Entrepreneurial Creativity As A Source Of Success Commerce Essay


Firstly, this essay discusses the extent to which creativity is an essential skill for entrepreneurs. As entrepreneurial creativity is an ambiguous concept, the traditional meaning is often used out of context in reference business practices. By deconstructing such a meaning of creativity and then re-building it around an entrepreneurial framework, we are able to examine the merits of these diametrically opposed views and ultimately draw our own conclusions as to the importance or otherwise of this skill.

Secondly, the provocative notion that ultimately, entrepreneurship is all about having a great idea is addressed and discussed. This would appear to be a relatively straightforward undertaking. However, the numerable examples which can provide support both for and against this idea make this a challenging task. For instance as Drucker (1985) succinctly points out "entrepreneurship depends on an ability to perceive opportunities for innovation" (p. 1). Whether this is synonymous with creativity, and if so to what extent, is the central theme of this paper.

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While it appears that the jury may still be out on the requirement of creativity for entrepreneurial success (Barnes, 2005; Hanson, 2006; Rowarth, 2006; Spicer, 2006), this may yet be simply an issue of semantics. One of the reasons that the relevance of creativity to entrepreneurship is so fervently debated is no doubt due to the multiple interpretations of the surrounding language. It is therefore imperative to clarify precisely what is meant by creativity before going any further. Creativity in an entrepreneurial or business sense means more than just creating a product or system. Creativity as it is used here, refers to; the ability to come up with ideas that are novel and high in quality; to think flexibly and to be ahead of the pack; and to defy the crowd, seeing alternative ways of defining and solving problems that others miss or do not see (Morris, 2001; Sternberg & Lubart, 1995). This concept of creativity, whilst a departure from it's traditional usage (Becker, 1995), is useful here as it frames the perspectives discussed in this paper and allows for a more liberal application.

Creativity can be categorised as either adaptive - taking something that already exists and making it different or better; or innovative - where something really is brand new (Moberg, 2001). The classic definition of innovation comes from the mid-century economist Joseph Schumpeter, who described innovation as the first commercial use of a product or a process that hadn't previously been exploited (Green & Kersetter, 2001). From this distinction between creative adaptation and innovation, it is argued (Hanson, 2006) that while innovation is essential for long-term economic growth, creativity - in an artistic sense - is not. Although somewhat myopic, this perspective gains the support of others (Barnes, 2005), who highlight that although "entrepreneurship starts with creativity and aspiration, it is not the whole story" (p. 18). This appears true enough. Indeed, reflecting on the success of J. K. Rowling (of Harry Potter fame), most would consider her creativeness as a vital contributing factor, but is she not strictly speaking an entrepreneur. Hanson (2006), goes one step further in suggesting that we may actually have an over abundance of ideas - more than we could ever possibly pursue given our finite resources. Instead of coming up with more and more ideas, he argues, we need to better manage the flood of ideas that we already have. To be sure, there is some validity in this perspective, but, as we shall see, the concept of creativity should not be confined to product innovation alone when considering it's legitimacy in the entrepreneurial toolkit.

Taking a slightly more centrist position is Jacqueline Rowarth, who believes that for aspiring entrepreneurs, the emphasis should be more on hard work than creativity. Founding her position on the well known Edison truism of genius being "99% perspiration and 1% inspiration", she suggests that the current focus on creativity may be somewhat misguided. Through an interview with Jonathan Ive, creator of Apple's iPod, she proposes that creativity - in an entrepreneurial sense - is really about changing the way people think. Certainly, this perspective is echoed by others (Robinson & Hackett, 1997) who consider this change in our way of thinking to really be the litmus test for entrepreneurial creativity.

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Not all theorists and business commentators see it this way though. Spicer (2005) for instance, posits - to the extent that it represents an ability to create, identify and capitalise on opportunities - that creativity is an essential skill for entrepreneurs. He criticises the commonly held assumption that entrepreneurship means increasing the amount of output, while decreasing the amount of input. Entrepreneurship, in his view, has little to do with creating efficiency - this is the domain of management, but is more about developing a skill of opportunism. Barnes (2005) weighs in on this side of the debate as well, offering the valuable insight that "the process of turning inventive, creative thinking into real products with real uses is innovation, and building a successful business around such innovations is entrepreneurship" (p. 18). If by creativity it is meant, an ability to garner the necessary resources and organise them in such a way as that economic value is created, then surely from this we can deduce that creativity is an essential skill for entrepreneurs.

Attention is now directed towards the notion of the great idea as the nexus of entrepreneurship. Research conducted in 1996 by Born and Altink found that the attribution of entrepreneurial success was more often circumstantial than behavioural. Amongst the most important situational factors that they identified were the number of clients, the type of product/service and the competitive nature of the industry in which the entrepreneur operates. Behaviourally, the most important attributes were found to be perseverance, independence, and financial control. Although it is commonly appreciated that the personal characteristics of an entrepreneur play the most significant role in their success, this study underscored the importance of the situational characteristics as contributing factors. In support of these findings, Dimov (2007) argues that, when we think about great entrepreneurs, the fundamental attribution error is evident in our tendency to praise their individual characteristics or skills and neglect the enabling force of their environment. Therefore, to accept the notion that entrepreneurship can be ultimately distilled down to a single great idea, does perhaps risk overlooking the suitability of the fit between entrepreneurs and their environments.

Just as numerous examples can be found of entrepreneurs whose success can be traced back to a single idea - there are also many instances of where this has not been the case. For instance, the success of well known British entrepreneur Richard Branson, chairman of the Virgin Group, can be attributed to a number of business ventures including entertainment, music, air travel, retail, beverages and publishing. Clearly, Branson's success as an entrepreneur extends further than his involvement in a single idea. For others, a great idea can be the foundation upon which they establish themselves, providing a platform of necessary experience, networks and resources, from which to then pursue other ventures. Sam Morgan, the founder of the New Zealand based auction website TradeMe, is a case in point. As a result of the sale of his company in 2006 for $700 million, he has been able to pursue other avenues such as providing venture capital for tech start-ups (Hart, 2007). The idea behind TradeMe is undoubtedly responsible for his initial success, but it would inaccurate to suggest that this one idea defines the extent of his entrepreneurialism.

Further evidence supporting this line of thought can be found in the groundbreaking work of two academic researchers. In their book Built to Last: Successful Habits of Visionary Companies, James Collins and Jerry Porras (1994) shatter the myth that it takes a great idea to start a great company. In fact, they suggest that "starting a company with a 'great idea' might be a bad idea" (p. 7). The rationale for this is that amongst the companies that they studied, few of the most successful began with a great idea. Interestingly they found that regardless of the original concept, the most successful companies were significantly less likely to have early entrepreneurial success. Examples of such companies included Wal-Mart, Hewlett & Packard, Sony, Procter & Gamble, Motorola, Phillip Morris, Boeing, Disney, Ford and General Electric. Instead of waiting for a great idea and then starting a company around it, the founders of these visionary companies studied by Collins and Porras saw the organisation itself as the ultimate creation.

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From these insights it is evident that more than just a great idea is needed. The skills of a successful entrepreneur span a range of activities and competences. For instance, perseverance in the face of uncertainty can be the deciding factor as to whether an entrepreneur is a success or failure. As mentioned, the ability to recognise and act on opportunities is also vitally important. If one continually allows opportunities to escape from one's grasp they will find other's quickly infringing on their ideas and capitalising on them before they can. Furthermore, a positive, forward-looking attitude is also an inherent quality of many successful entrepreneurs. Surely, the belief in the success of their idea plays a vital role in convincing lenders and investors to provide financial capital. Finally a solid network or web of contacts is invaluable to the successful entrepreneur. Being able to draw from an experienced base of professionals and specialists, frees the entrepreneur to focus on doing what they do best, building their business. Several of these additional skills, that are arguably more important than idea generation, will now be expanded further.

Firstly, persistence - a tenacious ability to continue on, even in the face of adversity, is a hallmark of a successful entrepreneur. Thomas Edison displayed such an attitude in the development of the incandescent light bulb. Often it is not until all other possible options have been explored, does one arrive at the right solution to a problem. In this respect Edison was marvellous because surely the majority of people would have given up, where he carried on. Resigning to defeat, often when just moments away from success is one of the primary causes of failure in any entrepreneurial activity. Another telling example is that of Donald Trump. After being virtually bankrupt and with debts of close to US$900 million, he was able to climb his way back to pre-eminence in New York's property market. Furthermore, through expanding into television, with his prime-time hit, The Apprentice, Trump certainly displayed this vital characteristic.

Secondly, a keen eye for seeing the commercial opportunity is another valuable property amongst successful entrepreneurs. Bill Gates, with the development of a personal computer's operating system; Stephen Tindall, with the recognition of the low cost, value-for-money large box retail concept; and Sam Morgan, with the introduction of the web-based auction - a model which had been successfully employed overseas (by eBay), but had yet to be brought to New Zealand, all exemplify the recognition of a viable market opportunity. Yet recognition is not enough. Each of these entrepreneurs was able to act to take advantage of the opportunity at hand.

Thirdly, positive and pragmatic optimism also characterises many entrepreneurs. A firm belief in their product or business is often necessary, especially when pessimistic onlookers cast doubt of the validity of one's plans. Tied closely to persistence, the positive outlook is often what carries the entrepreneur through the dark times. Also, this type of attitude is contagious. As the entrepreneur seeks assistance from others be they lenders, investors, equity partners or family and friends, their attitude and the strength of their resolve often inspires these significant others to become involved.

Finally, the associations or networks to which the entrepreneur has access play a vital role. These can determine everything from the ability to obtain finance, the interest rate charged, and supplier and buyer connections, not to mention international export opportunities. Therefore having a good team of competent professionals behind you, is a must for any fledging entrepreneur. The advantage here is that is allows you to focus on expanding your business and concentrate on building your strengths.

In conjunction, these other aspects of entrepreneurship play just as vital a role as idea generation. In fact many veteran entrepreneurs now look for the ideas of others that they can turn into profitable businesses. Annette Presley, founder of Slingshot, an internet service provider, is one such individual. By focusing on what they do well, in this case recognising good opportunities, these venture capitalists are able to leverage off the ideas, knowledge, time and abilities of others - quite often in return for a share of the business.

In conclusion, this essay has brought forth some of the important issues facing entrepreneurs. The skill of creativity was debated as essential, particularly when it refers to an ability to orchestrate multiple resources and create economic value. The importance of a great idea was examined from several viewpoints. In reflection, it appears that this may not be what entrepreneurship is ultimately all about as numerous examples abound regarding individuals who have displayed their entrepreneurial talent and risen to success on the ideas of others. To fill this gap, a range of other, arguably equally important, skills were identified and briefly discussed. Perhaps none of these skills in isolation (idea generation included), could ultimately result in entrepreneurial success, however in tandem, the chances of success are greatly maximised.