The entrepreneur, according to Peter F. Drucker in his book Innovation and Entrepreneurship (HarperBusiness , 277 pages), “always searches for change, responds to it, and exploits it as an opportunity.” An entrepreneur acknowledges change as normal and welcomes it. He went on to quote J.B. Say that the entrepreneur “shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.”
Innovation, which is the “specific function of entrepreneurship” according to Drucker, “is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth.”
Drucker is one of the recognized management advisors in the world, a fact that remains even after his death. His observations and teachings are immortalized in his articles and books. It’s interesting that Ducker was cited in the book Blue Ocean Strategy in relation to “value innovation”, which “is the cornerstone of blue ocean strategy”.
According to Drucker, “the very foundation of entrepreneurship is the practice of systematic innovation,” although there are two other critical aspects – entrepreneurial strategies and entrepreneurial management, both of which deserve separate discussions. He discussed certain principles of innovation, including:
1. “Purposeful, systematic innovation begins with the analysis of the sources of opportunities”.
2. “To be effective, an innovation has to be simple, and it has to be focused.”
3. “Effective innovations start small.”
4. “The successful innovation aims from the beginning to become the standard setter, to determine the direction of a new technology or a new industry, to create the business that is – and remains – ahead of the pack.”
5. “Innovation is work rather than genius. It requires knowledge. It requires ingenuity. And it requires focus.”
It’s often noted that entrepreneurs are risk-takers. Drucker has this interesting take on this: “ Entrepreneurship is “risky” mainly because so few of the so-called entrepreneurs know what they are doing.” That’s something that should make you rethink what you’re doing.