Page 146 - ENTREPRENEURSHIP Innovation and entrepreneurship

53231_Innovation and Entrepreneurship.qxd 11/8/2002 10:50 AM Page 139

Principles of Innovation 139

is, in how people work and produce something. Innovation therefore
always has to be close to the market, focused on the market, indeed
market-driven.

THE CONSERVATIVE INNOVATOR

A year or two ago I attended a university symposium on entrepre-
neurship at which a number of psychologists spoke. Although their
papers disagreed on everything else, they all talked of an “entrepre-
neurial personality,” which was characterized by a “propensity for
risk-taking.”
A well-known and successful innovator and entrepreneur who had
built a process-based innovation into a substantial worldwide busi-
ness in the space of twenty-five years was then asked to comment. He
said: “I find myself baffled by your papers. I think I know as many
successful innovators and entrepreneurs as anyone, beginning with
myself. I have never come across an ‘entrepreneurial personality.’The
successful ones I know all have, however, one thing—and only one
thing—in common: they are not ‘risk-takers.’ They try to define the
risks they have to take and to minimize them as much as possible.
Otherwise none of us could have succeeded. As for myself, if I had
wanted to be a risk-taker, I would have gone into real estate or com-
modity trading, or I would have become the professional painter my
mother wanted me to be.”
This jibes with my own experience. I, too, know a good many suc-
cessful innovators and entrepreneurs. Not one of them has a “propen-
sity for risk-taking.”
The popular picture of innovators—half pop-psychology, half
Hollywood—makes them look like a cross between Superman and the
Knights of the Round Table. Alas, most of them in real life are unro-
mantic figures, and much more likely to spend hours on a cash-flow pro-
jection than to dash off looking for “risks.” Of course innovation is risky.
But so is stepping into the car to drive to the supermarket for a loaf of
bread. All economic activity is by definition “high-risk.” And defending
yesterday—that is, not innovating—is far more risky than making
tomorrow. The innovators I know are successful to the extent to which
they define risks and confine them. They are successful to the extent to
which they systematically analyze the sources of innovative opportuni-
ty, then pinpoint the opportunity and exploit it. Whether opportuni