Innovation and Entrepreneurship
The legendary Peter Drucker wrote a book with this title more than three decades ago. Drucker and many other management thinkers have emphasized the importance of innovation not only for the growth of an organization but also for its very existence. Drucker defined innovation as “the act that endows resources with a new capacity to create wealth”.
While traditional industries and new age organizations have contributed their might in creating (and sometimes destroying) wealth, in today’s world, entrepreneurs are playing an increasingly bigger role by bringing innovative products and services, which were sometimes never heard of before. Change being the only constant, organizations which have not kept pace with the changes in the environment or which have failed to read the signals, have invariably perished. In 1998, Kodak had nearly 1,70,000 employees and made more than 80% of all the photo paper sold worldwide. Nobody would have thought that it would go bankrupt. Kodak just failed to keep an eye on the environment and perished. The same story goes for companies that restricted themselves to making dot matrix printers, floppy disks and other similar devices now obsolete. At the same time, nobody could have imagined that an organization which owns no vehicles would become synonymous with taxi services around the world (Uber).
Innovation keeps an organization relevant over a longer horizon of time. What makes a company more innovative than others? The entrepreneurial spirit is a certainly a key factor. Drilling further into entrepreneurship, the following six elements are significant:
- Comfort with disorderliness is vital. Creative breakthroughs are often preceded by a high level of chaos where people are trying to make sense of their thoughts and environment, but the thinking at this stage is freewheeling. Over time, the inherent contradictions start getting understood better and things move from chaos to clarity. Some wild ideas die during the process and the most relevant survive.
- Dissatisfaction with the way things are is an essential condition for coming up with novel ideas. Satisfaction with the status quo more often than not kills inquisitiveness and the quest for learning newer things. Life moves on a defined path, and is hardly exciting although it may be comfortable.
- The ability to decipher unusual patterns and meanings goes hand in hand with creativity and innovation. Perhaps Kodak lacked this and the rest is history.
- Giving shape to an envisioned future is uncommon and important ability. The Wright brothers, Thomas Edison, and many other inventors had it in abundance. Having this ability in abundance is not necessary though, because it can be enhanced through experience. A spark may be enough.
- An above average willingness to take risks is important in innovation and entrepreneurship. The basic premise is that the higher the risk, the greater the reward. Remember, this is not even remotely similar to gambling. The risks are calculated and well thought through.
- Structure and processes are not necessarily antithetical to creativity and innovation. These have their own place in an organization and can’t be wished away. Innovators look for open spaces and green fields to think and work differently, and invariably find them. In the process, the organization benefits by leaps and bounds.
In conclusion, creativity and innovation appear to be strongly correlated with successful entrepreneurship.