ABM 601/ L-4: Prof.

Swami Prasad Saxena

Lesson 4
Motivation, Creativity, and Innovation
Objectives of the lesson
At the end of the lesson, students will be able to:
• Understand the meaning and components of motivation,
• Describe meaning and principles of creativity, and
• Explain meaning and principles of innovation.
1.0 Introduction
It is often said that a person cannot win a game that they do not play. In the context of
entrepreneurship, this statement suggests that success depends on people’s willingness
to become entrepreneurs. The pursuit of entrepreneurial opportunity is an evolutionary
process which includes to discover the opportunity, deciding whether that is a positive
one; to pursue resources, and to design the mechanisms of exploitation. Human
motivations influence the decisions related to entrepreneurship endeavours, and that
variance across people in these motivations will influence who pursues entrepreneurial
opportunities, who assembles resources, and how people undertake the entrepreneurial
process.
Innovation is the tool of entrepreneurship, both innovation and entrepreneurship
demand creativity. Creativity and innovation by definition involves the creation of
something new which is central to the entrepreneurial process. Creativity and
innovation are considered inseparable from entrepreneurship, which is in turn
manifested in the act of starting up and running an enterprise. Entrepreneurs and their
start-ups are considered to be important agents of innovation, not simply in terms of the
products and services they provide, but also in terms of the technologies and processes
that they utilize. Start-up entrepreneurs could, thus be argued to be, by their very
nature, the essence of creativity and innovation. Creativity is applied because it
connects, innovation is required because it implies progress and both play role in
entrepreneurship. These fill in the vacuum created between an idea and an opportunity.
2.0 Concept of Motivation
In common perception, entrepreneurs are after money and they engage in profit
making. True, profit as understood in terms of the residual income of the owner after
meeting all the expenses incurred on the engagement and utilization of other factors of
production-is the reward of entrepreneurship just as salary is to people in employment
and professional fees is to those in profession. So, everybody works for money. But
people certainly do not work for money alone. After all, money is required not for its
own sake, but for the sake of the needs of the person that it can fulfil. Money, thus, is not
the need as such. It is teleological related to the internally felt needs and socially
acquired needs, e.g., status symbols. This leads to the need of entrepreneurial
motivation to achieve that extra edge over others.

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3.0 Components of Motivation

The motivation is not a package, it is accompanied by various other things which are as
follows:
• Self-Efficacy: Self-efficacy is the belief in one’s capabilities to organize and execute
the courses of action required to manage prospective situations. In other words, self -
efficacy is a person’s belief in his or her ability to succeed in a particular situation.
Virtually all people are known of the goals to accomplish, and things that need
changes in the process. However, most people also realize that putting these plans
into action is not quite so simple. Bandura and others have found that an individual’s
self-efficacy plays a major role in how goals, tasks, and challenges are approached.
People with a strong sense of self-efficacy view challenging problems as tasks to be
mastered, develop deeper interest in the activities in which they participate, form a
stronger sense of commitment to their interests and activities, and recover quickly
from setbacks and disappointments. People with a weak sense of self-efficacy avoid
challenging tasks, believe that difficult tasks and situations are beyond their
capabilities, focus on personal failings and negative outcomes, and quickly lose
confidence in personal abilities.
• Creativity: In a very simple and straightforward manner, creativity is the ability of
creation, that is the causing of a new thing to exist. A thing that did not exist before
now does. That thing can be anything; maybe a concept like Marginal Utility that
helps to explain previously unexplained phenomena. It could also be a product, like
Champaign, wine that is fermented in a special way. A new advertising campaign is
certainly an act of creation. But things may be created if they are looked at in a
different way. Creativity is also the bringing of these new perspectives. There are
many ways for a creative mind to apply its talents. These may include: creating a
new product for which the entrepreneur has anticipated future sales, improving a
product that is adding or modifying something that makes the product better
according to certain criteria like consumers’ needs, improving a process for
manufacturing something, maybe baking a cake at home or producing a better
computer application to avoid popup ads, using the same product to satisfy a
different need, inventing new concepts or constructs that help to better explain
certain phenomena, interpreting information in a different way, or doing business
abroad.
• Risk Taking: The market order tends to generate goods and services to cater to the
demands of the customer. More precisely, individual producers and sellers produce
the goods and services, acting based on their appraisal of the wants of the customers.
If they are correct in their judgement then they will prosper, if not, they will not
attract buyers and they will fail. Within a free market order, entrepreneurs must
take risks because the last word lies with the potential buyers, the consumers. This
involves an element of risk for the entrepreneur and in return for the risk he
demands a reward this is the profit margin. Profits serve the dual purpose of

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rewarding the successful entrepreneur (that is, the person who caters best to the
wants of the public) and providing capital to develop the business. This may take the
form of investment in updated plant for increased efficiency and lower prices, it may
involve expansion into new products and new markets, and it may involve the
takeover of less thriving firms to put their resources to more productive use.
• Leadership: Entrepreneurship is a special skill set. Some great entrepreneurs are
not-so-great leaders or managers, but successful leaders need to master some of the
entrepreneurship skill set. There is a “new” word that is thrown around –
Intrapreneurship – to represent the entrepreneurial activities internal to an
organization. The businesses would be better off if leaders learn and adapt a bit of
entrepreneurial focus as a part of being successful and enduring in business.
• Entrepreneur Communication: Early stage and start-up businesses have demanding
communication challenges. The entrepreneur must distill a lengthy business plan
and its financial projections into a standard and very brief “elevator pitch” -the
succinct yet complete description of the enterprise and its business model that can
be communicated in the time it takes to ride an elevator to a building’s top floor. And
for its customers, an early-stage business needs a precisely articulated and easily
communicated value proposition, or it will not generate the revenue and profits to
provide the return that investors expect.
4.0 Concept of Creativity
Creativity is a process by which a symbolic domain in the culture is changed. Creativity
is the ability to make or otherwise bring into existences something new, whether a new
solution to a problem, a new method or device, or a new artistic object or form.
Creativity is moving from the known to the unknown. No entrepreneur or enterprise,
however successful and big, can continue to hold a place of leadership unless it
recognizes that modern business operates in a world of galloping change which creates
new problems, risk and opportunities and for which they have to mobilize the
enterprise’s resources before changes make their impact felt. All innovation begins with
creative ideas.
Creativity is marked by the ability to create, bring into existence, to invent into a new
form, to produce through imaginative skill, to make to bring into existence something
new. Creativity is not ability to create out of nothing but the ability to generate new
ideas by combining, changing, or reapplying existing ideas. Everyone has a creative side
but is not realized. Creativity is the starting point for innovation. It is necessary but not
sufficient condition for innovation. Innovation is the implantation of creative
inspiration. Creativity requires passion and commitment. It is is an attitude, the ability
to accept change and newness, a willingness to play with ideas and possibilities, a
flexibility of outlook, the habit of enjoying the good, while looking for ways to improve it.
Creativity is also a process. Creative people work hard to improve ideas and solutions,
by making continuous and gradual alterations and refinements to their works.

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5.0 Principles of Creativity

People become creative when they feel motivated primarily by the interest, satisfaction,
and challenge of the situation and not by external pressures; the passion and interest ; a
person’s internal desire to do something unique; the person’s sense of challenge, or a
drive to prove something no one else has been able to. Within every individual,
creativity is a function of three components: (i) expertise, (ii) creative thinking skills,
and (iii) motivation.
• Expertise encompasses everything that a person knows and can do in the broad
domain of his or her work- knowledge and technical ability.
• Creative thinking refers to how you approach problems and solutions- the capacity
to put existing ideas together in new combinations. The skill itself depends quite a
bit on personality as well as on how a person thinks and works. Expertise and
creative thinking are the entrepreneur’s raw materials or natural resources.
• Motivation is the drive and desire to do something, an inner passion and interest.
When people are intrinsically motivated, they engage in their work for the challenge
and enjoyment of it. Entrepreneurial activity depends on the process of innovation
following creativity, not on creativity alone.
6.0 Concept of Innovation
Innovation is the process of bringing the best ideas into reality, which triggers a creative
idea, which generates a series of innovative events. Innovation is the creation of new
value. Innovation is the process that transforms new ideas into new value. No
innovation is possible without creativity. Innovation is the process that combines ideas
and knowledge into new value. Without innovation an enterprise and what it provides
quickly become obsolete.
Joseph Schumpeter (1934) believes that the concept of innovation, described as the use
of an invention to create a new commercial product or service, is the key force in
creating new demand and thus, new wealth. Innovation creates new demand and
entrepreneurs bring the innovations to the market. This destroys the existing markets
and creates new ones, which will in turn be destroyed by even newer products or
services. Schumpeter calls, this process, creative destructions.
7.0 Principles of Innovation
Innovation requires a fresh way of looking at things, an understanding of people, and an
entrepreneurial willingness to take risks and to work hard. People involved in
innovation are guided by certain principles of innovation. These vary among different
entrepreneurs; Organisation; philosophers; but the basic framework remains the same.
Steve Jobs has given seven principles largely responsible for success thr ough innovation.
These are described in his book, “The Innovation Secrets of Steve Jobs”. Briefly, these
principles are as follows:

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• Do what you love: Steve Jobs once told a group of employees, “People with passion
can change the world for the better.” Jobs has followed his heart his entire life and
that passion, he says, has made all the difference. It’s very difficult to come up with
new, creative, and novel ideas unless you are passionate about moving society
forward.
• Put a dent in the universe: Passion fuels the rocket, but vision directs the rocket to its
ultimate destination. In when Jobs and Steve Wozniak co -founded Apple, Jobs’ vision
was to put a computer in the hands of everyday people. In 1979, Jobs saw an early
and crude graphical user interface being demonstrated at the Xerox research facility
in Palo Alto, California. He knew immediately that the technology would make
computers appealing to “everyday people.” Xerox scientists didn’t realize its
potential because their “vision” was limited. Two people can see the exactly the same
thing, but perceive it differently based on their vision.
• Kick start your brain: Steve Jobs once said, “Creativity is connecting things.”
Connecting things means seeking inspiration from other industries. At various
times, Jobs has found inspiration in a phone book, Zen meditation, visiting India, a
food processor at Macy’s, or The Four Seasons hotel chain. Steve doesn’t “steal”
ideas as much as he uses ideas from other industries to inspire h is own creativity.
• Sell dreams, not products: To Steve Jobs, people who buy Apple products are not
“consumers.” They are people with hopes, dreams and ambitions. He builds
products to help people achieve their dreams. He once said, “some people think
you’ve got to be crazy to buy a Mac, but in that craziness, we see genius.” How do
you see your customers? Help them unleash their inner genius and you’ll win over
their hearts and minds.
• Say no to 1,000 things: Steve Jobs once said, “I’m as proud of what we don’t do as I
am of what we do.” He is committed to building products with simple, uncluttered
design. And that commitment extends beyond products. From the design of the iPod
to the iPad, from the packaging of Apple’s products to the functionality of the Web
site, in Apple’s world, innovation means eliminating the unnecessary so that the
necessary may speak.
• Create insanely great experiences: The Apple store has become the world’s best
retailer by introducing simple innovations any business can adopt to create deeper,
more emotional connections with their customers. For example, there are no
cashiers in an Apple store. There are experts, consultants, even geniuses, but no
cashiers. Why? Because Apple is not in the business of moving boxes; they are in the
business of enriching lives.
• Master the message: Steve Jobs is the world’s greatest corporate storyteller, turning
product launches into an art form. You can have the most innovative idea in the
world, but if you can’t get people excited about it, it doesn’t matter. Simply put,
innovation is a new way of doing things which results in positive change. Innovation

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is attainable by anyone at any organization, regardless of title or position. Make

innovation a part of your brands’ DNA by thinking differently about business
challenges.
Summary
Successful entrepreneurs require an edge derived from some combination of a creative
idea and a superior capacity for execution. The entrepreneur’s creativity may involve an
innovation product or a process that changes the existing order. Or entrepreneur may
have a unique insight about the consequence of an external change. Entrepreneurship is
the vehicle that drives creativity and innovation. Innovation creates new demand and
entrepreneurship brings the innovation to the market. Innovation is the successful
development of competitive edge and as such, is the key to entrepreneurship. Creativity
and Innovation are at the heart of the spirit of enterprise. It means striving to perform
activities differently or to perform different activities to enable the entrepreneur to
deliver a unique mix of value. Thus, the value of creativity and innovation is to provide a
gateway for astute entrepreneurship. This results in actively searching for opportunities
to do new things, to do existing things in extraordinary ways. Creativity and Innovation
therefore, trigger and propel first-rate entrepreneurship in steering organization
activities in whatever new directions are dictated by market conditions and customer
preferences, thereby delighting the customers to the benefit of the stakeholders.
Innovation also means anticipating the needs of the market, offering additional quality
or services, organization efficiently, mastering details, and keeping cost under control.
Growth and development cannot be sustained without additional innovations.
Additional innovations make firms look glamorous in terms of new products, new
marketing techniques, and newer ways to reach out to customer in satisfying their
needs. These are usually seen as part of the process of innovation, which is itself seen as
the engine driving continued growth and development. The ‘winning performance’ of
the entrepreneur and the organization focuses on (i) competing on quality, not prices,
(ii) domination of a market niche, (iii) competing in an area of strength, (iv) having tight
financial and operating controls, and (v) frequent product or service innovation.
Entrepreneurship is, therefore, the innovatory process involved in the creation of an
economic enterprise based on a new product or service which differs significantly from
products or services offered by other suppliers in content or in the way its production is
organized nor in its marketing.
Self-check Questions
1. What do you mean by entrepreneurial motivation? Discuss clearly its main
components.
2. What do you mean by creativity? How it helps an entrepreneur to excel in
competitive environment? Also discuss basic principles of creativity.
3. What is innovation? Write a detailed note on principles of innovation given by Steve
Jobs.