Why Is It Important For An Entrepreneur To Have Creativity?

Many aspiring entrepreneurs feel the creative urge represents the most important trait for success. Many great ideas, though, never become viable businesses.

Take a look at some of the greatest entrepreneurs of all time.

Did Henry Ford invent the automobile? No. Nicolas-Joseph Cugnot first produced a steam-powered automobile in 1769.

Did Steve Jobs and Steve Wozniak invent the microcomputer in 1979 with the introduction of the Apple AAPL ][ computer? No. The French team headed by François Gernelle within a small company, Réalisations & Etudes Electroniqes (R2E), created what they called the “Micro-ordinateur” in 1973.

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 ‘necessity’ entrepreneurs [whose focus is on producing family income], and those who are motivated by creativity are more risk tolerant than other entrepreneurs.”1

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Most people tend first to associate “risk taking” with the idea of entrepreneurship. Despite this, creativity certainly merits the “Step #1” label. You need to create something before you can assess its risk. And “create something” does not only mean coming up with an idea from scratch. You can take a pre-existing idea and put a twist on it in a way that no one has ever done before.

What is the entrepreneurial mindset?

It is this sense of flexible innovation—thinking of processes and systems in ways no one has ever before successfully executed—that many come to call “the entrepreneurial spirit.” It’s why non-entrepreneurs naively assume entrepreneurs are, first and foremost, inventors.

Joseph Alois Schumpeter (1883-1950) was an Austrian political economist who coined the term “Unternehmergeist.” This word translates from its original German as “entrepreneur-spirit.” Schumpeter explained, “The typical industrial entrepreneur of the nineteenth century was perhaps the man who put into practice a novel method of production by embodying it in a new firm.”2

Considered one of the first economists to treat the study of entrepreneurship with serious academic rigor, Schumpeter defined the archetype in this manner:

“[T]he function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.”3

What are 3 reasons why creativity is important?

Indeed, Schumpeter referred to this process as a “perennial gale of creative destruction.” But what are the critical elements of creativity that make it so important?

The Harvard Business School identified a handful of reasons4 which explain how creativity impacts business, several of which are most relevant to entrepreneurs.

Innovation: “Anyone who starts a small business from scratch has a creative tendency,” says Julie Bee, President and Founder of BeeSmart Social Media and Lead From Anywhere in Charlotte, North Carolina. “In my world, I call this innovation.”

As alluded to above, the power of creativity isn’t necessarily in inventing something new but in taking something old and using it in a novel way. This is the very definition of innovation. It requires a lot less investment to improve something that already exists than to build it from the ground up.

Adaptation: Nothing goes according to plan. It’s something everyone undertaking a new venture finds out sooner or later. Possessing a creative tendency allows you to adapt to the ever-changing environment.

Chin Beckmann, CEO & Co-Founder of DSP Concepts in Santa Clara, California, had his life uprooted twice as a child. “I moved from Taiwan to Argentina at the age of 8 and moved again to New Jersey at the age of 14,” he says. “Because each of these countries are completely different in culture and background, and because I did not come from a rich family, every new environment required creativity and the ‘street smarts’ to navigate through since my parents were not as equipped to help guide me through environments that were equally foreign to them. Being forced to adapt in these environments fostered new and creative ways for me to approach adversity and any roadblocks that came my way. By learning these new cultures and social expectations, I gained a more fully rounded perspective when approaching new opportunities in my career.”

Productive Growth: In the end, isn’t this what it’s all about? It’s the fundamental reason to act creatively. Imaginative thinking allows you to discover opportunities you never knew existed.

“Turning down an early admission acceptance into the University of Minnesota School of Dentistry, I began to forge a more creative and unconventional career path built out of my love for innovation, community and science,” says Mollie Krengel, Founder of Wild Bum in Minneapolis. “These are what sparked my first business, Wildhive, which has evolved into annual philanthropic adventures for women. Had I not tapped into my creativity and taken the calculated risk to start Wildhive, I would not have had the courage to develop the concept for Wild Bum. And, getting creative and scrappy in building our global community has been the reason we have continued to grow. As a bootstrapped company—creativity is everything!”

Why is being creative important for success?

With productive growth comes success. This is the goal every business start-up strives to attain. The road to success is paved by creativity.

“Everything you do when starting a business alone is creative,” says Calloway Cook, President of Illuminate Labs in Northampton, Massachusetts. “Finding creative solutions to problems you encounter while launching your business is what separates successful from unsuccessful entrepreneurs.”

Along the way, you’re always testing ideas, learning what the market gives to you and takes from you. Your ability to creatively innovate as a result of this give and take can spell the difference between reward and failure.

“Creativity that builds off-market validation adds another line of defense for any entrepreneurial pursuits,” says Stan Garber, Vice President & Co-Founder, Scout RFP a Workday WDAY Company in San Francisco. “After determining your audience, it is essential to identify and establish what will set your business apart from companies with similar offerings. Creatively solving the issue of technology being complex and difficult to use was a game-changer—allowing us to win the hearts of our target audience and power an upward trajectory for our business.”

It’s like one big jigsaw puzzle. As you proceed on your entrepreneurial journey, you’ll find yourself not just thinking outside the box but shaking that box to discover the pieces needed to put together a viable and sustainable business. From there, it’s just a matter of having the diligence and determination to execute your plan.

“Once the risks and rewards are well defined, the remainder is all about solving problems, small and big, on the path to success,” says Florian Bohn, CEO and Founder of GuRu, Pasadena, California. “Every business problem requires a unique, custom solution—and a mindset that one could call ‘creative.’”

Creativity is not just a light bulb that shines with sudden brilliance, a thought that materializes out of nothing. It comes in many flavors. Sure, it might be that lightbulb, but more often than not, it’s simply a variation on a theme.

Why get hung up by imposing the burden of inventing the mousetrap when all you need to do is build a better mousetrap? That’s the essence of creativity.

Beyond creativity lies the most common image associated with entrepreneurs—that of the rugged individualist. Find out what researchers call this and why it’s a vital 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 Recent Literature.” Foundations and Trends® in Entrepreneurship 14, no. 3 (July 2018): 279–356

2 Schumpeter, J. A., “The Creative Response in Economic History,” The Journal of Economic History, Vol. 7, No. 2 (Nov., 1947), pp. 149-159

3 Schumpeter, J. A., Capitalism, Socialism and Democracy, Harper, New York (1950), p.132

4 Boyles, Michael, “The Importance of Creativity in Business,” Harvard Business School Online’s Business Insights Blog, January 25, 2022

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