Introduction to Entrepreneurship Chapter 5 Quiz MindtapOpportunity identification

The Most Common Idea Killers

"Naah." "Can't" (said with a shake of the head and an air of finality). "That's the dumbest thing I've ever heard." "Yeah, but if you did that ... " (poses an extreme or unlikely disaster case). "We already tried that—years ago." "I don't see anything wrong with the way we're doing it now." "We've never done anything like that before." "We've got deadlines to meet—we don't have time to consider that." "It's not in the budget." "Where do you get these weird ideas?"

Principles of Innovation

- Be action oriented. - Make the product, process, or service simple and understandable. - Make the product, process, or service customer-based. - Start small. - Aim high. - Try/test/revise. - Learn from failures - Follow a milestone schedule. - Reward heroic activity. - Work, work, work.

Creating Process Phase 3: The Idea Experience Examples

Following are ways to speed up the idea experience: daydream and fantasize about your project, practice your hobbies, work in a leisurely environment (e.g., at home instead of at the office), put the problem on the back burner, keep a notebook at bedside to record late-night or early-morning ideas, take breaks while working

The Major Misconceptions of Innovation

Innovation is planned and predictable Technical specifications must be thoroughly prepared Innovation relies on dreams and blue-sky ideas Big projects will develop better innovations than smaller ones Technology is the driving force of innovation success

creative process

The four phases of creative development: background or knowledge accumulation, incubation process, idea experience, and evaluation or implementation.

Creativity

The generation of ideas that results in an improvement in the efficiency or effectiveness of a system.

left brain

The part of the brain that helps an individual analyze, verbalize, and use rational approaches to problem solving.

right brain

The part of the brain that helps an individual understand analogies, imagine things, and synthesize information.

Innovation

The process by which entrepreneurs convert opportunities into marketable ideas.

Phase 4: Evaluation and Implementation

This is the most difficult step of a creative endeavor and requires a great deal of courage, self-discipline, and perseverance. Successful entrepreneurs can identify ideas that are workable and that they have the skills to implement. More important, they do not give up when they run into temporary obstacles

Creativity Arena #4 Relationship creativity

an innovative approach to achieving collaboration, cooperation, and win-win relationships with others. The person who handles a difficult situation well or deals with a particular person in an especially effective manner is being creative in a relationship or one-on-one context.

Creativity Arena #6 Inner creativity

changing your inner self; being open to new approaches to how you do things and thinking about yourself in different ways; achieving a change of heart or finding a new perspective or way to look at things that is a significant departure from how you have traditionally looked at them.

Examples of Creative Process Phase 2:

engage in routine, "mindless" activities (cutting the grass, painting the house), exercise regularly, play (sports, board games, puzzles), think about the project or problem before falling asleep, meditate or practice self-hypnosis, and sit back and relax on a regular basis.

Trend 3 Economic Trends:

higher disposable incomes, dual wage-earner families, performance pressures

Trend 4 Government Trends

increased regulations, petroleum prices, terrorism

Example of an Innovation Type #4 Synthesis

Description: Combination of existing concepts and factors into a new formulation or use Examples: Fred Smith—FedEx Howard Schultz—Starbucks

Example of an Innovation Type #3 Duplication

Description: Creative replication of an existing concept Examples: Walmart—department stores Gateway—personal computers Pizza Hut—pizza parlor

Example of an Innovation Type #2 Extension

Description: New use or different application of an already existing product, service, or process Examples: Ray Kroc—McDonald's Mark Zuckerberg—Facebook Barry Sternlicht—Starwood Hotels & Resorts

Example of an Innovation Type #1 Invention

Description: Totally new product, service, or process Examples: Wright brothers—airplane Thomas Edison—lightbulb Alexander Graham Bell—telephone

1st Approach to Creative Problem Solving: Adaptor

Employs a disciplined, precise, methodical approach Is concerned with solving, rather than finding, problems Attempts to refine current practices Tends to be means oriented Is capable of extended detail work Is sensitive to group cohesion and cooperation

Creativity Arena #2 Material creativity

inventing and building a tangible object such as a product, advertisement, report, or photograph.

four major types of innovation

invention, extension, duplication, and synthesis.

Trend #2 Technology Trends

mobile (smartphone) technology, e-commerce, Internet advances

Creativity Arena #3 Organization creativity

organizing people or projects and coming up with a new organizational form or approach to structuring things. Examples could include organizing a project, starting a new type of venture, putting together or reorganizing a work group, and changing the policies and rules of a group.

Creativity Arena #5 Event creativity

producing an event such as an awards ceremony, team outing, or annual meeting. The creativity here also encompasses decor, ways in which people are involved, sequence of happenings, setting, and so forth.

Examples of Creative Process Phase 1:

read in a variety of fields; join professional groups and associations; attend professional meetings and seminars; travel to new places; talk to anyone and everyone about your subject; scan magazines, newspapers, and journals for articles related to the subject; develop a subject library for future reference; carry a small notebook and record useful information; and devote time to pursue natural curiosities

Creativity Arena #1 Idea Creativity

thinking up a new idea or concept, such as an idea for a new product or service or a way to solve a problem.

2nd Approach to Creative Problem Solving: Innovator

Approaches tasks from unusual angles Discovers problems and avenues of solutions Questions basic assumptions related to current practices Has little regard for means; is more interested in ends Has little tolerance for routine work Has little or no need for consensus; often is insensitive to others

Innovation Type #4 Synthesis

A basic type of innovation that involves combining existing concepts and factors into a new formulation.

Innovation Type #2 Extension

A basic type of innovation that involves extending the life of a product, service, or process already in existence.

Innovation Type #1 Invention

A basic type of innovation that involves the creation of a new product, service, or process that is often novel or untried.

Innovation Type #3 Duplication

A basic type of innovation that involves the replication of an already existing product, service, or process.

appositional relationship

A relationship among things and people existing in the world in relation to other things and other people.

The Creative Climate Characteristics

A trustful management that does not overcontrol employees Open channels of communication among all business members Considerable contact and communication with outsiders A large variety of personality types A willingness to accept change An enjoyment in experimenting with new ideas Little fear of negative consequences for making a mistake The selection and promotion of employees on the basis of merit The use of techniques that encourage ideas, including suggestion systems and brainstorming Sufficient financial, managerial, human, and time resources for accomplishing goals

Sources of Innovative Ideas #5 Demographic Changes

Changes in population size, age, education, occupation, geographic locality, and similar demographic variables often catalyze new entrepreneurial opportunities. For example, as the average population age in Florida and Arizona has increased (due largely to the influx of retirees), land development, recreation, and health care industries all have profited.

Muddling Mindset #2 Security hunting

Common mental habit that inhibits creativity and innovation by hindering creative thought processes.

Sources of Innovative Ideas #4 Industry and Market Changes

Continual shifts in the marketplace caused by changes in consumer attitudes, advancements in technology, and growth in the structure, design, or definition of markets or industries are sources of emerging opportunity. An example can be found in the health care industry, where in-patient care has undergone radical changes, and at-home health care and preventive medicine have replaced hospitalization and surgery as primary focus areas.

Creative Process Phase 2: The Incubation Process

Creative individuals allow their subconscious to mull over tremendous amounts of information gathered during the preparation phase. This incubation process often occurs while they are engaged in activities totally unrelated to the subject or problem. It happens even when they are sleeping.

# Sources of Innovative Ideas 7 Knowledge-Based Concepts

Inventions, which are the product of new thinking, new methods, and new knowledge, often require the longest time period between initiation and market implementation because of the need for testing and modification. For example, cell phone technology has advanced to include not just phone service but cameras, Internet access, and music. This has revolutionized the way we use cell phones today. These concepts were not thought possible just 5 years ago; some examples of these innovation sources are presented in Table 5.1.

Recognizing Relationships

Many inventions and innovations are a result of the inventor's ability to see new and different relationships among objects, processes, materials, technologies, and people. Examples: adding fruit juice to soft drinks to create Slice, combining combustion engine technology with the wheel to create the automobile, and using a 330-pound defensive football player as a running back and pass receiver.

Right Brain Hemisphere

Non-Verbal Synthesizing Seeing analogies Nonrational Spatial Intuitive Imaginative

Muddling Mindset #1 Either/or thinking

People often get bogged down with striving for an unreasonable amount of certainty in their lives. But the creative person learns to accept a reasonable amount of ambiguity in his or her work and life.

Sources of Innovative Ideas #6 Perceptual Changes

Perceptual changes in people's interpretation of facts and concepts may be intangible but meaningful. The perceived need to be healthy and physically fit has created a demand for both health foods and health facilities throughout the country. People's desire to better use their personal time has been a boon to the travel industry, which, capitalizing on consumers' desires to "see the world" while they are young and healthy, has led to increasing interest in time-share condominiums and travel clubs.

Two important components of creative problem

Process is goal oriented; it is designed to attain a solution to a problem. People are the resources that determine the solution. The process remains the same, but the approach that people take toward problem solving varies: Sometimes they will adapt a solution, and at other times they will formulate a highly innovative solution. Table 5.2 compares the approaches of adaptors versus innovators.

Muddling Mindset #3 Stereotyping

Refers to averages that people fabricate and then, ironically, base decisions on as if they were entities existing in the real world.

Muddling Mindset #4 Probability thinking

Relying on probability to make decisions in the struggle to achieve security.

Phase 4: Evaluation and Implementation Examples

Some of the most useful suggestions for carrying out this phase are to increase your energy level with proper exercise, diet, and rest; educate yourself in the business-planning process and all facets of business; test your ideas with knowledgeable people; take notice of your intuitive hunches and feelings; educate yourself in the selling process; learn about organizational policies and practices; seek advice from others (friends, experts, etc.); and view the problems you encounter while implementing your ideas as challenges.

Sources of Innovative Ideas #1 Unexpected Occurrences

Successes or failures that were unanticipated or unplanned often prove to be major sources of innovation. The infamous 9/11 terrorist attack on the United States is a good example of an unexpected occurrence; it produced an influx of innovative solutions to new homeland security challenges.

Creative Process Phase 1: Background or Knowledge Accumulation

Successful creations are generally preceded by investigation and information gathering. This usually involves extensive reading, conversations with others working in the field, attendance at professional meetings and workshops, and a general absorption of information relative to the problem or issue under study.

Opportunity identification

The ability to recognize a viable business opportunity within a variety of good ideas.

Creating Process Phase 3: The Idea Experience

This phase of the creative process is often the most exciting because it is when the idea or solution the individual is seeking is discovered. As with the incubation process, new and innovative ideas often emerge while the person is busy doing something unrelated to the enterprise, venture, or investigation (e.g., taking a shower, driving on an interstate highway, or leafing through a newspaper).

Trends

Trends signal shifts in the current paradigm (or thinking) of the major population. The close observation of trends—whether societal, technological, economic, or governmental—and the valuable insights that emanate therefrom constitute an abundant source of potential entrepreneurial ideas.

Sources of Innovative Ideas #3 Process Needs

Venture capitalists often refer to process needs in the marketplace as "pain" and to innovative solutions to these needs as "painkillers." When the need is to do something better, innovative new medical devices, healthier foods, more effective pharmaceuticals, and time-saving devices can be the result.

Left Brain Hemisphere

Verbal Analytical Abstract Rational Logical Linear

functional perspective

Viewing things and people in terms of how they can be used to satisfy one's needs and to help complete a project.

muddling mind-sets

When creative thinking is blocked or impeded.

Sources of Innovative Ideas #2 Incongruities

Whenever a gap or difference exists between expectations and reality.

Creativity Arena #7 Spontaneous creativity

acting in a spontaneous or spur-of-the-moment manner, such as coming up with a witty response in a meeting, an off-the-cuff speech, a quick and simple way to settle a dispute, or an innovative appeal when trying to close a sale

Trend #1 Societal Trends

aging demographics, health and fitness growth, senior living