Innovation and Entrepreneurship - Peter F. Drucker

Innovation and Entrepreneurship - Peter F. Drucker

Learn everything you need to know about the act of innovating and how you can apply it in your work environment.

Have you ever thought that only geniuses can create a thriving and innovative company? Have you considered impossible to innovate in the company that you work? Peter Drucker will show you in the book "Innovation and Entrepreneurship" that is possible to innovate in any area without being a specialist on it.

The author intends to break your conception with this book. He explains that it is possible to innovate, even in a consolidated private company, a public institution or in the development of a new company. And, regardless of industry, you can learn how to do it.

This book is based on some strategies that will improve your ability of perception. Peter teaches the importance of an open-mind and the general analysis of your company. This attitude allied with the skills presented in the book will help you to make the difference!

Got interested to bring great ideas to your company? Stay with us in this summary and discover how!

About the book "Innovation and Entrepreneurship"

The book "Innovation and Entrepreneurship" had its first original edition published in 1986 by the publisher Cengace Learning.

The book consists of five parts, which are: Introduction, Innovation, Entrepreneurship, Entrepreneurial Strategies and Conclusion.

The work is, to a certain extent, a paradigm break, because it defends the theory that creativity and innovation are not acts of genius, but a study, search and a planning that requires discipline to follow systematic steps. The author considers that to innovate it is necessary to have the discipline to apply the right techniques.

Drucker defines innovation as practice and discipline. He also believes that innovation is a market necessity and paramount to the sustainability of any company, regardless of its size and industry.

About the author Peter F. Drucker

Peter Ferdinand Drucker was born in 1909, he is an Austrian considered by many as the "Modern Management Father". In 1933, he had to move to London, fleeing from Nazism. Shortly thereafter, he moved to the United States, where he lived a good part of his life.

He wrote thirty-nine (39) books in his career, among them we have another Pocketbook:

Peter has consolidated his career as a business specialist, consultant and writer. In addition to contributing to the founding of the University of Claremont Graduate in California.

On 11 November 2005, Peter died at the age of 95. In a statement after his death, Robert Klitgaard, president of the University Claremont Graduate titled him as:

"Recognized author, international consultant, and father of modern management."

To whom is this book indicated?

Despite being written over thirty years ago, the book presents concepts that are quite current and applicable in the business world, both in Silicon Valley companies and institutions around the world.

The ideas of the book shows the quality of its content, which is recommended to everyone who wants to be the difference in the market, undertaking or optimizing a public or a private company, regardless of the market sector.

Main ideas of the book "Innovation and Entrepreneurship"

  • The Practice of Innovation;
  • The Practice of Entrepreneurship;
  • Entrepreneurial Strategy.

In this summary, we will explain the author's main insights for innovation and the applicability of them in your work environment.

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[Book Summary] Innovation and Entrepreneurship - Peter Ferdinand Drucker

Overview: The Practice of Innovation

The Influence of Management

In the first moment of the book, the author analyzes the influence of administration in the development of the United States of America.

For this, Peter Drucker quotes the cycle of Nikolai Kondratieff, a Russian economist, who briefly explains that in every 50 years are spikes of technology. But in the last 20 years of the cycle, industries appear to be exceptionally well, and a "sudden" crisis ensues, followed by 20 years of stagnation, in which no one can generate employment.

Peter Drucker analyzes that this stagnation has not happened in the US because the Administration technology has arisen along with the development of an Entrepreneurial Economy in the country.

This Entrepreneurial Economy arose because young Americans were interested in building new ventures in the areas of education, health, technology, and food that were based on innovation as an opportunity to meet the needs of the population.

And for business to thrive, the author breaks the paradigm that administration is only for consolidated companies. Peter says the attempt to try without any strategy is the way to failure.

To illustrate this analysis, he notes that from the outset, when it was just a restaurant, Mc Donald's applied administration concepts, designing the final product, and redesigned the entire process to prepare the product in a timed and automated manner.

In this way, he insists that the application of administrative processes is the key to prosper and a strand of the implementation of innovation in the company. Administration establishes principles, practice and requires discipline.

The practice of innovation

In this part of the book, Drucker defines innovation as an act of practice, and discipline as a consequence of a definite purpose.

In addition, to show how an entrepreneur seeks opportunities, he also presents good and bad practices during the development of an innovative idea, as listed below:

Good practices:

  • Study the market, people and expectations;
  • Analyze opportunities critically;
  • Be simple: innovation is simple and straightforward solution to the problem.

Bad practices:

  • Try to create something very complicated;
  • Try to please everyone;

In the author's conception, innovation can be organized as a systematic work, in this way the book is very practical, more focused on what to do, when and why of actions. Because of your consulting experience, "Innovation and Entrepreneurship" is packed with examples and cases that are sure to fit the reality you live!

As he said, creativity is not only inspiration, but a study, an act of will, discipline and planning. In addition, he cites that innovation must be the function of a successful enterprise. That is, the company must always be innovating, should never be content with the current.

Innovation becomes an instrument that entrepreneurs expresses change as an opportunity for a different business or service. Any new undertaking or implementation of an idea is a risky activity, but the risk can be reduced if the enterprise is subjected to a discipline and a working methodology.

Overview: The Entrepreneurship Practice

In this step, Peter Drucker change his thinking to institutions and formulates, practically, a guide to be followed so that it is possible to innovate in each of the types of companies. Each location has a different approach strategy that must be followed. He deals with administration in three areas:

  • An existing company:
  • Entrepreneurial guidelines (show that it is advantageous to innovate);
  • Entrepreneurial practices;
  • Evaluation of innovative performance;
  • Structures;
  • Provision of personnel;
  • Do-not-do list;
  • A public service institution:
  • Entrepreneurial guidelines;
  • Need to innovate;
  • A new venture business (Startup):
  • Need to focus on the market;
  • Financial forecast;
  • The formation of the senior management team;
  • Where I can contribute (in the vision of the founder);
  • Need for external counseling.

In all topics, Drucker brings several interesting cases that can help you.

The intention of this step is to demonstrate how the innovation process takes place in practice.

One of their concerns is how to organize and prepare people for the venture, as well as cite and analyze the most common impediments, obstacles, mistakes and pitfalls of the innovation process and then, avoid them by bringing a set of basic rules and practices of action.

The book seeks to emphasize the importance of knowledge of general perception and to develop innovative solutions based on the focus of the company's strategy in the short, medium and long term.

Entrepreneurial Strategies

After demonstrating the importance of innovation, practice and applicability in various types of companies, Peter informs that the success of innovation is directly linked to the utility in the market.

To do this, he lists four different strategies to reach the market in different ways, they are:

  • With everything and for real;
  • Strike them where they are not;
  • Finding and occupying an ecological niche;
  • Change the economic characteristics of a product, market or industry.

With everything and for real

Here he approaches a strategy that aims leadership in a particular market from the beginning. In this way, if innovation becomes a successful business, it is necessary to always be innovating.

For this, the company must be able to make its own products obsolete and innovate in the same proportion, so that it does not lose market leadership to the competition. And it is up to the entrepreneur to be willing to change direction according to the market.

In this strategy it is not necessary to create a big business in the beginning, the main goal is to achieve the market leadership. Among all, the author considers it as the most risky.

Strike them where they are not

Strategy is subdivided into two, but both seek market leadership.

  • Creative Imitation: Reusing something already existing with the goal of optimizing it, be it marketing, design, user experience, among others;
  • Judo Entrepreneur: Boosting the company to leading position in the market by exploiting competition weaknesses. Less risky and more likely to be successful.

Ecological niches

A strategy that can also be subdivided into other types, but always seek to have a monopoly of a small and specific area.

  • Toll position strategy: It was developed with the aim of creating an intermediate product, which becomes essential for the whole process and therefore cannot be ignored;
  • Skilled Skill Strategy: Considers that a company develops a specific set of skills to later differentiate and increase its influence in the market. The skill has to be unique and must be constantly improved to stay ahead of competitors. It is made up of a product or service.
  • Market strategy for specialty goods: similar to specialty, but considers the company to specialize in one type of market. This approach aims to produce products or services through a customer need analysis.

Changing the economic characteristics of a product, market or sector

Unlike other strategies, it aims to introduce innovation in the market. The product may have existed for a long time, but this strategy offers a new utility or optimization. This introduction can occur in four ways:

  • Creating utility;
  • Pricing;
  • Adapting to the client's social and economic reality;
  • Providing what represents true value for the customer.

What do other authors say about it?

Eric Ries, in his book "The Lean Startup", also looks for a way to drive innovation and the creation of a company. He explains that the lack of management in the beginning is one of the factors for the failure of many startups. So, he has developed a practical and disciplined method for the success of the companies.

Chris Zook and James Allen in the book "The Founder's Mentality" seek to educate readers that there are strategies for maintaining and conquering consumers and the marketplace. But they explain that most ventures fail to achieve their goals because of internal factors.

Jim Collins and Jerry Porras, authors of the book "Built to Last", explain their finding that visionary companies did not start with a revolutionary idea that made them successful early on. But, in fact, they had a slow start and, over time, managed to dominate their markets, just as Peter Drucker proposes in one of the strategies.

Okay, but how can I apply this to my life?

  • Develop awareness that it is not necessary to be genius or enlightened to innovate;
  • It is possible to create new products, services and companies through much study and dedication in a disciplined way;
  • Keep focus on company strategy;
  • Perform with a purpose;
  • It is possible to innovate in any company, just follow the correct process.

Did you like this summary of the book "Innovation and Entrepreneurship"?

Are you ready to innovate in your business? Did you find this content useful? Leave your feedback in the comments! So we can always offer the best summaries for you.

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Book 'Innovation and Entrepreneurship'

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