Essentials of Entrepreneurship and Small

Business Management
Ninth Edition, Global Edition

Chapter 3
Creativity and Innovations:
Keys to Entrepreneurship
Success

Prepared by the GCC at AOU, Kuwait Branch

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Learning Objectives:

1. Explain the differences among creativity, innovation, and

entrepreneurship.
2. Highlight the importance of creativity and innovation in
entrepreneurship.
3. Identify mental locks that limit creativity.
4. Outline methods to enhance individual and organizational
creativity.
5. Describe intellectual property protection mechanisms.

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Creativity vs. Innovation vs.
Entrepreneurship
• Creativity is the ability to develop new ideas and discover new ways of looking at problems
and opportunities. A recent study reports that small companies produce 16 times more
patents per employee than their larger rivals. The secret is to apply creativity and innovation
to solve problems and exploit opportunities that people face every day.
• Innovation is the ability to apply creative solutions to problems and opportunities that
enhance or enrich people’s lives. Entrepreneurs succeed by thinking and doing new things or
old things in new ways. Some create innovations reactively in response to customer
feedback or changing market conditions, and others create innovations proactively, spotting
opportunities on which to capitalize. Innovation is evolutionary, developing market-
sustaining ideas that elaborate on exiting products, processes, and service.
• Entrepreneurial innovation encompasses not only new products and service, but also new
business models.
• Entrepreneurship is the result of a disciplined, systematic process of applying creativity
and innovation to needs and opportunities in the marketplace. Innovation must be a constant
process because most ideas do not work, and most innovations fail. Table 3.1 “The Five
Dimensions of Discovery-Driven Leadership” can be used to differentiate between delivery-
driven and discovery-driven leadership.

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 Creativity – Essential to Survival
Creativity is an important source for building a competitive advantage and for
survival.
•Companies that fail to become engines of innovation are more likely to lose ground
to their more creative competitors and ultimately become irrelevant and close their
doors.
•Realizing what has worked in the past and what will work today (or in the future)
requires entrepreneurs to cast off their limiting assumptions, beliefs, and behaviors
and to develop new insights into the relationship among resources, needs, and
values.
•A creative exercise, shown in Figure 3.1, “How Creative Are You?” can be used to
explore aspects of creativity.

Can Creativity Be Taught? Research shows that anyone can learn to be creative.
Author Joyce Wycoff believes everyone can learn techniques and behaviors that
generate ideas. Not only can entrepreneurs and the people who work for them learn
to think creatively, THEY MUST !!!
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 Barriers to Creativity
There are endless barriers to creativity such as: time pressures, unsupportive
management, pessimistic coworkers, overly rigid company policies, and countless
others.
The most difficult challenges to overcome are those that individuals impose upon
themselves. Ten “mental blocks” that limit individual creativity are listed below :
1. Searching for just one right answer
2. Focusing on being logical
3. Blindly following rules
4. Constantly being practical
5. Myopic thinking is a common killer of creativity; being narrowly focused
and limited by the status quo.
6. Becoming overly specialized
7. Avoiding ambiguity
8. Fearing looking foolish
9. Fearing mistakes and failure
10.Believing that “I’m not creative”

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How Creative are You? (1 of 2)
Figure 3.1 How Creative Are You? Can You Recognize
the Well-Known Phrases These Symbols Represent?

Do you recognize these?

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Questions to stimulate creativity
1. Is there a new way to do it?
2. Can you adapt it / Can you give it a new twist?
3. Do you need more (or less) of the same?
4. Is there a substitute?
5. Can you rearrange the parts?
6. What if you do just the opposite?
7. Can you combine ideas?
8. Are customers using your product or service in ways you never
expected or intended?
9. Which customers are you not serving? What changes to your
product or service are necessary to reach them?
10.Can you put it to other uses?
11.What else could we make from this?
12.What idea seems impossible, but if executed, would revolutionize
your business?
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How to enhance creativity?

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Enhancing Organizational Creativity
Creativity doesn’t just happen in organizations. Entrepreneurs must establish an
environment in which creativity can flourish for themselves and for their workers. New
ideas are fragile creations, but the right organizational culture can encourage people to
develop and cultivate them.
Ensuring that workers have the freedom and the incentives to be creative is one of the best
ways to achieve creativity. Entrepreneurs can stimulate their own creativity and encourage it
among workers by:
1. Including creativity as a core company value and make it an integral part of the
company’s culture.
2. Hiring for creativity, and reward creative efforts.
3. Establishing an organizational structure and culture that nourishes creativity.
4. Design collaborative workspaces.
5. Encourage experimentation, embrace failure and view problems as opportunities.
6. Eliminating bureaucratic obstacles and providing the support necessary for innovation.
 Intrapreneurs are entrepreneurs who operate within the framework of an existing
business and can sometimes transform a company’s future or advance its competitive edge
(a good example is Ken Kutaragi, the electrical engineer at Sony who came up with the
PlayStation idea.
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 Enhancing Individual Creativity
You can enhance individual creativity by using the following
techniques:

1. Allow yourself to be creative. 8. Notice what is missing.

2. Forget the “rules”. 9. Listen to other people including
3. Take up a hobby. customers
4. Travel and observe. 10. Keep a journal handy to record
5. Observe the products of other your thoughts and ideas.
companies, especially those in 11. Watch a movie.
completely different markets. 12. Talk to a child.
6. Recognize the creative power of 13. Explore hobbies and travel.
mistakes and accidents. 14. Keep a journal for ideas.
7. Look for ways to turn trash into 15. Learn from mistakes.
treasures. 16. Collaborate with diverse groups.

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 The Creative Process
Although new ideas may appear to strike like a bolt of lightning,
they are actually the result of the creative process. The creative
process involves seven steps:

1. Preparation: Lifelong learning and active listening.

2. Investigation: Understanding the problem deeply.
3. Transformation: Convergent and divergent thinking.
4. Incubation: Let ideas simmer.
5. Illumination: The "aha!" moment.
6. Verification: Evaluating the idea’s feasibility.
7. Implementation: Turning the idea into reality.
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 Techniques for Enhancing Creativity
1. Brainstorming: is a process in which a small group interacts with
very little structure with the goal of producing a large quantity of
novel and imaginative ideas.
2. Mind-Mapping: Mind–mapping is a graphical technique that
encourages thinking on both sides of the brain, visually displays
the various relationships among ideas, and improves the ability to
view the problem from many sides. It relates to the way the brain
actually works.
3. Force Field Analysis: is useful to evaluate the forces that support
and oppose a proposed change. It addresses the problem to be
solved, the driving forces, and the restraining forces.
4. Rapid Prototyping: is the process of creating a model of an idea,
enabling an entrepreneur to discover flaws in the idea and to make
improvements in the design. The three principles of rapid
prototyping are “The 3 R’s”: rough, rapid, and right.
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 Intellectual Property Protection
1. Patents: is a grant from a government’s Patent and Trademark Office (PTO),
to the inventor of a product, giving the exclusive right to make, use or sell the
invention in this country for 20 years from the date of filing the patent
application.
2. Trademarks: is any distinctive word, phrase, symbol, design, name, logo,
slogan, or trade dress that a company uses to identify the origin of a product or
to distinguish it from other goods on the market. A trademark prevents other
companies from employing a similar mark to identify their goods. The first
party who either uses a trademark in commerce or files an application with the
PTO has the ultimate right to register that trademark. Trademarks last
indefinitely as long as the holder continues to use it.
3. Copyrights: is an exclusive right that protects the creators of original works of
authorship such as literary, dramatic, musical, and artistic works (e.g., art,
sculptures, literature, software, music, videos, video games, and recordings).

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Chapter 3 Discussion Questions
1. Explain the differences among creativity, innovation, and
entrepreneurship.
2. Being creative is important for every organization. Define creativity.
3. Why are creativity and innovation so important to the survival and
success of a business?
4. Can creativity be taught or is it an inherent trait? Explain.
5. Successful entrepreneurs are willing to take risks, explore new ideas, and
ask questions when required. Do you agree? Why?
6. What can entrepreneurs do to stimulate their own creativity and to
encourage it among workers?
7. Explain the differences between a patent, a trademark, and a copyright.
8. What form of intellectual property do patents, trademarks, and copyrights
protect?

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
 Chapter 3 Online Videos and Podcasts
These online videos may enhance class discussion and provide additional insight for the
chapter topics.
 From Artist to Entrepreneur: (Audio Podcast) 46:17 minutes
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2278
 Creativity Loves Constraint: 1:40 minutes
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1530
 How to Protect Your Intellectual Property and Trade Secrets: 3:39 minutes
http://www.youtube.com/watch?v=5t-WOvifb6c
 The Simple Truths of Change: 2:20 minutes
http://www.changeisgoodmovie.com/
 The Paper Airplane Movie: 3:30 minutes
http://www.youtube.com/watch?v=37TQZyDMEP8
 Three Factors to Improve Entrepreneurial Success: 2:11 minutes
http://www.youtube.com/watch?v=W7ubqh1Rkts&feature=channel
 What Is Creativity? 6:10 minutes
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1187

Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.