FROM CREATIVE IDEAS TO INNOVATIVE VENTURES
Innovation refers to the process of successfully implementing creative ideas in the marketplace
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Innovation refers to the process of successfully implementing creative ideas in the marketplace. Startups are known to be the drivers of innovative activity and thus, they spur the economic growth of societies. Whereas teams usually support innovation process in large firms, in entrepreneurial ventures it is mainly the founder (entrepreneur) who leads the innovation process, at least in the early phases. In accordance with this, it is quite natural to suggest that entrepreneurs’ innovative behavior triggers the introduction of innovations within their ventures.
But, what triggers innovative behavior in entrepreneurs?
Frequently, innovative behavior has been associated to creative behavior, and while it is true that “all innovation begins with creative ideas”, being creative is roughly enough to innovate. In fact, being able to innovate requires several skills and mindsets other than creativity. Innovation does not occur if individuals do not perceive an appealing opportunity to innovate, one can come up with a brilliant new idea but not be motivated enough to realize it either because one beliefs not having the required skills for implementing it or because one thinks is just not the desire path to pursue.
Also, while being creative is important for being innovative, both activities require different skills, mental processes and behavior that sometimes might even be opposing. For example, creativity implies searching for problems, gaps and solutions, thinking divergently and having explorative behavior. On the other hand, implementation requires gathering external support and resources, possessing the skills and social relationships to ultimately exploit these ideas.
Moreover, passing from idea generation to its implementation requires making a decision of going further in the process and investing time, effort and money. This decision is strongly influenced by whether the individual judges that an opportunity for that idea exists (or not) in the market that is feasible and personally desirable to pursue.
In this sense, being innovative means being creative but also judging that the outcome of that creative activity represents an opportunity worth pursuing.
Because implementing an innovation requires action, and an individual will not act if he or she is not confident enough that he/she is confident enough about having a good idea, the right skills and a bright future ahead.
For becoming an entrepreneur, you must truly believe in your business idea. To achieve successfully your mission and business goals, you need to be intrinsically motivated towards your idea. You need to be confident about your skills for pursuing your idea and making it happen, you have to be extremely optimist about the potential growth of your business. And of course you have to take the risk of going against odds and probably not achieving what you forecasted. Without intrinsic motivation, self-efficacy (confidence in one skills), risk-taking and optimism you’ re likely to fail or not even start your venture and pursue easier (traditional) paths to the active life.
So what are these mindsets that can help you to become a successful innovative entrepreneur.
To think more about the possibility of positive rather than negative outcomes taking place may explain why individuals persevere in their activities and continue striving towards the achievement of their initial goals regardless of the risks involved.
It encourages higher cognitive flexibility, suggesting that thinking more about positive outcomes enhances the ability of individuals to interpret information, recombine resources and solve problems in creative ways.
To have positive attitudes and feelings towards what they do and the future as they believe they will be able to control the course of their actions even in times of adversity.
Optimistic individuals feel that the environment is safe so they pay less attention to details and are more novelty seeking and allow playfulness. While negative moods lead to problematic view of the environment and forces people to be more detail-oriented and to put more effort on analyzing information so that they don’t incur in risks.
BUT, too much optimism might have detrimental effects on innovation. Managers engage more in searching for solutions to problems as well as looking for new opportunities to innovate. But their results evidenced that the relationship between managers’ optimism and search behavior followed a “u-shape”: while moderately high levels of optimism might lead to deeper searching, extreme optimism might reduce and harm managers’ performance.
Too much optimism can impact negatively the performance of ventures and can lead to early venture failure or excess entry to inefficient opportunities. Optimistic individuals tend to excessively look for opportunities to exploit hampering their ability to implement all those opportunities effectively.
It can harm the judgment and decision-making of entrepreneurs, because it leads to having unrealistic expectations, overlooking negative information and risks and reducing effort in current tasks.
SO, yes being optimistic is a must-have mindset for being an entrepreneur and coming up with innovative ventures, but you have still need to be down to earth and be aware that too much positive mood can leave you blinded.
Self-efficacy is the belief of having the required capabilities to mobilize motivation, cognitive resources, and courses of action in order to accomplish a job or specific task.
Being confident about one skilss might have a strong impact on goal commitment, aspiration levels, work attitudes and career choices.
It plays a crucial role in shaping people’s choices, effort and time devoted to a task (or job), it can be used for predicting entrepreneurs’ intention to pursue a new business opportunity.
The decision of implementing a particular opportunity depends strongly on whether or not one believes in having the required skills and knowledge to put it into action.
People who tend to think they can control the situation and its course because they see themselves as competent to implement it, are more likely to think that it is feasible and see an opportunity for business.
The introduction of innovations and new venture creation are characterized as risky activities. The high asymmetry of information, the uncertainty about outcomes, the lack of resources and the high rates of failure are some of the many risks to bear when introducing an innovation or launching a new venture.
People that tend to categorize more situations as having strengths and opportunities and overweigh more positive potential outcomes of a situation rather than negative ones, are more likely to innovate and create their own startup.
Also, confident people tend to pursue more innovative but riskier ventures, because they tend to under-evaluate the probable negative outcomes, resulting in low risk perception and thus a higher propensity to take risks.
Creative ideas are disruptive by nature, their development involves taking the risk of thinking ‘outside-the-box’ and going beyond common habits and ways of doing things, they disturb the status-quo and power balances.
The probabilities of failure are higher for the implementation of creative ideas compared to more traditional ones and greater uncertainty exists concerning the potential outcomes their implementation might carry.P eople supporting that idea might experience losses of reputation and trust from friends and stakeholders. Thus, the “knowledge-doing gap” might decrease if individuals are more willing to take risks and if the surrounding environment encourages risk-taking behavior
Entrepreneurs tend to overweigh private information and base their decisions mainly on their beliefs. Being overconfident might be very useful when deciding to introduce pioneering products, because external information is very difficult to obtain, uncertainty about outcomes is really high and convincing others about the value of the business is a hard thing to do. Confident people tend to overcome this challenges and moreover convince key people (investors, customers, associates) to get access to key resources.
Overconfidence encourages innovation, because overconfident managers tend to pursue riskier actions, underestimating the real risks involved and overestimating their chances of success, compared to those they might have pursued if they were not overconfident.
Being confident about one’s predictions and knowledge might be beneficial to evaluating an opportunity and thus deciding to act upon and implement it.
In conclusion, if you want to increase your chances of seeing your idea become a reality and become your own boss, you need to workout and modify your mindset. Self-confidence and risk-tolerance can help you counterbalance the effects of high uncertainty, information asymmetry and scarcity of resources that usually challenge the decision to start a new venture and innovate. But to much of it has also a dark side. Being highly optimistic about future outcomes might lead to significant inefficiencies, as it encourages people to pursue more opportunities than they can handle and to overestimate the potential gains while misjudging the risks. Also, overconfidence concerning one’s knowledge can increase the chances and abilities of implementing creative ideas, but it can undermine long-term growth and profitability, as highly overconfident individuals tend to overlook negative and external information.
This article is originally published by Maria Claudia Angel Ferrero on medium.
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