Chapter 7: Creativity, Innovation, and Invention
Creativity, Innovation, and Invention: How They Differ
One of the key requirements for entrepreneurial success is the ability to develop and offer something unique to the marketplace. Over time, entrepreneurship has become associated with creativity, the ability to develop something original, particularly an idea or a representation of an idea. Innovation requires creativity, but innovation is more specifically the application of creativity. Innovation is the manifestation of creativity into a usable product or service. In the entrepreneurial context, innovation is any new idea, process, or product, or a change to an existing product or process that adds value to that existing product or service (OpenStax, 2020).
How is an invention different from an innovation? All inventions contain innovations, but not every innovation rises to the level of a unique invention. For our purposes, an invention is a truly novel product, service, or process. It will be based on previous ideas and products, but it is such a leap that it is not considered an addition to or a variant of an existing product but something unique. The box below highlights the differences between these three concepts.
Innovation or Invention? What Do You Think?
Invention
The first ever cell phone was created by a team led by Martin Cooper, an American engineer (Gregerson, n.d.). See Figure 7.1 (a). He is regarded as the father of the cell phone, launching the first phone in 1984 called the DynaTAC (The Invention of Mobile Phones, 2018).
This idea was novel because phones were not mobile before. It is an example of an invention.
Innovation
Now let’s compare this phone to the iPhone. The first iPhone was released in 2007, twenty-three years after the first mobile phone was available for purchase. See Figure 7.1 (b). The iPhone was the first of its kind to have a touch-sensitive multisensory interface. This made the product truly innovative. Apple took existing cell phone technology and made it better, therefore, classifying this product as an innovation.
Incremental Innovation and Creativity
As Apple continues to release new versions of the iPhone, some argue that these new phones are due to incremental innovation because the new versions are relatively similar to past versions, adding enhanced features. See Figure 7.1 (c). Apple must use their creativity to continue improving the iPhone and to keep up with changing customer expectations.
One way we can consider these three concepts is to relate them to design thinking. Design thinking is a method that focuses on designing and developing products based on customer needs. It involves an empathy-driven process to define complex problems and create solutions. This process is complex. Straightforward problems that can be solved with enough money and force do not require much design thinking. Creative design thinking and planning are about finding new solutions for problems with several tricky variables in play. Designing products for human beings, who are complex and sometimes unpredictable, requires design thinking.
How Airbnb Embraced ‘Design Thinking’
Airbnb has become a widely used service all over the world. That has not always been the case, however. In 2009 the company was near failure. The founders were struggling to find a reason for the lack of interest in their properties until they realized that their listings needed professional, high-quality photographs rather than simple cell-phone photos.
Using a design thinking approach, the founders traveled to the properties with a rented camera to take some new photographs. As a result of this experiment, weekly revenue doubled. This approach could not be sustainable in the long-term, but it generated the outcome the founders needed to better understand the problem. This creative approach to solving a complex problem proved to be a major turning point for the company.
People who become proficient at design thinking strive to tackle different types of problems by being creative, innovative, or inventive – sometimes all three. Consider Divya Nag, a millennial biotech and medical device innovation leader, who launched a business after she discovered a creative way to prolong the life of human cells in Petri dishes. Nag’s stem-cell research background and her entrepreneurial experience with her medical investment firm caught the attention of Apple. Apple hired her to run two programs dedicated to developing health-related apps, a position she reached before turning twenty-four years old, as a result of her creative, innovative, and inventive thinking.
Creativity, innovation, inventiveness, and entrepreneurship are tightly linked. As exemplified by Divya Nag, it is possible for one person to model all these traits to some degree. Additionally, developing creativity skills, a sense of innovation, and inventiveness can be done in a variety of ways. In this chapter, we’ll discuss each of the key terms and how they relate to the entrepreneurial spirit.
Creativity
Entrepreneurial creativity and artistic creativity are not so different. Inspiration can be found in books, songs, and paintings, or even from existing products and services. Creative inspiration can also be found in nature, in conversations with other creative minds, and through formal ideation exercises such as brainstorming. Brainstorming, the generation of ideas in an environment free of judgment or dissension with the goal of creating solutions, is just one of dozens of methods for coming up with new ideas. Ideation is the purposeful process of opening up one’s mind to new trains of thought that branch out in all directions from a stated purpose or problem.
There are many benefits from setting aside time for ideation. Reserving time to let the mind roam freely while thinking about an issue or problem from multiple directions is a necessary component of the process. Ideation takes time and a deliberate effort to move beyond habitual thought patterns. Consciously setting aside time for creativity will broaden mental horizons and allow for change and growth (Kelly, 1991).
Entrepreneurs work with two types of thinking. Linear thinking—sometimes called vertical thinking—involves a logical, step-by-step process. In contrast, creative thinking is more often lateral thinking, free and open thinking in which established patterns of logical thought are purposefully ignored or even challenged. If logic is ignored, anything becomes possible. Linear thinking is crucial in turning an idea into a business. Lateral thinking allows one’s creativity to solve problems that arise. Table 7.2 summarizes linear and lateral thinking.
Table 7.2: Linear vs Lateral Thinking
| Linear vs Lateral Thinking | |
|---|---|
| Linear | Lateral |
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Brainstorming Activities
Looking for new ways to brainstorm?
Visit the Introduction to the Essential Ideation Techniques Which are the Heart of Design Thinking web page for different ways to get those creative juices flowing like mind maps, brain dumps, storyboarding, and others.
It is certainly possible for an entrepreneur to focus on linear thinking. Many viable business ventures flow logically and directly from existing products and services. However, for various reasons, creativity and lateral thinking are emphasized in many contemporary contexts in the study of entrepreneurship. Some reasons for this are increased global competition, the speed of technological change, and the complexity of trade and communication systems. These factors help explain not just why creativity is emphasized in entrepreneurial circles but also why creativity should be emphasized. Product developers are expected to do more than simply push products and innovations a step farther down a planned path. Newer generations of entrepreneurs are expected to be path breakers in new products, services, and processes.
Examples of creativity are all around us. They come in the forms of fine art and writing, or in graffiti and viral videos, or in new products, services, ideas, and processes. In practice, creativity is incredibly broad. It is all around us, whenever or wherever people strive to solve a problem, large or small, practical or impractical. Walking out of a brainstorming session is an example of creativity.
Innovation
We previously defined innovation as a change that adds value to an existing product or service. According to the management thinker and author Peter Drucker, the key point about innovation is that it is a response to both changes within markets and changes from outside markets. For Drucker, classical entrepreneurship psychology highlights the purposeful nature of innovation (Drucker, 1985). Business firms and other organizations can plan to innovate by applying either lateral or linear thinking methods, or both. In other words, not all innovation is purely creative. If a firm wishes to innovate a current product, what will likely matter more to that firm is the success of the innovation rather than the level of creativity involved.
Drucker’s Seven Sources of Innovation
Drucker summarized the sources of innovation into seven categories, as outlined in Table 7.3 below. Firms and individuals can innovate by seeking out and developing changes within markets or by focusing on and cultivating creativity. Firms and individuals should be on the lookout for opportunities to innovate.
Table 7.3: Peter Drucker’s Seven Sources of Innovation
| Source | Description |
|---|---|
| The unexpected | Looking for new opportunities in the market; unexpected product performance; unexpected new products as examples |
| The incongruity | Discrepancies between what should be and what is reality |
| Process need | Weaknesses in the organization, product, or service |
| Changes in industry/market | New regulations; new technologies |
| Demographics | Understanding needs and wants of target markets |
| Changes in perceptions | Changes in perceptions of life events and values |
| New knowledge | New technologies; advancements in thinking; new research |
One innovation that demonstrates several of Drucker’s sources is the use of cashier kiosks in fast-food restaurants. McDonald’s was one of the first to launch these self-serve kiosks. Historically, the company has focused on operational efficiencies (doing more/better with less). In response to changes in the market, changes in demographics, and process need, McDonald’s incorporated self-serve cashier stations into their stores. These kiosks address the need of younger generations to interact more with technology and gives customers faster service in most cases (Morgan, 2017).
Another leading expert on innovation, Tony Ulwick, focuses on understanding how the customer will judge or evaluate the quality and value of the product. The product development process should be based on the metrics that customers use to judge products, so that innovation can address those metrics and develop the best product for meeting customers’ needs when it hits the market. This process is very similar to Drucker’s contention that innovation comes as a response to changes within and outside of the market. Ulwick insists that focusing on the customer should begin early in the development process (Ulwick, n.d.).
Disruptive Innovation
Disruptive innovation is a process that significantly affects the market by making a product or service more affordable and/or accessible, so that it will be available to a much larger audience. Clay Christensen of Harvard University coined this term in the 1990s to emphasize the process nature of innovation. For Christensen, the innovative component is not the actual product or service, but the process that makes that product more available to a larger population of users. He has since published a good deal on the topic of disruptive innovation, focusing on small players in a market. Christensen theorizes that a disruptive innovation from a smaller company can threaten an existing larger business by offering the market new and improved solutions. The smaller company causes the disruption when it captures some of the market share from the larger organization (Larson, 2017).
One example of a disruptive innovation is Uber and its impact on the taxicab industry. Uber’s innovative service, which targets customers who might otherwise take a cab, has shaped the industry as a whole by offering an alternative that some deem superior to the typical cab ride.
One key to innovation within a given market space is to look for pain points, particularly in existing products that fail to work as well as users expect them to. A pain point is a problem that people have with a product or service that might be addressed by creating a modified version that solves the problem more effectively (Waldo, 2016). For example, someone might be interested in whether a local retail store carries a specific item without actually going there to check. Most retailers now have a feature on their websites that allows customers to determine whether the product (and often how many units) is available at a specific store. This eliminates the need to go to the location only to find that they are out of a favorite product.
Pioneering Innovation
A pioneering innovation is one based on a new technology, a new advancement in the field, and/or an advancement in a related field that leads to the development of a new product (Ali, 1994). Firms offering similar products and services can undertake pioneering innovations, but pioneering the new product requires opening up new market space and taking major risks.
Is a pioneering innovation an invention? A firm makes a pioneering innovation when it creates a product or service arising from what it has done before. Pokémon GO is a great example of pioneering innovation. Nintendo was struggling to keep pace with other gaming-related companies. The company, in keeping with its core business of video games, came up with a new direction for the gaming industry. Pokémon GO is known worldwide and is one of the most successful mobile games launched (Chamary, 2018). It takes creativity to explore a new direction, but not every pioneering innovation creates a distinctly new product or capability for consumers and clients.
Entrepreneurs in the process of developing an innovation usually examine the current products and services their firm offers, investigate new technologies and techniques being introduced in the marketplace or in related marketplaces, watch research and development in universities and in other companies, and pursue new developments that are likely to fit one of two conditions: an innovation that likely fits an existing market better than other products or services being offered or an innovation that fits a market that so far has been underserved.
Incremental Innovation
When a firm identifies a pain point in their own product or a competitor’s product, they can use creativity to find and test solutions. These solutions can help to avoid or eliminate the pain, making the innovation marketable. This is one example of an incremental innovation, an innovation that modifies an existing product or service (Ali, 1993).
An example of an incremental innovation is the trash receptacle found at fast-food restaurants. For many years, trash cans in fast-food locations were placed in boxes behind swinging doors. The trash cans did one job well: they hid the garbage from sight. But they created other problems. Often, the swinging doors would get ketchup and other waste on them, surely a pain point. Newer trash receptacles in fast-food restaurants have open fronts or open tops that enable people to dispose of their trash more neatly. The downside for restaurants is that users can see and possibly smell the food waste, but if the restaurants change the trash bags frequently, as is a good practice anyway, this innovation works relatively well. One might not think twice about this everyday example of an innovation when eating at a fast-food restaurant, but even small improvements can matter a lot, particularly if the market they serve is vast.
SHIFT Cyclery & Coffee Bar – Eau Claire, Wisconsin
SHIFT Cyclery and Coffee Bar, established in March 2018, was born out of the collective experiences of its four original business partners who had lived in large cities across the U.S. These cities featured successful models of combined coffee shops and bike shops, inspiring the partners to bring this concept to Eau Claire, Wisconsin. They envisioned a welcoming, inclusive space where people could indulge in their passions for both coffee and biking, while also fostering a sense of community around activism and citizenry. From its inception in 2016, the idea was to blend a café with bike repair and retail services, creating a hybrid model that offers a diverse range of experiences under one roof. There are no other business models like this in the Eau Claire, Wisconsin, area. The combination of a coffee shop and bike shop makes SHIFT Cyclery and Coffee Bar stand out. Some patrons come only for the coffee, others for bike repairs, and many appreciate the dual nature of the business. Using an established business model has an advantage for SHIFT. Owner Laura Lash shares:
One clear draw for us is that people traveling through town from larger cities find us based on our online photos, coffee offerings, and hybrid shop model. It’s either familiar to them or they are intrigued.
Despite the challenges posed by the economic climate post-pandemic, the core idea of inclusiveness and providing a friendly, safe space for all levels of coffee and biking enthusiasts has been the cornerstone of SHIFT’s character and personality, contributing significantly to its success and community appeal.
- What specific elements of SHIFT Cyclery & Coffee Bar’s business model demonstrate innovation?
- What specific elements demonstrate creativity?
Invention
An invention is a leap in capability beyond innovation. Some inventions combine several innovations into something new. Invention certainly requires creativity, but it goes beyond coming up with new ideas, combinations of thought, or variations on a theme. Inventors build. Developing something users and customers view as an invention could be important to some entrepreneurs, because when a new product or service is viewed as unique, it can create new markets. True inventiveness is often recognized in the marketplace, and it can help build a valuable reputation and help establish market position if the company can build a future-oriented corporate narrative around the invention (Vendelø, 1998).
Besides establishing a new market position, a true invention can have a social impact. At the social level, a new invention can influence the ways institutions work. For example, the invention of desktop computing put accounting and word processing into the hands of nearly every office worker. The ripple effects spread to the school systems that educate and train the corporate workforce. Not long after the spread of desktop computing, workers were expected to draft reports, run financial projections, and make appealing presentations. Specializations or aspects of specialized jobs—such as typist, bookkeeper, corporate copywriter—became necessary for almost everyone headed for corporate work. Colleges and eventually high schools saw software training as essential for students of almost all skill levels. These additional capabilities added profitability and efficiencies, but they also have increased job requirements for the average professional.
Some of the most successful inventions contain a mix of familiarity and innovation that is difficult to achieve. With this mix, the rate of adoption can be accelerated because of the familiarity with the concept or certain aspects of the product or service. As an example, the “videophone” was a concept that began to be explored as early as the late 1800s. AT&T began extensive work on videophones during the 1920s. However, the invention was not adopted because of a lack of familiarity with the idea of seeing someone on a screen and communicating back and forth. Other factors included societal norms, size of the machine, and cost. It wasn’t until the early 2000s that the invention started to take hold in the marketplace (Fitzgerald, 2003). The concept of a black box is when activities are performed in a somewhat mysterious and ambiguous manner, with a serendipitous set of actions connecting that result in a surprisingly beneficial manner.
An example is Febreze, a chemical combination that binds molecules to eliminate odors. From a black box perspective, the chemical engineers did not intend to create this product, but as they were working on creating another product, someone noticed that the product they were working on removed odors, thus inadvertently creating a successful new product marketed as Febreze.
Did Henry Ford Invent the Assembly Line?
Very few products or procedures are actually brand-new ideas. Most new products are alterations or new applications of existing products, with some type of twist in design, function, portability, or use. Henry Ford is usually credited with inventing the moving assembly line as shown in Figure 7.2(a) in 1913. However, some 800 years before Henry Ford, wooden ships were mass produced in the northern Italian city of Venice in a system that anticipated the modern assembly line.
Various components (ropes, sails, and so on) were prefabricated in different parts of the Venetian Arsenal, a huge, complex construction site along one of Venice’s canals. The parts were then delivered to specific assembly points as shown in Figure 7.2 (b). After each stage of construction, the ships were floated down the canal to the next assembly area, where the next sets of workers and parts were waiting. Moving the ships down the waterway and assembling them in stages increased speed and efficiency to the point that long before the Industrial Revolution, the Arsenal could produce one fully functional and completely equipped ship per day. The system was so successful that it was used from the thirteenth century to about 1800.
Henry Ford did not invent anything new—he only applied the 800-year-old process of building wooden ships by hand along a moving waterway to making metal cars by hand on a moving conveyor.
Opportunities to bring new products and processes to market are in front of us every day. The key is having the ability to recognize them and implement them.
Pause and Reflect
- How do you distinguish between creativity and innovation in your own work or projects?
- Think of an invention that significantly impacted your life or industry. What were the key elements that made it truly novel and different?
Key Takeaways
- Creativity is the ability to develop something original, particularly an idea or representation of an idea. Innovation is the application of creativity to create a usable product or service that adds value to an existing product or service. Invention is a truly novel product, service, or process that represents a significant leap from previous ideas and products.
- Incremental innovation involves small improvements to existing products, like the enhancements in successive versions of the iPhone.
- Disruptive innovation significantly affects the market by making a product or service more affordable and accessible, as exemplified by Uber’s impact on the taxi industry.
- Pioneering innovation involves developing a new product based on new technologies or advancements, such as the creation of Pokémon GO.
- Design thinking is an empathy-driven process focused on developing products based on customer needs, often requiring creativity and innovation to solve complex problems.
- Entrepreneurs benefit from both linear thinking (logical, step-by-step processes) and lateral thinking (creative, open possibilities) to innovate effectively.
- According to Peter Drucker, innovation can come from unexpected opportunities, incongruities, process needs, market changes, demographics, perception changes, and new knowledge.
Knowledge Check
The ability to develop something original, particularly an idea or a representation of an idea.
Any new idea, process, or product, or a change to an existing product or process that adds value to that existing product or service.
A truly novel product, service, or process.
An innovation that modifies an existing product or service.
A method that focuses on designing and developing products based on customer needs. It involves an empathy-driven process to define complex problems and create solutions.
The generation of ideas in an environment free of judgment or dissension with the goal of creating solutions, is just one of dozens of methods for coming up with new ideas.
The purposeful process of opening up your mind to new trains of thought that branch out in all directions from a stated purpose or problem.
Sometimes referred to as vertical thinking, this involves a logical, step-by-step process.
Free and open thinking in which established patterns of logical thought are purposefully ignored or even challenged.
A process that significantly affects the market by making a product or service more affordable and/or accessible, so that it will be available to a much larger audience.
A problem that people have with a product or service that might be addressed by creating a modified version that solves the problem more effectively.
Innovation based on a new technology, a new advancement in the field, and/or an advancement in a related field that leads to the development of a new product.
Activities are performed in a somewhat mysterious and ambiguous manner, with a serendipitous set of actions connecting that result in a surprisingly beneficial manner.