Creativity Innovation Entrepreneurship Enterprise and its Business Environment

Creativity, Innovation & Entrepreneurship Enterprise and its Business Environment © Goodfellow

Creativity; Past, Present & Future…. . “How Can we Know Where We’re Going Without Knowing First Where We ‘ve Been? ” Enterprise and its Business Environment © Goodfellow

Creativity: What is it? ? ? …… “The ability to create and innovate has been observed throughout history and even though the fundamental tools may have changed the ability has been prevalent in every civilisation” (Hisrich, Peters and Shepherd, 2005, p. 8). “May our species be resurrected and awakened by the Spirit of Creativity for this coming century” (Fox, 2002). Enterprise and its Business Environment © Goodfellow

The Past……. “Throughout history, the process of creation whether; paintings or musical compositions were thought of as ‘spiritual experiences in the service of whatever muse held the artist in her thrall” (Thorsby, 2001, p. 95). “The artist was a channel for a superior power, creativity a gift from the gods, and the imagination a divine spark” (Thorsby, 2001, p. 94). Enterprise and its Business Environment © Goodfellow

A Gift from the Gods or a New Phenomenon? Or…Could Both Be True? ? . . . Maybe? Natures Creation? or Human Creation Venoms & Poison or Anaesthetics The Leaf or Solar Panel (energy from light) The Brain or Computer/Electronic Circuitry DNA or Computer Program The Ear Drum or Microphone The Eye or Camera (lens, focus, iris, film) Eye Lid or Windshield Wiper Incisor Teeth or Knife The Heart or Pump Spinal Chord/Nervous system or Communication/Telephone Cables Birds or Music Enterprise and its Business Environment © Goodfellow

Creativity “There is no doubt that creativity is the most important human resource of all. Without creativity there would be no progress, and we would be forever repeating the same patterns” (Edward de Bono). Enterprise and its Business Environment © Goodfellow

Two views of Creativity The Elite View V’s The Developmental View Enterprise and its Business Environment © Goodfellow

The Elitist View… • Getting New & Valuable Ideas • A Rare Talent • Creating Great Works of Art or Scientific Discoveries • Unable to be Taught • Not Relevant in My Job/ Organisation • A Lonely Individual Process Enterprise and its Business Environment © Goodfellow

The Developmental View… • Available to Everyone • Evident in Personal & Modest Insights • Released Through Training & Development of Personal Potential • Within the Scope of All Jobs • Encouraged or Discouraged Within Groups According to their Climate • Escape from ‘Personal Stuckness’ & Reveals Itself in Results Which are Original & Potentially Valuable Enterprise and its Business Environment © Goodfellow

Which View Do You Agree With? Enterprise and its Business Environment © Goodfellow

The Reality…. . • Creativity Is Not Exclusively for ‘Elite’ People • It Can be Developed in All Persons • Creativity is a Personal Problem-solving Process of a Non-routine Kind • It Can be Learned, Practiced & Successfully Applied by all – in Every Walk of Life Enterprise and its Business Environment © Goodfellow

Three Components of Creativity • Domain Relevant Skills • Creative Processes • Intrinsic Task Motivation See; Amabile, Philips & Collins, Enterprise and its Business Environment © Goodfellow

Stages in Creative Thought • Preparation • Incubation • Insight • Evaluation • Elaboration Enterprise and its Business Environment © Goodfellow

• So What Is An Innovation? Enterprise and its Business Environment © Goodfellow

What is Innovation? • Newness & Adding Value • Functional Value: Technology-Driven • Symbolic Value (Meaning): Design-Driven • Degree of Newness: • Radical Innovation • Incremental Innovation Enterprise and its Business Environment © Goodfellow

What is A New Innovation? • What do you define as new? • Can mean different things to different people • New to the world (10%) • New to the firms (20%) • Additions to existing products/process (26%) • Improvement and revisions to existing products/process (26%) • Repositioning (with different purposes) (7%) • • New to the market (geography + segments) New to the season • Cost reduction (11%) (See; Booz, Allen & Hamilton, 1982; Griffin, 1997) Enterprise and its Business Environment © Goodfellow

New Meaning, New Concept…. (1) Enterprise and its Business Environment © Goodfellow

New Meaning, New Concept… (2) Enterprise and its Business Environment © Goodfellow

Creative New meaning with New Innovation Enterprise and its Business Environment © Goodfellow

Revolutionise Existing Concepts Enterprise and its Business Environment © Goodfellow

Not all Innovations are Successful… Innovation = Invention + Commercialization Enterprise and its Business Environment © Goodfellow

Neither are All Fashion Trends Enterprise and its Business Environment © Goodfellow

What is Entrepreneurship? “Entrepreneurship is the identification, evaluation, and exploitation of opportunities” (Shane, 2011, p. 143). Enterprise and its Business Environment © Goodfellow

Historic Evolution on Entrepreneurship • Entrepreneurial strategies are not a twentieth-century phenomenon. • The word entrepreneur originates from a 13 th century French verb, entreprendre, meaning “to do something” or ‘to undertake’ (Sobel, 2011, p. 2). • Marco Polo established trade routes to the Far East, he demonstrated risk-taking behaviour we associate with entrepreneurship today (Osborne, 1995, p. 4). The ‘fit’ between his skills and the environmental opportunity is a perfect illustration of a true entrepreneurial strategy, and in particular is more relevant to our understanding of entrepreneurship, with its increasing global scope (Ibid, p. 4). Enterprise and its Business Environment © Goodfellow

Marco Polo’s Trade Routes… Enterprise and its Business Environment © Goodfellow

What Does it Mean Today? • Dictionary definition • The owner or manager of a business enterprise who, by risk and initiative, attempts to make profits • Popular view: • ‘Arthur Daly’, ‘Del Boy’ • Original derivation: • ‘entreprendre’ (French): to undertake Enterprise and its Business Environment © Goodfellow

Definitions of Entrepreneurship • “Much has been written on the complex subject of entrepreneurs and entrepreneurship, and many inconsistent definitions have been brought forth and explored in great detail. Yet the entrepreneur is still one of the most ‘intriguing and elusive characters to constitute the subject of analysis” (Baumol, 1968, p. 64). • “All who claim to have caught sight of him report he is enormous, but disagree on his particulars” (A. A. Milne. In Kirby, 2003, p. 11). Enterprise and its Business Environment © Goodfellow

However…. . “Entrepreneurship is essentially an economic phenomenon, and ‘involves a nexus of two phenomena: the presence of lucrative opportunities and the presence of enterprising individuals”. (Venkataraman, 1997) Enterprise and its Business Environment © Goodfellow

• Who are these Individuals? Enterprise and its Business Environment © Goodfellow

Historical Views from Economics • • Economics tends to marginalize the entrepreneur Cantillon and Say (from the perspective of an agrarian economy) – someone who makes buying and selling decisions and in so doing is the bearer of risk ‘Austrian school’: Kirzner – an ‘alert’ middleman who spots opportunities to facilitate exchange (arbitrage) Schumpeter: an innovator – the entrepreneur brings change through the introduction of new technological processes or products Knight: someone who undertakes risk, with profit being the reward for bearing uncertainty Shackle: emphasises the role of creativity in the entrepreneurial process Casson: someone with the skills to organise or reallocate Enterprise and its Business resources Environment © Goodfellow

Economic Theories of Entrepreneurship Risk Taker – Richard Cantillion, 1755 Risk Taker & Innovator – Von Thunen, 1850 Novel Resource Combination – Alfred Marshall, 1920 Technological Knowledge – Jeremy Bentham, 1838 Capitalist – Adam Smith, 1776, David Ricardo, 1871 Capi Ama talist – sa 1866 Walker, , Fra n ci A. W alker s 1887 , Economic Change – Carl Menger, 1871 Risk T Unc aker & Avo ertainty – r o idan at Fran v ce – o k Kn nn seph er, I i Jo pet 192 ght, 1 hum 52 c S 19 Enterprise and its Business Environment © Goodfellow – s s rtne l A a Isre er, n Kirz 73 19

Definitions continued • Note: None of These Definitions Sees the Entrepreneur as the Creator of a Business • Contemporary Definitions: • Distinguish Between ‘Enterprise’ & ‘Entrepreneurship’ • Enterprise: • Using Skills Such as Initiative, Independence, Creativity, Problem-solving, Identifying & Working on Opportunities, Leadership & Acting Resourcefully to Apply Creative Ideas & Innovations to Practical Situations to Effect Change Enterprise and its Business Environment © Goodfellow

• Which Entrepreneurs Can You Name? Enterprise and its Business Environment © Goodfellow

Revolutionaries continued • How have entrepreneurs affected your life in the past 24 hours? • Have you used your computer? (personal computers, PC software: Intel, Microsoft, Dell, Apple) • Have you surfed the web? (web browser – Netscape, Google, AOL) • Have you made a purchase over the internet (internet retailers, e. Bay, Pay. Pal) • Have you made a mobile phone call? (cellular phone services; voice mail IT services) • Have you used a hand held wireless communication device (a ‘blackberry’)? (RIM) • Have you taken your car in for a fast oil change or Mo. T? (Kwik. Fit) • Have you taken a budget flight? (Easyjet, Ryan Air) Enterprise and its Business Environment © Goodfellow

Revolutionaries … continued • Where have you bought your clothes? Have you put on trainers (Nike, Reebok), put on waterproof clothes (WL Gore, Timberland)? • Have you bought a coffee (Starbucks) • Have you bought some DIY products (Home Depot, B&Q) • Have you bought any stationary? (Staples) • Have you listened to your i. Pod? (Apple) • Have you watched a 24 hours news channel? (CNN) • Do you purchase ethically (Bodyshop)? • Have you played a round of golf? (Calloway Golf) • Have you been to a fitness club (Fitness First, David Lloyd)? • Have you bought a copy of ‘Big Issue’? (social entrepreneurship) • Have you donated anything to a charity shop? (e. g. Bethany Trust) Enterprise and its Business Environment © Goodfellow

• Why Do They Do What They Do? Enterprise and its Business Environment © Goodfellow

So Why Choose to be an Entrepreneur? • Luke Johnson (FT 25/4/07) • Freedom: “starting and running a business is the best way of controlling your destiny” • Changing the world: “creating an enterprise is perhaps the most effective way of making a positive difference to society that has ever been devised. ” “What could be more important than creating jobs? ” • Progress: “new business is about upsetting the status quo, thereby leading to progress. I think that is a virtuous mission” Enterprise and its Business Environment © Goodfellow

continued • Social mobility; “business is a fantastic way for someone from a modest background … to improve their life and get ahead. ” • Creative destruction: inefficient and loss making companies die … but productive companies tend to create a virtuous circle: … attract talent, pay more, make investors good returns, and can afford to launch better products. This is called progress. ” • Creating a better future: “the inventive ability of entrepreneurs to find solutions to … problems” such as global warming and so forth. • Entrepreneurship is about striving for a better future – not just dreaming. Enterprise and its Business Environment © Goodfellow

In Economic Terms…. • “There has never been a better time to practice the art and science of entrepreneurship”. (Bygrave and Zacharakis) Enterprise and its Business Environment © Goodfellow

UK SME Statistics: Start of 2013 • • • There were an estimated 4. 9 million businesses in the UK which employed 24. 3 million people, and had a combined turnover of £ 3, 300 billion SMEs accounted for 99. 9 per cent of all private sector businesses in the UK, 59. 3 per cent of private sector employment and 48. 1 per cent of private sector turnover SMEs employed 14. 4 million people and had a combined turnover of £ 1, 600 billion Small businesses alone accounted for 47 per cent of private sector employment and 33. 1 per cent of turnover Of all businesses, 62. 6 per cent (3. 1 million) were sole proprietorships, 28. 5 per cent (1. 4 million) were companies and 8. 9 per cent (434, 000) partnerships There were 891, 000 businesses operating in the construction sector - nearly a fifth of all businesses In the financial and insurance sector, only 27. 5 per cent of employment was in SMEs. However, in the agriculture, forestry and fishing sector virtually all employment (95. 4 per cent) was in SMEs Only 22. 5 per cent of private sector turnover was in the arts, entertainment and recreation activities, while 92. 7 per cent was in the agriculture, forestry and fishing sector With 841, 000 private sector business, London had more firms than any other region in the UK. The south east had the second largest number of businesses with 791, 000. Together these regions account for almost a third of all firms Enterprise and its Business (Federation of Small Businesses, 2013) Environment © Goodfellow 40

Small and Medium Sized Enterprises (SMEs) The main factors determining whether a company is an SME are: Company category Employees Turnover or Balance sheet total Medium-sized < 250 ≤ € 50 m ≤ € 43 m Small < 50 ≤ € 10 m Micro < 10 ≤ € 2 m (European Commission, 2013) With the UK government adopting the definition of SMEs as - Micro firm: 0 -9 employees Small firm: 0 -49 employees Medium firm: 50 -249 employees (Greene and Mole, 2006). Enterprise and its Business Environment © Goodfellow 41

Importance of SMEs • SMEs play an important role in the change of technology and innovation • SMEs create an additional sense of competition whilst also, providing a mechanism for regeneration • SMEs contribute to international competition • SMEs create jobs • SMEs contribute to economic growth Enterprise and its Business Environment © Goodfellow 42

What Explains this Growth? • Structural shift from manufacturing (large firm dominated) to services (small firm dominated) • Growth in personal, flexible, tailor-made services • Restructuring by large firms – focus on core activities, sub-contract non-core activities • Technological change • Scientific discoveries exploited by small firms • Production and IT technologies have reduced the role of economies of scale • Low cost and access to communications technology (‘the great equaliser’): access to information, distribution (‘the long tail’) Enterprise and its Business Environment © Goodfellow

Growth Continued • Importance of human capital rather than financial capital as the basis for competitiveness • Consumer choice – reaction against mass produced products and services: individualism, demand for authenticity, natural products (e. g. real ale beer) – growth in market niches • Deregulation of markets: e. g. in airlines, telecoms, media • Personal choice – ‘rebellion’, reaction against working in large impersonal organisations, want to control own destiny • Availability of finance – venture capital • Availability of support, advice and education Enterprise and its Business Environment © Goodfellow

• How do they do it? Enterprise and its Business Environment © Goodfellow

Timmon’s (2007) Model Enterprise and its Business Environment © Goodfellow

An Enterprise Needs • According to Timmons & Spinelli (2007); • Opportunity • Lead Entrepreneur & A Team • Resource Parsimony & Creative Use of Resources • Fit & Balance • Integrated & Holistic • Sustainable Enterprise and its Business Environment © Goodfellow

The Paradoxes of Enterprise On The One Hand On The Other • Enterprise Requires Thought & Preparation • To Make Money • An Opportunity with Little or No Potential • To Create & Build Wealth • To Succeed • It Is An Unplanned Event • You Have To Loose Money • Can Be An Enormous Opportunity • You Must First Relinquish Wealth • You Must Experience Failure Enterprise and its Business Environment © Goodfellow

Planned or Unplanned? Sarasvathy, 2001 Enterprise and its Business Environment © Goodfellow

The Entrepreneurial Process Enterprise and its Business Environment © Goodfellow

So… • Do Ideas = Opportunities? • Do Problems = Opportunities? • Reality - An Idea is Only an Opportunity when It: • Adds Value to Consumer • It Solves a Problem • It Can Make Some Money ( Communicate Some Value to Other Stakeholders) • It is a Good “Fit” with the Entrepreneurial Team Enterprise and its Business • Timmons& Spinelli (2007) Environment © Goodfellow

Ideas Can Start with Solving Problems • Solving “Points of Pain”: • To Notice Inefficiency, Inconveniences, & Other Forms of “Points of Pain” & Use these to Build New Business Opportunities Enterprise and its Business Environment © Goodfellow

Ideas Start With Solving Problems • Any Problems are Big Opportunities. • No Problems, No Solutions, & No Reasons for Firms to Exist. • No One Pays You to Solve a Non-exist Problem (Vinod Khosla, Sun Microsystems) Enterprise and its Business Environment © Goodfellow

Example (1): Rise of Levi’s • Problem: • Working Clothes for Mining Workers do Not Last • Solution: • First Pair of Jeans Enterprise and its Business Environment © Goodfellow

• The Point of Pain: A Direct Solution http: //kck. st/LEbznj Enterprise and its Business Environment © Goodfellow

What is Your Opportunity for the Pizza Business? Enterprise and its Business Environment © Goodfellow

What is Your Opportunity for the Pizza Business? Enterprise and its Business Environment © Goodfellow

Locating a Business Idea Mapping: where to look for? Enterprise and its Business Environment © Goodfellow

Searching for Business Opportunity in a 360 Degree Space Enterprise and its Business Environment © Goodfellow

Locating Business Ideas • Products: Create Entirely New Products or New Services • Solutions: Solve “End-to-end” Problems for Customers • Customers: Find New Customer Segments or Unmet Needs • Customer Experience: Change How Customers Interact With You • Revenue Model: Change How You Get Paid • Processes: Innovate on Operating Processes • Value Chain: Change Position or Scope of Participation • Logistics/Supply Chain: Change the Way You Source & Ship • Channels: Change How you Go To Market with your Products • R&D: Create New Technologies, Materials, Products or Processes Enterprise and its Business Environment © Goodfellow

There are Other Techniques to Screen Your Idea…. Enterprise and its Business Environment © Goodfellow

Screening • Systematic approach but avoid the paralysis with analysis approach. • Should screening be the same for every business or change depending on the context? Service company’s think that ideas should be generated as required rather than an ongoing basis but still use financial, marketing, management, strategy and resource implications ( Kelley & Storey 1999) • Hard and fast rules presented by writers. Enterprise and its Business Environment © Goodfellow

Enterprise and its Business Environment © Goodfellow

Case Studies of Successful Businesses • http: //www. growingbusiness. co. uk/ones-towatch? page=6 • https: //www. nationalfield. com/ Enterprise and its Business Environment © Goodfellow

True Entrepreneurial, Creative & Innovative Acts • Dare To Dream!!! • Be Creative… Do Things Which Others Refuse! No Compromise Between Dream & Capabilities • The New Ones Can Start from the Forgotten Old Ones Stop & Look Around Enterprise and its Business Environment © Goodfellow

Don’t Limit Yourselves Enterprise and its Business Environment © Goodfellow

Additional Resources. . • • • Berger, B. (1991) The Culture of Entrepreneurship. CA: ICS Press. Adair, J (2007) The Art of creative Thinking London. Kogan Page Antoncic, Bostjan & Hisrich, Robert D ( 2003) Clarifying the intrapreneurship concept Journal of Small Business & enterprise Development Vol 10 no 1, pp 7 -24 Bilton, C. (2007) Management and Creativity: From Creative Industries to Creative Management. 1 st Edition, Oxford: Blackwell Publishing. Christensen C, Anthony, Roth, E. (2004) Seeing What's Next: Using the Theories of Innovation to Predict Industry Change, Harvard Business School Press. Davidsson, P. (2006) The entrepreneurial process. In Enterprise and Small Business: Principles, Practice and Policy, S. Carter and D. Jones-Evans, eds. 2 nd Edition, Financial Times/Prentice Hall: Hanslow. De Bono, E. Dimov, D & De Clercq, D ( 2006) Venture Capital Investment Strategy and. Portfolio Failure Rate: A Longitudinal Study Entrepreneurship, Theory and Practice Fox, M. (2002) Creativity: Where the Divine and the Human Meet, 1 st Edition. New York: Tarcher/Putnam. Goffin, K. , & Mitchell, R. (2005) Innovation Management, Palgrave Macmillan. Hisrich, R. D. , Peters, M. P. , Shepherd, D. A. (2005) Entrepreneurship, 6 th Edition, USA: Mc. Graw Hill Irwin. Howells, J. (2005) The Management of Innovation and Technology, Sage. Johnson, Steven (2010) Where good ideas come from Kelley & Storey (2000) New service Development: initiation strategies, Int Journal of Service management. Vol 11 no 1 pp 45 -62 Lumsdaine, E. , & Binks, M. 2007. Entrepreneurship: From Creativity to Innovation, Oxford: Trafford Publishing. Mc. Donald, L (2009) Wild drinks: The hedgerow Martini” The Times May 30 2009 available from http: //www. timesonline. co. uk/tol/life_and_style/food_and_drink/drinks/article 6365156. ece accessed 23 January 2011 Piercy, N. (2002) Market Led Strategic Change, Third Edition, Butterworth Heinemann. Porter & Kramer(2011) Creating shared Value HBR Jan/Feb 2011 Stewart, Anne(2011) Where do great ideas come from? Inc magazine [online] available from http: //www. inc. com/magazine/20021015/24773_pagen_3. html accessed 21 January 2011 Stokes, D, . Wilson, N, . (2006) Small Business Management & Entrepreneurship, Ch 4, pp 100 – 139 Thomson Learning. Throsby, D. (2001) Economics and Culture. Cambridge: Cambridge University Press Timmons, Jeffry A & Spinelli, Stephen (2007) New Venture Creation Mc. Graw. Hill. ch 3 & 4 • • • WEBSITES ACCESSED……… http: //www. sie. ac. uk/60 secondshorts/videos. php http: //www. creax. com/csa/frame. asp? session=zero • • • • Enterprise and its Business Environment © Goodfellow

Reading Fillis, I. (2002) An Andalusian Dog or a Rising Star? Creativity and the Marketing/Entrepreneurship Interface. Journal of Marketing Research, 18(1), 379 -395. Bygrave, W. D. (1989) The entrepreneurship paradigm (1): a philosophical look at its research methodologies, Entrepreneurship Theory and Practice, 14(1), 1 -26. Enterprise and its Business Environment © Goodfellow