunities in the marketplace. Innovation must be a
constant process because most ideas do not work and most innovations fail. Table 3.1
“The Five Dimensions of Discovery-Driven Leadership” can be used to differentiate
between delivery-driven and discovery-driven leadership.
Creativity – Essential to Survival LO 2
Creativity is an important source for building a competitive advantage and for survival.
Companies that fail to become engines of innovation are more likely to lose ground to
their more creative competitors and ultimately become irrelevant and close their doors.
Making the leap from what has worked in the past to what will work today (or in the
future) requires entrepreneurs to cast off their limiting assumptions, beliefs, and behaviors
and to develop new insights into the relationship among resources, needs, and values.
A creative exercise, shown in Figure 3.1, “How Creative Are You?” can be used to
explore aspects of creativity.
Can Creativity Be Taught? Research shows that anyone can learn to be creative. Author
Joyce Wycoff believes everyone can learn techniques and behaviors that generate ideas.
Not only can entrepreneurs and the people who work for them learn to think creatively,
but they must for their companies’ sake!
Consider using You Be the Consultant “10 Keys to Business Innovation” at this
point.
Barriers to Creativity LO 3
There are limitless barriers to creativity—time pressures, unsupportive management,
pessimistic coworkers, overly rigid company policies, and countless others.
The most difficult hurdles to overcome are those that individuals impose upon themselves.
In his book, A Whack on the Side of the Head, Roger von Oech identifies ten “mental
blocks” that limit individual creativity. They are as follows:
1. Searching for just one right answer
2. Focusing on being logical
3. Blindly following rules
4. Constantly being practical
5. Viewing laughter and play as frivolous. Myopic thinking is a common killer of
creativity; being narrowly focused and limited by the status quo.
6. Becoming overly specialized
7. Avoiding ambiguity
8. Fearing looking foolish
9. Fearing mistakes and failure
10. Believing that “I’m not creative”
Questions to spur the imagination are presented in Table 3.2. Questions to Spur the
Imagination include:
1. Is there a new way to do it?
2. Can you borrow or adapt it?
3. Can you give it a new twist?
4. Do you merely need more of the same?
5. Do you need less of the same?
6. Is there a substitute?
7. Can you rearrange the parts?
8. What if you do just the opposite?
9. Can you combine ideas?
10. Are customers using your product or service in ways you never expected or
intended?
11. Which customers are you not servicing? What changes to your product or
service are necessary to reach them?
12. Can you put it to other uses?
13. What else could we make from this?
14. Are there other markets for it?
15. Can you reverse it?
16. Can you rearrange it?
17. Can you put it to another use?
18. What idea seems impossible, but if executed, would revolutionize your
business?
How to Enhance Creativity LO 4
Enhancing Organizational Creativity. Creativity doesn’t just happen in organizations;
entrepreneurs must establish an environment in which creativity can flourish — for
themselves and for their workers. New ideas are fragile creations, but the right
organizational environment can encourage people to develop and cultivate them.
Ensuring that workers have the freedom and the incentives to be creative is one of the best
ways to achieve creativity. Entrepreneurs can stimulate their own creativity and
encourage it among workers by:
Including creativity as a core company value and make it an integral part of the
company’s culture.
Hiring for creativity
Encouraging curiosity
Designing a work space that encourages creativity
View problems as opportunities
Providing creativity training
Eliminating bureaucratic obstacles and providing the support necessary for
Monitoring emerging trends and identifying ways your company can capitalize on
them
Looking for uses for your company’s products or services in other markets
Rewarding creativity
Modeling creative behavior
Not forgetting about business model innovation
Enhancing Individual Creativity. You can enhance individual creativity by using the
following techniques:
Allow yourself to be creative
Forget the “rules”
Give your mind fresh input every day
Take up a hobby
Travel and observe
Keep a journal handy to record your thoughts and ideas
Listen to other people
Listen to customers
Get adequate sleep
Watch a movie
Collaborate with others
Read books on stimulating creativity or take a class on creativity
Doodle
Take some time off
Be persistent
Refer to the “Hands On… How To” feature for more suggestions.
The Creative Process LO 5
Although new ideas may appear to strike like a bolt of lightning, they are actually the
result of the creative process. The creative process involves seven steps:
1. Preparation to get the mind ready for creative thinking. Suggestions include:
o Adopt the attitude of a lifelong student
2. Investigation. This requires one to develop a solid understanding of the problem.
3. Transformation. This involved viewing the similarities and differences among the
4. Incubation refers to the need to have time to reflect on the information collected,
5. Illumination refers to the proverbial light bulb turning on, and happens sometime
during the illumination stage.
6. Verification refers to the steps taken to validate an idea as realistic and useful by
asking questions such as:
o Is it really a better solution?
o Will it work?
o Is there a need for it?
o If there is a need, what is the best application in the marketplace?
o Does this idea fit into our core competencies?
o How much will it cost to produce or provide?
o Can we sell it at a reasonable price that will product adequate sales, profit, and
returns on investment?
o Will people buy it?
7. Implementation refers to transforming the idea into reality. What sets
entrepreneurs apart is that they act on their ideas.
Techniques for Improving the Creative Process LO 6
Brainstorming. Teams of people working together usually can generate more and more
creative ideas. Brainstorming is a process in which a small group interacts with very little
session
Company rank and department affiliation are irrelevant
Give the group a well-defined problem to address
Provide the group relevant background information about the problem in advance.
Invite them to provide at least three ideas by e-mail prior to the brainstorming
Throw logic out the window
Encourage all ideas from the team, even wild and extreme ones
Establish a goal of quantity of ideas rather than quality
the various relationships among ideas, and improves the ability to view the problem from
many sides. It relates to the way the brain actually works. Rather than throwing out ideas
in a linear fashion, the brain jumps from one idea to another. In many creative sessions,
ideas are rushing out so fast that many are lost if a person attempts to shove them into a
linear outline. The mind-mapping process works this way:
mind map.
Force Field Analysis. This technique is useful to evaluate the forces that support and
oppose a proposed change. It addresses the problem to solved, the driving forces, and the
restraining forces. TRIZ. This is a systematic approach to solve any technical problem
and relies on 40 principles and left-brain thinking to solve problems. Refer to Figure 3.2,
Intellectual Property: Protecting Your Ideas LO 7
Entrepreneurs must understand how to put patents, copyrights and trademarks to work for
them. The World Trade Organization estimates that between 5 and 7 percent of all goods
traded globally are counterfeit. Refer to Table 3.3, Top Counterfeit Products Seized by
design patents extending for 14 years beyond the date the patent is issued, are
given to inventors who make new original and ornamental changes in the designs
of existing products that enhance their sales.
Inventors who develop a new plant can obtain a plant patent (by grafting or cross-
breeding, not planting seeds).
the patent application.
A patent is awarded to the first person to file a patent application.
Before beginning the lengthy process of applying for a patent, it is best to seek the
advice of a patent agent or attorney who is registered with the Patent and
Trademarks Office.
Refer to Figure 3.3 for Patent Applications and Patents Issued, which graphs the number
of patent applications from 1975 to 2015.
http://www.uspto.gov/web/offices/dcom/olia/oed/roster/
The Patent Process. To receive a patent, an inventor must follow these steps:
1. Establish the invention’s novelty
2. Document the device
