Chapter 2

Creativity and generating new

business ideas
Learning outcomes
• Describe creativity and how it reveals itself in individuals
• Understand the myths surrounding creativity, as well as the reality
about these myths
• Identify the barriers to creativity and how they can be overcome
• Understand the creative process and its development, and describe
the entrepreneurial creative process
• Identify and make use of the resources for identifying a new product
or service idea
• Understand the need to screen business ideas and opportunities
2.1 Creativity
Creativity is:
• the ability to see the world in new ways
• find hidden patterns
• make connections between seemingly disparate things, and
• generate new ideas and solutions to problems Kaur (2022)
2.1 Creativity (cont.)
2.1.1 Creativity defined
• There are many different definitions of creativity as it is difficult to define
• Common descriptions all share the following aspects:
• Looking at things differently
• Implementation of an idea by making it a reality
• Addressing a gap such as a problem or an unmet need
• Creativity is the process of developing and implementing ideas that are both novel
and useful and address a gap in the market
2.1 Creativity (cont.)
2.1.2 Addressing the market gap
• Techniques that entrepreneurs can use to address the market gap:
• Defining or identifying the need using analytical methods to ensure precise identification of the
problem or need and identifying a response to the need
• Transforming problems into opportunities that will help the entrepreneur to look at the problem
or gap as an opportunity that can be addressed
• Breaking down any prior assumptions and making new connections for new ideas
• Strategic assessment where possible future outcomes must be predicted and all possible outcomes
should be identified
• Strategic assessment to predict future outcomes
• Entrepreneurs should use not only logic but intuition too
2.2 Myths and realities surrounding
creativity and entrepreneurship
• Myth 1: Creativity is limited to a small number of people
• Myth 2: Only creative people have good ideas
• Myth 3: Creative people are born that way
• Myth 4: Analytical thought and creative thought are fundamentally different
• Myth 5: Money is a creativity motivator
• Myth 6: There is no business without a unique idea
• Myth 7: Entrepreneurs are high-tech wizards
• Myth 8: Entrepreneurs are risk-takers
• Myth 9: Entrepreneurs do not have a boss
• Myth 10: Entrepreneurs need to know everything
2.3 Barriers to creativity
• Barrier 1: Fear of failure
• Barrier 2: Negative beliefs and habits
• Barrier 3: Making assumptions
• Barrier 4: Following rules
• Barrier 5: Environment not open to risk
• Barrier 6: Lack of financial support
• Barrier 7: Cultural barriers
• These barriers can all be overcome using specific strategies
2.4 The creative process
2.4.1 Theoretical developments in the creative process
• An early model of the creative process is that of Wallas (1926) who proposed four phases in the creative thinking
process:
• Preparation
• Incubation
• Illumination
• Verification
• Rossman (1931) expanded these to seven steps:
• Observation of a need or difficulty
• Analysis of the need
• A survey of all available information
• A formulation of all objective solutions
• A critical analysis of these solutions for their advantages and disadvantages
• The birth of the new idea – the invention
• Experimentation, selection and perfection
2.4 The creative process (cont.)
• Osborn (1953) put forward a seven-step model of creative thinking:
• Orientation
• Preparation
• Analysis
• Ideation
• Incubation
• Synthesis
• Evaluation
• More recent models include the creative problem-solving (CPS) model:
• Objective finding
• Fact finding
• Problem finding
• Idea finding
• Solution finding
• Acceptance finding
2.4 The creative process (cont.)
2.4.2 The entrepreneurial creative process
• Preparation
• Information gathering
• Idea generation
• Evaluation of ideas
• Implementation
• Experimentation
2.5 Sources of product or service ideas
• Look for an idea, an opportunity, where the next frontiers lie, the process of evaluation
• Sources of product and/or service ideas:
• Personal skills, passions, imagination and talents
• Hobbies and interests
• Talking to family, friends, or shoppers
• Current or previous experiences
• Government assistance services for small businesses
• Mass media
• Keeping up with current events and being ready to take advantage of business opportunities
• Visits to trade shows and exhibitions
• The internet and online research
• Identifying gaps in the market for new or improved products and services
• Libraries
• Creative thinking
2.6 Methods for generating new
product or service ideas
2.6.1 Accumulation of knowledge:
• Read extensively , investigate possible business opportunities in different areas, travel to new places to
experience different environments

2.6.2 Observation
• Observe the environment and its events, products and services to generate viable business ideas
• Visit successful businesses in neighbouring suburbs, cities or towns to determine whether you could
replicate any component of the enterprise
• Consider products or services that have been successful in the past and which may have become obsolete

2.6.3 Brainstorming
• Use this group technique to involve two or more people in the generation of ideas
2.6 Methods for generating new
product or service ideas (cont.)
2.6.4 Nominal group technique
• Used during the decision-making process as a method to generate and prioritise ideas
• Can be used to provide solutions for groups of various sizes allowing all opinions to be taken into account

2.6.5 Delphi technique

• Similar to the nominal group technique, but not all members need to be physically present
• Uses carefully designed questionnaires in each step, then collects and collates the information gathered

2.6.6 The incubation of ideas

• Creating an environment where subconscious thoughts are allowed to develop into creative ideas is a form of idea
incubation
• By keeping yourself occupied with activities totally unrelated to the subject, an idea could potentially develop
2.7 Initial screening of ideas
• Do a detailed follow-up of the ideas generated to screen and identify the good and bad
features of each alternative
• Purpose: To exclude ideas that will not have any chance of success and allow only those ideas
that have some element of viability and marketability through to the final evaluation
• Categorise potential ideas and opportunities according to:
• Perception of desirability
• Perception of feasibility
• Propensity to act
• Entrepreneurial ideas that pass the initial screening have innovation at the core and have
proved theoretically to provide a competitive position
• Next step: Idea evaluation to refine the idea enough to get it to run smoothly in real-life
situations