FUNDAMENTALS OF ENTREPRENEURSHIP

(ETR300/ENT300)

MODULE 3 :
CREATIVITY AND INNOVATION

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 1

 WHAT IS CREATIVITY

• (Lotherington,2008) - the merging of ideas which have

not been merged before. New ideas are formed by
developing current ones within our minds.
• (Dorf and Byers, 2005) - the ability to use the
imagination to develop new ideas, new things or new
solutions
• (Matherly & Goldsmith, 1985) – the generation of ideas
that result in improved efficiency or effectiveness of a
system.
• (May, 1975) – the process of bringing something new
into being.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 2

 WHAT IS INNOVATION

• (Howell & Higgins, 1990) – the process by which

entrepreneurs convert opportunities into marketable
ideas.
• (Drucker, 1985) - the specific instrument of entrepreneurs,
the means by which they exploit change as an opportunity
for a different business or a different service.
• Luecke and Katz (2003) - "Innovation….is generally
understood as the successful introduction of a new thing
or method . . . Innovation is the embodiment, combination,
or synthesis of knowledge in original, relevant, valued new
products, processes, or services.

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 CREATIVITY, INNOVATION &
ENTREPRENEURSHIP
• Davila et al (2006) - "Often, in common parlance, the words
creativity and innovation are used interchangeably. They
shouldn't be, because while creativity implies coming up with
ideas, it's the "bringing ideas to life“……that makes innovation
the distinct undertaking it is.“
• (Lotherington, 2003) - Creativity enables people to connect
unconnected things and from that meeting, new ideas spring
forth, whether they are new ideas for doing things or new
ideas for using things.
• Amabile et al (1996) – “All innovation begins with creative
ideas…..We define innovation as the successful
implementation of creative ideas within an organization. In this
view, creativity by individuals and teams is a starting point for
innovation; the first is necessary but not sufficient condition for
the second"

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 CREATIVITY, INNOVATION &
ENTREPRENEURSHIP

• Creativity is the process of generating unique

and useful ideas.
• Innovation will take place when there is a
creative idea generation.
• Innovation is about taking the creative/unique
new idea and turning it into something of value
• Innovation requires discipline and action to
evaluate the ideas, test them, modify them and
then apply them. It is through there disciplined
and actions that turn an idea into something of
value.
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 CREATIVITY, INNOVATION &
ENTREPRENEURSHIP
• Creative entrepreneurs observed people’s problem, and see
opportunities. These entrepreneurs then innovate by applying
creative solutions to people’s problems to better enhance
people’s quality of life.
• Entrepreneurship is the commercialization of creativity.
• Entrepreneurship occurs when an individual or organization:
a. Sees the potential in an idea that can be developed for the
marketplace or user groups
b. Is prepared to take the necessary risks to stir things up
and get things out of their neat or comfortable spaces
c. Has the skills (or access to them), confidence,
determination, and the funds (or access to them) to carry
out the innovation that is required to turn the idea into
reality.

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 CREATIVE 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
• Phase 1: Background or Knowledge Accumulation
• Involves seeking and gathering of information through observations,
readings, conversations with others, attending seminars, meetings
and workshops, etc

• Phase 2: The Incubation Process

• Entrepreneurs deliberately allows creativity to spur by breaking-away
from the problem and let the subconscious mind work on it

• Phase 3: The Idea Experience

• Discovery of the idea or solutions to the problems (eureka factor)
• Phase 4: Evaluation and Implementation
• Evaluation and implementation of workable ideas requires high level
of persistency and patience. Entrepreneurs do not easily give-up
when they face obstacles.
Source: Adopted from Entrepreneurship A Contemporary Approach, Donald F. Kuratko and Richard M. Hodgetts, 5 th Ed. Harcourt,
2001

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 COMPONENTS OF CREATIVITY
a. Creative thinking skills
– The use of creative intelligence to approach
problems and find solutions
b. Knowledge
– Four styles of creative intelligence:
• Intuitive
• Innovative
• Imaginative
• Inspirational
c. Motivation
• Extrinsic
• Intrinsic

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 COMMON CREATIVITY TECHNIQUES

a. Brainstorming (Alex F. Osborn)

b. SCAMMPERR (Micheal Michalko)
c. Lateral thinking (Edward De Bono)
d. Mind mapping (Tony Buzan)
e. Problem reversal (Charles Thompson)
f. Attribute listing

Source: Adopted from http://www.mycoted.com/Category:Creativity_Techniques

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 10

 BRAINSTORMING (ALEX F. OSBORN )

• Organize the group of ideally 4-8 students (per group).

• Choose the topic (problem) and write it on a whiteboard. Lecturer must
make sure that everyone understands the problem or issue.
• Remember the rules:
i. Do not criticize. All ideas are welcome and valid.
ii. Do not limit the number of ideas. The aim of brainstorming is to
get large number of ideas.
iii. Do not filter /censor any ideas. Keep the brainstorming session
flowing.
iv. Listen to other ideas and use it to generate other ideas.
v. Do not discuss or question as it could stop the flow of ideas.
• The lecturer can conduct the session either in an unstructured way (any
group can give ideas at any time) or structure (going round the group for
ideas).
• The lecturer must be around to enforce the rules and write down all the
ideas.
• Lecturer should clarify and conclude the session.
• Lecturer should get a consensus of the best ideas produced from the
session (at least two).

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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 - components, materials, people
 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
 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.

• Students can use these changes as starting points for Lateral Thinking

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 LATERAL THINKING (EDWARD DE BONO)

• Lateral 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:
• Specific: A set of systematic techniques used for
changing concepts and perceptions, and generating new
ones.
• General: Exploring multiple possibilities and approaches
instead of pursuing a single approach.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 13

 MIND MAPPING (TONY BUZAN)

• Also called ‘spider diagrams’ which represents ideas,

notes, information, etc. in far-reaching tree-diagrams.
• To draw a mind-map:
• Put down a large sheet of paper and write a short heading
for the subject/theme in the centre of the page.
• For each major sub-topic start a new major branch from
the central subject/theme and label it.
• Each sub-sub-topic, creates a subordinate branch to the
appropriate main branch
• Carry on in this way for ever finer sub-branches.
• It may be appropriate to put an item in more than one
place, cross-link it to several other items or show
relationships between items on different branches. This
can be done through colour coding, type of writing etc.
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 14
 Problem Reversal (Charles Thompson)

The Method
a. Create negative statements. For example, in dealing with Customer
Service issues, ask students to generate a list of all the ways to make
customer service bad.
b. Doing what everybody else doesn't. For example, food delivery using
“mangkuk tingkat” or selling women accessories using vending machine.
c. Make a list of pairs of opposing actions which can be applied to the
problem. Make students ask themselves "What if I ........" and plug in each
one of the opposites. A small sample:-
i. Stretch it/Shrink It
ii. Freeze it/Melt it
iii.Personalise it/De-personalise it
d. Change the direction or location of your perspective.
e. “Flip-flop” the results. For example, if we want to increase sales, think
about decreasing them. What would you have to do?
f. Turn defeat into victory or victory into defeat. For example, if something
turns out bad, think about the positive aspects of the situation. If I lost all
of the files off this computer, what good would come out of it? Maybe I
would spend more time with my family?! Who knows!
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 15
 ATTRIBUTE LISTING
Steps:
a. Identify the product or process you are dissatisfied with or
wish to improve.
b. List its attributes. For a simple physical object like a pen, this
might include: material, shape, target market, colours,
textures, etc.
c. Choose, say, 7-8 of these attributes that seem particularly
interesting or important.
d. Identify alternative ways to achieve each attribute (e.g.
different shapes: cylindrical cubic, multi-faceted….), either by
conventional enquiry, or via any idea-generating technique.
e. Combine one or more of these alternative ways of achieving
the required attributes, and see if you can come up with a
new approach to the product or process you were working on.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 16

 BLOCKS TO CREATIVITY

• Blockages to creativity need to be recognized and

eliminated so that it will smooth the way to creativity.
CLASSIFICATION OF BLOCKS ARE :
a. Perceptual
b. Emotional
c. Cultural
d. Environmental
e. Intellectual/Conceptual

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 PERCEPTUAL BLOCKS

• Prevent problem recognition, limiting the

problem.
• Inability to see problems from different
perspectives
• Stereotyping, missing the connections or
associations
• Not thinking outside the box
• Literal thinking

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 18

 EMOTIONAL BLOCKS

• Fear of failure can paralyse us if we think what we

are doing won’t be good enough. Will lead to
procrastination and project abandonment.
• Most blockages are attitudinal or psychological.
Inability to incubate can lead to other fears such as:
fear of problem, fear of work, fear of fun, fear of
exploring and fear of abandonment.

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 EMOTIONAL BLOCKS

a) Fear of problem We are inclined to worry when we view our

situation as a problem to be solved.
b) Fear of work Lazy to merge or seek new ideas
c) Fear of fun Believe that fun is childish and a waste of time, yet
some of the best ideas come when we are relaxing or
fooling around.
d) Fear of exploring Uncertainties of the unknown, rigid people feel
uncomfortable to be adventurous and discover
because they have to leave the safety of their
known world.
e) Fear of abandonment Comes from the need to conform. Conformity brings
new acceptance while deviating from normal path or
escape show our independence and make us stand
out.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 20

 EMOTIONAL BLOCKS

f. Judging rather than generating ideas like :

“Oh, that won’t work”

“We have tried that before. It didn’t work out well”

g. Dislike new challenges

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 CULTURAL BLOCKS

a) Tradition is to be maintained.
b) Playfulness is only for children
c) Fantasies or dreams are for crazy people
d) Comfortable zone

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 ENVIRONMENTAL BLOCKS

• Environmental blockages are those impose upon us

by external factors. These include the working
atmosphere, amount of stress on individual,
organizational culture, supervisory practices and
even the physical surroundings of our workspace.
• Blockages can also arise from physical and mental
exhaustion.

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 ENVIRONMENTAL BLOCKS

a. Lack of corporation and trust among colleagues

(lack esprit de corp)
b. Bosses who practice autocratic management
c. Too many distractions
d. Lack of financial and top management support to
bring ideas to implementation

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 INTELLECTUAL/ CONCEPTUAL BLOCKS

a. Failure to understand and acknowledge problems that

need to be solved.
b. “I don’t know; “Don’t’ ask me”
c. “Try asking someone else”
d. Many creative solutions are hidden by mistaken
assumptions. Therefore, people need to be more open
minded and receptive.

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 TYPES OF INNOVATION

There are 3 types of innovation :

a. Technological Innovation
b. Operational Innovation
c. Organizational 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, 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.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 3 : Creativity and Innovation 30

 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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 HOW TO INSTILL ORGANIZATIONAL
INNOVATION
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:
a. Change the way the staff work
b. Change their attitudes and mindsets
c. Improve their skills
d. Improve the methods they use to carry out their work

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 EXAMPLES OF ORGANIZATIONAL
INNOVATION
1. A CEO who accepts the challenge to be innovative and
encourages risk-taking (a spur to innovation) and
rewards good ideas as well as the successful
completion of projects (the results of innovation)
2. An organization where everyone understands the
many benefits of innovation. Even those who are not
directly involved in innovative work, such as production
people, recognize they have a part to play in identifying
better ways of doing things. They notice what’s going
on around them and they find opportunities or way for
improvement.

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 SOURCES OF INNOVATION
• Within the company or industry
a. Unexpected occurrence (viagra, 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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 COMMON CHARACTERISTICS OF CREATIVE
ENTREPRENEURS

• Sensitive to problems
• Broad perspectives
• Flexible and adaptable
• Original thinker and stick-to-own opinion
• Risk-taker
• Motivated and dedicated
• Curious

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END OF MODULE 3