chapter 5 creativity and innovation introduction to entrepreneurship, 8e donald f. kuratko
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Chapter 5 Creativity and Innovation
Chapter 5 Creativity and Innovation
Introduction to Entrepreneurship, Introduction to Entrepreneurship, 8e8e
Donald F. KuratkoDonald F. Kuratko
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–2
Chapter ObjectivesChapter Objectives
1.1. To explore the opportunity identification To explore the opportunity identification processprocess
2.2. To define and illustrate the sources of To define and illustrate the sources of innovative ideas for entrepreneursinnovative ideas for entrepreneurs
3.3. To examine the role of creativity and to To examine the role of creativity and to review the major components of the creative review the major components of the creative process: knowledge accumulation, incubation process: knowledge accumulation, incubation process, idea experience, evaluation, and process, idea experience, evaluation, and implementationimplementation
4.4. To present ways of developing personal To present ways of developing personal creativity: recognize relationships, develop a creativity: recognize relationships, develop a functional perspective, use your “brains,” and functional perspective, use your “brains,” and eliminate muddling mind-setseliminate muddling mind-sets
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–3
Chapter Objectives (cont’d)Chapter Objectives (cont’d)
5.5. To introduce the four major types of To introduce the four major types of innovation: invention, extension, duplication, innovation: invention, extension, duplication, and synthesisand synthesis
6.6. To review some of the major myths To review some of the major myths associated with innovation and to define the associated with innovation and to define the ten principles of innovationten principles of innovation
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–4
Opportunity Identification: Opportunity Identification: The Search for New IdeasThe Search for New Ideas
• Opportunity identification is central to Opportunity identification is central to entrepreneurship and involves:entrepreneurship and involves: The creative pursuit of ideasThe creative pursuit of ideas The innovation processThe innovation process
• The first step for any entrepreneur is the The first step for any entrepreneur is the identification of a “good idea.”identification of a “good idea.” The search for good ideas is never easy.The search for good ideas is never easy. Opportunity recognition can lead to both personal and Opportunity recognition can lead to both personal and
societal wealth.societal wealth.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–5
Entrepreneurial Imagination and Entrepreneurial Imagination and CreativityCreativity• How entrepreneurs do what they do:How entrepreneurs do what they do:
Creative thinking + systematic analysis = successCreative thinking + systematic analysis = success
Seek out unique opportunities to fill needs and wantsSeek out unique opportunities to fill needs and wants
Turn problems into opportunitiesTurn problems into opportunities
Recognize that problems are to solutions what Recognize that problems are to solutions what demand is to supplydemand is to supply
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Table5.1Sources of Innovation Ideas
Source Examples
Unexpected occurrences Unexpected success: Apple Computer (microcomputers)Unexpected tragedy: 9-11 terrorist attack
Incongruities Overnight package delivery
Process needs Sugar-free productsCaffeine-free coffeeMicrowave ovens
Industry and market changes
Health care industry: changing to home health care
Demographic changes Rest homes or retirement centers for older people
Perceptual changes Exercise (aerobics) and the growing concern for fitness
Knowledge-based concepts Mobile (Cell phone) technology; pharmaceutical industry; robotics
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–7
The Role of Creative ThinkingThe Role of Creative Thinking
• CreativityCreativity The generation of ideas that result in the improved The generation of ideas that result in the improved
efficiency or effectiveness of a system.efficiency or effectiveness of a system.
• Two important aspects of creativity exist:Two important aspects of creativity exist: ProcessProcess
• The process is goal oriented; it is designed to attain a solution The process is goal oriented; it is designed to attain a solution to a problem.to a problem.
PeoplePeople• The resources that determine the solution.The resources that determine the solution.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–8
Table5.2Two Approaches to Creative Problem Solving
Adaptor Innovator
Employs a disciplined, precise, methodical approach
Approaches tasks from unusual angles
Is concerned with solving, rather than finding, problems
Discovers problems and avenues of solutions
Attempts to refine current practices Questions basic assumptions related to current practices
Tends to be means oriented Has little regard for means; is more interested in ends
Is capable of extended detail work Has little tolerance for routine work
Is sensitive to group cohesion and cooperation
Has little or no need for consensus; often is insensitive to others
Source: Michael Kirton, “Adaptors and Innovators: A Description and Measure,” Journal of Applied Psychology (October 1976): 623. Copyright © 1976 by The American Psychological Association.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–9
The Nature of the Creative ProcessThe Nature of the Creative Process
• Creativity is a process that can be Creativity is a process that can be developed and improved. Some individuals developed and improved. Some individuals have a greater aptitude for creativity than have a greater aptitude for creativity than others.others.
• Typical Creative ProcessTypical Creative Process Phase 1: Background or knowledge accumulationPhase 1: Background or knowledge accumulation
Phase 2: The incubation processPhase 2: The incubation process
Phase 3: The idea experiencePhase 3: The idea experience
Phase 4: Evaluation and implementationPhase 4: Evaluation and implementation
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–10
Table5.3The Most Common Idea “Killers”
1. “Naah.”
2. “Can’t” (said with a shake of the head and an air of finality).
3. “That’s the dumbest thing I’ve ever heard.”
4. “Yeah, but if you did that . . .” (poses an extreme or unlikely disaster case).
5. “We already tried that—years ago.”
6. “I don’t see anything wrong with the way we’re doing it now.”
7. “We’ve never done anything like that before.”
8. “We’ve got deadlines to meet—we don’t have time to consider that.”
9. “It’s not in the budget.”
10. “Where do you get these weird ideas?”
Source: Adapted from The Creative Process, ed. Angelo M. Biondi (Hadley, MA: The Creative Education Foundation, 1986).
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–11
Figure5.1The Critical Thinking Process
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Developing Your CreativityDeveloping Your Creativity
• Recognizing RelationshipsRecognizing Relationships Looking for different or unorthodox relationships Looking for different or unorthodox relationships
among the elements and people around you.among the elements and people around you.
• Developing a Functional PerspectiveDeveloping a Functional Perspective Viewing things and people in terms of how they can Viewing things and people in terms of how they can
satisfy his or her needs and help complete a project.satisfy his or her needs and help complete a project.
• Using Your BrainsUsing Your Brains The right brain helps us understand analogies, The right brain helps us understand analogies,
imagine things, and synthesize information. imagine things, and synthesize information. The left brain helps us analyze, verbalize, and use The left brain helps us analyze, verbalize, and use
rational approaches to problem solving.rational approaches to problem solving.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–13
A Creative ExerciseA Creative Exercise
• Think of and write down all of the functions you Think of and write down all of the functions you can imagine for the following items (spend five can imagine for the following items (spend five minutes on each item):minutes on each item):
• An egotistical staff memberAn egotistical staff member• A large pebbleA large pebble• A fallen tree branchA fallen tree branch• A chairA chair• A computer “whiz kid”A computer “whiz kid”• An obsessively organized An obsessively organized
employeeemployee• The office “gossip”The office “gossip”• An old hubcapAn old hubcap
• A new secretaryA new secretary• An empty roll of An empty roll of
masking tapemasking tape• A yardstickA yardstick• An old coat hangerAn old coat hanger• The office The office
“tightwad”“tightwad”• This exerciseThis exercise
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–14
Table5.4Processes Associated with the Two Brain Hemispheres
Left Hemisphere Right Hemisphere
Verbal Nonverbal
Analytical Synthesizing
Abstract Seeing analogies
Rational Nonrational
Logical Spatial
Linear Intuitive
Imaginative
Source: Betty Edwards, Drawing on the Right Side of the Brain (Los Angeles: Tarcher, 1979).
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–15
Table5.5Ways to Develop Left- and Right-Hemisphere Skills
Left-Hemisphere Skills Right-Hemisphere Skills
1. Step-by-step planning of your work and life activities
2. Reading ancient, medieval, and scholastic philosophy, legal cases, and books on logic
3. Establishing timetables for all of your activities
4. Using and working with a computer program
5. Detailed fantasizing and visualizing things and situations in the future
6. Drawing faces, caricatures, and landscapes
1. Using metaphors and analogies to describe things and people in your conversations and writing
2. Taking off your watch when you are not working
3. Suspending your initial judgment of ideas, new acquaintances, movies, TV programs, and so on
4. Recording your hunches, feelings, and intuitions and calculating their accuracy
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–16
Impediments to CreativityImpediments to Creativity
• Eliminating Muddling Mind-SetsEliminating Muddling Mind-Sets Either/or thinking (concern for certainty)Either/or thinking (concern for certainty)
Security hunting (concern for risk)Security hunting (concern for risk)
Stereotyping (abstracting reality)Stereotyping (abstracting reality)
Probability thinking (seeking predictable Probability thinking (seeking predictable results)results)
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–17
Arenas in Which People are CreativeArenas in Which People are Creative
Types of Types of CreativityCreativity
Types of Types of CreativityCreativity
MaterialCreativity
MaterialCreativity
Organization Creativity
Organization Creativity
Relationship Creativity
Relationship Creativity
Event Creativity
Event Creativity
Inner CreativityInner Creativity
Spontaneous Creativity
Spontaneous Creativity
IdeaCreativity
IdeaCreativity
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–18
The Creative ClimateThe Creative Climate
• Characteristics of a creative climate:Characteristics of a creative climate: A trustful management that does not overcontrol the personnelA trustful management that does not overcontrol the personnel Open channels of communication among all business membersOpen channels of communication among all business members Considerable contact and communication with outsidersConsiderable contact and communication with outsiders A large variety of personality typesA large variety of personality types A willingness to accept changeA willingness to accept change An enjoyment in experimenting with new ideasAn enjoyment in experimenting with new ideas Little fear of negative consequences for making a mistakeLittle fear of negative consequences for making a mistake The selection and promotion of employees on the basis of meritThe selection and promotion of employees on the basis of merit The use of techniques that encourage ideas, including The use of techniques that encourage ideas, including
suggestion systems and brainstormingsuggestion systems and brainstorming Sufficient financial, managerial, human, and time resources for Sufficient financial, managerial, human, and time resources for
accomplishing goalsaccomplishing goals
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–19
Innovation and the EntrepreneurInnovation and the Entrepreneur
• Innovation:Innovation: Is the process by which entrepreneurs convert Is the process by which entrepreneurs convert
opportunities into marketable ideas.opportunities into marketable ideas.
Is a combination of the vision to create a good idea Is a combination of the vision to create a good idea and the perseverance and dedication to remain with and the perseverance and dedication to remain with the concept through implementation.the concept through implementation.
Is a key function in the entrepreneurial process.Is a key function in the entrepreneurial process.
Is the specific function of entrepreneurship.Is the specific function of entrepreneurship.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–20
The Innovation ProcessThe Innovation Process
• Types of InnovationTypes of Innovation InventionInvention ExtensionExtension DuplicationDuplication SynthesisSynthesis
• Sources of Sources of InnovationInnovation Unexpected Unexpected
occurrencesoccurrences IncongruitiesIncongruities Process needsProcess needs Industry and market Industry and market
changeschanges Demographic changesDemographic changes Perceptual changesPerceptual changes Knowledge-based Knowledge-based
conceptsconcepts
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–21
Table5.6Innovation in Action
Type Description Examples
Invention Totally new product, service, or process
Wright brothers—airplaneThomas Edison—light bulbAlexander Graham Bell—telephone
Extension New use or different application of an already existing product, service, or process
Ray Kroc—McDonald’s Mark Zuckerberg—FacebookBarry Sternlicht—Starwood Hotels & Resorts
Duplication Creative replication of an existing concept
Wal-Mart—department storesGateway—personal computersPizza Hut—pizza parlor
Synthesis Combination of existing concepts and factors into a new formulation or use
Fred Smith—Fed ExHoward Schultz—Starbucks
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–22
Major Innovation MythsMajor Innovation Myths
• Myth 1:Myth 1: Innovation is planned and Innovation is planned and predictablepredictable
• Myth 2:Myth 2: Technical specifications should be Technical specifications should be thoroughly preparedthoroughly prepared
• Myth 3:Myth 3: Creativity relies on dreams and Creativity relies on dreams and blue-blue- sky ideassky ideas
• Myth 4:Myth 4: Big projects will develop betterBig projects will develop betterinnovations than smaller onesinnovations than smaller ones
• Myth 5:Myth 5: Technology is the driving force of Technology is the driving force of innovation successinnovation success
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–23
Principles of InnovationPrinciples of Innovation
Be action oriented.Be action oriented. Make the product, process, or service simple and Make the product, process, or service simple and
understandable.understandable. Make the product, process, or service customer-Make the product, process, or service customer-
based.based. Start small.Start small. Aim high.Aim high. Try/test/revise.Try/test/revise. Learn from failuresLearn from failures Follow a milestone schedule.Follow a milestone schedule. Reward heroic activity.Reward heroic activity. Work, work, work.Work, work, work.
© 2009 South-Western, a part of Cengage Learning. All rights reserved. 5–24
Key Terms and ConceptsKey Terms and Concepts
• appositional appositional relationshiprelationship
• creative processcreative process• creativitycreativity• duplicationduplication• extensionextension• functional perspectivefunctional perspective• incongruitiesincongruities• innovationinnovation
• inventioninvention• left brainleft brain• muddling mind-setsmuddling mind-sets• opportunity opportunity
identificationidentification• probability thinkingprobability thinking• right brainright brain• stereotypingstereotyping• synthesissynthesis