Creativity & innovation in business by Norhaniza Abdul Latiff

Lecture 4 SOLVING INTRAPRENEURIAL/ ENTREPRENEURIAL PROBLEMS

The Five Stages of a Business’s Life Cycle Pre Start-up Start-up Growth Maturity Rebirth or Decline Getty Images

Figure 5.1 The Life Cycle of the START UP/COMPANY

Key Issues about the START UP Cycle There are static and dynamic forces which need a special attention of the entrepreneur Entrepreneur needs to manage for changes and not changes The growth stage of the venture is more sophisticated with competition and dilemmas At a certain stage, you need to decide whether to do more innovation or allow decline

New venture pre start up Stage Creativity and assessment Resource base analysis Networking including vertical marketing Vision, Mission, Objectives, Strategies & Tactics

Start-up Stage Formal Business plan Searching for capital (Analyse the risks) Marketing research Developing a working team Identifying any core competencies for Competitive Advantage

Growth Stage Any modification on he operating strategy Positioning and re-positioning Knowing more details about he competitors (Survival of the fittest)

Maturity/Stabilization Stage Increased competition High bargaining power of customers Saturation of the market The entrepreneur needs to think where will the business be in the near future It is a stage preceding a great dilemma: to innovate or exit the business

Rebirth (innovation) or Decline? stage Without innovation the clear option is ‘death’ Possibility of acquiring or being acquired Might design new products for new markets (Diversification) Conclusion ALL STAGES ARE STRATEGIC POINTS OF THE VENTURE HENCE A NEED FOR SPECIFIC STRATEGIES FOR EVERY STAGE! Finally !!!!

Creative Problem Solving Creativity tends to decline with age, education, lack of use, and bureaucracy. Latent creative potential can be stifled by perceptual, cultural, emotional, and organizational factors. Creativity can be unlocked by using any of the creative problem-solving techniques.

Brainstorming  Session starts with a problem statement.  No group member should be an expert in the field of the problem.  All ideas must be recorded. Reverse Brainstorming  A group method that focuses on the negative aspects of a product, service, or idea as well as ways to overcome these problems.  Care must be taken to maintain group morale. Creative Problem Solving (cont.)

Gordon Method  Method for developing new ideas when the individuals are unaware of the problem.  Solutions are not clouded by preconceived ideas and behavioral patterns. Checklist Method  Developing a new idea through a list of related issues. Free Association  Developing a new idea through a chain of word associations. Creative Problem Solving (cont.)

Forced Relationships  Developing a new idea by looking at product combinations.  A five step process which focuses on generating ideas from relationship patterns between elements of a problem. Collective Notebook Method  Developing a new idea by group members regularly recording ideas. Creative Problem Solving (cont.)

Attribute Listing  Developing a new idea by looking at the positives and negatives. Big-Dream Approach  Developing a new idea by thinking without constraints. Parameter Analysis  Developing a new idea by focusing on parameter identification and creative synthesis. Creative Problem Solving (cont.)

Conditions for Creative Problem Solving (Hoffman) Condition 1: Condition 1: Differing, but comparable, cognitions must coexist (quantity vs. quality) Condition 2: Condition 2: At least two differing cognitions must achieve minimum threshold valence (only one vs. two weak ideas vs. impasse) Condition 3: Condition 3: Group is required to find the best possible decision (motivation) Condition 4: Condition 4: Recognize points of conflict between cognitive components (resolve conflict to achieve create solution) © Copyrig ht Prentice -Hall 2004

In the case of business creativity, to be successful the creator must consciously or intuitively have had a sense of the market and what is required. In the case of business creativity, to be successful the creator must consciously or intuitively have had a sense of the market and what is required. Hence, the challenge for the entrepreneur is to maintain creativity and innovation alongside a market orientation, rather than trust to the happy accident Hence, the challenge for the entrepreneur is to maintain creativity and innovation alongside a market orientation, rather than trust to the happy accident The creative process is being triggered by an awareness of the market, new ways of satisfying it, and openness to change. In this circumstance, creativity can stem from intuition or gut feel, but nevertheless remain in tune with actual or potential market needs. The creative process is being triggered by an awareness of the market, new ways of satisfying it, and openness to change. In this circumstance, creativity can stem from intuition or gut feel, but nevertheless remain in tune with actual or potential market needs. Creativity in Intrapreneurship & Entrepreneurship

An organization is creative when its employees do something new and potentially useful without being directly shown or taught. The results of creativity in organizations are improvements and innovations.

Building Intrapreneurship Two common approaches used to stimulate intrapreneurial activity are  Skunk works – a project team designated to produce a new, innovative product  Bootlegging – Informal work on projects, other than those officially assigned, of employees’ own choosing and initiative

SIX ELEMENTS OF INTRAPRENEURSIP & INTREPRENEURSHIP CREATIVITY Alignment Self-Initiated Activity Unofficial Activity Serendipity Diverse Stimuli Within-Organization Communication

Alignment The degree to which the interests and actions of each employee support the organization’s goals. Lack of alignment is one of the main reasons for lack of creativity in an organization. Alignment is both intangible and hard to achieve.

Ways to Promote Alignment Clarity about what the key goals of the organization are. Commitment to initiatives that promote key goals. Accountability for actions that affect key goals.

Self-Initiated Activity Unexpected creative acts will result only from self- initiated activity. The desire to initiate creative acts not only already exists within most people, but is derived from an urge as deep rooted as hunger. Action is needed by organizations to promote self- initiated creativity.

Effective Ways to Respond to Employee Ideas Include everyone. Make the process easy to use. Have strong follow-through. Document ideas. Base system on intrinsic motivation.

Unofficial Activity Work done without direct official support can make it possible for an organization to improve in ways it never expected. A period of unofficial status can bring some important benefits that are often lost with official status.

Serendipity The faculty of making happy and unexpected discoveries by accident.

Ways to Promote Serendipity Increase awareness of the accidents that occur. Increase the organization’s domain of sagacity to turn more accidents into fortunate ones.

Diverse Stimuli A stimulus can either push someone in a completely new direction or give that person fresh insight into what he or she has already set out to do. The majority of stimuli that lead to organization creativity arise in connection with the work itself.

Ways to Promote Diverse Stimuli Identify stimuli and provide them to employees. Rotate employees into every job they are capable of doing. Arrange for employees to interact with those inside and outside the organization who are likely to be the source of stimuli. Create opportunities for employees to bring into the organization stimuli they get on their own.

Within-Organization Communication The majority of creative acts in organizations bring together components from unexpected places. If communication occurs only through official channels, the employees who know about these components but who do not ordinarily communicate with each other will never interact.

Ways to Promote Within- Organization Communication Provide opportunities for employees who do not normally interact with each other to meet. Ensure that every employee has a sufficient understanding of the organization’s activities to be able to tap its resources and expertise. Create a new organization priority: all employees should know the importance of being responsive to requests for information or help from other employees.

Challenges to be Expected To be a successful intrapreneur takes much more than just creativity or an idea. The successful intrapreneur has to be willing to take real risks at sharing and pushing an unique idea. Intrapreneurs may have to be patient and have to wait for their organization’s senior management’s final approval to create and launch a product or to create a new service, and they must be willing to push- wait-push-wait and never quit. However, if the effort is developing a product or service that competes with the existing bread-and-butter business of the company, the effort could be seen as a threat to many inside the company.

Successful entrepreneurial businesses rely on the following to develop a competitive edge:  find a niche and fill it  don’t just sell – entertain  strive to be unique  connect with the customer on an emotional level  focus on the customer  devotion to quality  attention to convenience  concentration on innovation  dedication to service  emphasis on speed

The Idea Many great organizations have been built based on the founder’s desire to build a great organization rather than to offer a particular product After a job in corporate design turned out to be unsatisfying, Jennifer Velande found a creative outlet for herself—designing handbags. Soon, with the help of her friend Robin Newberry, Jennifer turned this “hobby” into a unique business concept Lill now gives customers the opportunity to design their own original handbags. Return

Key Takeaway Points... “Entrepreneurship” reflects creative, innovative, and arbitrage oriented behaviors. Is a process; involves planning, strategizing, and a little bit of luck. Interconnectedness of resources and opportunities Entrepreneurship can occur – and fail to occur – in firms that are old and new; small and large, fast and slow growing; in the private, not-for-profit, and public sectors; in all geographic points; and in all stages of a nation’s development

Drucker’s Entrepreneurial Practices Druker suggests some key management practices are vital in the development of ‘entrepreneurship’ in an existing business.  Management focuses on opportunity  Generation and maintenance of entrepreneurial spirit  Top-down and cross functional interaction  Source Drucker, P. Innovation & Entrepreneurship. Pan

The final word ….. 38 “Intrapreneurs cannot exist if their passionate commitment is ignored and their visions given to people who don’t understand them. Without intrapreneurs, innovation flounders Source Pinchot (1986)

“Bringing together ideas that were previously unrelated”