inside Learning Objectives On completion of this chapter, you will be able to: 1. Explain the differences among creativity innovation, and entrepreneurship. 2. Describe wiy creativity and innovation are such an integral part of entrepreneurship. 3. Understand how the two hemispheres of the hhuman brain function and what role they play in creativity. he t Mind: Fr trepreneurial ‘om Ideas to Reality 4 i i i 4, Explain the 10 "mental locks” that lit individual creativity, 5, Understand how entrepreneurs can enhance the creativity of their employees as well as their own, creativity 6. Describe the steps in the creative process, 7. Discuss techniques for improving the creative process, 8. Describe the protection of intellect property through patents, trademarks, and copyrights.(CHAPTER 3 » INSIDE THE ENTREPRENEURIAL MIND: FROM IDEAS TO REALITY 97 One of the tenets of entrepreneurship isthe ability to create new and useful ideas that solve the problems and challenges people face everyday. Entrepreneurs achieve sucess by cresting value in the marketplace when they combine resources in new and diferent ways o gain a competitive ‘edge over rivals. From Alexander Fleming's pioneering work that resulted in a cure for infections (Gericillin) and the founder» of die Rocket Chemical Company's fortieth try to create an industri) Inbricant (WD-40) to Jeff Bezos's innovative use ofthe Inteme in retailing (Amazon.com) and ‘Ted Tamer’ around-the-clock approach tothe availablity of television news (CNN), entrpre- nneuts' ideas have transformed the world ‘As you earned in Chapter I, entrepreneurs can ereate valu in a numer of ways-—inventing {ew products and services, developing new technology, discovering new knowledge, improving existing products or services, finding different ways of providing more goods and serviees witk fewer resources, and many others, Indeed, finding new ways of satisfying customers’ needs, inventing new products and services, puting together existing ideas in new aid different ways, ad ereating new twists on existing pradvcts and eervicos ars hallmarks uf de enreprencui! Since Earl Dickson invented the Band-sid in 1920 for his wife, who experienced frequent cuts while preparing food, entrepreneurs have been working to improve the simple but effective invention, Tsai Cheng: Ya and Hsu Hao-Ming, two students at Shih Chien University in Taiwan, created the AmoeBAND, a Band-aid with cut-away sections that allow it to be adjusted to ft the {cation ofthe wound so that it stays ou au a sensor that alerts the wearer ifthe wound becomes, infected. Inventors at the European Center of Innovative Textiles in Lille, France, have devel ‘oped a new fabric for use in dressing wounds that incorporates antiviral, antibacterial, and othe ‘nesticines into the fibers. They also are experimenting with nonwoven tentles that serve as seeds for rebuilding uman tissue, JefF Skiba, a former medical consultant and fonindlor af Voorarie {snvations, Won approval from the Food and Drug Administration (FDA) for an adhesive ban, age called Procellera that is equipped with microscopic batteries that pass a small amount of electrical current Gust 1.2 volts) over the injured area to accelerate the healing process Like ihany innovators, these entrepreneurs have achieved suecess by taking a common item, bantages, ‘hat had existed for many years and looking at it in different way, Creativity, Innovation, and Entrepreneurship According to the Batelle R&D Magazine, U.S, companies, government agencies, and universities invest more thn $465 billion anclly in seseates at development (4&6D). Small covrponiee fre an important part ofthe total R&D picture, One study by the Small Business Adminishation ‘eons that small companies produce 16 times more patents pr employee than ther larger rival ‘What i the entrepreneurial “secret” for creating value in the marketplace? In reality the “sexe iene secret at all: Lis applying creativity and innovation to solve problems and to exploit oppor. ‘unites that people fave every day. Creativity isthe ability to develop new ideas and to diseever ew ways of looking at problems and opportunites. Innovation isthe ability to apply creative {cltions to those problems and opportunities to enhance or enrich people's lives, Harvard's Toa ‘Levitt says creativity is thinking new things and innovation is doing new things. In short, ene: Dreneurs succeed by thinking and doin new things old things im new weyo. Sknply having 8 great new idea isnot enough; transforming the idea into a tangible produc, service, or bust Tea fone isthe essential next step. “Big ideas are ust hat—ideas “until you execle” cays (cisztina Holly, an entrepreneur who serves onthe National Advisory Council for lmovation aed Entrepreneurship. Successful entteprenenrs develop new ideas, products, aul services that solve a problem or Hill a need and, in doing go, create value for thei customers and wealth for themselves, Ax ‘Panagement legond Peter Drucker sai, “Innovation isthe specific instrument of entepreneurs, {fe stthat endows resources witha new capacity to create wealth” In a world that is changing faster than mest of us ever could have imagined, creativity and innovation are vital toa company’s suceece "and ultimate su vivil, Tha’ tre tor businesses in every industry from antoneren ws {ca grovers—and for companies of all sizes. A recent survey by Adobe of people in the world's five largest economies reports thet 80 pereent of people believe unlocking ereative potential is ihe key to economic and societal growth, yt only one in four people say they are ling up to ‘heir creative potential. In addition, the survey reveals a creativity gap, in which 75 peor of innovator ans tepreneurship, creativity ‘the ability to deveop new Tideas arc to cover new ways f looking at prot innovation the abity to apply creative solutions o problems and ‘ppartuits to enhance or to enrich peoples Wes,SECTION | + THE CHALLENGE OF ENTREPRENEURSHIP respondents say they are under inereasing pressure to be productive rather than creatives yet just 15 percent of their work time is devoted to creativity. The primary barrier to creativity onthe job? ‘Lack of time, In addition, 59 percent of the survey's respondents say their educational systems stifle individual creativity “Although big businesses develop many new ideas, creativity and mnovation are the signa tures of small, entrepreneurial businesses, Creative thinking has become a core business skil, and enttepteneurs lead the way in developing and applying that skill. In fact, creativity and innovation often fic atthe heart of small companies’ ability to compete successfully with theit Insger rivals, Even though they cannot cutspend their larger rivals, small companies can create powerful, effective competitive advantages over big companies by “out-creating” and “out- innovating” them! Tf they fil todo so, entrepreneurs don’t stayin business very long. Leadership cexpert Warren Bennis says, “Today's successful companies live and die according to the quality of their ideas”* ‘Solu stall Lusincsses create innovations roactively in reoponte to customer forthacle or changing market conditions, and others create innovations proactively, spotting opportunities on ‘which to capitalize. Sometimes ianovation is evoluaionary, creating market-changing, disruptive breakthroughs that ar the result of generating something from nothing. More often, innovation is ‘evolutionary, developing markel-sustaining ideas that elaborate on existing products, processes, tnd services that result trom putting old things together in new ways oF from taking something, away to create something simpler or better. Apple did not iaveat the digital music player, but Steve Jobs's company created a player that was easier to use and offered a “cool” factor that existing MP3 players did not have. One experimenter’s research to improve the adhesive on tape resulted in a glue that hardly stuck at all. Although most researchers might have considered the experiment a total failure and scrapped it this researcher asked a simple, creative question: What cean you do witha glue when you take away most of its stickiness? The answer led to te inven- tion af one of the most popiilar office products of alltime: the Post-It note, a product that now ‘neludes more than 4,000 vatiations. Entrepreneurial innovation encompasses not only new products and services but also new business models, As graduate students, Larry Page and Sergey Brin, cofounders of Goople, real~ ied that the Internet's ocean of information had outpaced people's ability to locate the informa tion they wanted with existing search engines. Convinced that Internet users would value more relevant search results, the entroprencurs developed a new service, Google's PageRank system, fn algorithm that screens Intemet searches aud urgauizes thew tw prertuce the most relevant ‘results, AS traffic on their search engine grew, the young entrepreneurs created a new business ‘model that involved selling advertising space (paid listings) by auctioning to businesses key ‘words that visitors used ia their searches. Today, their innovative business model accounts for 91 percent of Google's revenue (nearly $51 billion annually), and Google dominates the search ‘engine market with 68 percent of all searches conducted.” ‘Some entrepreneurs sturnble onto their ideas by accident but are clever enough to spot the business opportunities they offer, oO ENTREPRENEURIAL PROFILE: Brian Levin: Perky Jerky Serial entrepreneur Brian Levin, ‘who created the fist text-message voting system (the one used on American idol), and 3 ‘friend were on a chaiift on the snowy slopes In Snowbird, Utah, one morning when Levin reached into is backpack fora package of beet jerky. Unfortunately, an energy drink had spilled ‘onto the package, soaking the jerky, but Levin and his friend were hungry and ate it anyway. AS they skied dovin the mountain, the duo experienced an energy boost. The jerky, now quite ten- der because ofits soaking, had taken on the characteristics of the energy drink but hac retained its peppery flavor. Inspired, Levin spent the niext two years working with a food laboratory to refine @ process for making an energy-boosting jerky around which he bult @ company to mar- ket the new product, which he named Perky Jerky. The company now generates annual sales of $10 million * ‘More often, creative ideas arise when entrepreneurs look at something old and think some- thing new or different. Legendary Notre Dame football coach Knute Rockne, whose teams dominated college football in the 1920s, got the idea for his constantly shifting backfields while watching a burlesque chorus routine! Rockne’s innovations in the backfield (which