Introduction
We enter the world as curious beings. We’re taught to color inside the lines and that real animals
can't talk, which can stifle our natural creativity. Many successful entrepreneurs, like Steve Jobs, have to
unlearn these messages to tap into their creative thinking. Jobs found that walking, especially with a
friend, was a great way to develop new ideas. A Stanford University study confirms that walking
improves creative thinking. So, when you're starting a new entrepreneurial journey or facing a creative
block, consider taking a walk. It might just be the key to unlocking your next big idea.
4.1 Tools for Creativity and Innovation
Creativity, innovation, and invention are key concepts for your entrepreneurial journey. Fostering
creativity and innovation will add essential tools to your entrepreneurial toolkit.
Creative Problem-Solving Methods
Creative thinking can take various forms (Figure 4.2). This section focuses on a few creative
thinking exercises that have proven useful for entrepreneurs. After discussing ideation practices that you
can try, we conclude with a discussion of an in-depth innovation exercise that can help you develop a
habit of turning creative ideas into innovative products and services.
Figure 4.2.When your process hits a sticking point,
A walk—or a walk and talk—can help boost
Your creativity in thinking through solutions
Three Ideation
Figure 4.3 The empathetic design cycle is human-centric
This practice is the quintessential design thinking practice, or human-centric design thinking exercise,
and it consists of five parts: accessing and expressing empathy, defining the problem, ideating solutions
(brainstorming), prototyping, and testing (Figure 4.3).
Empathy is the human ability to feel what other humans are feeling, which in the context of
creativity, innovation, and invention is essential to beginning a process of human-centric design.
By expressing empathy, you can begin to understand many facets of a problem and start to think
about all of the forces you will need to bring to bear on it.
From empathy comes the ability to proceed to the second step, defining the problem. Defining
the problem must be based on honest, rational, and emotional observation for human-centric
design to work.
Third in the process is brainstorming solutions. What it means, and how you can brainstorm
creatively beyond the basic whiteboard scribbling in almost every organization.
Designing for other people means building a prototype—the fourth step—and to test it. Once
you apply this process to developing a product or service, you need to return to the empathetic
mindset to examine whether you have reached a viable solution and, thus, an opportunity.
Figure 4.4 The Six Thinking Hats exercise is designed to have each participant focus on a particular
approach to the problem or discussion.
To delve more deeply into ideation as a practice, we introduce here the Six Thinking Hats method (Figure
4.4).
White Hat: acts as information gatherer by conducting research and bringing quantitative analysis to the
discussion; sticks to the facts
Red Hat: brings raw emotion to the mix and offers sensibilities without having to justify them
Black Hat: employs logic and caution; warns participants about institutional limitations; also known as
the “devil’s advocate”
Yellow Hat: brings the “logical positive” of optimism to the group; encourages solving small and large
problems
Green Hat: thinks creatively; introduces change and provokes other members when needed; new ideas
are the purview of the Green Hat
Blue Hat: maintains the broader structure of the discussion and may set the terms by which progress will
be judged; makes sure the other hats play by the rules, or stay in their respective lanes, so to speak
Matching Innovation Methods to Circumstances
Open innovation involves searching for and finding solutions outside of the organizational structure.
Open innovation is somewhat difficult to pin down. The educator and author Henry Chesbrough was one
of the first to define it: “Open innovation is ‘the use of purposive inflows and outflows of knowledge to
accelerate internal innovation, and expand the markets for external use of innovation, respectively.’”
Open innovation takes an optimistic view of sharing information and ideas across a society connected
by instantaneous communication networks. It is also a shift from the classic research and development
model. In a sense, you allow others to solve problems in your business, startup, or social
entrepreneurship project.
Open innovation is a simple but essential framework for future innovation and for managing, even
possibly guiding, disruption in an industry as discussed previously.
Table 4.1 provides some examples of companies using disruptive technology.
Examples of Disruptive Technology
Company Disruptive Technology
Amazon Speed based delivery
Multiple delivery processes from drones to strategically located fulfillment
centers
Disruptive technology including processing the customer order before the
customer has even finished the purchase, so that the product is already moving
toward delivery
Uber and Lyft Ride sharing versus taxi driving
Apps and Beacon and Amp-color coded alert communication system disrupted
the taxi system
Bitcoin Digital currency not connected to a specific country or monetary standard
Value based on market forces
Toyota E- Palette Remote controlled driverless electric shuttle that brings the service to the
customer rather than the customer going to the service
Staying on Top of Emerging Practices
Consider searching for ideation and innovation practice links using a web browser and comparing
those results to what you can find in the academic literature via Google Scholar or other academic
databases. To adopt a truly open innovation mindset, it is essential to leave yourself open to all sorts of
influences, even if it demands time and much cognitive energy. The financial, social, and personal
rewards may be great.
4.2 Creativity, Innovation, and Invention: How They Differ
Table 4.2 highlights the differences between these three concepts.
Creativity Ability to develop something original, particularly an idea or a representation
of an idea, with an element of aesthetic flair
Innovation Change that adds value to an existing product or service
Invention Truly novel product, service, or process that, though based on ideas and
products that have come before, represents a leap, a creation truly novel and
different
One way we can consider these three concepts is to relate them to design thinking. Design thinking is a
method to focus the design and development decisions of a product on the needs of the customer,
typically involving an empathy-driven process to define complex problems and create solutions that
address those problems.
Airbnb has become a widely used service all over the world. That has not always been the case, however.
In 2009, the company was near failure. The founders were struggling to find a reason for the lack of
interest in their properties until they realized that their listings needed professional, high-quality
photographs rather than simple cell-phone photos. Using a design thinking approach, the founders
traveled to the properties with a rented camera to take some new photographs. As a result of this
experiment, weekly revenue doubled. This approach could not be sustainable in the long term, but it
generated the outcome the founders needed to better understand the problem. This creative approach
to solving a complex problem proved to be a major turning point for the company.
CREATIVITY
Entrepreneurial creativity and artistic creativity are not so different. You can find inspiration in your
favorite books, songs, and paintings, and you also can take inspiration from existing products and
services. You can find creative inspiration in nature, in conversations with other creative minds, and
through formal ideation exercises, for example, brainstorming.
Entrepreneurs work with two types of thinking.
Linear thinking—sometimes called vertical thinking—involves a logical, step-by-step process. In contrast,
creative thinking is more often lateral thinking, free and open thinking in which established patterns of
logical thought are purposefully ignored or even challenged.
Figure 4.5 Entrepreneurs can be most effective if they use both linear and lateral thinking
It is certainly possible for you to be an entrepreneur and focus on linear thinking. Many viable
business ventures flow logically and directly from existing products and services. However, for various
reasons, creativity and lateral thinking are emphasized in many contemporary contexts in the study of
entrepreneurship. Some reasons for this are increased global competition, the speed of technological
change, and the complexity of trade and communication systems.
INNOVATION
We previously defined innovation as a change that adds value to an existing product or service.
According to the management thinker and author Peter Drucker, the key point about innovation is that it
is a response to both changes within markets and changes from outside markets.
Drucker summarized the sources of innovation into seven categories, as outlined in Table 4.3. Firms and
individuals can innovate by seeking out and developing changes within markets or by focusing on and
cultivating creativity. Firms and individuals should be on the lookout for opportunities to innovate.
Drucker’s Seven Sources of Innovation
Source Description
The unexpected Looking for new opportunities in the market; unexpected product performance;
unexpected new products as examples
The incongruity Discrepancies between what you think should be and what is reality
Process need Weaknesses in the organization, product, or service
Changes in New regulations; new technologies
industry/market
Demographics Understanding needs and wants of target markets
Changes in Changes in perceptions of life events and values
perceptions
New knowledge New technologies; advancements in thinking; new research
One innovation that demonstrates several of Drucker’s sources is the use of cashier kiosks in fast-food
restaurants. McDonald’s was one of the first to launch these self-serve kiosks. Historically, the company
has focused on operational efficiencies (doing more/better with less).
Another leading expert on innovation, Tony Ulwick, focuses on understanding how the customer will
judge or evaluate the quality and value of the product. The product development process should be
based on the metrics that customers use to judge products, so that innovation can address those metrics
and develop the best product for meeting customers’ needs when it hits the market.
Disruptive innovation is a process that significantly affects the market by making a product or service
more affordable and/or accessible, so that it will be available to a much larger audience. Clay
Christensen of Harvard University coined this term in the 1990s to emphasize the process nature of
innovation. For Christensen, the innovative component is not the actual product or service, but the
process that makes that product more available to a larger population of users.
One key to innovation within a given market space is to look for pain points, particularly in existing
products that fail to work as well as users expect them to. Once a pain point is identified in a firm’s own
product or in a competitor’s product, the firm can bring creativity to bear in finding and testing solutions
that sidestep or eliminate the pain, making the innovation marketable. This is one example of an
incremental innovation, an innovation that modifies an existing product or service.
In contrast, a pioneering innovation is one based on a new technology, a new advancement in the field,
and/or an advancement in a related field that leads to the development of a new product.
INVENTION
An invention is a leap in capability beyond innovation. Some inventions combine several innovations
into something new. Invention certainly requires creativity, but it goes beyond coming up with new
ideas, combinations of thought, or variations on a theme.
Some of the most successful inventions contain a mix of familiarity and innovation that is difficult to
achieve. With this mix, the rate of adoption can be accelerated because of the familiarity with the
concept or certain aspects of the product or service.
The concept of a black box is that activities are performed In a somewhat mysterious and ambiguous
manner, with a serendipitous set of actions connecting that result in a surprisingly beneficial manner.
Did Henry Ford Invent the Assembly Line?
Very few products or procedures are actually brand-new ideas. Most new products are alterations or
new applications of existing products, with some type of twist in design, function, portability, or use.
Henry Ford is usually credited with inventing the moving assembly line Figure 4.7(a) in 1913. However,
some 800 years before Henry Ford, wooden ships were mass produced in the northern Italian city of
Venice in a system that anticipated the modern assembly line.
Henry Ford did not invent anything new—he only applied the 800-year-old process of building wooden
ships by hand along a moving waterway to making metal cars by hand on a moving conveyor (Figure 4.7).
Figure 4.7 (a) Workers assemble car parts on an early Ford factory assembly line. (b)
The Venetian Arsenal was an early “assembly line” where workers could build a complete ship in a single
day.
Opportunities to bring new products and processes to market are in front of us every day. The key is
having the ability to recognize them and implement them.
The process of Invention is difficult to codify because not all inventions or inventors follow the same
path. Often the path can take multiple directions, involve many people besides the inventor, and
encompass many restarts. Elon Musk is famous for founding four different billion-dollar companies. The
development processes for PayPal, Solar City, SpaceX, and Tesla differed widely; however, Musk does
outline a six-step decision-making process (Figure 4.8)
Ask a question.
Gather as much evidence as possible about it.
Develop axioms based on the evidence and try to assign a probability of truth to each one.
Draw a conclusion in order to determine: Are these axioms correct, are they relevant, do they
necessarily lead to this conclusion, and with what probability?
Attempt to disprove the conclusion. Seek refutation from others to further help break your
conclusion.
If nobody can invalidate your conclusion, then you’re probably right, but you’re not certainly
right.
The Rogers Adoption Curve was popularized through the research and publications of the author
and scientist Everett Rogers.He first used it to describe how agricultural innovations diffused (or failed to)
in a society. It was later applied to all inventions and innovations. This curve illustrates diffusion of an
innovation and when certain people will adopt it.
The diffusion curve depicts a social process in which the value of an invention is perceived (or not) to be
worth the cost (Figure 4.9). Early adopters generally pay more than those who wait, but if the invention
gives them a perceived practical, social, or cultural advantage, members of the population, the
popularity of the invention itself, and marketing can all drive the invention over the diffusion chasm.
Figure 4.9 The diffusion curve shows the adoption lifecycle according to the research of Everett Rogers.
The diffusion chasm occurs during early adoption
Razors
The safety razor was an innovation over the straight razor. Safety razor blades are small enough to fit
inside a capsule, and the location and type of handle was altered to suit the new orientation of handle to
blade (Figure 4.10). Most contemporary razors are themselves innovations on the safety razor, whether
they have two, three, four, or more blades. The method of changing razor blades has evolved with each
innovation on the safety razor, but the designs are functionally similar.
The electric razor is a related invention. It still uses blades to shave hair off the face or body, but the
blades are hidden beneath a foil or foils. Hairs poke through the foils when the razor is pressed against
the skin, and blades moving in various directions cut the hairs.
(a) (b) (c)
4.3 Developing Ideas, Innovations, and Inventions
The Creative Process: The Five Stages of Creativity
Raw creativity and an affinity for lateral thinking may be innate, but creative people must refine these
skills in order to become masters in their respective fields. They practice in order to apply their skills
readily and consistently, and to integrate them with other thought processes and emotions. For our
purposes, practice is a model for applied creativity that is derived from an entrepreneurial approach
(Figure 4.11). It requires:
• Preparation
• Incubation
• Insight
• Evaluation
• Elaboration
Figure 4.11 These are the five stages of creativity, according to Graham Wallas in The Art of Thought
Innovation as More than Problem Solving
Innovative entrepreneurs are essentially problem solvers, but this level of innovation—identifying a
pain point and working to overcome it—is only one in a series of innovative steps. In the influential
business publication Forbes, the entrepreneur Larry Myler notes that problem solving is inherently
reactive. That is, you have to wait for a problem to happen in order to recognize the need to solve the
problem.
Let’s examine one multilevel approach to innovation (Figure 4.12). The base is problem solving. The
next level up in the pyramid, so to speak, is prevention. The next level is working toward continuous
improvement, and at the top of such efforts is creating the capacity to direct the future of your industry
or multiple industries so that you can weather disruption in your career or even to create it.
Figure 4.12 The innovation pyramid is one multileveled approach to innovation.
Even if you are not interested in shaping the future of whole industry sectors, developing future-focused
innovation practices still is a good idea. It will help you prepare for disruption. The pace of technological
change is such that workers at all levels need to be prepared to innovate. Innovation leaders, such as the
marketing guru Guy Kawasaki, have built on psychological principles to suggest new ways to approach
innovation. According to Kawasaki, innovative products include five key qualities: deep, indulgent,
complete, elegant, and emotive—DICEE (Figure 4.13) You can strive to infuse individual innovations with
these qualities in practical ways.
Figure 4.13 Innovative products are deep, indulgent, complete, elegant, and emotive.
Developing an Invention
The general process of inventing involves systematic and practical steps that might include linear and
nonlinear thinking. You might think that only people with innate artistic skills are creative and that only
geniuses become innovators and inventors, but much of creativity is driven by being immersed in a
practice. You can build and foster your own creativity. Your idea of an inventor might be someone like
Johannes Gutenberg, who developed the printing press.
Gutenberg’s most important innovation was his use of moveable, interchangeable metal type instead of
entire hand-carved wooden blocks of text (Figure 4.14). Perfecting his printing process took decades and
left him all but broke. The notion of the inventor’s single stroke of genius is mostly myth. The people that
history remembers usually worked very hard to develop their creativity, to become familiar with the
processes and tools that were ripe for innovation in their time, and ultimately to make something so
unique that society recognizes it as an invention.
The old adage claims that “necessity is the mother of invention,” but an innovator needs experience in a
field, creative effort, and knowledge to be a successful inventor. Entrepreneurship means taking your
efforts and knowledge, and finding a market where your invention can first survive, then thrive.
One model for developing an invention is the first five steps of a plan adapted from Sourcify.com, which
specializes in connecting product developers with manufacturers.45 This process is succinct and includes
suggestions for building a team along the way (Figure 4.15).
Figure 4.15 These are the five steps for developing an invention, according to Sourcify.
