Are Creativity, Entrepreneurship & Innovation the Same Thing?

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 Who Owns Idea Execution?

Scott Belsky tries to unravel the mechanics of creativity in his book Making Ideas Happen.  He includes this equation:

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Making Ideas Happen = (The Idea) + Organization and Exuction + Forces of Community + Leadership Capability.

He goes on to say “Ideas are worthless if you can’t make them happen.”

Now consider this from Daniel Isenberg in Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value:

Most of us would agree that innovation has something to do with the tangible manifestation of novel ideas.  But entrepreneurship is about the creation of tangible value.  Ideas help, but the sine qua nons for entrepreneurs – hard work, ambition, resourcefulness, unconventional thinking, salesmanship, and leadership – will usually trump brilliant ideas.

When he says “innovation” he clearly doesn’t mean the same thing that I mean when I say it:

Innovation is executing new ideas to create value.

Here is one way to picture it:

Thinking of it visually emphasises that all three parts of the definition.  Everyone gets the “new idea” part of it.  But it’s not enough to have a great idea, you also have to execute it.  And even after you’ve done that, you’re not finished.  It’s not innovation if you’re not creating value for people.

So the people talking about creativity, entrepreneurship and innovation all make a distinction between having ideas, and creating value with those ideas.  And none of us want anything to do with just the “having ideas” part of the whole thing.

Does that mean that we’re talking about the same thing?

Innovation, Entrepreneurs and Entrepreneurship

Strangely, this confusion didn’t exist 100 years ago.  When Joseph Schumpeter wrote about innovation, he was talking about the process of creating value from ideas.  My definition of innovation basically builds on his.  The “entrepreneur” was the person that innovated.  And “entrepreneurship” didn’t exist.

Check out these stats from Google NGram tracking the use of the three words in books published between 1900 and 2000:

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Innovation is the most commonly used of the three words, and “entrepreneurship” as a concept was basically born in the 1950s.  Why?  Because the nature of innovation changed.

When Schumpeter was writing, innovation basically happened in startups.  So entrepreneurs were people that created innovation by starting new firms.  But the first half of the 20th century saw the rise of corporate innovation – which meant that we had to be able to distinguish between innovation taking place in large organisations and in startups.

That’s when we started to distinguish between innovation (which usually meant ideas executed in established firms), and entrepreneurship (ideas executed in new firms).

So Where to Next?

To answer my earlier question, I don’t think that we’re quite talking about the same thing when we talk about creativity, entrepreneurship and innovation.

In his forthcoming book The Myths of Creativity, David Burkus says:

Although there is still no precise and agreed-on definition of creativity despite nearly one hundred years of research on the subject, there appears to be at least a small consensus.  Creativity is seen by most experts in the field as the process of developing ideas that are both novel and useful.

Again, there is an emphasis on use (value!) – but the main concern is the processes through which we generate and execute these ideas.

This is obviously an issue of great importance in innovation, because better ideas lead to better outcomes.  Provided, of course, that we execute them!

Innovation, then, is this process of idea management.  Entrepreneurs are still the people that innovate, and entrepreneurship is doing this through the vehicle of a new venture.

If we accept all of this, there are a few important implications:

  • Everyone focuses on idea execution for a reason. Why do all three fields want to own idea execution?  Because trying to improve your performance by simply generating more ideas is one of the biggest mistakes that both people and organisations regularly make.  All of us focus on execution because this is where the gap is.  The great news here is that it means you don’t have to be a genius to be a creative entrepreneur.  You can do this by being really good at executing.
  • We need to put entrepreneurs back into innovation.  It’s too easy to forget that innovation is driven by people.  We need to put more focus on entrepreneurs – the people that are creating value out of ideas – and less on tools.  It’s people that create value.  If we’re in a big organisation, we need to figure out how to liberate and support our entrepreneurs.  If we’re in a startup, we need to figure out how to build a business model that creates value out of our great ideas.  Both approaches are people-based.
  • We need to be clear on our definitions.  Creativity, entrepreneurs and innovation are all important, and they all intersect.  People that study or practice any of these fields should be working together, rather than creating artificial distinctions between them.  My definitions might not be the best, but I do think that they have some historical weight to them, as well as reflecting fairly common usage.  But I’m definitely willing to have a discussion about what’s what!

This important because while the three areas have slightly different meanings, they share the same goal – to create value for people.  This is what leads to longer lifespans, higher standards of living, and more interesting and fulfilling work.

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Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

9 thoughts on “Are Creativity, Entrepreneurship & Innovation the Same Thing?

  1. Thanks for this informative post!
    It brings lights upon innovation, creativity, and entrepreneurship which are terms that can easily be confused with one another. I agree with you that while these three terms share different meanings, they’re all reaching toward the same goal. I recently wrote a blog post about innovation, the kinds of innovation, and innovation vs. invention, creativitiy, and entrepreneurship. I hope you find time to read it and will share your thoughts. http://iglo.me/k

  2. I find it interesting that Thomas Edison, arguably the greatest innovator of all time, did not use the word Innovation. He lived until 1931. He used the word invention. But he did say that if people did not want it, he didn’t want to invent it, or words to that effect. Some have defined innovation as inventiveness put to use, So clearly, value is at the center of innovation but use is a vital part as well.

    To me, there is are clear differences and distinctions between creativity, innovation and entrepreneurship. Creativity is part of a complicated process that may result it innovation. Creativity includes music, painting, poetry, writing fiction, and on and on. As a general rule, none of these are usually thought of as being part of innovation. Edison said, the inventors must be poets, otherwise they will not have imagination. Another important word in the process of innovation.

    Entrepreneurs, on the other hand, create, develop and/or lead enterprise. It may be an enterprise centered on an innovation or it may not be. It may also be a new or an existing enterprise. The word has recently been expanded to include activities within an existing company, usually within very large companies. That seems to stretch the definition, but perhaps in useful ways.

    For me, to attempt to draw these three words into too close a proximity of meaning can stretch them to such a degree that they have no real meaning at all. As a result, I have worked to make the distinctions clear and use them not as synonyms, but as separate and important words that add clarity to understanding the process of innovation.

  3. Great post Tim!

    One point worthy of some thought. Although you say (through Schumpeter) that Innovation happens when people created value from ideas, Jane Jacobs thought that innovation happens when we transform old work into new work. Further, she argued that this has been true since prehistoric times.

    It’s an interesting idea because it implies that we always create by thinking about what we’re doing rather than just thinking. While I’m not saying that Jane Jacobs is surely right and the people you mentioned above are wrong, it does address a certain historical bias: most of the people we read from generations ago were observers rather than players.

    I think it’s true about artistic creativity as well. Writers, write. Painters, paint, etc. So I think that the key thing about creativity, entrepreneurship and innovation is that, to be successful, all three have to solve a problem that others consider important.

    – Greg

    • That’s a great point Greg, and I don’t think that the two ideas are incompatible. Schumpeter also said something like “(Economic) development in our sense is then defined by the carrying out of new combinations,” which I would say is very close to what Jacobs is saying as well.

  4. Tim – good post as always. The aspect that I have not managed to reconcile is that from the public sector side an emphasis on ‘value’ can be troublesome. On the private sector side (or even the not-for profit) it is relatively easy to assess value. If it is of value then there will be demand for it in some fashion.

    On the public sector side the notion of value is a lot more complicated. It can perhaps give a misleading impression that what is valuable is clear, rather than recognising that there may be lots of different sets of value, and the (currently) dominant one will reflect political and power relations.

    Perhaps this is a minor nuance – but I worry the conflation of innovation and value can contribute to an impression that innovation is only about the ‘good’ stuff. If innovation is measured in terms of value, how do we reflect in discussion about the ‘bad’ innovation or the innovation that might be in conflict with the value of one or more sets of interests in civil society? Does equating innovation with value inhibit discussions and sharing about innovations that were ‘unsuccessful’ or that were only successful against one group of competing values? Or that innovation may not always resolve us having to choose between bads, but sometimes just a different set of bads?

    Of course this may just be a caveat to the model – that innovation has to create value to some group, though that value may not be apparent/true for others or the value can be in actual conflict with the value of another group – but I’d be interested in your thoughts.

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