Chapter 3: Creativity and Innovation in Entrepreneurial Ventures
Chapter 3: Creativity and Innovation in Entrepreneurial Ventures
Chapter 3: Creativity and Innovation in Entrepreneurial Ventures
INNOVATION IN ENTREPRENEURIAL
VENTURES
FUNDAMENTALS OF ENTREPRENEURSHIP
(ENT300)
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Chapter objectives
The objectives of this chapter are to:
i. provide students with a better understanding of the issues on
creativity and innovation especially those that are related to
entrepreneurship.
ii. provide students with creativity techniques that can be
applied in their course works
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Contents
3.1 Definition of Creativity and Innovation
3.2 The importance of Creativity & Innovation in business venture
3.3 Creativity Process
3.4 Components of Creativity
3.5 Common Creativity Techniques & Tools
3.6 Blocks to Creativity
3.7 Types of Innovation
3.8 Sources of Innovation
3.9 Promoting Creativity & Innovative environment in organization
3.10 Common Characteristics of Creative & Innovative
Entrepreneurs RBP/UiTMKS/FPP/ENT300
3.1 Definition of Creativity and Innovation
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Definition of Creativity and Innovation
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3.2 The importance of Creativity & Innovation
in business venture
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The importance of Creativity &
Innovation in business venture
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3.3 Creativity Process
• Edward De Bono, 1992 – creativity is a process that can
be developed and improved.
• Everyone possessed a certain degree of creativity, some
of us are more creative, and some are a little less.
• Creative process involves looking with different
perspectives on unique relationships of the
surroundings.
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PHASES OF CREATIVE PROCESS
Source: Adopted from Entrepreneurship A Contemporary Approach, Donald F. Kuratko and Richard M.
Hodgetts, 5th Ed. Harcourt, 2001
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3.4 Components of Creativity
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Components of Creativity
a. Creative thinking skills
– The use of creative intelligence to approach problems and find
solutions
b. Knowledge
– Expertise or knowledge encompasses everything a person knows
and can do—can be acquired in different ways: formal and informal
education—education and training are major factors that distinguish
the founders of technical ventures from other types of entrepreneurs.
c. Motivation
– Extrinsic (External influence-into financial and non-financial
motivation)
– Intrinsic (Internal influence-internally driven through a person
interest, desire, aspiration and passion. )
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3.5 Common Creativity Techniques & Tools
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Brainstorming (Alex F. Osborn)
• Peters, Hisrich and Shepherd (2008) suggest that when using brainstorming,
4 rules must be adhered to:
① No criticism is allowed by anyone in the group especially negative
comments.
② Freewheeling is encouraged because as the idea is wilder, it becomes
better.
③ Quantity of ideas is desired. The greater the number of ideas, the greater
the likelihood of the emergence of the useful ideas.
④ Combinations and improvements of ideas are encouraged because
ideas of others can be used to produce other new ideas.
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SCAMMPERR (Micheal Michalko)
• A checklist that could assists students to imagine various changes they can
make to an existing products/things to create a new one.
• SCAMMPERR stands for:
S - Substitute – different process, position
C - Combine - mix, combine with other assemblies or services, integrate
A - Adapt - alter, change function, use part of another element
M - Magnify - Make it enormous, longer, higher, overstated, added
features
M - Modify - increase or reduce in scale, change shape, modify
attributes (e.g. colour)
P - Put to another use – Is another use possible?
E - Eliminate - remove elements, simplify, reduce to core functionality
R - Rearrange - change the order, interchange components, change the
speed or other pattern.
R - Reverse - turn inside out or upside down.
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Lateral Thinking (Edward de Bono)
• Lateral (creative/imaginative) Thinking – seeking to solve
problems by unorthodox or apparently illogical methods
(Concise Oxford Dictionary).
• Lateral thinking - moving sideways when working on a
problem to try different perceptions, different concepts
and different points of entry (get us out of the usual line
of thought).
• Lateral Thinking can be used in two approaches:
① Specific: A set of systematic techniques used for changing
concepts and perceptions, and generating new ones.
② General: Exploring multiple possibilities and approaches
instead of pursuing a single approach.
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Mind Mapping (Tony Buzan)
• A mind map is a diagram used to represent words, ideas, tasks,
or other items linked to and arranged around a central key
word or idea.
• Mind maps are used to generate, visualize, structure, and
classify ideas, and as an aid to studying and organizing
information, solving problems, making decisions, and writing.
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Problem Reversal (Charles Thompson)
• It looks at the opposite of things, see things inside out,
backwards or upside down.
• This technique is based on the premise that the world is full of
opposites where the action of viewing a problem from an
opposite angle and by asking questions can yield a awareness
or realization of issues that hitherto is not obvious or
noticeable.
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Attribute Listing
• The attribute listing technique is where the problem is broken down into smaller
parts or characteristics and analysis is made on each of these parts to develop ideas
on how to improve them.
• In this technique, the entrepreneur is required to list the attributes of an item or
problem and look at each from a variety of viewpoints, looking at the positives and
negatives aspects.
• This technique allows entrepreneurs to process some unrelated ideas and form it
into a new combination for new uses.
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3.6 Blocks to Creativity
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3.7 Types of Innovation
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Technological Innovation
• These are breakthrough inventions that have
wide-reaching impact and influence which
benefit society and business.
• Major breakthroughs can be radical and
disruptive for people, society, businesses and
countries or the whole world. Example; the
internet.
• They can change the way people live their
lives, the way companies do business and the
way countries govern and behave
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Technological Innovation
• Example of major technological breakthroughs are : the wheel, smartphones,
the printing press, steam power, electricity, wireless technology, the
computer, the internet, high performance materials like plastic, fiber board,
nuclear power and so on.
• Smaller technological inventions have less impact but still have significant
benefit to certain users.
• Example of small technological inventions are: the paper cup, the ball-point
pen, the electric toothbrush, the electric razor, hair dryers, the garden hose,
electric toys, remote control toys, computer games, electric pencil sharpener
and so on.
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Operational Innovation
• Operational Innovation is smaller, more process-
oriented Innovation.
• Tends to be incremental in nature.
• Doesn’t necessarily change products or services or
how they are used and most of it goes unnoticed by
the public, but often it is the means to improved
products and lower operating costs.
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Operational Innovation
• This type of Innovation happens by the very act of people doing their
work… “Hmm, what if we try doing it this way instead?”
• Have much smaller impact, per invention, compared with breakthrough
technological innovation, but cumulatively their effect can be
enormous. Their effect builds and grows over time.
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Operational Innovation includes:
a. New systems or refinements to existing ones. For example, internal
systems and methods for many aspects of work such as staff
administration, purchasing, distribution and sales.
b. Small improvements in operations or processes. For example, changes
to make equipment run more effectively.
c. Minor improvements or developments that will enhance it to a
technological product.
d. Innovative new business practices. For example, new ways for thinking
strategically.
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Organizational Innovation
• Organizational Innovation is where a company or organization itself
is innovative
• In an innovative company or organization everyone knows his or her
specific role in innovation
• It can be purposely built through putting organizational culture as the
operational style or mode to get things done.
• Innovative companies don ’ t just produce innovative goods and
services. They use innovative methods in everything they do.
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3.8 Sources of Innovation
Within the company or industry
a. Unexpected occurrence (penicillin)
b. Incongruities (Federal Express)
c. Process needs (enzyme for cataract operation, sugar
free products)
d. Industry and market changes (advances in
technology, healthcare industry)
Within the social environment
a. Demographic changes (change in consumer
preference)
b. Perceptual changes (fitness craze)
c. New knowledge (video industry, robotics)
Source: Adopted from Entrepreneurship A Contemporary Approach, Donald F. Kuratko and Richard
M. Hodgetts, 5th Ed. Harcourt, 2001
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3.9 Promoting Creativity & Innovative
environment in organization
a. Developing and instituting an innovative work culture among the
people within the company or organization.
b. By enforcing work culture, company or organization able to:
i. Change the way the staff work
ii. Change their attitudes and mindsets
iii. Improve their skills
iv. Improve the methods they use to carry out their work
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3.10 Common Characteristics of Creative &
Innovative Entrepreneurs
Original thinker
Motivated and
and stick-to- Risk-taker
dedicated
own opinion
Curious
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END OF CHAPTER 3
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