Creativity & innovation in business

by

Norhaniza Abdul Latiff

Lecture 4

SOLVING INTRAPRENEURIAL/ ENTREPRENEURIAL PROBLEMS

The Five Stages of a Business’s Life Cycle• Pre Start-up

• Start-up

• Growth

• Maturity

• Rebirth or Decline

Getty Images

Figure 5.1 The Life Cycle of the START UP/COMPANY

Key Issues about the START UP Cycle• There are static and dynamic forces which need a

special attention of the entrepreneur

• Entrepreneur needs to manage for changes and not changes

• The growth stage of the venture is more sophisticated with competition and dilemmas

• At a certain stage, you need to decide whether to do more innovation or allow decline

New venture pre start up Stage• Creativity and assessment

• Resource base analysis

• Networking including vertical marketing

• Vision, Mission, Objectives, Strategies & Tactics

Start-up Stage• Formal Business plan

• Searching for capital (Analyse the risks)

• Marketing research

• Developing a working team

• Identifying any core competencies for Competitive Advantage

Growth Stage• Any modification on he operating strategy

• Positioning and re-positioning

• Knowing more details about he competitors (Survival of the fittest)

Maturity/Stabilization Stage• Increased competition

• High bargaining power of customers

• Saturation of the market

• The entrepreneur needs to think where will the business be in the near future

• It is a stage preceding a great dilemma: to innovate or exit the business

Rebirth (innovation) or Decline? stage

• Without innovation the clear option is ‘death’

• Possibility of acquiring or being acquired

• Might design new products for new markets (Diversification)

Conclusion

ALL STAGES ARE STRATEGIC POINTS OF THE VENTURE HENCE A NEED FOR SPECIFIC STRATEGIES FOR EVERY STAGE!

Finally !!!!

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.

• 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.)

• 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.)

• 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.)

• 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.)

Conditions for Creative Problem Solving (Hoffman)

Condition 1: Condition 1: Differing, but comparable, cognitions must coexist (quantity vs. quality)

Condition 2: Condition 2: At least two differing cognitions must achieve minimum threshold valence (only one vs. two weak ideas vs. impasse)

Condition 3: Condition 3: Group is required to find the best possible decision (motivation)

Condition 4: Condition 4: Recognize points of conflict between cognitive components (resolve conflict to achieve create solution)

© Copyrig

ht Prentice

-Hall 2004

• In the case of business creativity, to be successful the creator must In the case of business creativity, to be successful the creator must consciously or intuitively have had a consciously or intuitively have had a sense of the market sense of the market and what is and what is required.required.

• Hence, the challenge for the entrepreneur is to maintain creativity Hence, the challenge for the entrepreneur is to maintain creativity and innovation alongside a market orientation, rather than trust to and innovation alongside a market orientation, rather than trust to the happy accidentthe happy accident

• The creative process is being triggered by an awareness of the The creative process is being triggered by an awareness of the market, new ways of satisfying it, and openness to change. In this market, new ways of satisfying it, and openness to change. In this circumstance, creativity can stem from intuition or gut feel, but circumstance, creativity can stem from intuition or gut feel, but nevertheless remain in tune with actual or potential market needs.nevertheless remain in tune with actual or potential market needs.

Creativity in Intrapreneurship & Entrepreneurship

An organization is creative when itsemployees do something new andpotentially useful without being directly shown or taught.

The results of creativity in organizations are improvements and innovations.

Building Intrapreneurship• Two common approaches used to stimulate

intrapreneurial activity are

Skunk works – a project team designated to produce a new, innovative product

Bootlegging – Informal work on projects, other than those officially assigned, of employees’ own choosing and initiative

SIX ELEMENTS OF INTRAPRENEURSIP & INTREPRENEURSHIP CREATIVITY

• Alignment

• Self-Initiated Activity

• Unofficial Activity

• Serendipity

• Diverse Stimuli

• Within-Organization Communication

Alignment

• The degree to which the interests and actions of each employee support the organization’s goals.

• Lack of alignment is one of the main reasons for lack of creativity in an organization.

• Alignment is both intangible and hard to achieve.

Ways to Promote Alignment• Clarity about what the key goals of the organization

are.

• Commitment to initiatives that promote key goals.

• Accountability for actions that affect key goals.

Self-Initiated Activity• Unexpected creative acts will result only from self-

initiated activity.

• The desire to initiate creative acts not only already exists within most people, but is derived from an urge as deep rooted as hunger.

• Action is needed by organizations to promote self-initiated creativity.

Effective Ways to Respond to Employee Ideas

• Include everyone.

• Make the process easy to use.

• Have strong follow-through.

• Document ideas.

• Base system on intrinsic motivation.

Unofficial Activity• Work done without direct official support can make

it possible for an organization to improve in ways it never expected.

• A period of unofficial status can bring some important benefits that are often lost with official status.

Serendipity

The faculty of making happy and

unexpected discoveries by accident.

Ways to Promote Serendipity• Increase awareness of the accidents that occur.

• Increase the organization’s domain of sagacity to turn more accidents into fortunate ones.

Diverse Stimuli• A stimulus can either push someone in a completely

new direction or give that person fresh insight into what he or she has already set out to do.

• The majority of stimuli that lead to organization creativity arise in connection with the work itself.

Ways to Promote Diverse Stimuli• Identify stimuli and provide them to employees.

• Rotate employees into every job they are capable of doing.

• Arrange for employees to interact with those inside and outside the organization who are likely to be the source of stimuli.

• Create opportunities for employees to bring into the organization stimuli they get on their own.

Within-Organization Communication• The majority of creative acts in organizations bring

together components from unexpected places.

• If communication occurs only through official channels, the employees who know about these components but who do not ordinarily communicate with each other will never interact.

Ways to Promote Within-Organization Communication• Provide opportunities for employees who do not normally interact with each other to meet.

• Ensure that every employee has a sufficient understanding of the organization’s activities to be able to tap its resources and expertise.

• Create a new organization priority: all employees should know the importance of being responsive to requests for information or help from other employees.

Challenges to be Expected

• To be a successful intrapreneur takes much more than just creativity or an idea.

• The successful intrapreneur has to be willing to take real risks at sharing and pushing an unique idea.

• Intrapreneurs may have to be patient and have to wait for their organization’s senior management’s final approval to create and launch a product or to create a new service, and they must be willing to push-wait-push-wait and never quit.

• However, if the effort is developing a product or service that competes with the existing bread-and-butter business of the company, the effort could be seen as a threat to many inside the company.

Successful entrepreneurial businesses rely on the following to develop a competitive edge:

find a niche and fill itfind a niche and fill it

don’t just sell – entertain don’t just sell – entertain

strive to be uniquestrive to be unique

connect with the customer on an emotional levelconnect with the customer on an emotional level

focus on the customerfocus on the customer

devotion to qualitydevotion to quality

attention to convenienceattention to convenience

concentration on innovationconcentration on innovation

dedication to servicededication to service

emphasis on speedemphasis on speed

The Idea

• Many great organizations have been built based on the founder’s desire to build a great organization rather than to offer a particular product

After a job in corporate design turned out to be unsatisfying, Jennifer Velande found a creative outlet for herself—designing handbags. Soon, with the help

of her friend Robin Newberry, Jennifer turned this “hobby” into a unique business concept. 1154 Lill now gives customers the opportunity to design

their own original handbags.

Return

Key Takeaway Points . . .

• “Entrepreneurship” reflects creative, innovative, and arbitrage oriented behaviors.

• Is a process; involves planning, strategizing, and a little bit of luck.

• Interconnectedness of resources and opportunities

• Entrepreneurship can occur – and fail to occur – in firms that are old and new; small and large, fast and slow growing; in the private, not-for-profit, and public sectors; in all geographic points; and in all stages of a nation’s development

Drucker’s Entrepreneurial Practices• Druker suggests some key management practices are vital in the development of ‘entrepreneurship’ in an existing business. Management focuses on opportunity Generation and maintenance of

entrepreneurial spirit Top-down and cross functional interaction

Source Drucker, P. Innovation & Entrepreneurship. Pan 1986

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The final word …..

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“Intrapreneurs cannot exist if their passionate commitment is ignored and their visions given to people who don’t understand them. Without intrapreneurs, innovation flounders

Source Pinchot (1986)

“Bringing together ideas that were previously unrelated”