INNOVATION AND CREATIVITY, S CURVE,

1. UNIT 3
Creativity, Innovation, and
Entrepreneurship

2. “How Can we Know Where We’re Going
Without Knowing First Where We ‘ve
Been?”
Creativity; Past, Present & Future…..

3. 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).

4. “Throughout history, the process of creation
whether; paintings or musical compositions were
thought of as ‘spiritual experiences in the service
of whatever muse held the artist in her thrall”
(Thorsby, 2001, p. 95).
“The artist was a channel for a superior power,
creativity a gift from the gods, and the
imagination a divine spark”
(Thorsby, 2001, p. 94).
The Past…….

5. Natures Creation? or Human Creation
Venoms & Poisons or Anaesthetics
The Leaf or Solar Panel (energy from light)
Brain or Computer/Electronic Circuitry
DNA or Computer Program
Ear Drum or Microphone
Eye or Camera (lens, focus, iris, film)
Eye Lid or Windshield Wiper
Tears or Wiper Fluid
Incisor Teeth or Knife
Heart or Pump
Spinal Chord/Nervous system or Communication/Telephone Cables
Song Birds or Music
A Gift from the Gods or a New Phenomenon?
Or…Could Both Be True????...... Maybe?

6. 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.

7. 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).

8. WHO IS CREATIVE?
• ARE CREATIVE PEOPLE BORN OR MADE?
• THINK BACK TO YOUR FIRST YEAR
MANAGEMENT STUDIES AND DISCUSSIONS OF
WHAT CONSTITUTES AN ENTREPRENEUR, AND
WHETHER THESE SKILLS CAN BE LEARNED.
• THE LITERATURE SUGGESTS THAT CREATIVITY
CAN BE INNATE (YOU’RE BORN WITH IT), BUT
CAN ALSO BE LEARNED (YOU GET BETTER WITH
PRACTICE).

9. 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

10. CAN WE LEARN CREATIVITY?
WE CAN ARGUE THAT ALTHOUGH WE MIGHT NOT BE ABLE TO
LEARN HOW TO TURN OURSELVES INTO CREATIVE PEOPLE,
WE CAN LEARN HOW TO THINK ABOUT BUSINESS
CREATIVELY.

11. THE ROLE OF THE BRAIN

12. THE WHOLE BRAIN: UNIVERSAL THINKING
STYLES

13. THREE COMPONENTS OF
CREATIVITY
• DOMAIN RELEVANT SKILLS
• CREATIVE PROCESSES
• INTRINSIC TASK MOTIVATION
See; Amabile, Philips & Collins,

14. 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)
“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.

15. Examples of Innovation
• Glass (3500 BC)
• Modern Public Library (1850-1945 depending on country)
• Electronic calculator (1961)
• Mobile phones (1973)
• World Wide Web / Internet (1989)
• Email (1993)

16. WHAT IS A NEW INNOVATION?
• WHAT DO YOU DEFINE AS NEW?
• CAN MEAN DIFFERENT THINGS TO DIFFERENT PEOPLE
• NEW TO THE WORLD (10%)
• NEW TO THE FIRMS (20%)
• ADDITIONS TO EXISTING PRODUCTS/PROCESS (26%)
• IMPROVEMENT AND REVISIONS TO EXISTING PRODUCTS/PROCESS (26%)
• REPOSITIONING (WITH DIFFERENT PURPOSES) (7%)
• NEW TO THE MARKET (GEOGRAPHY + SEGMENTS)
• NEW TO THE SEASON
• COST REDUCTION (11%)
(SEE; BOOZ, ALLEN & HAMILTON, 1982; GRIFFIN, 1997)

17. Open versus Closed Innovation
Under the concept of innovation that prevailed during most of the 20th
century, companies attained competitive advantage by funding large
research laboratories that developed technologies that formed the
basis of new products that commanded high profit margins that then
could be ploughed back into research.
The closed innovation paradigm has eroded due to the following
factors:
• Increased mobility of skilled workers
• Expansion of venture capital
• External options for unused technologies
• Increased availability of highly-capable outsourcing partners

18. CLOSED INNOVATION
(Chesbrough, 2003)

19. OPEN INNOVATION
(Chesbrough, 2003)

20. NOT ALL INNOVATIONS ARE
SUCCESSFUL…
INNOVATION = INVENTION + COMMERCIALIZATION

21. •Innovation = Invention
+ Commercialization
•Are all Innovations
Opportunities?

22. WHAT’S AN OPPORTUNITY?
“AN OPPORTUNITY HAS THE QUALITIES OF BEING ATTRACTIVE, DESIRABLE AND
TIMELY AND IS ANCHORED IN A PRODUCT OR SERVICE WHICH CREATES VALUE
FOR BUYER OR END USER”
• A NEW OR IMPROVED PRODUCT
• A NEW SERVICE
• A NEW MEANS OF PRODUCTION
• A NEW WAY OF DISTRIBUTING THE PRODUCT OR SERVICE
• AN IMPROVED SERVICE
• NEW COMBINATIONS
• OR A HYBRID OF THE ABOVE

23. RECOGNISING AN OPPORTUNITY
• OPPORTUNITIES ARE NOT LIKE RAINDROPS – THEY DO NOT
FALL AT OUR FEET.
• WELL, NOT USUALLY! FROM TIME TO TIME SOMETHING
MIGHT JUST HAPPEN WHICH ALLOWS AN ENTREPRENEUR TO
MOVE FORWARD.
• HOWEVER, IF WE WAIT FOR AN OPPORTUNITY TO TURN UP,
WE WILL PROBABLY NEVER SUCCEED.
• AS CREATIVE BUSINESS PEOPLE WE SEEK OR DEVELOP
OPPORTUNITIES.

24. SO…
• DO IDEAS = OPPORTUNITIES?
• DO PROBLEMS = OPPORTUNITIES?
• REALITY - AN IDEA IS ONLY AN
OPPORTUNITY WHEN IT:
• ADDS VALUE TO CONSUMER
• IT SOLVES A PROBLEM
• IT CAN MAKE SOME MONEY ( COMMUNICATE SOME VALUE TO OTHER
STAKEHOLDERS)
• IT IS A GOOD “FIT” WITH THE ENTREPRENEURIAL TEAM
• TIMMONS& SPINELLI (2007)

25. FACTORS INFLUENCING THE
CREATION/DISCOVERY OF
OPPORTUNITIES

26. CREATIVE INVENTION VS
INNOVATIVE OPPORTUNITY
STRUGGLER
COPIER
STAGNATOR
Creative
Invention
Innovative
Opportunity
Perception
High
Low
High
INNOVATOR
Low

27. ATTRIBUTES OF CREATIVE
THINKING
• FLEXIBILITY – WILLING TO LOOK AT AN ISSUE FROM
MANY ANGLES, NOT SET IN OUR WAYS.
• ORIGINALITY – ATTEMPTS TO FIND NON-TYPICAL
RESPONSES TO PROBLEMS.
• NON-JUDGEMENTAL – NOT REJECTING A POTENTIAL
SOLUTION WITHOUT GIVING IT APPROPRIATE
CONSIDERATION.

28. Ability to be
CREATIVE
Ability to spot
OPPORTUNITIES
INVENTION
INNOVATION
SUCCESS
ENTREPRENEURIAL ENVIRONMENT
REATIVITY, INVENTION, OPPORTUNITY
ENTREPRENEURSHIP

29. CREATING CREATIVITY
• CREATIVE INDIVIDUALS DON’T JUST SIT WAITING FOR THE
“LIGHTBULB MOMENT”
• THEY APPROACH A PROBLEM SYSTEMATICALLY

30. STAGES IN CREATIVE THOUGHT
• PREPARATION
• INCUBATION
• INSIGHT
• EVALUATION
• ELABORATION

31. 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

33. TRENDS
• THE START OF A TREND THAT LASTS FOR A CONSIDERABLE
PERIOD OF TIME PROVIDES ONE OF THE GREATEST
OPPORTUNITIES FOR STARTING A NEW VENTURE.
• TRENDS THAT WILL PROVIDE OPPORTUNITIES INCLUDE:
GREEN TREND, CLEAN-ENERGY TREND, ORGANIC-
ORIENTATION TREND, ECONOMIC TREND, SOCIAL TREND,
HEALTH TREND, AND WEB TREND.

34. SOURCES OF NEW IDEAS
• CONSUMERS
• INFORMALLY MONITOR POTENTIAL IDEAS AND NEEDS.
• FORMALLY ARRANGE FOR CONSUMERS TO EXPRESS THEIR
OPINIONS.
• EXISTING PRODUCTS AND SERVICES
• ANALYSIS UNCOVERS WAYS TO IMPROVE OFFERINGS THAT MAY
RESULT IN A NEW PRODUCT OR SERVICE.
• DISTRIBUTION CHANNELS
• CHANNEL MEMBERS CAN HELP SUGGEST AND MARKET NEW
PRODUCTS.

35. • FEDERAL GOVERNMENT
• FILES OF THE PATENT OFFICE CAN SUGGEST NEW PRODUCT
POSSIBILITIES.
• NEW PRODUCT IDEAS CAN COME IN RESPONSE TO GOVERNMENT
REGULATIONS.
• RESEARCH AND DEVELOPMENT
• A FORMAL ENDEAVOR CONNECTED WITH ONE’S CURRENT
EMPLOYMENT.
• AN INFORMAL LAB IN A BASEMENT OR GARAGE.
Sources of New Ideas (cont.)

36. METHODS OF GENERATING NEW
IDEAS
• FOCUS GROUPS
• A MODERATOR LEADS A GROUP OF 8 TO 14 PARTICIPANTS
THROUGH AN OPEN, IN-DEPTH DISCUSSION IN A DIRECTIVE OR
NONDIRECTIVE MANNER.
• AN EXCELLENT METHOD FOR GENERATING AND SCREENING IDEAS
AND CONCEPTS.

37. • BRAINSTORMING
• ALLOWS PEOPLE TO BE STIMULATED TO GREATER CREATIVITY.
• GOOD IDEAS EMERGE WHEN THE BRAINSTORMING EFFORT
FOCUSES ON A SPECIFIC PRODUCT OR MARKET AREA.
• RULES OF BRAINSTORMING:
• NO CRITICISM.
• FREEWHEELING IS ENCOURAGED.
• QUANTITY OF IDEAS IS DESIRED.
• COMBINATIONS AND IMPROVEMENTS OF IDEAS ARE
ENCOURAGED.
Methods of Generating New Ideas
(cont.)

38. • BRAINWRITING
• A FORM OF WRITTEN BRAINSTORMING.
• PARTICIPANTS WRITE THEIR IDEAS ON SPECIAL FORMS OR CARDS
THAT CIRCULATE WITHIN THE GROUP.
• PROBLEM INVENTORY ANALYSIS
• CONSUMERS ARE PROVIDED WITH A LIST OF PROBLEMS AND ARE
ASKED TO IDENTIFY PRODUCTS THAT HAVE THOSE PROBLEMS.
• RESULTS MUST BE CAREFULLY EVALUATED AS THEY MAY NOT
ACTUALLY REFLECT A NEW BUSINESS OPPORTUNITY.
Methods of Generating New Ideas
(cont.)

39. CREATIVE PROBLEM SOLVING
• CREATIVITY TENDS TO DECLINE WITH AGE, EDUCATION, LACK
OF USE, AND BUREAUCRACY.
• LATENT CREATIVE POTENTIAL CAN BE STIFLED BY PERCEPTUAL,
CULTURAL, EMOTIONAL, AND ORGANIZATIONAL FACTORS.
• CREATIVITY CAN BE UNLOCKED BY USING ANY OF THE CREATIVE
PROBLEM-SOLVING TECHNIQUES.

40. • BRAINSTORMING
• SESSION STARTS WITH A PROBLEM STATEMENT.
• NO GROUP MEMBER SHOULD BE AN EXPERT IN THE FIELD OF THE
PROBLEM.
• ALL IDEAS MUST BE RECORDED.
• REVERSE BRAINSTORMING
• A GROUP METHOD THAT FOCUSES ON THE NEGATIVE ASPECTS OF A
PRODUCT, SERVICE, OR IDEA AS WELL AS WAYS TO OVERCOME
THESE PROBLEMS.
• CARE MUST BE TAKEN TO MAINTAIN GROUP MORALE.
Creative Problem Solving (cont.)

41. • GORDON METHOD
• METHOD FOR DEVELOPING NEW IDEAS WHEN THE INDIVIDUALS ARE
UNAWARE OF THE PROBLEM.
• SOLUTIONS ARE NOT CLOUDED BY PRECONCEIVED IDEAS AND
BEHAVIORAL PATTERNS.
• CHECKLIST METHOD
• DEVELOPING A NEW IDEA THROUGH A LIST OF RELATED ISSUES.
• FREE ASSOCIATION
• DEVELOPING A NEW IDEA THROUGH A CHAIN OF WORD
ASSOCIATIONS.
Creative Problem Solving (cont.)

42. • FORCED RELATIONSHIPS
• DEVELOPING A NEW IDEA BY LOOKING AT PRODUCT
COMBINATIONS.
• A FIVE STEP PROCESS WHICH FOCUSES ON GENERATING IDEAS
FROM RELATIONSHIP PATTERNS BETWEEN ELEMENTS OF A
PROBLEM.
• COLLECTIVE NOTEBOOK METHOD
• DEVELOPING A NEW IDEA BY GROUP MEMBERS REGULARLY
RECORDING IDEAS.
Creative Problem Solving (cont.)

43. • ATTRIBUTE LISTING
• DEVELOPING A NEW IDEA BY LOOKING AT THE POSITIVES AND
NEGATIVES.
• BIG-DREAM APPROACH
• DEVELOPING A NEW IDEA BY THINKING WITHOUT CONSTRAINTS.
• PARAMETER ANALYSIS
• DEVELOPING A NEW IDEA BY FOCUSING ON PARAMETER
IDENTIFICATION AND CREATIVE SYNTHESIS.
Creative Problem Solving (cont.)

44. FIGURE 4.1 - ILLUSTRATION OF
PARAMETER ANALYSIS

45. 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.

46. • 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.
Innovation (cont.)

47. • 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.
Innovation (cont.)

48. • CLASSIFICATION OF NEW PRODUCTS
• CONSUMER’S VIEWPOINT
• THE CONTINUUM PROPOSED BY THOMAS ROBERTSON IS BASED ON THE
DISRUPTING INFLUENCE THAT USE OF THE PRODUCT HAS ON
ESTABLISHED CONSUMPTION PATTERNS.
• CONTINUOUS INNOVATIONS.
• DYNAMICALLY CONTINUOUS.
• DISCONTINUOUS INNOVATIONS.
• THIS APPROACH IS CONSISTENT WITH THE MARKETING PHILOSOPHY
THAT “SATISFACTION OF CONSUMER NEEDS” IS FUNDAMENTAL TO A
VENTURE’S EXISTENCE.
Innovation (cont.)

49. FIGURE 4.3 - CONTINUUM FOR
CLASSIFYING NEW PRODUCTS

50. • 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.
Innovation (cont.)

51. FIGURE 4.4 - NEW PRODUCT
CLASSIFICATION SYSTEM

52. FIGURE 4.5 - A MODEL OF THE
OPPORTUNITY RECOGNITION PROCESS

53. PRODUCT PLANNING AND DEVELOPMENT
PROCESS
• ESTABLISHING EVALUATION CRITERIA
• CRITERIA SHOULD BE ESTABLISHED AT EACH STAGE OF THE
PRODUCT PLANNING AND DEVELOPMENT PROCESS.
• IT SHOULD BE ALL-INCLUSIVE AND QUANTITATIVE IN NATURE.
• CRITERIA SHOULD EVALUATE THE IDEA IN TERMS OF:
• MARKET OPPORTUNITY.
• COMPETITION.
• MARKETING SYSTEM.
• FINANCIAL FACTORS.
• PRODUCTION FACTORS.

54. FIGURE 4.6 - THE PRODUCT PLANNING
AND DEVELOPMENT PROCESS

55. • IDEA STAGE
• PROMISING IDEAS SHOULD BE IDENTIFIED AND IMPRACTICAL
ONES ELIMINATED.
• EVALUATION METHOD – SYSTEMATIC MARKET EVALUATION
CHECKLIST.
• DETERMINE THE NEED FOR THE NEW IDEA AS WELL AS ITS VALUE
TO THE COMPANY.
• CONCEPT STAGE
• REFINED IDEA IS TESTED TO DETERMINE CONSUMER ACCEPTANCE
WHICH CAN BE MEASURED THROUGH THE CONVERSATIONAL
INTERVIEW METHOD.
Product Planning and Development
Process (cont.)

56. • PRODUCT DEVELOPMENT STAGE
• CONSUMER REACTION TO THE PRODUCT/SERVICE IS
DETERMINED.
• A CONSUMER PANEL IS GIVEN A PRODUCT SAMPLE AND
PREFERENCE IS DETERMINED THROUGH METHODS SUCH AS
MULTIPLE BRAND COMPARISONS, RISK ANALYSIS, ETC.
• TEST MARKETING STAGE
• INCREASES CERTAINTY OF SUCCESSFUL COMMERCIALIZATION.
• ACTUAL SALES REFLECT CONSUMER ACCEPTANCE.
Product Planning and Development
Process (cont.)

57. E-COMMERCE AND BUSINESS
START-UP
• E-COMMERCE OFFERS ENTREPRENEURS AN OPPORTUNITY TO BE
CREATIVE AND INNOVATIVE.
• FACTORS THAT FACILITATE HIGH-GROWTH IN ELECTRONIC
COMMERCE:
• WIDESPREAD USE OF PERSONAL COMPUTERS.
• ADOPTION OF INTRANETS IN COMPANIES.
• ACCEPTANCE OF THE INTERNET AS A BUSINESS COMMUNICATIONS
PLATFORM.
• FASTER AND MORE SECURE SYSTEMS.

58. • USING E-COMMERCE CREATIVELY
• ENTREPRENEURS HAVE TO DECIDE WHETHER TO:
• RUN INTERNET OPERATIONS WITHIN THE COMPANY.
• OUTSOURCE THESE OPERATIONS TO INTERNET SPECIALISTS.
• USE E-COMMERCE PACKAGES PROVIDED BY SOFTWARE
COMPANIES.
• THE INTEGRATION OF FRONT-END AND BACK-END
OPERATIONS REPRESENTS THE GREATEST CHALLENGE FOR
DOING INTERNET BUSINESS.
E-commerce and Business Start-up
(cont.)

59. • WEB SITES
• EASE OF USE.
• STRUCTURE AND ORGANIZATION OF INFORMATION.
• SEARCH CAPABILITY.
• E-MAIL RESPONSE SYSTEM.
• SPEED.
• COMPATIBILITY WITH DIFFERENT BROWSERS AND PLATFORMS.
E-commerce and Business Start-up
(cont.)

60. • TRACKING CUSTOMER INFORMATION
• ELECTRONIC DATABASES TRACK THE ACTIVITY OF THE
INDUSTRY, SEGMENT, AND COMPANY.
• IT SUPPORTS PERSONAL MARKETING TARGETED AT
INDIVIDUAL CLIENTS.
• CARE MUST BE TAKEN TO FOLLOW THE LAWS PROTECTING
THE PRIVACY OF INDIVIDUALS.
E-commerce and Business Start-up
(cont.)

61. • DOING E-COMMERCE AS AN ENTREPRENEURIAL COMPANY
• PRODUCTS SHOULD BE DELIVERED ECONOMICALLY AND
CONVENIENTLY.
• PRODUCTS NEED TO INTEREST A WIDE MARKET; COMPANY
MUST BE READY TO SHIP THE PRODUCT OUTSIDE ITS OWN
GEOGRAPHICAL LOCATION.
• ONLINE OPERATIONS SHOULD BRING SIGNIFICANT COST
REDUCTIONS.
• COMPANY MUST BE ABLE TO ECONOMICALLY DRAW
CUSTOMERS TO ITS WEB SITE.
E-commerce and Business Start-up
(cont.)