Many aspiring entrepreneurs believe that creative drive is the most important trait for success. However, many great ideas never become profitable businesses.
Take a look at some of the greatest entrepreneurs of all time.
Did Henry Ford Invent the Automobile? no Nicolas-Joseph Cugnot produced the first steam-powered automobile in 1769.
Did Steve Jobs and Steve Wozniak invent the microcomputer in 1979 with the introduction of the Apple?
Did Ray Kroc invent the fast food hamburger joint? No. Most point to White Castle’s 1921 opening of its original location in Wichita, Kansas, as the first fast food hamburger franchise. Heck, Kroc didn’t even invent McDonald’s. He bought the restaurant from founders Dick and Mac McDonald after becoming the chain’s franchising agent in 1955.
What is the importance of creative behavior?
It’s not the ability to come up with an original idea that wins the day. It’s the ability to take a unique idea—whether the one you came up with or the one someone else developed—and fashion it into a profitable ongoing enterprise. That’s why it’s helpful to understand calculated risk taking before talking about creativity.
Indeed, one study found so-called “‘opportunity’ entrepreneurs [whose primary goal is venture growth] are more willing to take risks than “need” entrepreneurs [whose focus is on producing family income]and those motivated by creativity are more risk tolerant than other entrepreneurs.”1
Most people initially associate “risk taking” with the idea of entrepreneurship. Nonetheless, creativity certainly deserves the “Step #1” label. You have to create something before you can assess its risk. And “creating” doesn’t just mean reinventing an idea from scratch. You can take an existing idea and give it a twist like no one has ever done before.
What is the entrepreneurial mindset?
It’s this sense of flexible innovation—thinking of processes and systems in ways no one has successfully done before—that many call “entrepreneurship”. For this reason, non-entrepreneurs naively assume that entrepreneurs are inventors first.
Joseph Alois Schumpeter (1883-1950) was an Austrian economist who coined the term “entrepreneurial spirit”. This word means “entrepreneurial spirit” from the original German. Schumpeter explained: “Perhaps the typical industrial entrepreneur of the 19th century was the man who put into practice a novel method of production by embodying it in a new firm.”2
As one of the first economists to treat the study of entrepreneurship with serious academic rigor, Schumpeter defined the archetype thus:
“[T]The function of entrepreneurs is to reform or revolutionize the pattern of production by using an invention or, more generally, an untried technological possibility to produce a new good or an old good in a new way, by finding a new source of materials or a new outlet for products, by restructuring an industry and so on.”3
What are 3 reasons why creativity matters?
In fact, Schumpeter called this process a “perpetual storm of creative destruction.” But what are the critical elements of creativity that make it so important?
That Harvard Business School has identified a handful of reasons4 explaining how creativity impacts business, some of which are most relevant to entrepreneurs.
Innovation: “Anyone who starts a small business from scratch has a creative bent,” says Julie Bee, president and founder of BeeSmart Social Media and Lead From Anywhere in Charlotte, North Carolina. “In my world I call that innovation.”
As suggested above, the power of creativity doesn’t necessarily lie in inventing something new, but in taking something old and using it in novel ways. That is the actual definition of innovation. It takes far less investment to improve something that already exists than to build it from scratch.
Adjustment: Nothing goes according to plan. It’s something that everyone who starts a new venture finds out sooner or later. If you possess a creative inclination, you can adapt to the ever-changing environment.
Chin Beckmann, CEO and co-founder of DSP Concepts in Santa Clara, California, was killed twice as a child. “I moved from Taiwan to Argentina when I was 8 years old and then back to New Jersey when I was 14,” he says. “Because each of these countries is completely different in culture and background, and I didn’t come from a wealthy family, each new environment required creativity and ‘street smarts’ to navigate since my parents weren’t as well equipped to help me through Environments that were just as alien to them. The need to adapt to these environments encouraged new and creative ways for me to deal with adversity and obstacles that came my way. Exploring these new cultures and social expectations gave me a broader perspective when approaching new opportunities in my career.”
Productive growth: In the end, isn’t that what it’s all about? It is the fundamental reason for acting creatively. Imaginative thinking allows you to discover possibilities you never knew existed.
“When I declined early admission to the University of Minnesota School of Dentistry, I began pursuing a more creative and unconventional career path rooted in my love of innovation, community and science,” said Mollie Krengel, founder of Wild Bum in Minneapolis . “That was the catalyst for my first business, Wildhive, which has grown into an annual philanthropic adventure for women. If I hadn’t used my creativity and taken the calculated risk of starting Wildhive, I wouldn’t have had the courage to come up with the concept for Wild Bum. And getting creative and piecemeal in building our global community is why we’ve continued to grow. As a bootstrap company, creativity is everything!”
Why is creativity important for success?
With productive growth comes success. That is the goal that every start-up strives for. The road to success is paved with creativity.
“Everything you do when you start a business on your own is creative,” says Calloway Cook, president of Illuminate Labs in Northampton, Massachusetts. “Finding creative solutions to problems you face when starting your business is what separates successful entrepreneurs from unsuccessful ones.”
Along the way, you’re constantly testing ideas and learning what the market is giving you and what it is taking from you. Your ability to innovate creatively as a result of this give and take can mean the difference between reward and failure.
“Creativity that builds off-market validation adds another line of defense to all entrepreneurial activity,” said Stan Garber, vice president and co-founder of Scout RFP a Workday
It’s like a big jigsaw puzzle. As you continue your entrepreneurial journey, you’ll find that you’re not just thinking outside the box, you’re shaking that box to discover the pieces needed to build a viable and sustainable business. From there, it’s just a matter of diligence and determination to execute your plan.
“Once the risks and opportunities are well defined, the rest is about solving problems big and small along the way to success,” said Florian Bohn, CEO and founder of GuRu, Pasadena, California. “Each business problem requires a unique, individual solution – and a mindset that you could call ‘creative’.”
Creativity isn’t just a sudden lightbulb, a thought that comes out of nowhere. It comes in many flavors. Sure, it could be that lightbulb, but more often than not it’s just a variation on a theme.
Why take on the burden of inventing the mousetrap when you just have to build a better mousetrap? This is the essence of creativity.
Beyond creativity lies the most common image associated with entrepreneurs – that of the rugged individualist. Find out what researchers call it and why it’s an important entrepreneurial trait in the next article in this series.
1 Kerr, Sari Pekkala, William R. Kerr, and Tina Xu. “Personality Traits of Entrepreneurs: A Review of the Current Literature.” Fundamentals and Trends® in Entrepreneurship 14, No. 3 (July 2018): 279–356
2 Schumpeter, JA, “The Creative Response in Economic History”, The Journal of Economic HistoryVol. 7, No. 2 (November 1947), pp. 149-159
3 Schumpeter, YES, capitalism, socialism and democracyHarper, New York (1950), p. 132
4 Boyles, Michael, “The Importance of Creativity in Business”, Harvard Business School Online Business Insights BlogJanuary 25, 2022