The Relationship Between Creativity, Innovation & Entrepreneurship

DAVIDPRICEThree inter-related concepts that each business owner should know and use.
PART 1 of a 4-Part Series on Entrepreneurship


Every business wants to stay ahead of its competitors, whether on a local or global scale. But how can you stay ahead, catch up to or better yet leapfrog the competition? What is it that can give your firm the separation it needs to gain competitive advantage? This article will discuss how creativity and innovation fuel business creation, growth and sustainability.

There is no single, authoritative perspective or definition of creativity. One simple and often used definition is that creativity requires “novelty.” Novelty requires originality and newness, thus creativity is the ability to come up with new and original ideas, or new and unique solutions to problems.

But creativity itself is not necessarily useful. For example, an artist may spray graffiti on a wall and the resulting “artwork” may be certainly considered creative—but does it have use to anyone? True innovation is the conversion of ideas from the creative process into a benefit. This can include new or improved products, services, processes or social causes. Thus innovation certainly requires creativity, but to be called an innovation it must be useful and add value.

Which brings us to the final step in the process, developing a business that can take advantage of the innovation or “entrepreneurship.” Entrepreneurship includes basic business disciplines we are familiar with, such as marketing, finance and management, often referred to as the “business model.” Figure 1 shows creativity as the central spark, taking the creative process and making it beneficial and useful as an innovation and developing a business model that can exploit the opportunity.

Creativity 101 involves an understanding of convergent and divergent thinking. Convergent thinking is when individuals attempt to solve problems with a single, correct answer. Using rational arguments, eliminating probable incorrect paths, a systematic and logical processes of elimination to arrive at an answer or decision. Divergent thinking is solving problems with many possible solutions – incorporating spontaneous and free-flowing ideas, and in a non-linear fashion. Irrational thoughts and illogical responses to problems are encouraged (at least at first), in order to obtain new and novel answers.

An atmosphere that supports trying new things is critical to creativity, as it encourages experimentation. Thomas Edison failed thousands of times before he found a solution for the light bulb. James Dyson had over 5000 failed prototypes for his vacuum cleaner before he found a marketable version. In each these cases, failure was not a stopping point, but the impetus to keep trying. Learning from previous mistakes allowed them to reach their goals; they had the ability to “fail forward.”

Recent research suggests that most creativity is not accomplished by dramatic and earth shattering moments of creation, but rather simply “doing new things with old things.” Bob Sutton, a professor at Stanford University, suggests that most new ideas come from an ability of some people to look at the world differently and make novel connections between what already exists.

Take the story of Play-Doh as an example. Back in the 1930s, people used coal and wood to heat their homes, and an unwanted by-product of burning was an unsightly residue that would build up on walls. Noah McVicker, a soap manufacturer in Cincinnati, had created a pliable, putty-like substance to remove the residue. However, after WWII, a transition from coal-based heating to natural gas rendered his product irrelevant, and in the 1950s his company was facing bankruptcy.

As it turned out his nephew was related to a nursery school teacher, and she had given her students the same putty to play with, and that the children had enjoyed it. She suggested they market the product as a children’s toy called “PlayDoh.” As they say, the rest is history.

When first faced with the declining market for the original product, McVicker began taking the usual steps any good businessperson would take: hiring business consultants, developing a new and improved formula, increasing efficiency in manufacturing, additional marketing, changing management, etc. It took a fresh perspective to see an alternative vision, a new way of doing something with an old thing.

Many of us have heard that there are two sides of our brain, the left side of the brain, which is more rational, logical, linear and quantitative, and the right side of the brain, which is more visual, non-verbal, understands rhythm, uses imagination and is creative. While we may think that creativity is hopelessly trapped in the right side of the brain, recent research suggests that connections between brain neurons move back and forth between both sides when people are at their most creative. That is, to be more creative, we initially begin the creative process in the right side of our brains, but then jump to the left to analyze the idea and move back to the right side to gradually alter the idea, and so on. We need both processes to be creative.

A great book by Guy Claxton called “Hare Brain – Tortoise Mind” discusses how developing an idea is like growing a tree from a seed. Good ideas take time. Claxton argues that creative accomplishments are not usually an epiphany or an “A-ha” moment, but rather the seeds of the idea were planted long ago. The initial idea needs time to gestate as it is not fully developed, or the solution is not quite complete. The right brain-left brain dance needs to play out, as it may require more research (left brain activity), or it has reached an impasse and may require an additional fresh perspective (right brain). Often when people talk of the “A-ha” moment, it was in reality bouncing around in their minds for a long time, being refined and improved, from left to right, until it reached a stage where it all finally came together and made sense.

Which brings us to an interesting development regarding daydreaming. Often brushed off as a waste of time, “zoning out” was considered counter-productive. Research from the University of British Columbia suggests our minds are not at rest during these periods, and that we are actually solving problems. They found that activity in the complex problem-solving areas of the brain were highly active during daydreaming episodes. Thus, people who are having trouble solving complicated problems may be better off to leave the problem at hand and let their mind wander.

This may help explain why we often have new and interesting ideas while undertaking mundane daily tasks, such as driving to work or showering. How often have we thought “I wonder why I thought of that now?” Interestingly, this aspect of creative people has long been frowned upon by the left-brain quantitative elite. Children who had trouble focusing in school or would not pay appropriate attention were duly punished.

In today’s knowledge economy, the importance of creativity and innovation is clear. A poll conducted by IBM of over 1500 CEOs discovered that creativity was identified as the No. 1 most critical “leadership competency” of the future. If creativity is this important, shouldn’t we be spending more time on it? Unfortunately, the reverse may be true, as it appears that creativity in the United States may be on the decline. A Newsweek article called “The Creativity Crisis” looked at data from a creative test given to children since the 1950s, and found that the creativity levels of U.S. children has been steadily declining since the 1990s. Several reasons for this were proposed, but one suggested that our education system is not encouraging creativity but implementing standardized curriculum and rewarding rote memorization.

Despite these challenges, we are understanding more and more about creativity. An important finding is that creativity can be taught. While some individuals are certainly more prone to being creative, we can all improve our creative output by implementing some of the suggestions above. TK


Robert Epstein, renowned psychologist and creativity expert, recommends the following proven steps:

Write down all your ideas.
This amazingly simple act can increase your creative output tenfold.

Give yourself tough problems to solve.
Examples include learning a new language, a new instrument, or a new dance move. This builds the problem-solving muscles in your brain.

Increase your knowledge.
The more diverse your knowledge, the more novel connections, especially outside your area of expertise. For example reading a book on a new subject.

Change your physical and social surroundings.
Multiple new stimuli will put in motion new connections. Move to another area in the office, complete work in a coffee shop or outside, drive to work in a new direction, listen to different music, meet new people from another organization.


DavidPrice_2012Dr. David Price is the Associate Professor of Marketing and Lecturer in Entrepreneurship at Washburn University.