CREATIVITY,

INNOVATION AND
ENTREPRENEURIAL
MANAGER
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LEARNING OBJECTIVES
After reading this chapter, you should be able to:

• Understand the many aspects of creativity.

• Use many creative problem solving techniques.
• Understand the role of creativity in innovation.
• Understand the process of innovation.
• Know the different types of innovation
• Understand the principles and benefits of
innovation.
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INTRODUCTION
Even though creativity and innovation are frequently used
interchangeably, there are fundamental distinctions between the
two concepts.
Creativity – is about developing ideas, processes, or concepts.
Innovation – is the process of translating an idea or invention into
a good or service that creates value or for which customers will
pay.
Without creativity, there would be no innovation, as creativity is
the foundation on which innovation emerges, develops, and
grows. Creativity can lead to commercialized innovation, but to
be successful, the creativity and innovation must create new
value for customers and generate return.
Creativity is a process that can lead to incremental
improvements or breakthrough innovations. While
breakthrough innovations such as penicillin, the
computer, and the automobile are wonderful, most
innovations make incremental improvements to
existing product line rather than bringing something
radically new to the market.

INCREMENTAL IMPROVEMENTS – is the form of innovation

that occurs most frequently and makes minor
changes in the product or service.
BREAKTHROUGH INNOVATIONS - is when you bring
something new to the world. It is developing
something that no one else has done before; really
original, something that couldn’t have been possible.
It is the innovation that opens the organization to new
markets or changes the way customers interact with
the market or the industry.
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THE DIFFERENT TYPES OF CREATIVITY INCLUDE:

• Creativity that develops new ideas, processes, or

concepts.
• Creativity that modifies existing ideas, processes,
or concepts.
- Creates a new, improved version that is more
efficient and effective
- Adds additional features and functions
- Performs in a different setting
- Targets a new audience
• Creativity that combines things that were
previously unrelated.
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CREATIVE PROCESS
3 KEY ASPECTS OF ORGANIZATIONAL CREATIVITY
1. Knowledge – Knowledge of the course of action is required for
opportunity identification, problem-solving and decision
making.
2. Drive – refers to the passion, desire, and motivation to do
something new and novel with the confidence to proceed as
a first mover.
3. Ability – refers to the ways in which an individual seeks to
identify a solution to a problem by adopting diverse and
creative techniques in order to accurately assess and
evaluate the situation and identify the best, viable course of
action.
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5 COMPONENTS THAT ARE THE ESSENTIAL

ASPECTS OF THE CREATIVE PROCESS:
• Preparation – is the background, experience, and
knowledge that an individual brings to the opportunity
recognition process. In this preparation stage, the
individual attempts to find the answers to the question or
problem. At this stage, it is important to fully understand
the issues involved.
• Incubation – is the stage where an individual considers an
idea or thinks about a problem. Time and space are
reflected in the solution or considerations that may not be
immediately forthcoming. This stage is important where
extra help may be needed in order to progress forward.
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• Illumination – the stage involves coming up with an outline of an

answer to the question or problem. Frequently this answers needs to be
further refined and modified.
• Validation – the individual selects the best choice with a calculated
level of risk and uncertainty. The ultimate success of the chosen
alternative depends on whether it can be translated into action. This
stage often requires further modification and adjustments to fit the
organizational culture. This is particularly challenging stage of the
creative process because it requires the individual to objectively
reflect on the viability of the idea.
• Implementation – involves the use of managerial, administrative, and
persuasive abilities to ensure that the selected alternative is carried out
effectively. This is the transformation of the creative idea into reality.
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TRENDS
A trend often provides a great opportunity for starting a new venture
particularly when the entrepreneur can be at the start of a trend that
will last a considerable period of time. There are 7 trends occurring
today include:

• Wearable Trend – As the cost and size of microprocessors continues to

shrink, the ability of computers to monitor and record activity and
display relevant information is now reality. Broadly speaking, the
wearable tech industry includes categories such as augmented reality
(Google Glass), body monitoring (Fit bit) and point of view (GoPro).
Consumer interests in “Smart Watches” is expected to boost the
industry further as new companies form to service the industry with
applications and accessories.
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• Green Trend – The green sector continues to provide of wealth of inspiration for
entrepreneurs around the world. Although investment activity is down from its
peak in the early 2000’s data provided by CB Insights show that investor
committed over $2 billion in 2014. In recent years, there has been a shift
beyond traditional capital intensive commodities manufacturing and
downstream business models designed to scale quickly with relative capital
efficiency. New businesses in this area include energy efficiency and storage,
software, e-commerce and electronic components. Also, popular are hybrid
energy storage approaches designed to stabilize demand on an energy grid
such as what is being implemented in Braderup, Germany where citizens can
sell excess electricity during peak demand when prices are higher.
• Payments Trend – Money, and the way we manage and exchange it,
continues to be an industry undergoing a massive transformation. This industry
includes services for lending money (LendingTree.com) to products that allows
anyone to accept credit cards, as well as billing and accounting services.
• Maker Trend – The maker movement attracts more individuals
into product design, and thus may launch more
“accidental entrepreneurs” if they find that their user solutions
have a market. Secondly, the maker movement generates
dense but diverse networks, creating new ideas and innovative
thinking.
• Mobile Trend – The mobile phone continues to revolutionize the
way we consumer content, make purchases and interact with
each other. Consumers are increasingly short on time so
activities once confined to a desktop are now being done on
the go with their tablet or phone.
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• Health Trends – Health maintenance and concerns about

health care provisions and together are one of the biggest
trends today that will continue in the next decade as the
world population ages. This provides many opportunities for
entrepreneurs, including cosmetic procedures, mind
expansion such as the “brain gym” of Vibrant Brains,
personal health portals, point-of-care testing facilities, fitness
centers, wellness coaches.
• The Internet of Things Trend - The internet of things, or IoT, is a
system of interrelated computing devices, mechanical and
digital machines, objects, animals or people that are provided
with unique identifiers (UIDs) and the ability to transfer data over
a network without requiring human-to-human or human-to-
computer interaction.
 METHODS OF GENERATING IDEAS
Even recognizing these trends , coming up with an idea to serve as the basis for
new venture can still pose a problem, particularly since the idea is the basis for
the business. The entrepreneur can use several methods to help generate and
test new ideas.
1. FOCUS GROUP
2. BRAINSTORMING
3. BRAINWRITING
4. PROBLEM INVENTORY ANALYSIS
5. REVERSE BRAINSTORMING
6. GORDON METHOD
7. CHECKLIST METHOD
8. FREE ASSOCIATION
9. FORCED RELATIONSHIP
10. COLLECTIVE NOTEBOOK METHOD
11. ATTRIBUTE LISTING
12. BIG-DREAM APPROACH
13. PARAMETER ANALYSIS
 INNOVATION
INNOVATION - The process of translating an idea or invention into
a good or service that creates value or for which customers will
pay. In business, innovation often results when ideas are applied
by the company in order to further satisfy the needs and
expectations of the customers.

TYPES OF INNOVATION
• BREAKTHROUGH INNOVATION
• TECHNOLOGICAL INNOVATION
• ORDINARY INNOVATION
 DESIGN THINKING
The process of design thinking as a strategy of innovation puts
together creative thinking, logical thinking and experimentation
in the face of a lot of testing and prototyping in order to
achieve the perfect product for the end-user.

ASPECTS OF DESIGN THINKING

• DEFINING THE PROBLEM
• DEVELOPING THE OPTIONS
• DETERMINING THE DIRECTION
• SELECTING THE BEST SOLUTION
• EXECUTING
 ORGANIZATIONAL BARRIERS
• LACK OF MANAGEMENT COMMITMENT
• LACK OF Permanent Indicators
• RESISTANCE TO CHANGE

OVER ALL CULTURE

The overall culture of the organization can either support or inhibit
design thinking. An organization's culture defines the proper way
to behave within the organization. This culture consists of shared
beliefs and values established by leaders and then
communicated and reinforced through various methods,
ultimately shaping employee perceptions, behaviors and
understanding.