Chapter 04

8/9/2016
Chapter 4 Learning Objectives
• To understand the meaning and implication of creativity to
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

entrepreneurship.
Creativity and Business Ideas • To understand the difference between convergent thinking and
divergent thinking.
• To understand and appreciate the echo system for promotion
of entrepreneurship.
• To know about characteristics of creative people.
• To know about blocks to creativity.
• To understand the relevance of creativity at work in present
context.
• What are the sources for looking at new ideas for business?
• To learn about techniques to generate new ideas.
• To appreciate that a good idea is not enough for
entrepreneurial success
Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar
What is Creativity? According to Edward Debono
• Creativity is a process, technique, mindset that helps in • Creativity involves breaking out the established patterns in

creation of some new concept, thinking, design, product that order to look at things in a different way.
did not exist.
• Creativity is a great motivator because it makes people
• Creativity and intelligence are two different terms having interested in what they are doing.
different meaning.
• Creativity gives hope that there can be a worthwhile idea.
Creative problem solving is looking
at the same thing as everyone else,
and thinking something different. • Creativity gives the possibility of some sort of achievement to
everyone.
• Creativity makes life more fun and more interesting.
Creativity is Illogical Logic Different Types of Thinking
Effective Precise Creative Convergent thinking

Thinking = Thinking + Thinking consider all available

Yes/No No/Definite
Logic Illogical information and arrive at
Right/Wrong May/May Not the unique best possible
answer.
Types of
thinking
Creative thinking is a necessary ingredient when there
are no immediate solutions to the problem. Divergent thinking
involving multiple
possible solutions to
problem under
consideration.
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Vertical versus Lateral Thinking Effective Thinking
Lateral Vertical
Precise thinking focuses on
• Helps in solving problems and • Is sequential, selective, finite, logic, rational, yes and no, and

pain points faced by customers and analytical. right and wrong
by a process of non- • See things in definite patterns
conventional and illogical ways. and logic.
• Process to see and look at • Usually involves definite moves. Workable,
Effective acceptable, and
things differently. • One moves step by step through To come out
practical
• Involves trial and error logic. Thinking with
solutions with
• Can make jumps from the • One has to go through the test economic sense
existing frame of reference of being right at every stage to
• Probabilistic as regards arrive at correct solution to the
outcomes are concerned. problem. Creative thinking focuses on
• Proactive and open to new and no definite answers, illogical and
unseen paths, and is generative may or may not be kind of
in nature. outcomes
You Would be Demonstrating Creativity Creativity and Entrepreneurship

if You:
• Creativity deals with the creation of novelty and value, and

• Invent something which has never existed entrepreneurship deals with novelty in business through
before innovative ideas through existing and new business models.
• Invent something which exists elsewhere but
you are not aware of. • Entrepreneurship is an outcome of systematic and organized
• Invent a new process for doing something. process of applying innovations through creativity to respond
• Reapply an existing process or product into a to customer needs.
new or different market.
• Develop a new way of looking at something • Entrepreneurship translate new ideas into reality.
(bringing a new idea into existence).
• Change the way someone else looks at • Entrepreneurs see the worth of a creative idea leading to
something. innovation.
Need to Continuously Come Out with Echo System to Promote

New Ideas is Imperative as …….. Entrepreneurship
• 5–6% of ideas having gone through concept and prototype
stage see it materializing well in the market place. Educational

Marketable
Institutions Innovations
Products
and
• Thus, 95% fail and only 5% earn money. Services
• 95% fail—Only 5% of independent inventor patents are Government Entrepreneurship Funding

Policies Echo System Organizations
produced in the marketplace.
• 95% of all new products fail.
Marketing
System
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Characteristics of Creative People Blocks to Creativity

Do not conform to society’s
Unconventional standards, rituals and norms Rules and traditions

Independent and Resist dependence or
individualistic overdependence
Blocks within
Sensitive Sensitive to the happenings around
Have a shared sense of higher Environmental blocks

Money is not a motivator
Characteristics
of Creative
purpose
Blocks to
People
Inventive and intelligent
Great imagination quality along with
a rooted sense of reality
creativity
Emotional blocks
High physical energy and Can work for long hours with great
drive concentration
Visionary Vision permeated in their head, Perceptual blocks

heart, and soul
Humble and proud Aware and realize about vast

knowledge Habits
Intuitive Sense the problems where others do
not see anything
Creativity at Work—Must for Survival Organization Culture to Promote

Innovation
• Innovation is essential for the long-term survival of the

organizations.
• Innovation requires individual creative action. Culture to

Analyse Implement
Generate More
and Worthwhile
and More
• Employees irrespective tiers and organizations are creative in Ideas
Evaluate Innovative
general. Ideas Ideas
• Intense competitive environment has necessitated

organizations to continuously come out with new and better
solutions to problems for their survival and growth. Need for Organization Culture to
Promote Innovation
• Organizations should facilitate unfoldment of creativity in
people.
Sources of New Ideas Sources of New Business Ideas
• Consumers: The final focal-point of the idea for a new

Consumers
product or service is consumer, and the needs of the
consumers if taken into account can generate potentially
Existing sound ideas.
products Distribution
and channels • Existing companies: A comprehensive analysis of
services
Sources competitive products and services already existing in the
of New
market may result in a new product with a better market
Ideas
appeal.
• Distribution channels: Members of the distribution channels
are excellent sources for new ideas because of their familiarity
Research and Government
development
policies and
priorities
with the needs of the market.
Contd…
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Sources of New Business Ideas Scoring for Project Ideas
• Research and development: Efforts could be of a formal • Analyse the performance of existing units.

nature within the organization or taken up in association • Examine the inputs and outputs of industries.
with industry. Even the research and development efforts • Examine imports and exports.
being pursued by competitors in the industry provide an • Study plan outlays and government guidelines.
insight on where to focus efforts for product development. • Look at suggestions of foreign investors and development
agencies.
• Government: Government can be a source of new product • Investigate local materials and resources.
ideas in two ways: • Analyse economic and social trends.
The files of the Patent Office contain numerous new • Study new technological developments.
product possibilities.
New product ideas can come in response to government
regulations. Contd…
Scoring for Project Ideas Steps to Solve Problems Creatively
Understanding the
• Draw clues from consumption abroad. problem

• Explore the possibility of reviving sick units.
• Identify unfulfilled psychological needs.
• Stimulate creating new product ideas—modification,
reduction, rearrangement, substitution, reversal, adaptation,
magnification and combination. Steps:
Creative
Problem
Solving
Towards solving Using your brain

the problem effectively and absurdly
Techniques for Creative Problem Mind Mapping

Solving
• A pictorial way to give a shape to ideas and concepts.
• Mind Mapping • It is a visual thinking technique that facilitates structuring

• Focus Groups • Free Association information, better analysis and synthesis, recall
• Brainstorming • Forced Relationships
• Attribute listing
information quickly and generate new ideas.
• Reverse Brainstorming
• Synectics • Reversal •
• Gordon Method • SCAMPER • A mind map is a diagram that is used to represent through
• Scientific Method • Collective Notebook
words, ideas, tasks, etc. linked to and arranged around a
• Value Analysis Method
• Problem Inventory • Big Dream Approach central theme or idea.
Analysis
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Guidelines for Creating Mind Maps Guidelines for Creating Mind Maps
• Start in the centre of big sheet of a paper with an image • Clearly emphasize wherever required and show associations

symbolizing the problem. between various thoughts in mind map.
• Use key images, symbols, codes, and dimensions to record • Keep the mind map clear by using radial hierarchy, numerical
ideas in a short hand. order or outlines to embrace your branches.
• Select key words and print using upper or lower case letters. • When the flow of ideas is slowed down, it is better to stop.
• Each word/image is best alone and sitting on its own line. • Above all, moving away from mind map and the central
• The lines should be connected, starting from the central problem for sometime helps in flow of several new ideas or
image. The central lines are thicker, organic and flowing, relationships among ideas.
becoming thinner as they radiate out from the centre.
• Use multiple colors throughout the mind map for visual
stimulation and also to encode or group.
Contd…
Mind Mapping—Business Performance SWOT Analysis of a Branch

Geographic markets Number
Review Reasonable
Fast expanding market Staff
skills
productivity
Scope for new product lines qualification
Received Targets Opportunities
Strengths Technology
Given
Management Potential for

Support Not Received Foreign
Business Latest
Not Reasonable
Identify and apply outdated
patents
Business
Performance SWOT economies
Review Need Customer service of scale

High Low Scientific
Setting Avert/Safeguard
against Overcome
Productivity Good service
Success Threats Weaknesses
Good customer
Objectives
Base
Achieved Weak financials Good
Number Staff Competition Reputation
Not Achieved Shift in taste Few giant players Brand image
and preferences Scope for niche products
Surplus Shortage Financial/Non-financial
Quantitative/Qualitative Intense competitition
Short Term
Regulatory requirements Under utilized
Long Term Past, Present , Future plant capacity
Creative Problem Solving Techniques— Brainstorming—Ground Rules

Group Creativity
• Focus group technique involves a moderator to leads the • Involve one and all in the process of brainstorming.
group through an open, in-depth discussion on a particular • Quantity is more important than quality.
subject, and channelizing the thought process and debate on • Give importance to all ideas by jotting down on board or flip
pre-selected issues. The moderator allows free flow of ideas in chart.
a focused manner. • Come out with as many ideas as the group could within short
time.
• Brainstorming is group technique to generate maximum
• No criticism and negativity of any idea whatsoever.
possible ideas in a short time by involving as many people as
• Spontaneity and free wheeling is encouraged.
are there. A group is encouraged to come out with as many
• The more foolish and wilder is the idea, the better it is.
ideas as possible, without bothering about how good or bad
• Combining and improving ideas based on others ideas is
the idea is. The emphasis is on quantity of ideas rather than
desirable and encouraged. Cross fertilization of ideas is
quality. Spontaneous participation of the group members is a
encouraged.
must. No criticism of idea is done.
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Reverse Brainstorming Creative Problem Solving Techniques
This technique • Synectics: A creative process that forces individuals to

Reverse Brainstorming encourages fault solve problems through one of the four analogy
• Brainstorming with criticism finding through
• Identify everything that is wrong with asking questions mechanisms: personal, direct, symbolic and fantasy.
an idea with a focus on why
• Identify ways and means to overcome Stage 1
this idea would not
criticism.
work?
Problem Problem Generalization
Search for
Definition Analysis of elements
familiar models
of problem to
familiar entities
Come
out with innovative Use of
Speculation Force Fit Solution
workable and worthwhile ideas Analogies
Stage 2
Creative Problem Solving Techniques Value Analysis to Reduce Cost
• Gordon method: In this method the individuals are unaware


For Non-critical
of the actual problem which ensures that the solution is not Identify Steps,
clouded by preconceived ideas and behavioural patterns. Problem Analysis Criticality Compromise on
of Steps Quality to
Reduce Cost
• Scientific method: The scientific method used invariably in

different fields requires use of well-established principles and
Reduce Cost or
processes, observation and experimentation, analysis of data Develop New
Improve Quality
Solutions
so as to validate or otherwise the hypothesis proposed to be
tested.
Improve
Overall
Value
• Free association: One of the powerful technique that can be

• Problem inventory analysis: This technique uses
used to generate new ideas through chain of word

individuals almost similar to the focus groups to generate
association. The process begins by writing a word related to
new ideas by providing list of problems in a general product
the problem which is followed by writing other words
category to consumers.
sequentially. Thus each word keep giving rise to chain of
ideas related to the problem under consideration. This
• Checklist method: It facilitates generation of new idea
process is continued till a useful idea is found.
through a listing of related issues, suggestions, and
questions. Entrepreneur can use list of questions to
• Forced relationships: As the name suggests, it is a
channelize and guide the process of thinking so as to develop
technique in which one attempts to visualize forced
an entirely a new idea.
relationships among given products by combining them. In
this technique one attempt to ask questions about objects so
as to come out with a new idea.
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SCAMPER Technique for New Ideas SCAMPER Stands for . ..
Put to Other
Substitute
Use • S – Substitute: Materials, components, design, shape,

people etc.
• C – Combine: Mix, combine with other products or parts.
Combine
Reverse
Modify
SCAMPER integrate processes, parts etc.
• A – Adapt: Alter, change, use part of another element to suit
to different situations
• M – Modify: Increase or reduce in size and scale, change
Eliminate
shape, modify attributes of the product etc.
Adapt
• P - Put to another use top derive different value proposition
• E – Eliminate: Remove elements, simplify, reduce so as
improve core functionality
• R – Reverse: Turn upside down or inside out to find the
implications and arriving at new ideas.
• Attribute listing technique is used when an entrepreneur

is confronted with a situation that can be decomposed into • Collective notebook method idea generation requires a

certain key attributes. As such listing attributes itself is a small notebook containing the problem statement as also
creative process. Attributes are main ingredients some blank pages along with pertinent background data to
constituting parts, properties, qualities or design elements the participants. Notebook also contains some suggestions
of the object or a situation being examined and help in for coming out with new ideas such as transformation
coming out with new product. method—reverse, expand, minimize; exploration method—
• Reversal is good technique for improving a product or a listing similar problems or problem characteristics; remote
service. To use this technique you should ask the opposite association – random stimuli from different senses etc.
of the question you want to ask, and apply the results. The
strength of this technique lies in assuming that all • Big dream approach requires thinking big, irrespective of
assumptions are false, limiting, reversible and therefore one
focusing on constraints that would or could come on the
need to make assumptions.
way of pursuing those dreams.
Evaluation Criteria Evaluation Criteria
• A broad and quantitative criteria should be developed to Marketing system: The new product should be
evaluate the idea/product at any stage of development. compatible with existing management capabilities and
• The criteria should be developed in terms of: marketing strategies.
Market opportunity: Assessment of market opportunity Financial factors: This should be evaluated by estimating
and size of the potential market including the market share manufacturing cost per unit, sales and advertising expense
which the product could capture. per unit, and amount of capital and inventory required.
Competition: Current competing producers, prices and Production factors: The compatibility of the new
marketing policies should also be evaluated, particularly in product’s production requirements with existing plant,
terms of their impact on the market share. machinery, and personnel should be determined.

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8/9/2016

Chapter 4 Learning Objectives

• To understand the meaning and implication of creativity to

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

What is Creativity? According to Edward Debono

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Creativity makes life more fun and more interesting.

Creativity is Illogical Logic Different Types of Thinking

Effective Precise Creative Convergent thinking

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Thinking = Thinking + Thinking consider all available

Vertical versus Lateral Thinking Effective Thinking

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

You Would be Demonstrating Creativity Creativity and Entrepreneurship

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Need to Continuously Come Out with Echo System to Promote

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

stage see it materializing well in the market place. Educational

• 95% fail—Only 5% of independent inventor patents are Government Entrepreneurship Funding

• 95% of all new products fail.

Characteristics of Creative People Blocks to Creativity

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Sensitive Sensitive to the happenings around

Have a shared sense of higher Environmental blocks

Visionary Vision permeated in their head, Perceptual blocks

Humble and proud Aware and realize about vast

Creativity at Work—Must for Survival Organization Culture to Promote

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Innovation requires individual creative action. Culture to

• Intense competitive environment has necessitated

Sources of New Ideas Sources of New Business Ideas

• Consumers: The final focal-point of the idea for a new

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Sources of New Business Ideas Scoring for Project Ideas

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Scoring for Project Ideas Steps to Solve Problems Creatively

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Towards solving Using your brain

Techniques for Creative Problem Mind Mapping

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Mind Mapping • It is a visual thinking technique that facilitates structuring

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Mind Mapping—Business Performance SWOT Analysis of a Branch

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Review Need Customer service of scale

Creative Problem Solving Techniques— Brainstorming—Ground Rules

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Reverse Brainstorming Creative Problem Solving Techniques

This technique • Synectics: A creative process that forces individuals to

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Creative Problem Solving Techniques Value Analysis to Reduce Cost

• Gordon method: In this method the individuals are unaware

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Scientific method: The scientific method used invariably in

• Free association: One of the powerful technique that can be

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

used to generate new ideas through chain of word

SCAMPER Technique for New Ideas SCAMPER Stands for . ..

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.