This topic examines creativity and its links to enterprise; the three stage process of entrepreneurship; opportunity screening; innovation and competitive advantage; acquiring resources – financing ventures and the role of family, friends and fools; team building and entrepreneurial growth. The screening of opportunities is a key part of the entrepreneurial process and the reason why some people identify opportunities better than others may be due to their having access to better information channels and the cognitive abilities to assess and value them.
When faced with uncertain, ambiguous environments nascent and novice entrepreneurs are more likely to use an effectuation process than a causation one. The theory of effectuation suggests that they will plan forward not by trying to maximise profit and return on investment, but by assessing affordable loss and acceptable risk. They will forge strategic alliances and use these to replace competitive analysis. Their success will be based on the exploitation of contingencies rather than the exploitation of pre-existing knowledge, and they will seek to control an unpredictable future instead of trying to predict an uncertain one.
The business plan or planning process lies at the heart of the entrepreneurial process but is less a document than a balancing of opportunity, resources and team capabilities using creativity, communication and leadership skills. The entrepreneurial process can be understood as the interplay between opportunity, resources and the creation of a team that can implement the business plan. When screening future opportunities a useful tool is the “3M Analysis” that examines market, money and management issues.
The factors likely to trigger new venture creation involve both personal and environmental issues. Key trigger factors are likely to be creativity and autonomy, while major barriers might be fear of risk, lack of finance and finding the task more difficult than anticipated. Creativity appears to be a major driver for entrepreneurs and involves a process of accumulating knowledge, incubating this knowledge, generating ideas and evaluation and implementation. Creativity within the workplace can be affected by time pressures.
Useful applied creativity tools include the use of “rich pictures” to stimulate group thinking, and the SIMPLEX applied creativity process that provides a step-wise approach to addressing complex problems that require divergent, creative thinking before you can apply convergent planning and implementation.
Textbooks and readings
Amabile, T. M., Hadley, C.N., and Kramer, S.J. (2002). "Creativity Under the Gun." Harvard Business Review 80(8): 52-63.
Basadur, M., Pringle, P., Speranizini, G., and Bacot, M. (2000). "Collaborative Problem Solving Through Creativity in Problem Definition: Expanding the Pie." Creativity and Innovation Management 9(1): 54-76.
Basadur, M. (2004). "Leading others to think innovatively together: Creative Leadership." The Leadership Quarterly 15(1): 103-121.
Basadur, M. S., and Gelade, G. (2003). "Using the creative problem solving profile (CPSP) for diagnosing and solving real-world problems: Emergence." Journal of Complexity Issues in Organizations and Management 5(3): 22-47.
Davidsson, P. and Henrekson, M. (2002). "Determinants of the Prevalence of Start-ups and High-Growth Firms." Small Business Economics 19(2): 81-104.
Gartner, W. B. (1985). "A Conceptual Framework for Describing the Phenomenon of New Venture Creation." Academy of Management Review 10(4): 696-706.
Gibb, A., and Ritchie, J. (1990). "Understanding the Process of Starting Small Businesses." European Small Business Journal 1(1): 26-45.
Greenberger, D. B., and Sexton, D.L. (1988). "An Interactive Model for New Venture Creation." Journal of Small Business Management 26(3): 107-118.
McFadzean, E. (1998). "Enhancing creative thinking within organisations." Management Decision 36(5): 309-315.
Sarasvathy, S. D. (2001). "Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency." Academy of Management Review 26(2): 243-263.
Volery, T., Mazzarol, T., Doss, N., and. Thein, V. (1997). "Triggers and Barriers Affecting Entrepreneurial Intentionality: The Case of Western Australian Nascente Entrepreneurs." Journal of Enterprising Culture 5(3): 273-291.