CREATIVITY AND EXPLORING NEW BUSINESS IDEAS (I)

CREATIVITY AND INNOVATION

Q-1. What is creativity? How is it different from innovation? Discuss Creativity is a

prerequisite to innovation.
Ans : Creativity : An entrepreneur succeeds by thinking and doing new things or doing old
things in new ways. Successful entrepreneurs come up with creative ideas and then use them to
innovate something. With such innovative product or service, they try to satisfy an unsatisfied
need of customers or try to solve their problem. In todays fast-changing world, creativity and
innovation are vital to a companys success.

The terms creativity and innovation are often used as synonyms, but, in fact, they are quite
different :
Creativity is the ability to bring something new into existence, while innovation is the
activity (process) of bringing a new product or service into market.
Creativity is thinking new things; innovation is doing new things. The outcome of
creativity is a new idea, whereas the outcome of innovation is a new product or
service or process.
Creativity is the seed that inspires entrepreneurship, but innovation is the process of
entrepreneurship.
Creativity is the ability to create new, original ideas, whereas innovation is the
transformation of those creative ideas into useful applications (new products, services
or processes).
For example,
- Bill Gates transformed his creative idea into Microsoft Office.
- Right Brothers transformed their creative idea into Aeroplane.
- Alexander G. Bell transformed his creative idea into Telephone.
- James Cameron transformed his creative idea into the blockbuster movie Titanic.

An idea has no value unless it is transformed into a tangible product, service or business
venture. If an entrepreneur is not creative, he cannot innovate anything. Thus, without a new
/creative idea, innovation is not possible. So, we can say that, Creativity is a prerequisite to
innovation.

CREATIVE PROCESS

Q-2. How does a creative idea get generated in the mind of an entrepreneur?
OR
Give step-by-step explanation of the creative process.
Ans : Creative Process : Idea usually develops through creative process. A new idea must be
creative and capable of implementation. Implementation must result into some useful
creation (product/service/process).

Individuals differ in their creative ability. Highly creative people are more originative and flexible
than less creative people. They are more independent than less creative people. They prefer to
try different things. They prefer autonomy (independence); they love challenges and
complexity.
Although creative ideas flash in the minds of entrepreneurs, they usually develop through creative
process. Creative Process is the process of generation of creative idea in the mind of an
individual (entrepreneur). It involves five stages :

1. Idea Germination (Recognition) : Idea germination is like a Seeding process, in which,

ideas get planted into the mind of an entrepreneur. In fact, he/she may not be aware of that,
because it is something, which cannot be examined or observed. It is the stage, in which, idea
begins to grow automatically in the mind of an entrepreneur. Idea germination starts when
- entrepreneur is very interested in a particular subject/area, or
- he is very curious/eager to find solution of a particular problem faced by people.
For example, one day Ratan Tata noticed a family of four on motorcycle, getting drenched in rain.
That problem of a small, middle class family made him very eager to find out a solution a budget
car for middle class Indian family.

2. Preparation (Rationalization) : It is the second stage of the creative process. After being aware
of his idea, entrepreneur starts conscious search for the necessary knowledge (information)
to bring his idea to life. He tries to collect information related to the problem. He also tries to
know how others have tried to solve the problem. All his efforts and energies are directed to
find out ways for converting his idea into reality. This stage requires devotion of energy,
intelligence and efforts to extend the idea.
For example, Ratan Tata soon called a meeting of his expert employees (belonging to different
functional areas) and asked them to work out on designing and producing a small, budget car. He
also made a thorough study of various small cars manufactured by foreign companies.

3. Incubation (Fantasizing) : Incubation means allowing idea to grow naturally (without any
intentional efforts). In this stage, subconscious mind takes control over the idea.
Entrepreneur may be doing other activities, but idea stays with him - in his subconscious mind.
It flows freely; without any limitations of human logic. [When an individual tries to solve a
problem, he applies logic to solve it. Logic is related with the conscious mind; creativity lies in the
subconscious mind. Logic cannot allow creativity to grow. Subconscious mind grows the idea
as it is open to unusual information and knowledge. Many times, new ideas may come without
any intentional efforts; new ideas arise even when the entrepreneur is doing other activities.]
Later on, when the entrepreneur tries to solve the problem by working on his idea, conscious mind
takes over the idea.

For example, Ratan Tata got busy in other projects, but the idea of making a small, budget car for a
middle class Indian family stayed with him in his subconscious mind.

4. Illumination (Realization) : This stage occurs when the idea comes on surface through
incubation. This stage is an outcome of conscious preparation and subconscious incubation.
This stage refers to realization that the ideas can be converted into reality. This happens due to
some opportune incident. Here, an entrepreneur gets a sudden flash : Yes! It is possible.
This stage separates daydreamers from creative people. Many times, a person struggles for a
long period and when there are no expectations, ideas may suddenly trigger (arise) in his/her
mind.
This stage determines whether an idea will move to the next stage or will die. Creative people
go through many cycles of preparation and incubation to search opportune incidents.
For example, when all the concerned experts put in their best efforts, one by one, all the problems
(technical, financial, supplies related, land related, regulations related etc.) melted away and Ratan
Tata became certain that his dream car can be made.

5. Verification (Validation) : Verification is the development stage of putting knowledge into

application. This is the last stage of creative process. Now, the entrepreneur verifies illuminated
idea to determine three things :
1) Is the idea realistic?
2) Is it feasible to convert idea into some useful product?
3) Will the product be commercially applicable?
If the test-result is positive, development starts. Many ideas may be rejected at this stage if
commercial application is not possible, or
many competitors are there, or
 the invention is already patented by someone.

In this case, entrepreneur may search for new ideas and again the creative process starts.
However, this is very tedious, time-consuming and needs patience on the side of an
entrepreneur.
For example, Ratan Tata checked all above aspects related to his dream car Nano and when he
was satisfied with the positive results, he started manufacturing Nano at a plant near Sanand.

We can also present the creative process with the help of flow chart as follows :

Idea Germination Preparation Incubation

the seeding stage conscious search for subconscious assimilation
of a new idea knowledge/ info. of information
Recognition Rationalization Fantasizing

Verification Illumination
test to prove that the recognition of idea as
idea has value being feasible
Validation Realization

The entire creative process can also be understood with the help of example of blockbuster movie
- Titanic :
1) Idea Germination : An idea of making a film on Titanic got planted into James
Camerons mind.
2) Preparation : J.C. collected many photographs, blueprints and articles related to Titanic.
He also visited the survivors as well as the relatives of the dead passengers of Titanic to get
the further information.
3) Incubation : J.C. had to temporarily put his idea aside as it was not possible at that time to
go deep into the ocean to see the ruins of the Titanic. For some time, J. C. got busy in other
movie schedules. He stopped giving efforts, but his subconscious mind was continuously
growing that idea.
4) Illumination : One day, J. C. knew that he can go into deep sea to see the ruins of Titanic,
because a new device (submercile) was available. He got a sudden flash : Yes ! Making of
Titanic is now possible!
5) Verification : J.C. himself went deep into the ocean in submercile 17 times to ensure
that his idea of making the movie on Titanic is practically possible, and he vigourously
started working on it.
After passing through all the five stages, James Camerons creative idea got transformed into a
useful application - the blockbuster movie : 'Titanic'.

SOURCES OF NEW IDEAS

Q-3. List out various sources that help an entrepreneur develop a unique idea for his new
product/service.
Ans : Sources of New Ideas : For successful launching of a new venture, it is necessary to
develop a unique idea (related with a product/service). Following are the various sources, with
the help of which, an entrepreneur can develop a unique idea for his new product or service :
 1. Consumers
2. Existing products and services
3. Distribution channel
4. Government
5. Research and Development (R&D)
(1) Consumers : Potential consumers are the main source of ideas for developing new
product/service. An entrepreneur should encourage potential consumers to freely express
their opinions. He must ensure that the idea deals with the needs of a large market so as
to ensure reasonable returns.

(2) Existing products and services : A new idea can also be developed by monitoring and
evaluating competitive products and services, which are sold in the market. Such an
analysis can suggest ways to improve the existing products/services. It may result into a
new and more appealing product or service.

(3) Distribution channel : Distributors are an excellent source of new ideas, because they are
familiar with the needs of the market. Distributors can help in two ways :
1. by making suggestions for a new product
2. by helping in the marketing of the entrepreneurs new product.

(4) Government : Government can also help a budding entrepreneur develop new product ideas
in two ways :
1. Government records and publications : The files of the patent office contain a
number of new product ideas. By studying them, an idea about a marketable product
can emerge in the mind of an entrepreneur. Several government agencies and
publications provide information about patented as well as non-patented items.
2. Government regulations : New product idea can arise in response to the
government regulations e.g., in every company, safety is a prime concern. A company
must take necessary precautions to provide a safe working atmosphere to its
employees. This has helped many entrepreneurs to develop products such as safety
shoes, safety goggles, safety gloves, fire extinguisher etc.

(5) Research and Development (R&D) : The largest source of new ideas is the entrepreneurs
own research and development efforts. Efforts may be formal - made in the company,
where he/she is working. They may be informal made at home.