1. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. RECOGNIZING AND SHAPING AN OPPORTUNITY 3

2. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives  Understand the nature of entrepreneurial opportunity through discovery and creation.  Discuss creativity, its challenges, and how to develop creative skills.  Explain problem solving as it relates to creativity and entrepreneurship.  Understand types of innovation and the innovation process.

3. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity: What It Means  Enables entrepreneurs to differentiate their businesses from competitors  Is the basis for invention  Is fundamental to problem solving  Is a critical skill for recognizing or creating opportunity in a dynamic environment

4. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity Themes Figure 3.1 Source: Adapted from Isaksen, S.G., Stein, M.I., Hills, D.A. & Grayskiewicz, S.S. (1984). “A Proposed Model for the Formulation of Creativity Research,” Journal of Creative Behavior, 18: 67–75.

5. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity: What It Means (cont’d) Four stage creative process: 1. Preparation: looking at a problem from a variety of perspectives 2. Incubation: letting the problem lie in the subconscious for a time 3. Illumination: the discovery of a solution 4. Verification: bringing the idea to an outcome

6. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Seven Stage Dynamic of the Creative Process Figure 3.2 Source: Adapted from Norman Seeff Productions.

7. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Challenges to Creativity  No time for creativity  No confidence “Confidence is the expectation of success.”

8. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Developing Creative Skills 1. Design an environment to stimulate creativity Minimize distractions Devote time daily to quiet contemplation Spend time in the places that best promote your creative thinking Spend time with people in different fields of interest and move out of the comfort zone

9. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Developing Creative Skills (cont’d) 2. Log ideas 3. Put the familiar into a new context 4. Take advantage of a personal network 5. Return to childhood

10. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity and Problem Solving  Define the problem Restate the problem so as to uncover the real problem Identify the pros and cons for potential solutions Develop a decision tree

11. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity and Problem Solving (cont’d)  Generate ideas for sources of the problem and potential solutions Quantity over quality initially Capture every idea Piggyback on ideas and create new combinations and modifications

12. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creativity and Problem Solving (cont’d)  Other techniques for generating ideas: Brainwriting Getting ideas down on paper and then organizing ideas and creating themes Connecting unrelated concepts Attribute identification Restating the problem

13. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Focus on Problem Definition  Use affirmative judgment  Use a set of predefined criteria  Effective problem statement contains: A “how” question Identification of responsible party Action verb, representing positive course of action Targeted or desired outcome

14. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Developing Solutions  Use same techniques used to generate and focus ideas  Criteria plays critical role in solution identification  Explicit: time limits, budgets, constraints  Implicit: considerations such as intuition, team culture, preferences, prejudices, etc.

15. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation  Joseph Schumpeter identified five categories of innovation: 1.A new product or substantial change in an existing product 2.A new process 3.A new market 4.New sources of supply 5.Changes in industrial organization

16. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation and Commercialization Process Figure 3.4

17. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Some Sources of Innovation CustomersUnexpected news events Newspapers and magazinesTrends and patterns of change ObservationNew government regulation Demographic shiftsEmerging industries Small businessesBusiness operations Table 3.2

18. ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. New Venture Action Plan Do the exercises under “Developing Creative Skills.” Complete the Creativity Action Plan. Practice generating ideas and problems using the techniques provided in the chapter.