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Entrepreneurship and Developing Creative Strategies By D. J. Power.

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1 Entrepreneurship and Developing Creative Strategies By D. J. Power

2 Entrepreneur The term entrepreneur is often used broadly to describe a person who starts a business. An entrepreneur organizes, operates, and assumes the risk for a business venture. Successful entrepreneurs change the competitive situation by innovating with new products, processes or approaches. Entrepreneurs identify and exploit opportunities. Within a company such a person is called an Intrapreneur.

3 Schumpeter capitalism sparks entrepreneurship entrepreneurs innovate by figuring out how to use inventions, and by introducing new means of production, new products, and new forms of organization Innovation by entrepreneurs leads to “creative destruction” of existing businesses and industries and progress For economic development to happen, there have to be leaders who display energy to act in new ways and are also motivated to do so. Schumpeter calls the leader the “Man of Action” (Mann der Tat), and he describes him as someone who does not accept reality as it is. Schumpeter argued that the innovation and technological change of a nation come from the entrepreneurs, or wild spirits. Schumpeter writes: “The Man of Action acts in the same decisive manner inside as well as outside the usual tracks in the economy. He does not feel the restrictions that block the actions of the other economic actors.” (Schumpeter 1911:132) Capitalism, Socialism and Democracy. London: George Allen and Unwin, 1942.

4 Creative Destruction action.html

5 Characteristics of Entrepreneurs An enthusiastic vision, the driving force of an enterprise. An interlocking collection of specific ideas not implemented in the marketplace. Overall blueprint to realize the vision is clear, however details may be incomplete, flexible, and evolving. Promotes the vision with enthusiastic passion. With persistence and determination, the entrepreneur develops strategies to change the vision into reality. Takes the initial responsibility to cause a vision to become a success. Takes prudent risks. Assesses costs, market/customer needs and persuades others to join and help. A positive thinker and a decision maker.

6 Traits of Entrepreneurs A desire to achieve Hard work Desire to work for themselves Nurturing quality for a new venture Acceptance of responsibility Reward orientation Optimism Orientation to excellence Organization Profit orientation John G. Burch, Business Horizons, September-October 1986

7 Strategic Thinking Anticipate what might, will or could occur in a situation and how it is possible to shape or influence what is occurring so that what one wants to occur actually occurs. Think about consequences and choosing actions to achieve objectives. Try to turn a situation to one's advantage. Ask the right questions in a solution-oriented manner Conduct appropriate analyses to formulate plans and strategy. Anticipate competitor actions and preparing to counter or thwart them.

8 New Venture Plans A new venture plan usually refers to a plan for starting and operating a new business venture. A new venture is usually a business enterprise involving some risk in expectation of gain. Venture is often used to refer to a risky start-up. The term is broad enough to encompass tasks related to any new venture whether initiated by an individual, group or organization for a profit or non- profit motive. Venture planning answers the question, Should I be doing this and why?

9 Developing Creative Strategies How can CEOs develop creative strategies and enhance innovation? 1. Assemble “creative” teams - diverse, heterogeneous, charge to be “creative” 2. Creativity enhancement techniques - learn them and use them 3. Design “creative organizations” – structure, culture

10 How can we design “creative” organizations? Push decision-making down in the organization structure -- decentralize Open new channels of communication Down play rules Provide rewards for creativity Create special programs – retreats, seminars on creativity

11 Creativity enhancement techniques Brainstorming Synectics – use analogies SCAMPER – Substitute? Combine? Adapt? Modify or magnify? Put to other uses? Eliminate or reduce? Reverse or rearrange? Attribute list – modify systematically Challenge assumptions Nominal Group Technique (NGT)

12 Brainstorming The following steps are required for effective brainstorming: Describe the problem or decision and state the objective of identifying as many ideas as possible. For example: Why did market share decline? or How to increase market share? Determine how team members are to be separated – same place vs. different.

13 Generation vs. Evaluation Provide time to brainstorm. Time needed depends on members’ familiarity with the issue. Encourage idea generation by asking members to do the following: Withhold self-criticism of ideas Be as creative as possible and do not worry if the ideas seem wild Generate as many ideas as possible, quantity is what is wanted Hold an idea evaluation meeting, or at least separate the idea generation and idea evaluation phases of the meeting.

14 Nominal Group Technique The idea generation stage of this technique is very similar to individual brainstorming in that individuals work alone. The nominal group technique includes the following steps: Present to team members, both orally and in writing, the issue for which ideas are needed. Let team members list ideas on a yellow pad for about 10 minutes.

15 Generate Have each member generate new ideas, individuals do so in the same location as other team members. Cross- chatter and criticism of ideas are not allowed. Record individual ideas by going around the team and asking for one idea from each member at a time. Continue until all members’ ideas have been recorded. This procedure ensures equal participation among team member, keeps the team involved in the process, and increases individual involvement.

16 Discuss Discuss, in order, each idea. Discussion should focus initially on meaning and clarification on an idea. After seeing the complete list of ideas, team members should individually brainstorm new ideas again Shift focus to discussing agreement and disagreement about the importance and/or validity of each idea.

17 Preference Team members should then be asked to choose from the entire list a specific number of ideas (e.g., 7-10) that are most important and rank them. Assign a score of one to the least important and so on. The most important item in the list should have the highest score. Determine the team’s preference by counting the ideas with the highest scores. Those ideas are considered the most important and valid ones.

18 What are the major challenges for the Entrepreneur? No fixed business model to follow Hard to accurately identify risks Non-level playing field, esp., local company vs MNC Deterioration of government protection forbusinesses/industries Increased competition among businesses Improved and faster information flows Increased competition to find investor funding (globalmarket) Increased competition for talent

19 What are some practical steps for a “would be” Entrepreneur? Embrace an Entrepreneurial Mindset by turning problems into opportunities Asking the right questions like “how can I afford it? rather than saying, “I can’t afford it!” Learn the skills required to use resources available only in another country Make networking with people a part of your lifestyle Don’t be afraid to fail! Try and then try again.

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