essay about creativity in entrepreneurship

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Importance of Creativity & Innovation in Entrepreneurship 2024

If entrepreneurs all did business in the same way, in the same industries, in the same marketplace, and with the same products and services, nobody would stand out with a competitive advantage and many businesses would not be in business for very long.

Carving out a niche for yourself as an entrepreneur, or making sure that your Unique Selling Proposition (USPs) helps differentiate your business to make it stand out from the clutter, you need to implement high levels of creativity and innovation into all of your entrepreneurial practices. Innovation and entrepreneurship, and more specifically, cultivating creativity in entrepreneurship is an important process which helps entrepreneurs generate value, useful unique products, services, ideas, procedures, or new business processes. 

Role Of Creativity and Innovation In Entrepreneurship

According to Atlantis Press , creativity and innovation helps develop new ways of improving an existing product or service to optimize the business. Successful innovation is the driving force that allows entrepreneurs to think outside the box and beyond the traditional solutions. Through this opportunity new, interesting, potential yet versatile ideas come up.

Overall, creativity and innovation are integral to entrepreneurial success. They empower entrepreneurs to discover opportunities, solve problems, differentiate themselves, adapt to change, continuously improve, and drive business growth. By embracing creativity and fostering an innovative mindset, entrepreneurs can build successful ventures in an ever-evolving business landscape.

Entrepreneurs and creativity

Creativity is an indispensable trait for entrepreneurs. It drives idea generation, opportunity recognition, problem-solving, innovation, and differentiation. Creative entrepreneurs embrace risk, communicate effectively, and continually learn and adapt. By harnessing their creativity, entrepreneurs can navigate challenges, seize opportunities, create new solutions and build successful and impactful ventures.

But creativity does not only assist entrepreneurs in the initial stages of coming up with a business idea. Creativity will also be a driving force and also highly valuable in terms of:

Coming up with branding and marketing ideas

Creative ideas for blogs, other SEO-related content

Finding creative solutions to everyday business problems

Fun and exciting social media strategies

A good balance of linear and lateral thinking

Entrepreneurs and Innovation

Entrepreneurs and innovation go hand in hand. Innovation is a key driver of entrepreneurial success, and entrepreneurs play a critical role in bringing innovative ideas to life. They adapt to change, solve problems, and fuel business growth through innovation. By embracing innovation, entrepreneurs can create disruptive solutions, differentiate themselves in the market, and ultimately achieve entrepreneurial success.

Having a good hold on innovation and as a net result, innovative ideas, is very important for entrepreneurs. Not only will an innovative mindset be advantageous in coming up with products, services, and business ideas, it will also be exceptionally helpful when it comes to adapting to change and finding new and improved ways of doing things in your business structure.

Do you have the skills to be a successful entrepreneur?

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Benefits of using creativity for innovation

For decades, advertising and marketing companies have used creativity to differentiate innovative products and services being advertised against other like products in the marketplace. Using creativity for innovation can lead you to be a better entrepreneur and infusing creativity into your business makes you an innovative leader within your industry. Without creativity, businesses run the risk of slipping into the clutter that may exist in an industry.

To improve your chances of successful entrepreneurship, here are some of the benefits of being a creative and innovative entrepreneur:

You will be able to create new products or services that solve problems for people

You will be able to improve processes and make them more efficient

You will be able to find new markets for existing products or services

You will be able to create new jobs

You will be able to make a positive impact on society

You will be able to have a lot of fun and satisfaction in what you do

Thinking about Improving your Skills as an Entrepreneur?

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Download the free report  now and find out how you can do this and stay ahead of the competition!

And if you're interested in pursuing entrepreneurship further, here at Nexford University , why not consider our excellent selection of BBA , MBA and MS degrees , including our BBA in Entrepreneurship and our MS in Entrepreneurship .

Examples of Entrepreneurial Creativity and Innovation

Apple (steve jobs).

He may have passed away on the 5th of October 2011, but the creative entrepreneurial legacy that Steve Jobs left behind will have a marked impact on all other intrepid tech entrepreneurs that come after him. 

Steve Jobs had a never say die attitude and an incredible flair when it came to producing products that were leagues ahead of the competition and so creative that they stood head and shoulders above the competition. 

Apple Computer, Inc. was founded on April 1, 1976, by college dropouts Steve Jobs and Steve Wozniak, who brought to the new company a vision of changing the way people viewed computers. Jobs and Wozniak wanted to make computers small enough for people to have them in their homes or offices. And they succeeded beyond their wildest imagination.

Entrepreneur magazine says that Steve Jobs systematically cultivated his creativity and so can others. While there's no doubt that Jobs had a naturally creative brain, thanks to modern research, we can see that Jobs' artistry was also due to practices every entrepreneur can adopt to enhance creative thinking.

Jobs' meditation practice helped him develop creativity. Meditative practices, such as "open-monitoring training," encourage divergent thinking, a process of allowing the generation of many new ideas, which is a key part of creative innovation.

Other forces of creative entrepreneurial thinking

Steve Jobs most certainly did not have the monopoly when it came to creative entrepreneurial thinking. Far from it. Many other top creative entrepreneurs came before him, and right now the next wave of creative entrepreneurs are starting to make their mark. Household names such as Richard Branson, Bill Gates, Jeff Bezos, and Elon Musk have set the bar very high when it comes to creative thinking, allowing them to build multi-billion dollar empires.

Now whilst they may have had one thing in common which was having a knack for creative thinking, the one thing that leading entrepreneurs and innovators like Bill Gates and J.K. Rowling all have one thing in common and that is that they were all domain experts before launching their businesses. Bill Gates, spent nearly 10 years in school programming in different computer systems before starting Microsoft, whilst J.K. Rowling began writing at the age of six, and spent over seven years refining and perfecting her idea before it became a global sensation and boosted her net worth to over $1 billion.

Conclusion  

Whilst people maintain that you are born with creativity and an entrepreneurial flair, others maintain that it can be taught. You may have a great idea, but you’ll need business acumen to turn your idea into a successful, sustainable enterprise. Business degrees give you the space and time to hone these critical skills in a safe environment. A good one will give you opportunities to work on real-life projects or go on placements with industry leaders before launching out on your own. And once you're ready to go solo, you'll have already built an important network of connections and highly creative ways of thinking in an effective way.

If you are looking to up your understanding of business, improve your levels of creativity and promote entrepreneurship when it comes to the branding and running of a business, you might want to consider a university that offers  business degrees that involve learning how to be creative and effective in business using real life case studies. 

Nexford is just such a university. Expand your entrepreneurial skill set with an online BBA , MBA and MS degrees , including our BBA in Entrepreneurship and our MS in Entrepreneurship .

For a more in-depth analysis  download our free report .

Is innovation and creativity key to entrepreneurial success?

Yes, innovation and creativity are key to entrepreneurial success. They are essential elements that drive the growth and sustainability of entrepreneurial ventures. Innovation and creativity are vital for entrepreneurial success. They enable entrepreneurs to differentiate themselves, respond to market changes, solve problems, drive growth, take risks, attract stakeholders, and foster a culture of continuous improvement. 

Now whilst there have been many business ideas that were a stroke of genius, or people being in the right place at the right time, it is undeniable that the difference between business success and abject failure is the use of creativity in coming up with a concept and getting it noticed. Not always is it a case of 'if you build it they will come.' It's all about being innovative and never taking no for an answer.

Applied to business, innovation comprises several key elements, including a challenge   (to provoke it), creativity   (to spark it), contemplation   (to come up with an idea), focus on the customers (to sharpen the idea), and communication and cooperation   to facilitate the whole process.

How does creativity and innovation work together? 

Creativity provides the foundation of new and unique ideas, while innovation is the process of transforming those ideas into tangible outcomes. They work together to generate solutions, improve offerings, take risks, and differentiate in the market. By leveraging both creativity and innovation, entrepreneurs can foster a culture of continuous improvement and drive entrepreneurial success.

Whilst experts say that you are born with an innate sense of creativity and innovation, many others say that there are ways to encourage creativity and innovation. Don't be afraid to take risks and always maintain an open mind.

What is the purpose of innovation in business? 

The purpose of innovation in business is to differentiate, meet customer needs, gain a competitive advantage, drive growth, improve operational efficiency, adapt to change, and promote sustainable development. By embracing innovation, businesses can remain relevant, creative, thrive in a dynamic marketplace, and create long-term value for customers and stakeholders.

Creativity and innovation in organizations allows for adaptability, separates a business from its competitors, and fosters growth.  

How can you encourage innovation and creativity in the workplace?

Encouraging innovation and creativity in the workplace is crucial for fostering a culture of continuous improvement and driving business success. Here are some ways you can promote an innovative environment in your business with a proven methodology that combines theory and practice:

1. Make innovation a core value

2. Hire people with different perspectives

3. Give employees time and space to innovate

4. Encourage collaboration

5. Have a feedback process

6. Reward employees for great ideas

What strategies can leadership use to enhance creativity and innovation for employees

The importance of creativity and innovation can't be stressed enough and both play a major role in entrepreneurship. The link between creativity and successful businesses is proven. Kelly Personnel maintains that there are four strategies to enhance your team's creativity and improve organizational productivity.

1. Cultivate open communication 

Cultivating open communication in the workplace is essential for creating an environment where ideas can freely flow, collaboration can thrive, and innovation can flourish. There are many strategies to cultivate open communication which include; establishing a foundation of trust, encourage active listening, promoting two-way communication, fostering an open-door policy, embracing diverse perspectives, using clear and transparent communication channels, providing communication skills training, and leading by example.

2. Facilitate diverse ways of working

Facilitating diverse ways of working can greatly enhance creativity and innovation within an organization. By embracing diverse ways of working, organizations can tap into the collective creativity and innovation potential of their workforce. It encourages fresh perspectives, drives collaboration, and opens up new possibilities for problem-solving and growth.

3. Intentionally change things up

Intentionally changing things up in the workplace can have a positive impact on creativity and innovation. By intentionally changing things up, organizations can stimulate creativity and foster a culture of innovation. Embracing variety, providing opportunities for cross-pollination, and encouraging experimentation all contribute to an environment where new ideas can flourish, leading to breakthrough innovations and improved problem-solving.

4. Hold guided brainstorm sessions

Holding guided brainstorming sessions can be an effective way to enhance creativity and innovation in the workplace. By conducting guided brainstorming sessions, organizations can tap into the collective creativity and generate innovative ideas. These sessions provide a structured framework for idea generation, encourage collaboration, and inspire employees to think outside the box.

Looking to Improve your Skills as an Entrepreneur?

Mark is a college graduate with Honours in Copywriting. He is the Content Marketing Manager at Nexford, creating engaging, thought-provoking, and action-oriented content.

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6 Creativity and Innovation in Entrepreneurship

Task Summary:

Lesson 2.3.1: Entrepreneurial Creativity and Innovation

Lesson 2.3.2: Design Thinking

Activity 2.3.1: Read/Watch/Listen – Reflect

Activity 2.3.2: Journal Entry

• Unit 2 Assignment: The Makings of a Successful Entrepreneur

Learning Outcomes:

• Define creativity and innovation in an entrepreneurial context
• Reflect on various perspectives on creativity and innovation in an entrepreneurial context
• Assess the potential of design thinking
• Identify the characteristics that resonate with you as being critical to entrepreneurial success

Creativity and innovation are what make the world go around and continue to improve and evolve! There have been lots of great ideas and thoughts around the creative and innovative process for entrepreneurs, as this is a key part of the problem identification process. Have a look at what some resident experts have said about creativity and innovation from an entrepreneurial lens.

Systematic innovation involves “monitoring seven sources for an innovative opportunity” (Drucker, 1985). The first four are internally focused within the business or industry, in that they may be visible to those involved in that organization or sector. The last three involve changes outside the business or industry.

• The unexpected (unexpected success, failure, or outside events)
• The incongruity between reality as it actually is and reality as it is assumed to be or as it ought to be
• Innovation based on process need
• Changes in industry structure or market structure that catch everyone unawares
• Demographics (population changes)
• Changes in perception, mood, and meaning
• New knowledge, both scientific and nonscientific

One of the components of Mitchell’s (2000) New Venture Template asks whether the venture being examined represents a new combination. To determine this, he suggests considering two categories of entrepreneurial discovery: scientific discovery  and  circumstance .

• Physical/technological insight
• A new and valuable way
• Specific knowledge of time, place, or circumstance
• When and what you know

The second set of variables to consider are the market imperfections that can create profit opportunities:  excess demand  and  excess supply . This gives rise to the following four types of entrepreneurial discovery.

• Uses science to exploit excess demand (a market imperfection)
• Becomes an opportunity to discover and apply the laws of nature to satisfy excess demand
• Inventions in one industry have ripple effects in others
• Example: the invention of the airplane
• Circumstances reveal an opportunity to exploit excess demand (a market imperfection)
• Not necessarily science-oriented
• Example: airline industry = need for food service for passengers
• Uses science to exploit excess supply (a market imperfection)
• Example: Second most abundant element on earth after oxygen = silicon microchips
• Circumstances reveal an opportunity to exploit excess supply (a market imperfection)
• Example: Producer’s capacities to lower prices = Wal-Mart

Schumpeter’s (1934) five kinds of new combinations can occur within each of the four kinds of entrepreneurial discovery (Mitchell, 2000):

• The distinction between true advances and promotional differences
• Example: assembly line method to automobile production, robotics, agricultural processing
• Global context: Culture, laws, local buyer preferences, business practices, customs, communication, transportation all set up new distribution channels
• Example: Honda created a new market for smaller modestly powered motorbikes
• Enhance availability of products by providing at lower cost
• Enhance availability by making more available without compromising quality
• Reorganization of an industry

Murphy (2011) claimed that there was a single-dimensional logic that oversimplified the approach taken to understand entrepreneurial discovery. He was bothered by the notion that entrepreneurs either deliberately searched for entrepreneurial opportunities or they serendipitously discovered them. Murphy’s (2011) multidimensional model of entrepreneurial discovery suggests that opportunities may be identified (a) through a purposeful search; (b) because others provide the opportunity to the entrepreneur; (c) through prior knowledge, entrepreneurial alertness, and means other than a purposeful search; and, (d) through a combination of lucky happenstance and deliberate searching for opportunities.

According to experimentation research, entrepreneurial creativity is not correlated with IQ (people with high IQs can be unsuccessful in business and those with lower IQs can be successful as an entrepreneur). Research has also shown that those who practice idea generation techniques can become more creative. The best ideas sometimes come later in the idea-generation process—often in the days and weeks following the application of the idea-generating processes (Vesper, 1996).

Vesper (1996) identified several ways in which entrepreneurs found ideas:

• Chance event
• Answering discovery questions

Although would-be entrepreneurs usually don’t discover ideas by a deliberate searching strategy (except when pursuing acquisitions of ongoing firms), it is nevertheless possible to impute to their discoveries some implicit searching patterns. (Vesper, 1996)

Vesper (1996) categorized discovery questions as follows:

• What is bothering me and what might relieve that bother?
• How could this be made or done differently than it is now?
• What else might I like to have?
• How can I fall the family tradition?
• Can I play some role in providing this product or service to a broader market?
• Could there be a way to do this better for the customer?
• Could I do this job on my own instead of as an employee?
• If people elsewhere went for this idea, might they want it here too?

Vesper (1996) also highlighted several  mental blocks to departure . He suggested that generating innovative ideas involved two tasks: to depart from what is usual or customary and to apply an effective way to direct this departure. The mental blocks in the way of departure include the following:

• difficulty viewing things from different perspectives
• seeing only what you expect to see or think what others expect you to see
• intolerance of ambiguity
• preference for judging rather than seeking ideas
• tunnel vision
• insufficient patience
• a belief that reason and logic are superior to feeling, intuition, and other such approaches
• thinking that tradition is preferable to change
• disdain for fantasy, reflection, idea playfulness, humor
• fear of subconscious thinking
• inhibition about some areas of imagination
• distrust of others who might be able to help
• distractions
• discouraging responses from other people
• lack of information
• incorrect information
• weak technical skills in areas such as financial analysis
• poor writing skills
• inability to construct prototypes

Understanding these mental blocks to departure is a first step in figuring out how to cope with them. Some tactics for departure include the following (Vesper, 1996):

• Trying different ways of looking at and thinking about venture opportunities
• Trying to continually generate ideas about opportunities and how to exploit them
• Seeking clues from business and personal contacts, trade shows, technology licensing offices, and other sources
• Not being discouraged by others’ negative views because many successful innovations were first thought to be impossible to make
• Generating possible solutions to obstacles before stating negative views about them
• Brainstorming
• Considering multiple consequences of possible future events or changes
• Rearranging, reversing, expanding, shrinking, combining, or altering ideas
• Developing scenarios

The Hasso Plattner Institute of Design at Stanford University called the d.school ( http://dschool.stanford.edu/ ), is an acknowledged leader at promoting design thinking. You can download the  Bootcamp Bootleg  manual from the d.school website at  https://dschool.stanford.edu/resources/the-bootcamp-bootleg . The following description of design thinking is from the IDEO website:

Design thinking is a deeply human process that taps into abilities we all have but get overlooked by more conventional problem-solving practices. It relies on our ability to be intuitive, to recognize patterns, to construct ideas that are emotionally meaningful as well as functional, and to express ourselves through means beyond words or symbols. Nobody wants to run an organization on feeling, intuition, and inspiration, but an over-reliance on the rational and the analytical can be just as risky. Design thinking provides an integrated third way.

The design thinking process is best thought of as a system of overlapping spaces rather than a sequence of orderly steps. There are three spaces to keep in mind:  inspiration ,  ideation , and  implementation . Inspiration is the problem or opportunity that motivates the search for solutions. Ideation is the process of generating, developing, and testing ideas. Implementation is the path that leads from the project stage into people’s lives (IDEO, 2015).

Today is all about taking some time to sit the value of creativity and innovation in entrepreneurship. Similar to previous activities, this is all done with the intent to develop your own understanding of the characteristics needed for success in entrepreneurship. Pay close attention to characteristics and leanings that resonate with you, and are particularly appealing. Remember, at the end of this module you will be developing either a 250-word document, infographic, or a three-minute presentation on the characteristics that make an entrepreneurial thinker and leader successful.

The key steps are:

• Choose five (5) videos from this Innovation Playlist to watch
• Building on what you have learned throughout this unit, identify the characteristics that resonate with you as being critical to success and appealing to you personally
• Reflect on why these characteristics are critical and appealing
• Reflect on how these characteristics, or lack thereof, could impact your own success as an entrepreneur
• Reflect on how you can strengthen these characteristics to support your own entrepreneurial success over the next 18 months

As a reminder, journaling can be a really powerful way to learn because it gets us to pause and reflect not only on what we have learned but also on what it means to us. Journaling makes meaning of material in a way that is personal and powerful. Similar to your unit end reflection in Unit 1, we are going to take a slightly different approach for this journal, which focuses on developing an action plan given your previous two journal reflections. Here, you will develop a plan of action for immediate learning challenges, such as the unit assignments featured in this course. Recall in the past two journals you reflected on key learning (not content) aspects you found challenging. You will reconsider your strengths, weaknesses, and key learnings and determine specific steps to prepare and complete the oncoming learning challenge of designing the entrepreneurial process for yourself. Your reflection entries should be either 300 to 500 written words or a video that is approximately 5 minutes.

Using your past two journal reflections and your learning experience in Unit 2, Module 3, reflect on the following:

• If there was not a particular concept that was easy to understand, reflect on why this was the case
• If there was not a particular concept that was difficult to understand, reflect on why this was the case
• Develop a meaningful plan with clear and specific actions you need to take, how you will take them, and when you will take them, to address any challenges or weaknesses before you complete your Unit 2 Assignment: The Makings of a Successful Entrepreneur.

Media Attributions

• Photo of Innovation by Michal Jarmoluk  on Pixabay .

Text Attributions

• The content related to the Ways of Identifying Opportunities was taken from “ Entrepreneurship and Innovation Toolkit, 3rd Edition ” by L. Swanson (2017) CC BY-SA

Drucker, P. F. (1985). Innovation and entrepreneurship: Practice and principles . p. 35. New York, NY: Harper & Row.

IDEO. (2015). About IDEO. para. 7-8. Retrieved from http://www.ideo.com/about/

Mitchell, R. K. (2000). Introduction to the Venture Analysis Standards 2000: New Venture Template Workbook . Victoria, B.C., Canada: International Centre for Venture Expertise

Murphy, P. J. (2011). A 2 x 2 conceptual foundation for entrepreneurial discovery theory. Entrepreneurship Theory and Practice, 35 (2), 359-374. doi:10.1111/j.1540-6520.2010.00368.x

Schumpeter, J. A. (1934). The theory of economic development : An inquiry into profits, capital, credit, interest, and the business cycl e (R. Opie, Trans.). Cambridge, MA: Harvard University Press.

Vesper, K. H. (1996). New venture experience (revised ed.). p. 60. Seattle, WA: Vector Books

Introduction to Entrepreneurship Copyright © 2021 by Katherine Carpenter is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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The Role of Creativity in Entrepreneurship

Andrew Herkert

April 28th, 2022

Creativity in Business

Creativity is a necessity in a thriving business, but how often do we consider the role of creative thinking in the formation of a business?  Creativity is just as crucial for entrepreneurs as it is for those looking to maintain an advantage over the competition in well-established organizations.  Let’s see just how creativity can benefit the successful entrepreneur.

Innovation, Risk Taking, and Thinking the Unthinkable

Anastasia Belyh gives us a good place to start by helping us see where creativity naturally fits into this role .  Innovation, the first characteristic of the role that Belyh lists, entails creative ideation. As she puts it, “There is a continuous and conscious effort required to look for niches and undertake the risks in entering them,” and there’s a constant need to improve on existing business workflows.

Risk taking is another area where creativity is necessary—in fact, Belyh argues that “The whole essence of entrepreneurship revolves around the courage and ability to take new risks.”  Those risks involve more than innovative business workflows.  Entrepreneurs strive to develop new and inventive products, and meet customer needs while pleasantly surprising them.  They work to earn and maintain a competitive edge. They work with investors to meet financial needs while the business becomes profitable. 

Thinking creatively allows an entrepreneur to come up with the ideas worth bringing to bear on their business.  Belyh calls this “thinking the unthinkable” and describes the ability of entrepreneurs to “think beyond the traditional solutions, come up with something new, interesting, versatile, and yet have success potential.”

Adaptation and Success as a Continuum

Of course, there’s more to creativity than ideation , as Nicolas Susco contends—it’s not “just about coming up with ideas.  It’s about being able to adapt to new circumstances, navigate uncertainty, and find solutions as problems arise.”

Success depends on the ability to pivot, even when this means pivoting away from a good thing.  “Sometimes entrepreneurs get caught up in the success of their initial idea.  They feel it’s so amazing that they never have to be creative again.”  The entrepreneurs who succeed over time are the ones who don’t become complacent, but “use their creativity over and over” and reevaluate even what’s worked in the past.

A creative entrepreneur is also one who doesn’t see success as an endpoint—or, rather, one sees success as a moving target.  “Just because your business is doing fine, that doesn’t mean it can’t do better ,” Susco points out, and reinforces the importance of creativity in surviving complacency: “Sometimes sitting back allows a competitor to innovate and put you out of business with a more creative solution.”

This is something that bears a moment of serious thought: whether or not you are committed to creativity, you have competitors that are.  If you don’t fight fire with fire, you will be burned out by other firms working to develop next-level solutions and offerings.

Increasing Your Creativity: Going Analog

Now, let’s shift gears.  Creativity matters to the entrepreneur, their products, their ability to contend with change, their chances to compete, and their ability to stave off complacency—so how can an entrepreneur become (and remain) creative?

John Boitnott of entrepreneur.com suggests first “free[ing] your mind to take those flights of fancy that result in heightened creativity” in his tips to help entrepreneurs unlock the creativity inside them.  Boitnott’s suggestion for freeing the mind is to use your hands instead of your phone.  Find an ‘analog’ activity (“anything that requires repetitive movements and little intellectual analysis”) and let your mind drift through a far more creative thought process.

Expanding Your Horizons

It’s also important to take stock of, and value, the creativity of others as you work to cultivate it in yourself.  Boitnott suggests pursuing creative expression that you might not typically look into, like a movie or museum exhibit that you might otherwise skip.

Why should you go see art that would normally not match your interests?  It can certainly give you ideas, but more than that, it can remind you of the scope of creativity.  You might love movies, say, but this experiment might show you an art film or unconventional work that you hardly knew was possible.  And beyond others’ creative output, try to “look for other people’s creative decision-making skills.”

This second part of appreciating others might be even more useful to the entrepreneur interested in increasing their creativity.  Watching successful, innovative problem-solving, conflict resolution, or other decision-making situations involving others can create inspirational lightbulb moments.  When you find yourself thinking “It never occurred to me to try this approach—look how well it works,” take a note.

The last of Boitnott’s suggestions for open-minded ideation is also a great final piece of advice for the creativity-interested entrepreneur: meditate often.  Meditation serves many purposes, but in this context, its primary purpose is to quiet the mind and “power down.” 

As in the analog activity advice, this freeing of the mind allows creative thinking to come much more easily.  Open-monitoring meditation, “where you simply sit quietly and observe without judging whatever is going on around and within you,” is Boitnott’s suggestion for the greatest benefit.

Creativity is Indispensable

Creative thinking is crucial to an entrepreneur’s ability to gain traction with their business and maintain forward momentum.  It promotes divergent, innovative thought in business processes, product design, and more, and encourages continuous reevaluation of circumstances. 

Creativity is often the key differentiator between startups that do well for a time before becoming complacent and folding, and startups who enjoy lasting success.  How will you become a more creative business leader—even if your ‘entrepreneur days’ are behind you?

The Role of Creativity in Entrepreneurship: Nurturing Innovation and Out-of-the-Box Thinking

Unlocking the Power of Creativity to Drive Entrepreneurial Success.

Are entrepreneurs born with an inherent ability to think outside the box, or can creativity be nurtured and developed? This question has long fascinated both scholars and practitioners in the realm of entrepreneurship. While some may argue that entrepreneurial creativity is an innate trait, many studies suggest that creativity can indeed be cultivated and harnessed to fuel innovation and drive business success. In this article, we delve into the role of creativity in entrepreneurship, exploring how fostering a creative mindset can lead to breakthrough ideas, unique solutions, and a competitive edge in today’s ever-evolving business landscape.

The Creative Mindset: Breaking Free from Conventional Thinking

Entrepreneurship and creativity share a symbiotic relationship, with one feeding into the other. Creative thinking is the cornerstone of entrepreneurial success, enabling individuals to challenge existing norms, identify gaps in the market, and devise innovative solutions to meet evolving customer needs. In essence, a creative mindset allows entrepreneurs to break free from conventional thinking and envision new possibilities.

Consider the example of Airbnb, the now-revolutionary hospitality platform that disrupted the traditional hotel industry. Brian Chesky and Joe Gebbia, the co-founders of Airbnb, harnessed their creative thinking skills to transform spare rooms into profitable accommodations. By challenging the established norms of the hospitality sector, they not only built a successful business but also revolutionized the way people travel and experience new destinations.

Nurturing Creativity: Fueling the Entrepreneurial Flame

1. embrace curiosity and embody a growth mindset.

At the heart of nurturing creativity lies an insatiable curiosity—a relentless desire to explore, question, and learn. Entrepreneurs who actively seek out new experiences, diverse perspectives, and knowledge from various domains are more likely to develop a deep well of creative ideas. By embodying a growth mindset—an understanding that abilities and intelligence can be developed through dedication and hard work—entrepreneurs can overcome setbacks and push beyond their comfort zones, ultimately fostering innovation.

2. Cultivate a Diverse Network and Collaborate

Creativity thrives in diverse environments, where a multitude of perspectives and ideas intersect. By actively cultivating a diverse network—both within and outside their industry—entrepreneurs can tap into a rich source of inspiration. Collaborating with individuals from different backgrounds, disciplines, and cultures can spark new ways of thinking, challenging assumptions, and leading to breakthrough solutions. As Steve Jobs famously said, “Creativity is just connecting things.”

3. Embrace Failure as a Stepping Stone

Failure is an inevitable part of the entrepreneurial journey. However, rather than viewing failure as a roadblock, successful entrepreneurs leverage it as a stepping stone to innovation. Embracing failure requires a resilient mindset and the willingness to learn from mistakes. By reframing failures as valuable learning experiences, entrepreneurs can adapt, iterate, and pivot their ideas, ultimately leading to creative and successful ventures.

Unleashing Creativity: Techniques and Practices

While creativity is often associated with a free-flowing, spontaneous process, there are specific techniques and practices that can help entrepreneurs harness and unleash their creative potential. Here are a few effective strategies:

1. Design Thinking: Putting the User at the Center

Design thinking is a human-centered approach that encourages entrepreneurs to empathize with their target audience and deeply understand their needs, desires, and pain points. By immersing themselves in the user’s world, entrepreneurs can gain valuable insights that fuel creative problem-solving. The design thinking process typically involves five stages: empathize, define, ideate, prototype, and test. This iterative approach allows entrepreneurs to continuously refine their ideas and create customer-centric solutions.

2. Mind Mapping: Expanding the Web of Ideas

Mind mapping is a powerful technique for visualizing and organizing ideas. By creating a visual representation of concepts, entrepreneurs can explore connections, identify patterns, and generate new associations. Mind mapping encourages non-linear thinking, enabling entrepreneurs to expand their web of ideas and uncover innovative possibilities. There are numerous digital tools available, such as MindMeister and XMind, that facilitate the creation and collaboration of mind maps.

3. Reverse Thinking: Challenging Assumptions

Reverse thinking, also known as inversion thinking, involves flipping a problem on its head and challenging existing assumptions. By considering the opposite of a desired outcome or reversing cause and effect, entrepreneurs can uncover fresh perspectives and generate unconventional solutions. This technique encourages entrepreneurs to question the status quo and break free from the limitations of conventional thinking.

Cultivating Creativity: A Continuous Journey

Creativity is not a destination but a continuous journey. For entrepreneurs, nurturing and harnessing creativity is an ongoing process that requires dedication, adaptability, and an open mind. By embracing curiosity, fostering collaboration, embracing failure, and employing various creative techniques, entrepreneurs can unlock the full potential of their creativity and drive innovation in their ventures.

As the business landscapeevolves at an unprecedented pace, entrepreneurs who prioritize creativity will have a distinct advantage. By nurturing a creative mindset, entrepreneurs can navigate uncertainty, identify emerging trends, and seize new opportunities. The role of creativity in entrepreneurship cannot be overstated—it is the fuel that powers innovation, propels businesses forward, and creates a lasting impact.

So, are entrepreneurs born creative, or can creativity be nurtured? The answer lies in the intersection of nature and nurture. While some individuals may possess a natural inclination towards creativity, everyone has the capacity to cultivate and enhance their creative abilities. By adopting the strategies and practices outlined in this article, entrepreneurs can unlock their creative potential and embark on a journey of entrepreneurial success.

In conclusion, creativity is a vital ingredient for entrepreneurial success. It enables entrepreneurs to think beyond boundaries, challenge norms, and create groundbreaking solutions. By embracing curiosity, cultivating diverse networks, learning from failure, and employing creative techniques, entrepreneurs can nurture their creative prowess and thrive in an ever-changing business landscape.

Remember, the journey of entrepreneurship is not a solitary one. If you want to learn more about creativity, innovation, and entrepreneurship, here are some additional resources to explore:

• TED Talks: The Surprising Habits of Original Thinkers
• Harvard Business Review: The Innovator’s DNA
• Stanford d.school: An Introduction to Design Thinking

Now, it’s time to unleash your creativity and embark on your entrepreneurial journey. The world is waiting for your innovative ideas and game-changing solutions. Embrace the power of creativity, and let your entrepreneurial spirit soar!

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4 Entrepreneurial Creativity: The Role of Learning Processes and Work Environment Supports

Michele Rigolizzo is a Doctoral Student at Harvard Business School.

Teresa Amabile is the Edsel Bryant Ford Professor of Business Administration in the Entrepreneurial Management Unit at Harvard Business School.

• Published: 09 July 2015
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This chapter argues that the creative process is supported, at each stage, by certain learning behaviors and that both creative behaviors and learning behaviors depend on particular social-environmental conditions at each stage. Focusing on entrepreneurial creativity within startups and established organizations, the chapter describes four stages: problem identification; preparation; idea generation; idea evaluation and implementation. It explains how creativity-relevant and domain-relevant skills are distinct and how each skill set becomes more or less important depending on the uncertainty inherent in a given stage. The chapter also discusses the role of intrinsic motivation and the impact of various forces on the motivation for entrepreneurial creativity. With examples drawn from cases of entrepreneurial individuals and companies, links are made between creativity, learning, and the ways in which social-environmental factors influence the motivation for these behaviors differentially at different points in the creative process.

Introduction

Individuals are constantly seeking creative outlets. Hobbies—the activities we choose to engage in for fun—are often very creative activities. Even at work, organizations advertise innovation as a way to attract top talent. Why, then, is it important or even necessary to motivate creativity? Creativity—the generation of new, useful ideas—may be inherently rewarding, but it is also easily stifled and highly sensitive to social-environmental conditions ( Amabile, Conti, Coon, Lazenby, & Herron, 1996 ). In this chapter, we argue that creativity is a staged process supported by learning behaviors. Both creative behaviors and learning behaviors differ somewhat across the stages of the creative process, and the optimal social environments for motivating them are stage dependent ( Amabile, 1997 ; Nembhard & Edmondson, 2006 ).

As humans learn new skills, we assess our environment, process new information, develop solutions, and evaluate their use. Creative performance involves a similar process that is directed toward the production and evaluation of novel and useful ideas rather than skills. Entrepreneurial undertakings require rapid learning in service of nimble creativity in order to succeed in dynamic and complex business environments. In essence, entrepreneurial creativity is the development of novel and useful products, services, or business models in the establishment of a new venture ( Amabile, 1997 ). The entrepreneurial creative process and its associated learning behaviors do not differ from those involved in other forms of creativity (for example, in science or the arts). However, in entrepreneurial ventures, implementation of the end product serves as a touchstone for each stage of the creative process, providing guidance and correction as ideas are developed, tested, rejected, and finally come to fruition. Learning is heavily involved throughout. Therefore, by understanding the process of creativity through the lens of learning, entrepreneurs (and entrepreneurial managers in more established organizations) can make purposeful decisions about how to motivate employees and, most importantly, how to avoid extinguishing the creative spark.

Creativity depends on three internal components within the individual, and one external component, the social environment ( Amabile, 1983 , 1993 , 1996 ). The internal components are domain-relevant skills, creativity-relevant processes, and task motivation. Although each component depends, to some extent, on innate or deeply ingrained talents and orientations, they can all be influenced by experience and by the immediate social environment. Each component is necessary, and none is sufficient for creative behavior; the higher the level of each component, the more creative the outcome.

Domain-relevant skills include talent in, knowledge about, and technical expertise for doing work in the domain or domains that are relevant to the problem or task at hand. Essentially, this component is the individual’s set of cognitive pathways for solving a given problem or doing a given task. The larger the set, the more alternatives the individual has for producing a new combination. The ability to merge ideas or products into new designs is especially important for entrepreneurs. Many of the most successful new entrepreneurial ventures involve the combination of already existing products or technologies. For example, the explosion of popular apps for smartphones demonstrates the opportunity of combining an existing product (e.g., game, calendar, paperback book) with a new technology.

Creativity-relevant processes include personality processes (e.g., tolerance for ambiguity) and cognitive styles (e.g., a propensity for idea proliferation) that predispose the individual toward unusual approaches to problems, as well as work styles marked by high energy and perseverance on difficult problems. Because so many new ideas fail for reasons both within and outside the entrepreneur’s control, both an abundance of ideas and the determination to persevere are critical skills to entrepreneurial creativity.

Task motivation can be either intrinsic or extrinsic (or, more, likely, some combination of the two). Intrinsic motivation is the drive to engage in a task because it is interesting, enjoyable, personally challenging, or satisfying in some way; this form of motivation is most conducive to creativity. Extrinsic motivation is the drive to engage in a task for some reason outside the task itself—for example, to gain a reward, win a competition, or earn a positive evaluation. Extrinsic motivation can undermine intrinsic motivation (e.g., Deci, Koestner, & Ryan, 1999 ), and thus creativity, if it is perceived by the individual as controlling or constraining. However, “synergistic extrinsic motivation,” which is the use of externally derived incentives to enhance existing intrinsic motivation, can be a powerful tool ( Amabile, 1993 ). For example, informational feedback that provides direction on how to make progress or improve performance can support intrinsic engagement in the task.

The fourth component, the external social environment (e.g., the work environment in an organization) influences each of the three internal components ( Amabile, 1983 , 1993 , 1996 ). Domain-relevant skills can be influenced by supports for learning, including formal training and on-the-job opportunities for gaining new skills. Creativity-relevant processes can be influenced by training in idea-generation techniques and the development of thinking skills through observation of and collaboration with creative colleagues ( Scott, Leritz, & Mumford, 2004 ). Studies of learning curves ( Epple, Argote, & Devadas, 1991 ) show that the more we use skills, the more skilled we become. An environment that supports the process of creativity, rather than the outcome, allows people to practice and learn both from and for the creative process.

Recent research suggests that creativity-relevant processes can also be influenced by events in the work environment that cause positive or negative affect ( Amabile, Barsade, Mueller, & Staw, 2005 ; Amabile & Mueller, 2008 ). Of all three components, however, task motivation is the most strongly and immediately influenced by the work environment. When the environment supports autonomy and exploration of challenging, meaningful work, intrinsic motivation increases. When the environment is constraining and the work is perceived as meaningless, intrinsic motivation decreases ( Ryan & Deci, 2000 ).

The four creativity components all contribute to the outcome of any creative process an individual undertakes—whether that process is as minor as tweaking a company’s logo or as major as starting a new venture. The creative process encompasses stages which, although distinct, do not necessarily follow a straightforward sequence ( Amabile, 1996 ). However, for simplicity’s sake, the stylized sequence can be described as follows: (1) problem or opportunity identification; (2) preparation; (3) idea generation; and (4) idea evaluation and implementation ( Amabile, 1983 ).

The initial stage of the creative process, problem identification, is accomplished by the difficult task of challenging assumptions ( Amabile, 1996 ; Piaget, 1966 ). It is facilitated by cultivating the intrinsic motivation to take risks and explore the world—two behaviors that are particularly important for entrepreneurship. In Stage Two, preparation, knowledge, and resources are gathered from multiple sources; the purpose of this stage is to acquire relevant information before generating solutions to the problem ( Amabile, 1996 ). Reinventing the wheel is not a useful exercise for entrepreneurs. In Stage Three, idea generation, the newly gathered information is combined with existing knowledge to generate new connections and create new solutions. However, not all of these new ideas will be valuable or acceptable. The fourth stage of the creative process is idea evaluation and implementation—the evaluation of ideas in terms of the optimal level of novelty and appropriateness to meet the initial goal ( Amabile, 1996 ). In the arts, the appropriateness criterion is met when the work of art is expressive of intended meaning. In business, however, appropriateness equates to usefulness for customers. For entrepreneurs, it is especially important that the ideas be truly useful.

The three components of creativity—domain- relevant skills, creativity-relevant processes, and task motivation—have differential importance at the different stages of the creative process, depending on the level of new learning or novel cognitive processing required in the activity at that stage.

Domain-relevant skills play a prominent role at the second and fourth stages, where knowledge is acquired (Stage Two) or applied (Stage Four) in a relatively straightforward way. For example, for individuals in entrepreneurial ventures, knowledge about the domain and technical skills provide a way to assess the current business environment and evaluate the feasibility of newly generated ideas. Creativity-relevant processes are more prominent in the third stage. Developing novel ideas requires complex cognitive processing and breaking mental sets to view existing problems in new ways.

Of course, both domain skills and creativity skills are needed at all stages of the creative process, but they become more or less important depending on the level of uncertainty inherent in the stage. For example, knowledge of the domain space could reduce the time and effort exerted in the Stage One (problem identification). An entrepreneur who is familiar with the needs of customers and potential customers should be able to more easily identify unmet needs or avoid trying something that has already been shown not to work.

Finally, intrinsic motivation is most important in the first and third stages, when a drive to engage in unfettered exploration is most valuable. The componential theory of creativity emphasizes the importance of stage-appropriate motivation ( Amabile, 1997 ): intrinsic motivation is more crucial at Stages One and Three, when the most novel thinking is required, but synergistic extrinsic motivation can be useful at the more algorithmic stages (Stages Two and Four).

In the remainder of this chapter, we integrate research on creativity, learning, and entrepreneurship to delve more deeply into each stage of the creative process. Using examples from successful and struggling entrepreneurial ventures, we explore the creative behaviors that are most needed at each stage, the learning behaviors that support creativity at each stage, and the environmental factors that are most conducive to the necessary motivational states. Throughout, we discuss implications for leading entrepreneurial ventures.

Stage One: Problem Identification

The first stage of the creative process is problem identification, which is directed toward making sense of the problem or opportunity at hand ( Amabile, 1997 ). The goal of this stage is to construct the problem in a way that increases the chances of generating novel, workable solutions. In entrepreneurial settings, opportunities may seem obvious after the fact—although no one had seized them previously. For example, Nike founder Phil Knight, an avid middle-distance runner in school, had a coach who was obsessed with finding great shoes for his team ( Wasserman & Anderson, 2010 ). Knight knew that he wanted to provide runners like himself with shoes that were comparable in quality to Adidas but much less expensive. Knight’s domain-relevant knowledge made the opportunity in the market clear to him. His innovation lay in figuring out how to make that idea a reality.

Alternatively, an entrepreneur may spend intensive time and effort figuring out the problem that needs solving. Creativity-relevant processes, such as challenging assumptions and making novel connections, can help entrepreneurs discover new problems. Southwest Airlines challenged the assumption that consumers make air travel decisions based on service and amenities. Solving the problem—by lowering cost at the expense of amenities—was then a matter of execution.

Problems can also be “discovered” by reframing an existing situation. Reframing has the power to transform difficult problems into exciting opportunities ( Dutton, 1992 ). Jeff Housenburg, CEO of Shutterfly, attributes his success to reframing Shutterfly’s service model. The company transformed from a photo finishing service to a vehicle for publishing personal photo albums. The reframing lay in viewing the company as one that sells memories, not products. This new way of envisioning the use of an existing product enabled Shutterfly to develop creative solutions for a much wider, nonprofessional market base. In Stage One of the creative process, reframing presents an old or familiar problem as a newly discovered one.

Desired Behaviors for Problem/Opportunity Identification

Whether the entrepreneur is discovering a new problem or reframing an existing one, certain behaviors help him or her to be effective during this stage of the creative process. These behaviors include thinking broadly; considering the passions, pain points, and nagging problems of oneself and others; scanning the environment widely ( Perkins, 2001 ); staying alert to things that don’t fit and needs that aren’t met; amplifying weak information signals that others may miss ( Ansoff, 1975 ); and abandoning safe, taken-for-granted assumptions ( Argyris, 1976 ).

As an example, consider the entrepreneurial venture Sittercity, an online babysitter–parent matching service ( Wasserman & Gordon, 2009 ). Sittercity was founded in Boston in 2001 by Genevieve Thiers, then a college student. By 2009, Sittercity had moved to Chicago, and its large, successful program in cities throughout the United States led to equity financing of $7.5 million. Throughout the growth of this company, Thiers engaged in many iterations through the creative process—each time, identifying a problem or opportunity, preparing to solve it, generating ideas, validating her chosen ideas by actually implementing them, and assessing results.

Thiers had a long history of babysitting—first for her six younger siblings, then for neighborhood children, and eventually for families who hired her during her college years. Moreover, she loved it; she had a passion for meeting new people, getting out of her own home, and eating food from someone else’s kitchen. Her initial problem identification grew from paying attention to her own unmet needs and nagging problems. About to graduate from college, she said, “I didn’t know what I was going to do with my life, but I wanted to do something big—not be a nine-to-five employee” ( Wasserman & Gordon, 2009 , p. 2). Thus, the initial problem was to create an unusual (entrepreneurial) career path for herself. This realization heightened Thiers’ alertness to unconventional opportunities, led her to think broadly about her future, and amounted to abandoning the safe, taken-for-granted assumption that she would stay in a “regular” job—even as she accepted a full-time job at IBM after college.

Three days before college graduation in 2000, Thiers identified the specific opportunity that would lead to the founding of Sittercity. She did so by picking up on a weak signal that most other people would have completely missed. She was posting flyers for an upcoming musical event, and she found herself helping a very pregnant woman post flyers advertising for a mother’s helper. In that moment, she saw the unmet need that countless parents have of finding a suitable babysitter, and she wondered if it would be possible to list all of the babysitters in the country in one place. To her, this could be the “big” undertaking she had been looking for. She worked on her business idea for many months, while also working full-time at IBM, and launched the Sittercity website in September 2001.

By March 2002, the number of parents and sitters registered on the site had begun to grow, and Thiers—still alert to weak signals and things that didn’t fit—noticed that a few parents were not from Boston; they were from New York or Cleveland. Puzzled, she inquired, and discovered that they were commuters to Boston from those cities who had heard about Sittercity from their work colleagues and were hoping to find sitters in their hometowns. This identified another opportunity: expand Sittercity to new locations.

Learning Behaviors that Support Stage One

The goal of the first stage of creativity is to spot new problems and opportunities. This requires a difficult shift in the deeply rooted underlying assumptions that drive the routine behaviors that make up most of our day. Learning these routines is often effortless; changing them is not. The difficulty arises, in part, because routines are extremely valuable. In their classic work on organizations, March and Simon (1958) provided a description of the power of routines for accomplishing the well-defined tasks that build organizational capacity. Routines increase efficiency by reducing uncertainty, variability, and the time it takes to make decisions. Once established, routinized behaviors, which March and Simon termed “programs,” are launched by a particular stimulus that can occur in many different situations. It is the routine, not the situation, that guides behavior ( Levitt & March, 1988 ). The nuances of the situation are suppressed in favor of the expectations of the routine ( Nelson & Winter, 1982 ). Routines, whether examined at the organizational or the individual level, are sticky—so sticky that adult learning theorists have long argued that breaking routine thinking requires a triggering event ( Dewey, 1938 ; Marsick & Watkins, 2001 ; Piaget, 1966 ).

This is particularly problematic for creative entrepreneurs because they must not only break their own routines but also convince investors and customers to try something new. Certain learning behaviors can help to activate routine-breaking triggers. Adopting an open systems view ( Senge, 1990 ), seeking feedback ( Edmondson, 1999a ), and maintaining a learning mindset ( Dweck, 2006 ) can all serve the creative behaviors of Stage One. An open systems view considers how all elements of a system interact, as well as the interactions among related systems. Seeking feedback means, among other things, looking for disconfirming information at the risk of proving favored ideas false. Similarly, a learning mindset is open to new possibilities and able to challenge existing assumptions. For our purposes, the key element is that individuals with a learning mindset are better able to extract learning from situations; they have “learned how to learn” in just about any setting ( Feuerstein & Rand, 1974 ).

Developing an open systems view of a given domain supports the creative behavior of thinking broadly. In his seminal work on organizational learning, Senge (1990) reveals how prone even top executives are to viewing only their piece in a system of interacting dependencies. By seeking to understand how a given product or service relies on, and is relied upon, by consumers, suppliers, competitors, and industries, entrepreneurs may be able to identify the gaps that trigger great ideas and the problems that are not being addressed by the current business environment.

Confirming or disconfirming hunches can be facilitated by expanding the scope of feedback beyond one’s own internal states and seeking help from others both within and outside the relevant domain. The active seeking of feedback is a necessary part of the learning process ( Edmondson, 1999a ) and can save valuable time by allowing the problem-solver to abandon infeasible ideas early ( McGrath, 2001 ) or by triggering new connections that identify unmet needs. Internal feedback can alert us to the weak signals missed by others and give us a sense of what doesn’t fit, while openness to external feedback helps us expand our thinking and develop a learning mindset.

A learning mindset is needed to engage in the creative behavior of scanning the environment widely. It raises one’s perspective above the routines themselves to adjust embedded associations and reframe the situation ( Kegan, 1982 ). This embracing of uncertainty, at the expense of the comfort of certainty, is a hallmark of human learning ( Piaget, 1966 ). As demonstrated in the example of Southwest Airlines, entrepreneurial opportunities often arise because current products and services rest on specific assumptions about the customers that belie their actual needs and desires. Getting into the practice of surfacing, and challenging, underlying beliefs is a learning tool that enables entrepreneurs to define the ultimate goal of their creative process.

Work Environment Influences at Stage One

All work behavior is motivated either intrinsically or extrinsically, and usually both ways ( Amabile, 1997 ). As we have noted, work motivation is strongly affected by the social environment. The social-environmental conditions that entrepreneurs seek for themselves and establish for their first employees can determine whether, and how, people in the entrepreneurial organization will be motivated to engage in the learning behaviors necessary at each stage of the creative process.

Intrinsic and extrinsic motivation are often considered opposite constructs, with extrinsic motivation undermining intrinsic. Indeed, decades of research in psychology, organizational behavior, and economics suggest that intrinsic motivation and complex performance (like creativity) diminish when people are focused primarily on extrinsic goals, such as tangible rewards and deadlines, or extrinsic constraints, such as restrictions on how a task may be done ( Deci & Ryan, 1980 ; Frey & Palacios-Huerta, 1997 ; Lepper & Greene, 1978 ; see Deci et al., 1999 , for a review).

However, an accumulating body of research supports a much more nuanced view ( Amabile, 1993 , 1996 ; Amabile & Kramer, 2011 ). It is true that extrinsic forces that lead individuals to feel controlled generate nonsynergistic extrinsic motivation, which does undermine the intrinsic desire to tackle a problem for its own sake. But extrinsic forces that support individuals’ ability to engage in problem solving or opportunity identification, such as rewards that provide resources or recognition that confirms competence, can create the synergistic extrinsic motivation that actually adds to intrinsic motivation. Whether this type of extrinsic motivation will support creativity depends on the stage of the creative process; this is the concept of stage-appropriate motivation mentioned earlier.

According to the componential theory of creativity ( Amabile, 1983 , 1996 ; Amabile & Mueller, 2008 ), a more purely intrinsically motivated state is conducive to Stage One, when problems to be solved and entrepreneurial opportunities to be pursued are being identified. Intrinsic motivation fosters the expansive thinking, wide exploration, breaking out of routines, and questioning of assumptions that this stage requires.

Ideally, the work environment at this stage will present individuals with puzzles, dilemmas, problems, and tasks that match their interests and passions, thus maximizing the probability that intrinsic motivation will remain high throughout the process ( Csikszentmihalyi, 1990 ). For example, from a young age, Phil Knight was passionate about running and gear that optimized the running experience; he sought out environments in which he could explore this domain. Whatever the domain, the environment should allow a high degree of autonomy ( Gagne & Deci, 2005 ), whereby the person feels free to follow new pathways and need not fear breaking out of established routines—whether formalized or implicit. There should also be an optimal level of challenge, in which work demands are neither well below nor well above the person’s current skills ( Csikszentmihalyi, 1997 ); it is at optimal levels of challenge that learning is most likely to occur ( Bandura, 1993 ). Ideally, the task or problem will have sufficient structure so that the person can engage with it productively but not so much structure that there is little room for anything surprising.

Within an existing organization, leaders at the highest level can engender the proper environment for Stage One by voicing support for entrepreneurial, creative, innovative behavior and then showing that support through actions that reward and recognize good new ideas—even when those ideas ultimately fail ( McGrath, 2001 ). In fact, one of the most effective means for triggering the learning described in the previous section is to laud the value of good-effort failures that naturally arise whenever people try radically new ideas. Leaders at all levels in an organization, down to immediate supervisors, should talk about the importance of creativity—and then walk the talk.

Lower-level leaders can play a particularly important role at Stage One by matching people to projects on the basis of not only their skills and experience but also their interests ( Amabile et al., 1996 ). Moreover, supervisors can greatly increase the probability that people will engage effectively with new problems to solve (and find hidden opportunities) if they put two structural supports in place. First, providing clear strategic direction toward meaningful goals lends purpose to the work ( Latham & Yukl, 1975 ); coupling that strategic direction with operational autonomy allows flexible exploration ( Ryan & Deci, 2000 ). Second, in forming teams to collaborate on a creative task, leaders should ensure a substantial degree of diversity in perspectives and disciplinary backgrounds among the members and then provide the teams with support for communicating effectively across their differences ( Mannix & Neale, 2005 ). With these structural conditions in place, people are more likely to question their taken-for-granted assumptions in deciding how to tackle the task before them.

Conversely, managers undermine intrinsic motivation and creativity if they establish a work environment that is marked by an emphasis on the status quo and on extrinsic motivators such as unrealistic deadlines ( Amabile, DeJong, & Lepper, 1976 ) and rewards that are dangled like carrots to induce employees to perform. And, although competition with other organizations can fuel intrinsic motivation by lending additional meaning to the work, win-lose competition within the organization can sap intrinsic motivation ( Deci, Betley, Kahle, Abrams, & Porac, 1981 ). Finally, rigid status structures in the organization can lead employees to consciously or unconsciously believe that certain assumptions may not be questioned and certain problem domains are off-limits to them ( Detert & Edmondson, 2011 ).

Startup entrepreneurs have the advantage and challenge of establishing their own work environment. As such, they should be conscious that they are developing long-term practices for the fellow members of their founding team and their earliest employees. Generally, the first employees are intrinsically motivated because there is little pecuniary reward at the outset. Even in the earliest days of a firm, founders can model and encourage the sort of freewheeling exploration and questioning of assumptions that characterize Stage One. They can look for partners and initial employees who are also passionate about the undertaking, and they can focus everyone’s competitive instincts on external entities rather than internal colleagues.

Stage Two: Preparation

Preparation in this context is the acquisition of knowledge within a relevant domain. It is accomplished by gathering information and resources to understand what has and has not been done to address the defined problem. Gaining a deep understanding of the problem space allows entrepreneurs to seize opportunities as well as sharpen the creative goal. Nike founder Phil Knight’s travels through Japan, including many visits to sporting goods stores, allowed him to identify a Japanese company and brand that could help bring his idea to fruition. Although he still had not actually established his own company before he traveled, his growing understanding of the culture enabled him to make a favorable deal with his targeted Japanese manufacturer based on a cold call.

For individuals who have a deep familiarity with the problem space, this stage can be a trivial one. An important exception to consider is that such individuals may face a different sort of challenge in the preparation stage: unlearning some of their familiar cognitive pathways and re-examining their assumptions. Experts who engage in creative endeavors can be stifled by the deeply ingrained mental representations they hold ( Runco, 1994 ), which may lead them to think they already know the answer.

Desired Behaviors for Preparation

The behaviors that can be most conducive to the preparation stage are, in some ways, distinct from the desired behaviors for problem/opportunity identification. They include perseverance ( Dweck, 1986 ), searching for and incorporating a wide range of information, and discarding preconceived notions as warranted by new information ( Piaget, 1966 ).

In her many iterations through the creative process to build Sittercity, Genevieve Thiers engaged in a range of preparation behaviors. Although she could not have known it at the time, her years of babysitting, including the junior year abroad at Oxford University, when she elected to be both a student and a nanny, served as excellent preparation. The wide range of information she gained about parents and their constraints, needs, and concerns served her well as she founded her company. This knowledge formed the broad foundation of domain-relevant skills that Thiers could immediately call to mind and upon which she built as she worked intensely on her startup.

Excited about her initial opportunity identification just before college graduation, Thiers did an Internet search to see if anyone was already offering such a service. Although she found websites for Babysitters.com and Sitters.com, neither was an operating business. In the summer of 2000, after Thiers had graduated from college and started her job at IBM, she spent her free time writing a business plan for Sittercity. She searched for relevant information during this phase, drawing on resources at the Boston office of the US Small Business Administration (SBA), and incorporated that information into her approach to preparing the business plan. By the fall of 2000, after Thiers had participated in three meetings with potential investors arranged by the SBA, she discarded her preconceived notion that external funding was the route to starting this business. She persevered, searching for other ways to fund Sittercity.

As new problems and opportunities arose, Thiers repeatedly dove into information gathering. As described earlier, when she noticed the puzzling fact that a few parents from outside of Boston were signing up for her service, which was then available only in Boston, she spent time talking with them to discover their underlying motivations. Later, when Sittercity’s major competitor, Babysitters.com, launched its site, she diligently monitored that site, as well as others that later appeared, to keep herself prepared to deal with competition.

An important resource on which Thiers drew in preparing to grow her business was her boyfriend, Dan Ratner, whom she met a few months after launching Sittercity. Ratner, although only a few years older than Thiers, had already been involved in more than one startup. His entrepreneurship experience, as well as his technical expertise, served as broad and deep sources of information and assistance for Thiers in the ensuing years. Eventually, in 2005, Ratner joined Sittercity as vice president. Thiers was CEO.

Learning Behaviors That Support Stage Two

The second stage of creativity can be viewed as adopting or calling up the routines of the domain; as such, it is subject to all the advantages and drawbacks of human minds as incredible learning machines. For experts, the second stage of creativity can be a trap when the routines of the domain become mental ruts ( Levitt & March, 1988 ). On the other hand, knowing a subject matter can free up cognitive resources to engage with it in multiple ways. This freedom is not typically available to novices during the learning process ( Bransford, Vye, Stevens, Kuhl, Schwartz, Bell, & Meltzoff, 2005 ). One of the great paradoxes of creativity is that expertise can be both a great source of and a substantial barrier to creative thinking. What makes the difference is whether the expert retains a learning mindset and continues to learn from the situations she encounters ( Feuerstein & Rand, 1974 ).

Novices face different challenges at Stage Two. The learning process is generally a social one, situated in a specific context ( Vygotsky & Cole, 1978 ). Studies on how novices become full participants in a community of practice have demonstrated that learning best occurs when individuals engage in the co-construction of knowledge in that community ( Lave & Wenger, 1991 ). As demonstrated in the partnership of Thiers and Ratner to build Sittercity, working with practiced professionals can help novices process vast amounts of new information in meaningful ways.

In the first stage of creativity, there is possible discomfort from surfacing deeply held beliefs and challenging the assumptions embedded within routines. In Stage Two, there can also be discomfort in the effort it takes to learn something new. For adults, context is particularly important in enhancing the intrinsic motivation needed to stay actively engaged in the often arduous learning process. For example, informal learning through problem solving ( Marsick & Yates, 2012 ) acquired in the “midst of action” is specific to the task at hand ( Raelin, 1997 ). This action learning is potent because it addresses challenges of transfer, which are common when employees attend external trainings and then struggle to apply what they’ve learned back in their job context. Action learning means paying particular attention to learning while actually doing one’s work.

In her seminal work on achievement-oriented behavior, Dweck (1986) observed that children who focused on learning something new had better outcomes and were more resilient to failure than those who focused on demonstrating what they already knew. Learning-oriented children had an implicit theory that they had the ability to increase their intelligence through effort. In contrast, performance-oriented children felt that intelligence was fixed, so they focused their efforts on demonstrating what they already knew. A learning orientation enables children to be resilient to the failure inherent in the learning process. It also means they are more likely to take on challenges and seek feedback because these activities are less threatening to them. Learning orientation is related to the learning mindset discussed earlier in that both connote an openness to exploring new possibilities. However, they are distinct constructs. A learning mindset is developed over time and describes the ability of individuals to find the lesson in any situation—learning is a natural process of how they interact with the world. A learning-oriented individual associates effort with intelligence and will therefore approach difficulties and challenges with the belief that they can be overcome. They will learn if the situation requires it, but they will not necessarily reframe situations as learning opportunities on a consistent basis.

Dweck’s (1986) work has been extended to organizations, with dozens of studies consistently demonstrating that a learning orientation is positively associated with better learning and performance outcomes ( Payne, Youngcourt, & Beaubien, 2007 ). Organizational culture can help individuals develop a learning-oriented or growth mindset by embracing risk-taking in learning new skills, emphasizing challenge and development over success, and giving preference to deep learning over fast learning ( Murphy & Dweck, 2010 ).

Work Environment Influences at Stage Two

Synergistic extrinsic motivation, which uses externally derived incentives to enhance existing intrinsic motivation, can be particularly useful at Stage Two, because thorough preparation for idea generation can be a tedious affair. Particularly for people who are novices in a domain, the learning required is often vast and the time commitment is often high—meaning that intrinsic motivation alone may be insufficient to fuel behavior ( Amabile, 1997 ).

The motivation for learning is more likely to be maintained if people perceive a sense of progress ( Amabile & Kramer, 2011 ). And progress in gathering and assimilating information is more likely if the work environment has a sufficient level of two kinds of resources: relevant information and people who are both willing and able to share their tacit knowledge about the problem domain ( Frey & Osterloh, 2000 ). In established organizations, managers can ensure the availability of these resources by supporting the establishment of accessible, useful information management systems; by finding new ways for employees to access new sources of information; and by structuring the organization to facilitate smooth coordination and cooperation among individuals and groups. Moreover, tacit knowledge available to problem-solvers within an organization grows dramatically when employees with diverse sets of skills, backgrounds, and experiences are brought on board ( Woolley, Gerbasi, Chabris, Kosslyn, & Hackman, 2008 ).

Startup entrepreneurs can support their own progress in gaining knowledge by building and accessing wide social networks of individuals with potentially relevant, yet diverse, perspectives. Analysis of social networks shows the power of cultivating and maintaining connections in peripheral, but related, domains ( Granovetter, 1973 ). These “weak ties” provide ways of linking previously disconnected groups and filling in structural holes at the nexus of potential for the innovative recombination of ideas ( Burt, 1995 ). Often, the information-rich individuals are venture capitalists or other investors. Sometimes, they are other entrepreneurs—as in the innovation hotbed known as Silicon Valley (where venture capitalists and angel investors also abound). Not only can new opportunities be identified (Stage One) through even casual conversations in such settings, but much useful—and unique—information can be learned.

Managers can foster the synergistic extrinsic motivation needed in Stage Two with occasional rewards and recognition that confirm individuals’ competence as they struggle to learn ( Bandura, 1993 ). A sense of progress once again comes into play. Self-efficacy increases as individuals experience progress towards goals, even when the goals are externally set, as is often the case in learning situations. The progress is a signal of improvement, which furthers motivation ( Elliott & Dweck, 1988 ).

Ideally, managers will also support intrinsic motivation by enabling people to pursue new areas that have piqued their curiosity ( Lepper & Henderlong, 2000 ). For example, some organizations—most famously, 3M and Google—give some of their employees the gift of time by allowing them to spend approximately one day per week working on any project they wish. These self-motivated pursuits can involve extensive exploration into new domains of knowledge that can, ultimately, serve as superb preparation for generating new and valuable ideas. Google Scholar is one of many products that resulted from initial “free time” work.

Work environment elements to avoid include an atmosphere of threatening critical evaluation connoting incompetence ( Dutton, 1992 ) and constrained communication in the work group or across the organization ( Detert & Edmondson, 2011 ). To be sure, these elements can be damaging at any stage of the creative process. But they can be particularly harmful when people are venturing into arenas where they have much to learn and must adopt a vulnerable dependence on others with greater expertise.

Stage Three: Idea Generation

Idea generation, the third stage of the creative process, is the one that most commonly comes to mind when people think of creativity. The goal of Stage Three is to produce high-quantity and high-quality ideas. Generating a large number of new ways to combine existing concepts increases the probability of finding one that works ( Simonton, 1999 ). Creativity-relevant processes are the most used, and the most useful, creativity component at this stage ( Amabile, 1988 ). They depend on the interaction of flexible cognitive processes (including deliberate techniques for creative thinking), energetic work styles, and nonconforming personality traits.

Brainstorming ( Osborn, 1953 ) and breakthrough thinking ( Perkins, 2001 ) are two of the many techniques that have been devised to facilitate the flexible cognitive processes required by this stage. The goal of brainstorming is to unleash as many ideas as possible. It requires that all ideas receive at least initial exploration, with brainstorming groups ideally designed to reduce concerns about criticism by the self or by others. Research has shown that the quality of ideas produced during brainstorming can be increased if individuals develop the ideas alone, then openly discuss all of them in a group session ( Diehl & Stroebe, 1987 ). Breakthrough thinking involves seeking and embracing different ways of looking at the problem and turning the difficult aspects of the problem to one’s advantage. For example, a company with slow elevators installed mirrors in the lobby so that the previously painful wait time became an advantage to riders, who want to “spruce up” on their way to their appointments ( Byrnes, 2005 ).

Desired Behaviors for Idea Generation

The most prominent behaviors involved in successful idea generation can be described as various forms of mental gymnastics—taking unusual leaps in perceiving the world and combining cognitions in new ways ( Cropley, 1967 ; Getzels & Csikszentmihalyi, 1967 ). These behaviors include seeing multiple perspectives, exploring new cognitive connections, embracing complexity, tolerating ambiguity, and proliferating ideas.

After her initial opportunity identification and preparation, Genevieve Thiers entered the idea-generation phase by first coming up with a name for her business. Considering the essentials of what she wanted to do (i.e., helping parents in her city find a sitter), she considered various verbal connections and hit upon the new linguistic combination, “Sittercity.” As Thiers developed her business concept, she considered a number of different ideas for how to set up the Sittercity service. She knew that there were existing agencies to help parents find just the right babysitter, but those were expensive and time-consuming. She began focusing on how to provide such a service more cheaply and efficiently, but still with high quality. It was clear from her personal experience in this domain that parents were much more likely to hire a sitter who was a college student; therefore, she knew that she would require all sitters registered on her site to be currently enrolled college students. It was also clear to her that, even when an agency was involved, parents would want to interview potential sitters. When expanding her Sittercity business into new geographical areas, Thiers generated ideas for many different ways to entice parents to join. She offered movie tickets for referrals, interacted with local mothers’ groups, went on talk shows, and offered “SpeedSitting” events to remove the barrier of unfamiliarity with a new sitter.

Throughout the development of her business, Thiers generated a broad range of ideas by considering her complex multiple goals and, perhaps most importantly, by keeping the perspective of parents and the perspective of her business needs in mind simultaneously.

Learning Behaviors That Support Stage Three

Because the creative goal has been defined, Stage Three is a more targeted version of the activities that occurred at Stage One; like that earlier stage, it requires challenging assumptions and breaking out of cognitive routines. Theories of transformational learning ( Mezirow, 1990 ) lend insight into learning behaviors that reinforce the creative behaviors of seeing multiple perspectives, exploring new connections, and embracing complexity. Transformational learning is distinct from technical learning—the acquisition of knowledge and skills described in Stage Two. Technical learning, although potentially challenging and fruitful, occurs in known spaces in answer to technical problems. In contrast, transformational learning, the highest level of learning ( Bateson, 2002 ), occurs in response to adaptive challenges—the difficult, frustrating problems that arise from unpredictable breaks in routine. Globalization provides many examples of these dilemmas as leaders struggle to understand, manage, and inspire people from different cultures, with different values, needs, and priorities ( Molinsky, 2013 ). Transformational learning in creative endeavors means seeking information that is not only new to the problem-solver but novel in the given setting. Adapting ideas from a different domain is a key source of creative concepts, particularly for entrepreneurial ventures. Certainly, neither the Internet nor babysitting were new when Thiers developed Sittercity. The creative act lay in using the power of one to serve an unmet need in the other.

Although Thiers worked alone at that point, this sort of recombination can be served by engaging multiple actors from different disciplines to work together toward a common goal. For example, in a study of medical teams in Helenski, Engestrom (1999) described how personnel from different sites, with different levels of experience and authority, were able to cross boundaries to redesign the children’s healthcare model. Individuals had to transform how they interacted across both horizontal and vertical boundaries to gain multiple perspectives, make new connections, and embrace the complexity of understanding the experience of care for children within their system.

Work Environment Influences at Stage Three

Stage Three, idea generation, involves divergent thinking to produce a large number and wide variety of candidate ideas. Intrinsic motivation is particularly important at this stage, and extrinsic motivation can be particularly detrimental, because the individual problem-solver must become deeply engaged in the problem itself, exploring the possibilities that arise from new combinations of the knowledge elements garnered in Stage Two.

That sort of deep engagement, sometimes experienced as “flow” ( Csikszentmihalyi, 1990 ), is more likely when people have work that is optimally challenging—neither so difficult that it is completely beyond their capabilities nor so easy that they are bored. The implication is that managers must allow for sufficient preparation in Stage Two (or assign creative problem-solving projects to individuals with the optimal level of existing skills) so that the individual is able to generate truly novel ideas that are at least potentially useful.

One of the most supportive things that managers can do at this stage is, essentially, to leave people alone. Autonomy, a sense of control over one’s own work and one’s own ideas, is central to the divergent-thinking mindset. Research on the exploratory phases of innovation processes has shown that autonomy in both goals and supervision can lead to better team outcomes ( McGrath, 2001 ). In some cases, this can require physically separate spaces for work. For example, Steve Jobs famously secluded his group at Apple as it was creating the first Macintosh; he even flew a pirate flag over the building, as a symbol of the group’s difference from the rest of the organization.

This type of autonomy allows for creative people to feel like originators of their work ( De Charms, 1968 ), a belief that may be particularly important for individuals who are drawn to entrepreneurship. Unlike more traditional organizations, entrepreneurial ventures involve high levels of risk, but they often afford more freedom to explore and experiment. Ideally, these opportunities will be explicitly valued by entrepreneurial leaders. They can accomplish this by clearly signaling that calculated risks are encouraged, even though failure will often result. Entrepreneurial leaders can also seek out the “small wins” ( Amabile & Kramer, 2011 ) that are inherent in creative ideas by actively recognizing elements of ideas that could be applied to the end product, even if the idea as a whole must be abandoned; this orientation toward learning from failure is crucial.

While allowing autonomy, leaders at all levels should be sufficiently involved to encourage the generation of a range of new ideas, from the incremental to the radical. Moreover, in contemporary business, most problems and opportunities are sufficiently complex that few of them can be solved or pursued by lone individuals—whether entrepreneurs or inventors within established firms. Ideally, the collective intelligence ( Woolley, Chabris, Pentland, Hashmi, & Malone, 2010 ) of committed individuals with deep, diverse expertise will have been leveraged to come up with ideas to the identified problem. Working autonomously does not necessarily mean working alone.

To keep the engine of new ideas cranking long enough for really good ones to emerge, there must be an atmosphere of openness inside the organization, whether it is a three-person startup or a 50,000-person conglomerate. The need for openness in innovation has even redefined the boundaries of what it means to be a firm. Many organizations now draw on external expertise and knowledge to supplement existing research and development efforts ( Chesbrough, 2006 ; Lakhani & Panetta, 2007 ). There should be mechanisms for considering new ideas by which leaders and colleagues welcome new solutions and hear out new ideas. The work environment should be such that, although not every idea can be accepted, every idea will be respected enough to receive a fair hearing ( Edmondson, 1999a ).

To best facilitate Stage Three work, managers should keep the emphasis on intrinsic motivation and, to the extent possible, avoid extrinsic motivators. As damaging as an environment of harshly critical evaluation can be at Stage Two when people are trying to learn new knowledge and skills, it can be even more harmful at Stage Three when people are trying to “be creative” in the purest sense of the word. Similarly, competition with coworkers who could have valuable information or useful perspectives can undermine intrinsic motivation ( Deci et al., 1981 ); moreover, it can cut off access to important stimuli for idea generation. Time pressure can operate in this fashion, too. When people are placed under deadlines for solving complex problems, they will feel controlled, and their intrinsic motivation will be undermined ( Gardner, 2012 )—especially if they don’t understand and accept the urgency of the problem. At a practical level, unrealistic deadlines don’t allow people the time to come up with many ideas ( Amabile et al., 1976 ).

Finally, Stage Three thinking is particularly vulnerable to bureaucratic red tape and rigid routines—which can crop up quickly even in relatively young companies. Ideally, the work environment will afford people easy access to materials, colleagues, and information that could be helpful in stimulating divergent thought processes ( Amabile, 1996 ). For example, at the renowned design firm IDEO, people expect that they may be called on to participate in brainstorming sessions for projects that are well outside their usual areas of expertise, in the hope that they may stimulate the process through their “outsider” perspectives ( Hargadon & Sutton, 1997 ). Indeed, anyone in the firm feels free to ask anyone else to participate, and it is considered an honor to be asked.

Stage Four: Idea Evaluation and Implementation

The fourth stage of entrepreneurial creativity includes two related but distinct elements—idea evaluation and initial idea implementation. (Full implementation of an idea is, strictly speaking, innovation, not creativity [ Amabile, 1988 ].) Consideration of idea implementation drives the efforts of idea evaluation. The goal is to determine which of the newly-generated ideas is optimally novel and useful for implementation in the current business environment. Often, evaluation of ideas leads to the realization that the most novel idea is not the best fit for the current market situation, competitive situation, or level of resources available. Successful entrepreneurs have often adopted a “fast failure” approach, which gives quick and objective feedback to allow the entrepreneur to quickly evaluate many ideas. It is based on a rapid prototyping model that involves investment in trial and error. Many ideas are tested on a small scale before fully committing resources ( McGrath, 2001 ).

Stage Four is the stage at which ideas become reality, or not. Perhaps more prominently than any other, the fourth stage of entrepreneurial creativity is often marked by a return to earlier stages and trying again, with new understanding and sharpened criteria. The problem-solver could reconsider ideas from Stage Three that were not pursued, generate new ideas, back up to gather additional information, or even return to the beginning and re-conceptualize the problem or opportunity.

Interestingly, the evaluation of an idea’s novelty is usually quite straightforward. As long as the problem-solver prepared adequately enough, it is fairly easy to determine how different the idea is from what has been done before. It is the usefulness aspect of creative ideas that can present a greater analytical and practical challenge. No matter how new and potentially useful it might be, if a creative idea cannot be implemented within the current environment, it is simply not useful. This is evident in ideas that are “ahead of their time,” such as Leonardo DaVinci’s helicopter 1 or Charles Babbage’s 1837 analytical machine 2 . Both were amazingly well thought-out, novel ideas, but the technology, materials, and manufacturing processes were simply not available to bring the ideas to fruition—that is, to render them useful.

Even when the infrastructure exists to support a novel idea, it may not become reality because the organization, the industry, or the world may not be prepared to change to the degree required to adopt the new idea. The delay in the standardized use of seatbelts (first invented in 1885, implemented widely in the 1960s), and the lack of adoption of the metric system in the United States are examples of useful ideas that stalled because people were unwilling to change their habits. As these examples show, it is often difficult to determine a priori whether an idea will be within a given environment.

Desired Behaviors for Evaluation and Implementation

The demands of the fourth stage of entrepreneurial creativity require, again, a somewhat different set of behaviors from those required at earlier stages: realistically analyzing the potential of the various ideas, unbiased by passion for them; communicating the chosen idea clearly; non-defensively gathering feedback on the idea’s potential; and implementing the idea with a balance of speed and attention to crucial details ( Amabile, 1996 ; Dyer, Gregersen, & Christensen, 2011 ).

Encouraged by her SBA advisors in the summer of 2000, Genevieve Thiers fearlessly presented her business idea to potential investors. Unfortunately, in her own words, she got “laughed out of the room” ( Wasserman & Gordon, 2009 , p. 3). These investors saw the idea as little more than a babysitter’s club, not a serious business endeavor. However, rather than abandon the original idea, Thiers analyzed their reactions and realized that, as older men with grown children, they actually had less expertise in this particular marketplace than she did.

The feedback from these investors did, however, lead Thiers to non-defensively realize that she had to figure out how to get the service up and running without relying on investors. This led her to re-enter the creative process at the idea-generation stage. Choosing from the ideas thus generated, she recruited sitters by putting up posters in local colleges and holding recruiting events—including one at an all-female college that attracted 150 students. She held focus groups with parents to figure out their willingness to pay and, with Ratner, developed a streamlined payment transfer process.

Thiers worked tirelessly to implement her ideas quickly and assess their success as soon as possible. Ratner remarked that “she has limitless energy and a total lack of fear” ( Wasserman & Gordon, 2009 , p. 7). Nonetheless, Thiers also paid careful attention to details. She monitored competitors’ websites and adjusted her strategy as the competitive signals became clearer. For example, she realized how crucial it was to have information on her website about safety, parents’ primary concern when hiring sitters.

Because she had developed a system for carefully tracking Sittercity’s membership rates daily, Thiers got immediate feedback on the success of the ideas she implemented, enabling her to discard failed ones and quickly try something new. Moreover, when she got unexpectedly positive feedback—such as learning that media reporters, many of whom were mothers, loved her company—she moved quickly to build on the new opportunity. This led Thiers to send press releases to a wide range of media and to enthusiastically respond to requests for interviews.

Thiers’s fast failure approach of repeated iterations through problem/opportunity identification, preparation, idea generation, and evaluation/implementation allowed her to steadily and successfully grow Sittercity. In 2004, Time magazine named Sittercity one of the year’s “50 Coolest Websites.” In 2005, Sittercity received a $500,000 investment on favorable terms. By 2006, the company had grown to include over 100,000 sitters and 11,000 registered parents. By 2013, the company had a presence in more than 25 major cities in the United States and had expanded to include pet care, senior care, housekeepers, and tutoring services.

Learning Behaviors That Support Stage Four

The fourth stage of creativity is a culmination of the learning and creative efforts of the earlier stages. The more creatively the problem space was framed, the more expertise that was developed, and the more ideas that were generated, the better the chances of success at the evaluation/implementation stage. The learning behaviors at this final stage are more directed versions of those described in earlier stages. In particular, idea evaluation relies heavily on seeking, listening to, and applying feedback.

Not all feedback is equally useful. In a meta-analysis of external feedback in learning situations, Kluger and DeNisi (1998) found that feedback is more effective when it builds on previous iterations and provides correct information about the current trial ( Hattie & Timperley, 2007 ). Feedback on iterations can make a highly complex and challenging task more manageable because it scaffolds the learning process as that process moves along ( Eisenhardt & Tabrizi, 1995 ). It directs the process toward specific, challenging goals ( Latham & Yukl, 1975 ) without overwhelming individuals who are in the midst of learning how to better judge the value of each iteration. Even when these criteria are met, seeking feedback from others can often be difficult because individuals do not want to appear ignorant or admit to making mistakes ( Argyris, 1976 ; Edmondson, 1999a ). However, feedback from experimentation—that is, concrete feedback from the work itself—provides an objective source of learning for the problem-solver that can be easier to accept and discuss.

At times, even concrete feedback is ignored. Because of the effort and success experienced to even get to Stage Four, individuals are prone to cling to ideas that simply don’t work. The effects of this escalation of commitment are well documented ( Brockner, 1992 ; Sleesman, Conlon, McNamara, & Miles, 2012 ; Staw & Ross, 1989 ) in that, once time and resources (“sunk costs”) have been dedicated to a given course of action, individuals are vulnerable to “throwing good money after bad” ( Staw, 1981 ). The result can be an irrational commitment of even more resources, rather than “cutting one’s losses” ( Arkes & Blumer, 1985 ). The temptation to maintain a course of action is strong, even in the face of clear evidence that it is a bad idea.

For these reasons, it is crucial for problem-solvers, including entrepreneurs, to respond non-defensively to feedback from informed others. Critical reflection on “the basic premises that underlie thinking” ( Mezirow, 1990 ) has been shown to facilitate learning from feedback ( Argyris, 1976 ; Senge, 1990 ). Learning is described as a cycle of action and reflection ( Argyris, 1976 ; Edmondson, 1999b ), and entrepreneurial ventures, in particular, are action-oriented. The time and space for reflection can seem like time away from ‘real work,’ but it is important to take that time. O’Neil and Marsick (1994) described how, by embedding pauses for reflection within action, managers can gain insights into the problems and situations at hand, as well as their own learning patterns. This type of insight is needed at all stages of creativity, but with the high stakes involved in this final stage, it is especially important and useful here.

Work Environment Influences at Stage Four

As facilitative as passionate intrinsic motivation for the ideas can be at Stage Three, it can become something of a handicap at Stage Four. Here, individuals who came up with ideas need to dispassionately evaluate them with a critical eye, choose the most promising from among them, and champion that idea by communicating clearly and effectively with others in the organization ( Battilana & Casciaro, 2013 ). This requires a combination of intrinsic and synergistic extrinsic motivation.

Certain structural elements in the work environment support the effective evaluation and implementation of ideas. Clearly defined task structures and mechanisms, such as review procedures ( Zollo & Winter, 2002 ), can be detrimental at Stage Three but now become much more appropriate. They support competent performance, and a sense of self-efficacy that boosts synergistic extrinsic motivation, as discussed earlier. Providing access to information through structured knowledge processes can ensure coordination of activity and availability of critical information at the time of need ( Lee & Choi, 2003 ).

In all but the smallest startup organizations, more people are involved at Stage Four than at any of the earlier stages, to ensure that the selected ideas are fully vetted across multiple stakeholders throughout the organization. This means that wide cooperation and collaboration, helpful at each stage of the creative process, are essential at this stage. Often, that collaboration must be cultivated by keeping key individuals informed and involved throughout the process. In established organizations, these individuals may be colleagues in marketing and manufacturing; in entrepreneurial startups, they may be venture capitalists or other investors and partners. Buy-in of key stakeholders can make all the difference in whether promising ideas get implemented or wither away. And cultural norms within the organization make all the difference in determining how those individuals interact with the idea generators ( Russell & Russell, 1992 ). The most helpful organizational norms are those that combine an openness to new ideas with an expectation that every idea will be constructively challenged. This means that idea evaluators should objectively and dispassionately focus on the merits of the work itself (the pros and the cons) while avoiding harshly critical evaluation that implies incompetence on the part of the idea generators.

In the same vein, reactions to failure can make an important difference. Managers should expect that, as ideas are tested, a good number of them will be found to be infeasible ( Sitkin, 1992 ). If the culture is one that views such occasions as learning opportunities, rather than opportunities for blame, idea generators will maintain their motivation to cycle back through earlier stages of the creative process—or move on to other creative problem-solving projects, if the decision is made to end the current project ( McGrath, 2001 ). And such decisions do need to be made at times. Although it is harmful for decision makers to be wedded to the status quo, it is equally harmful for them to implement new ideas with insufficient regard to the organization’s capabilities and the realities of the marketplace.

Sufficient resources for testing and refining ideas are essential at this stage, and organizations need processes for securing and quickly deploying these resources. Other work environment factors can have a direct positive effect on intrinsic and synergistic extrinsic motivation. If there is a truly urgent need for a solution or workable idea, that realistic time pressure can actually augment intrinsic motivation—as long as the problem-solvers understand the urgency and are protected from extraneous demands so they can focus on the project ( Ohly & Fritz, 2009 ). Genuine urgency can lend great meaning to the work ( Amabile & Kramer, 2011 ). Sometimes that urgency arises because a competitor firm is attempting to create a product to capture the same market. Although internal competition among coworkers can undermine intrinsic motivation and creativity, competition with outside organizations can add to the cohesion and intrinsic motivation of problem-solving teams.

Most broadly, the organizational work environment should be one where people at all levels care about birthing and developing new ideas. Even contentious debate over the novelty, feasibility, and ultimate value of new ideas is preferable to bland apathy.

Future Directions

Both managers and researchers still have much to learn about entrepreneurial creativity. Our exploration of the process of entrepreneurial creativity suggests several avenues for future investigations into how learning can serve creativity and innovation. We believe that, just as open innovation has redefined organizational boundaries, the boundaries of workplace learning should be expanded. The entrepreneurial stories we presented demonstrate that new ideas and creative insights are not bound by time or location. Because learning involves making new connections to break from old ways of thinking, it can and does occur both within and outside of work. In fact, the learning that occurs outside of work may be more useful than the formal training and job development that occurs within the constraints of the workplace.

Organizations benefit, and should therefore support, learning outside of work, even when it is not related to the employee’s primary work role. Because learning outside of work is primarily voluntary, autonomous, and intrinsically motivated, only barriers of time and resources remain. These are barriers that organizations are designed to overcome. Research on non-workplace learning that enhances performance at work can help direct resources toward activities that naturally leverage intrinsic motivation in service of workplace innovation.

Future research on the joy of achievement also has the potential to leverage intrinsic motivation to serve entrepreneurial efforts in startups and established firms. Stages Two and Four of the creative process can be arduous, often involving repeated failure. Recent work on the power of progress, including incremental progress (small wins) ( Amabile & Kramer, 2011 ), has shown that progress in meaningful work is a powerful motivator and boosts positive affect. This means that arduous tasks can become self-motivating and satisfying if progress remains salient. Viewing creativity, learning, and performance through the lens of the progress principle could enlighten researchers and managers about how to enhance both employee work life and performance.

Other research could address environmental conditions that target cognitive rather than motivational processes. Triggering the creative process requires some change in thinking or behavior that allows entrepreneurs to notice things others miss and to realize the potential of new ideas. Future research could examine the types of triggers that tend to spark the entrepreneurial creative process, as well as behaviors in which entrepreneurs could engage to be more aware of triggers. For example, facilitated reflection has been shown to guide people toward challenging underlying assumptions ( Argyris, 1983 ; O’Neil & Marsick, 1994 ). This raises research questions about the possibility for self-directed reflection that might enhance the learning of individuals and teams and thus enable them to more readily break out of cognitive routines.

Individual differences may also play an important role in the processes we have explored. Given the strong psychological forces of cognitive routines and sunk costs, tremendous effort is required to begin and to continue the experimental mindset required for creative entrepreneurship. Although confidence enhances the likelihood of tackling transformational challenges, it may quickly lead to overconfidence in one’s ability to evaluate the solutions to those challenges ( Judge, Erez, & Bono, 1998 ). Research has shown that self-efficacy may, in fact, exacerbate the tendency to hold on to bad ideas ( Bragger, Hantula, Bragger, Kirnan, & Kutcher, 2003 ; Garland, 1990 ). Because learning enhances self-efficacy and tends to embed people in routines (at least initially), it may be impossible to objectively evaluate one’s own work, raising the stakes on making creativity a collaborative process. Ideally, future research will address the underexplored issue of self-evaluation in the creative process.

Creativity is hard. But it is hard at different points in the process for different reasons. Breaking out of routine thinking to identify truly interesting problems or opportunities requires intrinsic motivation and creativity-relevant skills that are supported by an open, learning-oriented mindset. Understanding a given domain deeply and widely requires learning domain-relevant skills that can be supported by access to expert knowledge and any other environmental factors that facilitate steady, meaningful progress. Intrinsic motivation and creativity-relevant skills are most important when taking the risk to generate new and useful ideas. Successfully validating a new idea and communicating its value depends on yet another set of skills, including dispassionately understanding the perspectives of stakeholders. Motivating the appropriate behaviors at each stage of creativity involves a nuanced understanding of the power of both intrinsic and synergistic extrinsic motivation, and especially how they may be used together to reinforce rather than undermine each other. This understanding must then actually be applied to the work environment, with leaders modeling the behaviors they hope to inspire.

As difficult as it may be, creativity is also highly rewarding. In this chapter, we deconstructed the stages of creativity to reveal the underlying learning behaviors that support creative problem solving and the work environments that can motivate—or demotivate—it. By establishing these facilitating environments, entrepreneurs and entrepreneurial leaders in established firms can help people push through the frustration to engage in genuine breakthrough thinking.

“Leonardo da Vinci’s helicopter is a world renowned example of his ability to think centuries ahead of his time. It is the first known drawing of any helicopter-like machine… The design was drawn in 1493, 450 years earlier than an actual helicopter would take to the air.”— Leonardo Da Vinci’s Inventions.   http://www.leonardodavincisinventions.com/inventions-for-flight/leonardo-da-vinci-helicopter/

2. Charles Babbage developed the principle of the Analytical Engine, which was the world’s first computer and could be programmed to solve a wide variety of logical and computational problems.— Charles Babbage   and   Henry P. Babbage . ( 1889/2010 ). Babbage’s Calculating Engines. England : Cambridge University Press .

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4.2 Creativity, Innovation, and Invention: How They Differ

Learning objectives.

By the end of this section, you will be able to:

• Distinguish between creativity, innovation, and invention
• Explain the difference between pioneering and incremental innovation, and which processes are best suited to each

One of the key requirements for entrepreneurial success is your ability to develop and offer something unique to the marketplace. Over time, entrepreneurship has become associated with creativity , the ability to develop something original, particularly an idea or a representation of an idea. Innovation requires creativity, but innovation is more specifically the application of creativity. Innovation is the manifestation of creativity into a usable product or service. In the entrepreneurial context, innovation is any new idea, process, or product, or a change to an existing product or process that adds value to that existing product or service.

How is an invention different from an innovation? All inventions contain innovations, but not every innovation rises to the level of a unique invention. For our purposes, an invention is a truly novel product, service, or process. It will be based on previous ideas and products, but it is such a leap that it is not considered an addition to or a variant of an existing product but something unique. Table 4.2 highlights the differences between these three concepts.

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. Complexity is key to design thinking. Straightforward problems that can be solved with enough money and force do not require much design thinking. Creative design thinking and planning are about finding new solutions for problems with several tricky variables in play. Designing products for human beings, who are complex and sometimes unpredictable, requires design thinking.

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. 7

People who are adept at design thinking are creative, innovative, and inventive as they strive to tackle different types of problems. Consider Divya Nag , a millennial biotech and medical device innovation leader, who launched a business after she discovered a creative way to prolong the life of human cells in Petri dishes. Nag’s stem-cell research background and her entrepreneurial experience with her medical investment firm made her a popular choice when Apple hired her to run two programs dedicated to developing health-related apps, a position she reached before turning twenty-four years old. 8

Creativity, innovation, inventiveness, and entrepreneurship can be tightly linked. It is possible for one person to model all these traits to some degree. Additionally, you can develop your creativity skills, sense of innovation, and inventiveness in a variety of ways. In this section, we’ll discuss each of the key terms and how they relate to the entrepreneurial spirit.

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. Ideation is the purposeful process of opening up your mind to new trains of thought that branch out in all directions from a stated purpose or problem. Brainstorming , the generation of ideas in an environment free of judgment or dissension with the goal of creating solutions, is just one of dozens of methods for coming up with new ideas. 9

You can benefit from setting aside time for ideation. Reserving time to let your mind roam freely as you think about an issue or problem from multiple directions is a necessary component of the process. Ideation takes time and a deliberate effort to move beyond your habitual thought patterns. If you consciously set aside time for creativity, you will broaden your mental horizons and allow yourself to change and grow. 10

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. You can ignore logic; anything becomes possible. Linear thinking is crucial in turning your idea into a business. Lateral thinking will allow you to use your creativity to solve problems that arise. Figure 4.5 summarizes 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. 11 These factors help explain not just why creativity is emphasized in entrepreneurial circles but also why creativity should be emphasized. Product developers of the twenty-first century are expected to do more than simply push products and innovations a step further down a planned path. Newer generations of entrepreneurs are expected to be path breakers in new products, services, and processes.

Examples of creativity are all around us. They come in the forms of fine art and writing, or in graffiti and viral videos, or in new products, services, ideas, and processes. In practice, creativity is incredibly broad. It is all around us whenever or wherever people strive to solve a problem, large or small, practical or impractical.

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. For Drucker, classical entrepreneurship psychology highlights the purposeful nature of innovation. 12 Business firms and other organizations can plan to innovate by applying either lateral or linear thinking methods, or both. In other words, not all innovation is purely creative. If a firm wishes to innovate a current product, what will likely matter more to that firm is the success of the innovation rather than the level of creativity involved. 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. 13

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). In response to changes in the market, changes in demographics, and process need, McDonald’s incorporated self-serve cashier stations into their stores. These kiosks address the need of younger generations to interact more with technology and gives customers faster service in most cases. 15

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. This process is very similar to Drucker’s contention that innovation comes as a response to changes within and outside of the market. Ulwick insists that focusing on the customer should begin early in the development process. 16

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. He has since published a good deal on the topic of disruptive innovation, focusing on small players in a market. Christensen theorizes that a disruptive innovation from a smaller company can threaten an existing larger business by offering the market new and improved solutions. The smaller company causes the disruption when it captures some of the market share from the larger organization. 17 , 18 One example of a disruptive innovation is Uber and its impact on the taxicab industry. Uber’s innovative service, which targets customers who might otherwise take a cab, has shaped the industry as whole by offering an alternative that some deem superior to the typical cab ride.

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. A pain point is a problem that people have with a product or service that might be addressed by creating a modified version that solves the problem more efficiently. 19 For example, you might be interested in whether a local retail store carries a specific item without actually going there to check. Most retailers now have a feature on their websites that allows you to determine whether the product (and often how many units) is available at a specific store. This eliminates the need to go to the location only to find that they are out of your favorite product. 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. 20

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. 21 Firms offering similar products and services can undertake pioneering innovations, but pioneering the new product requires opening up new market space and taking major risks.

Entrepreneur In Action

Pioneering innovation in the personal care industry.

In his ninth-grade biology class, Benjamin Stern came up with an idea to change the personal care industry. He envisioned personal cleaning products (soap, shampoo, etc.) that would contain no harsh chemicals or sulfates, and would also produce no plastic waste from empty bottles. He developed Nohbo Drops , single-use personal cleansing products with water-soluble packaging. Stern was able to borrow money from family and friends, and use some of his college fund to hire a chemist to develop the product. He then appeared on Shark Tank with his innovation in 2016 and secured the backing of investor Mark Cuban . Stern assembled a research team to perfect the product and obtained a patent ( Figure 4.6 ). The products are now available via the company website.

Is a pioneering innovation an invention? A firm makes a pioneering innovation when it creates a product or service arising from what it has done before. Pokémon GO is a great example of pioneering innovation. Nintendo was struggling to keep pace with other gaming-related companies. The company, in keeping with its core business of video games, came up with a new direction for the gaming industry. Pokémon GO is known worldwide and is one of the most successful mobile games launched. 22 It takes creativity to explore a new direction, but not every pioneering innovation creates a distinctly new product or capability for consumers and clients.

Entrepreneurs in the process of developing an innovation usually examine the current products and services their firm offers, investigate new technologies and techniques being introduced in the marketplace or in related marketplaces, watch research and development in universities and in other companies, and pursue new developments that are likely to fit one of two conditions: an innovation that likely fits an existing market better than other products or services being offered; or an innovation that fits a market that so far has been underserved.

An example of an incremental innovation is the trash receptacle you find at fast-food restaurants. For many years, trash cans in fast-food locations were placed in boxes behind swinging doors. The trash cans did one job well: They hid the garbage from sight. But they created other problems: Often, the swinging doors would get ketchup and other waste on them, surely a pain point. Newer trash receptacles in fast-food restaurants have open fronts or open tops that enable people to dispose of their trash more neatly. The downside for restaurants is that users can see and possibly smell the food waste, but if the restaurants change the trash bags frequently, as is a good practice anyway, this innovation works relatively well. You might not think twice about this everyday example of an innovation when you eat at a fast-food restaurant, but even small improvements can matter a lot, particularly if the market they serve is vast.

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. Inventors build. Developing something users and customers view as an invention could be important to some entrepreneurs, because when a new product or service is viewed as unique, it can create new markets. True inventiveness is often recognized in the marketplace, and it can help build a valuable reputation and help establish market position if the company can build a future-oriented corporate narrative around the invention. 23

Besides establishing a new market position, a true invention can have a social and cultural impact. At the social level, a new invention can influence the ways institutions work. For example, the invention of desktop computing put accounting and word processing into the hands of nearly every office worker. The ripple effects spread to the school systems that educate and train the corporate workforce. Not long after the spread of desktop computing, workers were expected to draft reports, run financial projections, and make appealing presentations. Specializations or aspects of specialized jobs—such as typist, bookkeeper, corporate copywriter—became necessary for almost everyone headed for corporate work. Colleges and eventually high schools saw software training as essential for students of almost all skill levels. These additional capabilities added profitability and efficiencies, but they also have increased job requirements for the average professional.

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. As an example, the “videophone” was a concept that began to be explored as early as the late 1800s. AT&T began extensive work on videophones during the 1920s. However, the invention was not adopted because of a lack of familiarity with the idea of seeing someone on a screen and communicating back and forth. Other factors included societal norms, size of the machine, and cost. It wasn’t until the early 2000s that the invention started to take hold in the marketplace. 24 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. An example is Febreeze, a chemical combination that binds molecules to eliminate odors. From a black box perspective, the chemical engineers did not intend to create this product, but as they were working on creating another product, someone noticed that the product they were working on removed odors, thus inadvertently creating a successful new product marketed as Febreeze.

What Can You Do?

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.

Various components (ropes, sails, and so on) were prefabricated in different parts of the Venetian Arsenal, a huge, complex construction site along one of Venice’s canals. The parts were then delivered to specific assembly points Figure 4.7 (b) . After each stage of construction, the ships were floated down the canal to the next assembly area, where the next sets of workers and parts were waiting. Moving the ships down the waterway and assembling them in stages increased speed and efficiency to the point that long before the Industrial Revolution, the Arsenal could produce one fully functional and completely equipped ship per day . The system was so successful that it was used from the thirteenth century to about 1800.

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 ).

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. Likewise, the people you need to help you be successful may be right in front of you on a regular basis. The key is having the ability to recognize who they are and making connections to them. Just as those ships and cars moved down an assembly line until they were ready to be put into service, start thinking about moving down the “who I know” line so that you will eventually have a successful business in place.

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. Inventors and their teams develop their own processes along with their own products, and the field in which an inventor works will greatly influence the modes and pace of invention. 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.

In other words, the constant underlying Musk’s decision process is the scientific method. 25 The scientific method , most often associated with the natural sciences, outlines the process of discovering an answer to a question or a problem. “The scientific method is a logical organization of steps that scientists use to make deductions about the world around us.” 26 The steps in the scientific method line up quite nicely with Musk’s decision-making process. Applying the scientific method to invention and innovation makes sense. The scientific method involves becoming aware of a problem, collecting data about it by observing and experimenting, and coming up with suggestions on how to solve it.

Economists argue that processes of invention can be explained by economic forces. But this hasn’t always been the case. Prior to 1940, economic theory focused very little on inventions. After World War II, much of the global economy in the developed world needed to be rebuilt. New technologies were developing rapidly, and research and development investment increased. Inventors and economists alike became aware of consumer demand and realized that demand can influence which inventions take off at a given time. 27 However, inventors are always up against an adoption curve. 28

The Rogers Adoption Curve was popularized through the research and publications of the author and scientist Everett Rogers . 29 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. First is the question of who adopts inventions and innovations in society: The main groups are innovators, early adopters, early and late-majority adopters, and “laggards” (Rogers’s own term). 30 The innovators are the ones willing to take a risk on a new product, the consumers who want to try it first. The early adopters are consumers who will adopt new inventions with little to no information. Majority adopters will adopt products after being accepted by the majority. And finally, laggards are often not willing to readily adopt change and are the hardest to convince to try a new invention. 31

Rogers’s second way of looking at the concept is from the point of view of the invention itself. A given population partially or completely adopts an invention or rejects it. If an invention is targeted at the wrong population or the wrong population segment, this can dramatically inhibit its chances of being adopted widely. The most critical point of adoption often occurs at the end of the early adoption phase, before the early majority steps in and truly confirms (or not) the diffusion of an invention. This is called the diffusion chasm (though this process is usually called the diffusion of innovations , for our purposes, it applies quite well to new inventions as we define them here).

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. Once the early majority adopts an innovation (in very large numbers), we can expect the rest of the majority to adopt it. By the time the late majority and the laggards adopt an innovation, the novelty has worn off, but the practical benefits of the innovation can still be felt.

Inventors are constantly trying to cross the diffusion chasm, often with many products at a time. Crossing the diffusion chasm is a nearly constant concern for business-focused or outcomes-focused inventors. Inventors put many of their resources into an invention during the innovation and early adoption stages. Inventions may not turn a profit for investors or the inventors themselves until they are well into the early majority stage of adoption. Some inventors are pleased to work toward general discovery, but most in today’s social and cultural context are working to develop products and services for markets.

One shortcoming of the diffusion of innovations model is that it treats inventions and innovations as though they are finished and complete, though many are not. Not all inventions are finished products ready for market. Iterative development is more common, particularly in fields with high levels of complexity and in service-oriented ventures. In the iterative development process, inventors and innovators continuously engage with potential customers in order to develop their products and their consumer bases at the same time. This model of business learning, also known as the science of customer development, is essential. 32 Business learning involves testing product-market fit and making changes to an innovation or invention many times over until either investment funding runs out or the product succeeds. Perhaps the most accurate way to summarize this process is to note that many inventions are hit-or-miss prospects that get only a few chances to cross the diffusion chasm. When innovators follow the build-measure-learn model (discussed in detail in Launch for Growth to Success ), they try to work their way across the diffusion chasm rather than making a leap of faith.

Work It Out

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. Although electric razors use blades as do mechanical razors, the new design and the added technology qualified the electric razor as an invention that offered something new in the shaving industry when Jacob Schick won the patent for a shaving machine in 1930. 33 Still other innovations in the shaving genre include gender-specific razors, beard trimmers, and, more recently, online clubs such as Dollar Shave Club and Harry’s Shave Club .

Think about the conceptual difference between innovation and invention. Is the safety razor a pioneering innovation or an incremental one? What makes the electric razor an invention, as we define it here? What makes it stand out as a leap from previous types of razors? Do you think the electric razor is a “sure thing”? Why or why not? Consider the availability of electricity at the time the first electric razors were being made. Why do you think the electric razor made it over the diffusion chasm between early adopters and early majority adopters? Do you think the electric razor was invented iteratively with small changes to the same product in response to customer preferences? Or did it develop in a series of black box inventions, with each one either diffusing or not?

• 7 “How Design Thinking Transformed Airbnb from Failing Startup to Billion Dollar Business.” First Round Review . n.d. https://firstround.com/review/How-design-thinking-transformed-Airbnb-from-failing-startup-to-billion-dollar-business/
• 8 “Divya Nag, 26.” Fortune . n.d. http://fortune.com/40-under-40/2017/divya-nag-27/
• 9 Rikke Dam and Teo Siang. “Introduction to the Essential Ideation Techniques Which Are the Heart of Design Thinking.” Interaction Design Foundation . April 2019. https://www.interaction-design.org/literature/article/introduction-to-the-essential-ideation-techniques-which-are-the-heart-of-design-thinking
• 10 Dawn Kelly and Terry L. Amburgey. “Organizational Inertia and Momentum: A Dynamic Model of Strategic Change.” Academy of Management Journal 34, no. 3 (1991): 591–612.
• 11 Ian Fillis and Ruth Rentschler. “The Role of Creativity in Entrepreneurship.”  Journal of Enterprising Culture  18, no. 1 (2010): 49–81.
• 12 P. F. Drucker. Innovation and Entrepreneurship: Practices and Principles . New York: Harper & Row Publishers, 1986.
• 13 P. F. Drucker. Innovation and Entrepreneurship: Practices and Principles . (New York: Harper & Row Publishers, 1986), 35.
• 14 P. F. Drucker. Innovation and Entrepreneurship: Practices and Principles . New York: Harper & Row Publishers, 1986.
• 15 Blake Morgan. “5 Fresh Examples of Customer Service Innovation.” Forbes . July 17, 2017. https://www.forbes.com/sites/blakemorgan/2017/07/17/5-fresh-examples-of-customer-experience-innovation/#3ae5a46e5c18
• 16 Tony Ulwick. “Reinventing Innovation for 25 Years.” Strategyn . n.d. https://strategyn.com/tony-ulwick/?network=g&matchtype=p&keyword=tony%20ulwick&creative=268244402567&device=c&devicemodel=&placement=&position=1t1&campaignid=1394486829&adgroupid=57939305027&loc_physical_ms=9015694&loc_interest_ms=&gclid=CjwKCAjw29vsBRAuEiwA9s-0B2jD3BYbm-BEiPWHKfd6R6mnW4XCHuhXbX_JhUof76IdXh6joIzlWRoCqJAQAvD_BwE
• 17 Chris Larson. “Disruptive Innovation Theory: What It Is & 4 Key Concepts.” Harvard Business School . November 15, 2016. https://online.hbs.edu/blog/post/4-keys-to-understanding-clayton-christensens-theory-of-disruptive-innovation
• 18 Rosamond Hutt. “What Is Disruptive Innovation?” World Economic Forum . June 25, 2016. https://www.weforum.org/agenda/2016/06/what-is-disruptive-innovation/
• 19 Lloyd Waldo. “What’s a Pain Point? A Guide for Startups.” StartupYard Seed Accelerator . December 1, 2016. https://startupyard.com/whats-pain-point/
• 20 Abdul Ali, Manohar U. Kalwani, and Dan Kovenock. “Selecting Product Development Projects: Pioneering versus Incremental Innovation Strategies.”  Management Science  39, no. 3 (1993): 255–274.
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The Importance of Creativity in Business

• 25 Jan 2022

When you think of creativity, job titles such as graphic designer or marketer may come to mind. Yet, creativity and innovation are important across all industries because business challenges require inventive solutions.

Here’s an overview of creativity’s importance in business, how it pairs with design thinking, and how to encourage it in the workplace.

Access your free e-book today.

Why Is Creativity Important?

Creativity serves several purposes. It not only combats stagnation but facilitates growth and innovation. Here's why creativity is important in business.

1. It Accompanies Innovation

For something to be innovative, there are two requirements: It must be novel and useful. While creativity is crucial to generate ideas that are both unique and original, they’re not always inherently useful. Innovative solutions can’t exist, however, without a component of creativity.

2. It Increases Productivity

Creativity gives you the space to work smarter instead of harder, which can increase productivity and combat stagnation in the workplace. Routine and structure are incredibly important but shouldn’t be implemented at the expense of improvement and growth. When a creative and innovative environment is established, a business’s productivity level can spike upward.

3. It Allows for Adaptability

Sometimes events—both internal and external—can disrupt an organization’s structure. For example, the COVID-19 pandemic has dramatically changed how the present-day business world functions . In such instances, imaginative thinking and innovation are critical to maintaining business operations.

Creatively approaching challenges requires adaptability but doesn’t always necessitate significantly adjusting your business model. For example, you might develop a new product or service or slightly modify the structure of your operations to improve efficiency. Big problems don’t always require big solutions, so don’t reject an idea because it doesn’t match a problem’s scale.

Change is inevitable in the business world, and creative solutions are vital to adapting to it.

4. It’s Necessary for Growth

One of the main hindrances to a business’s growth is cognitive fixedness, or the idea that there’s only one way to interpret or approach a situation or challenge.

Cognitive fixedness is an easy trap to fall into, as it can be tempting to approach every situation similar to how you have in the past. But every situation is different.

If a business’s leaders don’t take the time to clearly understand the circumstances they face, encourage creative thinking, and act on findings, their company can stagnate—one of the biggest barriers to growth.

5. It’s an In-Demand Skill

Creativity and innovation are skills commonly sought after in top industries, including health care and manufacturing. This is largely because every industry has complex challenges that require creative solutions.

Learning skills such as design thinking and creative problem-solving can help job seekers set themselves apart when applying to roles.

Creativity and Design Thinking

While creativity is highly important in business, it’s an abstract process that works best with a concrete structure. This is where design thinking comes into play.

Design thinking —a concept gaining popularity in the business world—is a solutions-based process that ventures between the concrete and abstract. Creativity and innovation are key to the design thinking process.

In Harvard Business School Dean Srikant Datar’s course Design Thinking and Innovation , the process is broken down into four iterative stages:

• Clarify: In this stage, observation and empathy are critical. Observations can be either concrete and based on metrics and facts or abstract and gleaned from understanding and empathy. The goal during this stage is to gain an understanding of the situation and individuals impacted.
• Ideate: The ideation stage is abstract and involves creativity and idea generation. Creativity is a major focus, as the ideation phase provides the freedom to brainstorm and think through solutions.
• Develop: The development phase is a concrete stage that involves experimentation and trial and error. Critiquing and prototyping are important because the ideas generated from the ideation stage are formed into testable solutions.
• Implement: The fourth stage is solution implementation. This involves communicating the solution’s value and overcoming preexisting biases.

The value of design thinking is that it connects creativity and routine structure by encouraging using both the operational and innovation worlds. But what are these worlds, and how do they interact?

The Operational World

The operational world is the concrete, structured side of business. This world focuses on improving key metrics and achieving results. Those results are typically achieved through routine, structure, and decision-making.

The operational world has many analytical tools needed for the functional side of business, but not the innovative side. Furthermore, creativity and curiosity are typically valued less than in the innovation world. Employees who initiate unsuccessful, risky endeavors are more likely to be reprimanded than promoted.

The Innovation World

The innovation world requires curiosity, speculation, creativity, and experimentation. This world is important for a company’s growth and can bring about the aforementioned benefits of creativity in business.

This world focuses more on open-ended thinking and exploration rather than a company’s functional side. Although risky endeavors are encouraged, there’s little structure to ensure a business runs efficiently and successfully.

Connecting the Two Worlds

Although the operational world and innovation world are equally important to a business’s success, they’re separate . Business leaders must be ambidextrous when navigating between them and provide environments for each to flourish.

Creativity should be encouraged and innovation fostered, but never at the expense of a business’s functionality. The design thinking process is an excellent way to leverage both worlds and provides an environment for each to succeed.

Since the design thinking process moves between the concrete and abstract, it navigates the tension between operations and innovation. Remember: The operational world is the implementation of the innovative world, and innovation can often be inspired by observations from the operational world.

How to Encourage Creativity and Innovation

If you want to facilitate an innovative workplace, here are seven tips for encouraging creativity.

1. Don’t Be Afraid to Take Risks

Creativity often entails moving past your comfort zone. While you don't want to take risks that could potentially cripple your business, risk-taking is a necessary ingredient of innovation and growth. Therefore, providing an environment where it’s encouraged can be highly beneficial.

2. Don’t Punish Failure

Provide your team with the freedom to innovate without fear of reprisal if their ideas don’t work. Some of the best innovations in history were the product of many failures. View failure as an opportunity to learn and improve for the future rather than defeat.

3. Provide the Resources Necessary to Innovate

While it can be tempting to simply tell your team to innovate, creativity is more than just a state of mind. If your colleagues have the opportunity to be creative, you need to provide the resources to promote innovation. Whether that entails a financial investment, tools, or training materials, it’s in your best interest to invest in your team to produce innovative results.

4. Don’t Try to Measure Results Too Quickly

If an innovative idea doesn’t produce desirable results within a few months, you may consider discarding it entirely. Doing so could result in a lost opportunity because some ideas take longer to yield positive outcomes.

Patience is an important element of creativity, so don't try to measure results too quickly. Give your team the freedom to improve and experiment without the pressure of strict time constraints.

5. Maintain an Open Mind

One of the most important components of an environment that fosters creativity and innovation is keeping an open mind. Innovation requires constantly working against your biases. Continually ask questions, be open to the answers you receive, and don't require fully conceptualized ideas before proceeding with innovation.

6. Foster Collaboration

Collaborative environments are vital for innovation. When teams work together in pursuit of a common goal, innovation flourishes. To achieve this, ensure everyone has a voice. One way to do so is by hosting brainstorming sessions where each member contributes and shares ideas.

7. Encourage Diversity

Diversity fosters creativity and combats groupthink, as each individual brings a unique outlook to the table. Consider forming teams with members from different cultural backgrounds who haven’t previously worked together. Getting people to step outside their comfort zones is an effective way to encourage innovation.

Learning to Be Creative in Business

Creativity and innovation are immensely important skills whether you’re a job seeker, employer, or aspiring entrepreneur.

Want to learn more about design thinking? Start by finding fellow professionals willing to discuss and debate solutions using its framework. Take advantage of these interactions to consider how you can best leverage design thinking and devise different approaches to business challenges.

This exposure to real-world scenarios is crucial to deciding whether learning about design thinking is right for you. Another option is to take an online course to learn about design thinking with like-minded peers.

If you’re ready to take your innovation skills to the next level, explore our online course Design Thinking and Innovation , one of our online entrepreneurship and innovation courses. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

About the Author

Creativity Perspective on Entrepreneurship

• First Online: 25 August 2018

Cite this chapter

• Chaoying Tang 3 ,
• Christian Byrge 4 &
• Jizhong Zhou 3  

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Tang, Byrge, and Zhou discuss the role of creativity training for entrepreneurship education and matters of concern in integrating creativity training in entrepreneurship education. The authors view creativity as a key competency of entrepreneurship being closely related to the abilities to recognize commercial opportunities, generate new business models, and build the skills to act upon them. They suggest exploring the relation between creativity and entrepreneurship from the perspectives of goal and process, characteristics, competency, and entrepreneurial intention. To successfully integrate creativity into entrepreneurship education, program designers should pay attention to a number of issues and concerns, such as the advancement of domain-relevant skills, creativity-relevant skills, task motivation, domain-specific or domain-general creativity training, and teaching and evaluation methods.

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Acknowledgment

This chapter was supported by the National Natural Science Foundation of China (71473238, 71673264, and 71273256).

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Tang, C., Byrge, C., Zhou, J. (2018). Creativity Perspective on Entrepreneurship. In: Turcan, R., Fraser, N. (eds) The Palgrave Handbook of Multidisciplinary Perspectives on Entrepreneurship. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-91611-8_5

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Innovation, Creativity, and Intrapreneurship Essay

Introduction, distinction between creativity and innovation, intrapreneurship, challenges in managing innovation, intrapreneurship, and creativity, ethical considerations, early and growth phase of an organizations’ lifecycle.

Innovation is a tool in entrepreneurship which allows entrepreneurs to exploit change as an opportunity for business. It characterizes a new way of doing things. Intrapreneurship refers to a strategy of developing organizations’ human resources to eliminate the possibility of their skills (innovative and creative) from being dormant. In this case, employees are at will to undertake innovative activities using company resources to assist in re-invention and improving performance in the organization. Creativity and innovation makes entrepreneurs tick. This paper seeks to discuss aspects relating innovation and creativity as applied within an organization setting. It establishes the relation between these two aspects and intrapreneurship.

In entrepreneurship, creativity and innovation go hand in hand. Ideally both aspects involve creation of something new. They are central to the entrepreneurial process. Creativity and innovation are vital skills for any successful entrepreneur. Creativity can be defined as the production of novel and unique ideas. Innovation refers to transformation of an existing idea into something better through modification and improvement. Creativity is simply the creation of something new. For example, creation of a new product or service that is not in the market. Creativity occurs in the event of identification of a need that is untapped and unexploited hence the need to fill in that gap and create equilibrium in the market (Heye,2006).

Innovation is improvement; hence an entrepreneur can improve the features of a product through branding and adding new functionalities. Innovation gives an entity the ability to survive in innovative markets by staying ahead of its competitors. This clearly indicates that innovation and creativity are inseparable and are useful for startup entrepreneurs and equally entrepreneurs who are already doing business. Creativity is a function of three vital areas: expertise, motivation and creative thinking. It requires an individual to have a vision to do something that will impact people, and in this case, customers in the market (Larsen & Lewis, 2007).

An ‘intrapreneur’ is an employee who practices entrepreneurship skills in an already established firm. Intrapreneurs are known for their agility and ability to take the organization to the next level through product evolution, organizational changes and innovation. The term is derived from a combination of ‘intra’ (which is borrowed from internal) and ‘entrepreneurship’. Intrapreneurs enhance their entrepreneurship skills and benefit from creating connections and networking with other successful entrepreneurs. They are also mentored by members of management within the organization. Furthermore, they do not invest in resources and technology as they have the firms’ resources and infrastructure at their disposal. Intrapreneurs equally learn from their mistakes.

Firms undergo several challenges in managing creativity, innovation and Intrapreneurship. Firms where employees lack motivation and drive to improve the organization do not contribute to these processes; hence they act as a drawback. In the event that the firm’s management is unsupportive, managing these processes may be a challenge. The management may fail to assign relevant resources to support the same thereby negatively impacting the project. An organizational culture that is rebellious equally poses as a challenge. This is because employees are not receptive to change and new imaginative ideas. They are not willing to think outside the box and take the company to the next level. Another challenge occurs in the event that the firm lacks the relevant technological infrastructure and financial resources to support the above processes. Technology and infrastructure are vital to support new developments in the market.

The firm requires eliminating any possibility of exploitation of intrapreneurs. The firm should consider recognition schemes to reward intrapreneurs of their creative and innovative ideas which keep the company current. Putting in place reward structures to encourage ‘intraprenerial’ innovation should be enacted by firms. Intrapreneurs learn from their mistakes. Therefore, management should not scold and crucify them as this will discourage their innovative and creative abilities. The firm should also exercise respect and objectivity in dealing with intrapreneurs.

In the early stages of business start up, creativity is most applicable. This is due to the fact that innovation depends on creativity. There has to be an existing idea. Creativity requires an entrepreneur to move from the known to the unknown. Bringing in something new in the market, that has not been offered by anyone else in the market, allows the entrepreneur to have competitive advantage. It is the most successful for startups due to the fact that it enables an entrepreneur to see things that no one else has accomplished by establishing new connections for the purpose of meeting needs that have not been fulfilled. It simply offers a solution to a problem hence the entrepreneur can maintain this position in the market due to the possibility that it is untapped. This increases chances of success at start up.

The growth phase requires the organization to remain relevant and stay ahead of its competitors. In this case, the firm has already introduced its product offerings in the market and due to changes in tastes and preferences or emerging needs; the firm has no choice but to innovate. Intrapreneurship is equally vital in the growth phase as intrapreneurs are responsible for a wide array of innovations that rejuvenate the company. To maintain an upward growth in market share, existing ideas must be improved continuously for the purpose of maintaining existing customers and acquisition of prospective customers.

In conclusion, it is evident that processes relating to innovation, creativity and intrapreneurship are inevitable for the survival of business entities. Creativity and innovation form the basis of Intrapreneurship. Companies must invest monetary and non- monetary resources to ensure cultivate of positive Intrapreneurship within their firms. Creativity, innovation and intrapreneurship may be referred to as the winning formula for any organization. They enable an organization to compete effectively based on quality perspectives and not simply prices. It allows the organization to compete on its area of strength.

Heye, D. (2006). Creativity and innovation: Two key characteristics of the 21st century information professional. Business Information Review , 23(4), 252 – 257.

Larsen, P., & Lewis, A. (2007). How award-winning SMEs manage the barriers to innovation. Creativity and Innovation Management , 16(2), 142 – 151.

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A Review of Creativity in Entrepreneurship Literature

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Essay on Entrepreneurship

Introduction

Entrepreneurship is a term that is widely applicable in the world of business. There are different definitions of the term entrepreneurship. The first definition identifies entrepreneurship as the process of creating a new business, with a view of making profits while bearing in mind all the risks that are involved. Different scholars have had their opinions about the description of the term entrepreneurship, including Stevenson, a renown expert in the topic. He defined entrepreneurship as the pursuit of opportunity beyond resources controlled. His definition is still widely applied by many in the world of business (Venkataraman, 2019). The second definition is linked to one Frank Knight, who defined it as the bearing of uncertainty and responsibility for risks within the financial market. Joseph Schumpeter also contributed significantly by defining entrepreneurship as the creation of new things in search of profits. Schumpeter also asserts that the role of creating new things is not only left to companies and other businesses but also individuals who make efforts in the area. The researcher introduced the concept of creative destruction to mean creation and invention of a new idea in the market that calls for the demise of the existing competitor. For instance, the emergence of Smartphones killed use traditional means of communication, such as telephone boots and regular use of letters. As such, Joseph Schumpeter contributed significantly as the term creative destruction is universal in the marketing. Marketing is a lucrative field that requires creativity for one to make an impact in the market. Fourth is Israel Kirzner who defined entrepreneurship as the process that led to discovery. It is important to note that most of the definitions by various scholars share a familiar concept, risk-taking and opportunity exploration.

A venture is considered as a small business that is started by one individual or groups with a view of gaining financially. The profits from the investment benefit all the backers of that particular project or business. There are many different ventures that an individual can offer to invest in. An enterprise should aim to make a financial gain to the individual or group that invested. The risk-taking tendency by entrepreneurs and the idea of profit making coincides with the typology of entrepreneurship. Examples of entrepreneurship ventures that many can get into include gazelle, microenterprise, small/lifestyle and medium enterprises.

A gazelle enterprise is a business venture that experiences rapid growth annually for period of over four years. Revenues of such an enterprise increase yearly by over 20% and must have a base capital of at least $100,000. Such companies experience high sales growth rates regardless of their size. However, most of such business ventures operate on the lower end of the scale. Company growth can be measured by the turnover or the number of employees working for the enterprise.

The second entrepreneurial venture is a microenterprise that employs a small number of people, usually less than 10. Microenterprises are started by small amounts of capital and they specialize in providing goods and services within its locality. All microenterprises venture into simple product lines and operate on small scale. Microenterprises contribute largely to the economy as they create employment. Business owners in such ventures enjoy small profits, which they use to improve their standards of living. As such, microenterprises agree to the typology of entrepreneurship by making profits for those who invest.

Small or lifestyle enterprises are business ventures started with aim of sustaining or maintaining a certain level of income. Such enterprises aim at sustaining a certain level of lifestyle for the entrepreneur. They employ a small number of people and maintain certain level of assets for owners. Lifestyle enterprises play a key role in employing people at the same time maintains a particular lifestyle for the owner, thereby, complying with the typology of entrepreneurship.

Medium size enterprises employ between 50 and 500 employees depending on the legislation in that specific nation. Such enterprises have a specified value of assets and in the UK, they have less than 250 employees. In the year 2013, there were over 5.2 million medium sized businesses, which comprised of over 99% of enterprises in the country. The aim of medium business enterprises is to make profit like any other entrepreneurial venture. As such, medium sized business enterprises agree to the typology of entrepreneurship.

According to Wennekers and Thurik (1999), a Schumpeterian entrepreneur is one who aims at capitalizing on the existing entrepreneurial abilities to make profits. In other words, a Schumpeterian entrepreneur will assess the current businesses that are operating and think of better services to people. The Schumpeter concept is Austrian. Existing product and service lines in the market require improvements for better service delivery (Wennekers & Thurik, 1999). A Schumpeter entrepreneur is an individual who capitalizes on such opportunities with a view of providing better services while making profits. An intrepreneur is a person who works for a particular organization and identifies better ways to improve quality and service delivery to customers. Innovative product development and marketing is the role of a manager working for that specific organization. As such, the manager is referred to as an entrepreneur. Managerial business owner is an individual who invests in a venture and entirely owns the business. Administrative business owners are not responsible for innovation and creative destruction in the market as these remains the work of managerial entrepreneurs. The main difference between the three terms described is that an administrative business owner is responsible for financing the venture while the rest work for the owner to ensure innovation and product development. A similarity known among the three types of entrepreneurs is the fact that they all aim to make profits for the owner of the business.

Miles & Snow (2009) classified organizations into four types, including prospector, defender, analytical and follower businesses. A prospector implies an organization that has difficulties in locating and exploiting a new product in the market. Such ventures require constant examination of the continually changing business world to succeed. The element of unpredictability makes a continuous check-up of the market a necessity to establish strategic production. According to the two researchers, prospector organizations have comprehensive product and service lines. Production in such cases prefers to promote creativity to efficiency. Defender organizations are defined as those entities that cannot survive in unstable environments (Miles, Miles, Snow, Blomqvist & Rocha, 2009). Their worry is how to maintain their current market share hence the need for them to operate in a relatively stable business environment. Cost leadership and specialization in a specific product line can well help solve the problem. Analyzer organizations refer to those that have both prospector and defender organization characteristics. They face a challenge of establishing in new markets and at the same have a problem of maintaining their current market share. Follower organizations refer to organizations that do not make long-term plans for business but instead ensure that managers study the dynamic world fast enough to cope with the changes.

Steve Blank in 2010 asserts that there are four types of entrepreneurs, namely small business owners, scalable, large business owners and large entrepreneurs. Small business owners face known risks in the market as they venture into product lines and services that are already known. A scalable business idea digs into the existing opportunity and turns it into a larger business through the expansion of its business activities. The aim of setting up such business entities is to take over the existing market and turn it out to make huge profits. On the other hand, a large business is an entity that has over 5000 employees or has a high financial turnover of over 1.5 billion Euros in a year (Blank, 2010). Any venture that does not feature any of the two characteristics or both of them cannot be termed as a large business. Social entrepreneurship involves start-up companies raising funds to solve cultural, social and environmental problems.

The data presented is indicative of the importance of having small businesses and startups within the economy. The data is extracted from the office of national statistics in the United Kingdom. Moreover, the data presented include information regarding micro-businesses and small businesses contribution to the economy of the region that they operate. For instance, from the year 2010 to 2017, the country has been registering an increasing trend indicating that such businesses play a crucial role. On employment, micro-business ventures employed over 4,618,315 people in 2010, and by 2017 (“Employment – ONS”, 2019), the number of those depending on such businesses rose to 5,491,009. On the other hand, small businesses employed over 3,785, 801 people in the year 2010 to a whopping 4,450, 716 by 2017. As such, micro and small businesses within the economy play a key role in ensuring increased employment opportunities as indicated by statistics from the national office in the UK.

Another vital aspect presented in the data provided is the turnover involved annually in the event of operating such businesses. Like the data on employment, the turnover for both micro and small businesses has been fluctuating from the year 2010. It is also critical to note from the data that in some years, the turnover reduced instead of increasing. For instance, in 2010 the turnover for both micro and small businesses was 589,871,148 and 549,139,326 billions of Euros, respectively. In the following year 2011, the turnover reduced to 552,345,550 and 508,579,840, respectively. However, the figures have increased as of 2017 to 791,771,342 and 616,807,735 respectively. The growth in the turnover of micro and small businesses is a clear indication that they contribute positively to the growth of the economy in the United Kingdom.

In terms of inventory and general count, micro and other small businesses have significantly contributed and have seen an expansion. This is indicated by the data provided as the numbers have changed from 2010 to 2017. In the year 2010, micro-businesses had a count of 1,861,590, which increased to 2,386, 740 by 2017. Additionally, small businesses increased their count from 196, 520 in the year 2010 to a whopping 231, 715 in the year 2017. The graphs provided indicates the trend that has been experienced in the economy in regards to micro and other small businesses. Such ventures are contributing positively to the economy of the United Kingdom.

Small businesses and start-ups play a crucial role in the growth of the social economy. Social economy comprises a diversity of enterprises and organizations sharing common values and features. Such may include cooperatives, mutuals, associations, foundations, paritarian institutions and social enterprises who value social objectives over capital. The first and most important role that the businesses play is the creation of employment (Burns, 2016). For instance, in the United States in the year 2015, small businesses and startups created over 1.9 million jobs. There are over 30.2 million small businesses in the United States who employ approximately 58 million people. As such, small businesses contribute primarily to the growth of the economy by creating jobs.

Second, small scale businesses and start-ups contribute by ensuring that the GDP of the country grows. Social economy contributes to the overall GDP sum and its growth projects more taxes to be paid. A small business thriving locally will have more to give as taxes to the local government and hence a contribution to the GDP. Such money can be used locally to develop infrastructure within the community. As such, small businesses play a vital role in ensuring that the well-being of the community improves in the long run.

Small businesses quickly adjust to changes in the economic environment and act as a cushion to the local economy in cases where large businesses have failed. This is because in cases of unpredictability in the market, small business owners are customer-oriented and can flex quickly to suit the needs of the market. Large businesses have few options in case of a similar predicament and may not help the local economy as anticipated. As such, all small businesses around the world contribute positively to the growth of the social economy as their interest is not capital-driven.

Blank, S. (2010). What’s A Startup? First Principles.  Steve Blank .

Burns, P. (2016).  Entrepreneurship and small business . Palgrave Macmillan Limited.

Employment – ONS. (2019). Retrieved 23 July 2019, from https://webarchive.nationalarchives.gov.uk/20160105164129/http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Employment

Miles, R. E., Miles, G., Snow, C. C., Blomqvist, K., & Rocha, H. (2009). The I-form organization.  California Management Review ,  51 (4), 61-76.

Venkataraman, S. (2019). The distinctive domain of entrepreneurship research. In  Seminal Ideas for the Next Twenty-Five Years of Advances  (pp. 5-20). Emerald Publishing Limited.

Wennekers, S., & Thurik, R. (1999). Linking entrepreneurship and economic growth.  Small business economics ,  13 (1), 27-56.

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