Customer Reviews

Innovation And Entrepreneurship

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I enjoyed reading this book, especially because it focuses so much on anecdotes. I definitely understood Drucker's point that innovation and entrepreneurship come out of changes in the environment.

However, I believe Drucker missed the most important point, which is: What makes someone more able to exploit an opportunity than someone else? For example, he tells a story about how Ray Krok found out about McDonalds, bought it, and made it great. However, I thought he should have focused on why it was Ray Krok, and no one else, who saw the opportunity, rather than how he bought and made McDonalds. It is an entertaining read, but do not expect any lessons on how to be an entrepreneur.

Drucker's thesis: "Systematic innovation consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation."

The book is divided into three sections: The practice of innovation (where to look to find indicators of opportunity for innovative change); The practice of entrepreneurship (managing so to foster innovation); and Entrepreneurial strategies (competitive strategies).

Drucker provides a detailed analysis of the sources of innovation and strategies for the implementation of innovation-based changes. He shows, with many real-world examples, how systematic innovation can be applied to business, government, politics, non-profit and service organizations.

The analysis is thorough, well structured and easy to understand. He finishes with an interesting discussion of why innovation is so necessary today, and gives some good examples of areas of society operating on dated assumptions and suggests some insightful innovations.

Even though the book was written some years ago, his methodology remains applicable. In terms of contribution to strategy development I rank Innovation and Entrepreneurship up there with Michael Porter's Competitive Strategy.

My only criticism of Drucker is his sometimes awkward writing style and his tendency to wordiness. However, I give the book full marks for being a well-researched and logically presented work.

Drucker's recurring theme is that good entrepreneurship is usually market-focused and market-driven.

Drucker gives us guidelines for identifying innovative opportunity. For example, unexpected successes or unexpected failures within an industry often point to opportunity. Drucker also suggests that innovative opportunity exists where there is "an internal incongruity within the rhythm or the logic of a process" or a process need.

As a great example, Drucker tells us the story of William Conner, a salesman to the medical industry who decided he wanted to start his own company. Conner went out and spoke with surgeons about the problems and difficulties the surgeons faced.

While talking with surgeons, Conner learned that the process for cataract surgery was generally routine and easy, except there was one incongruity making the surgery difficult and unpleasant for physicians. During the surgery, surgeons had to cut one ligament which involved some risk.

With research Conner learned that there was an enzyme that dissolved this ligament. Conner also learned that new methods of storage could preserve this enzyme allowing it to be used in surgery. After patenting his compound, Conner quickly captured a niche market providing his compound to surgeons performing cataract surgery. No longer did they need to cut the ligament. They could dissolve it. With process need, the market already exists for the innovation. Drucker notes this is a relatively low-risk type of entrepreneurship.

While process need is a great area of entrepreneurial innovation, Drucker also suggests demographics may provide opportunities. I'm more dubious of this. Even though we may know how the population will change in ten years, capitalizing on this change isn't easy. Further, most entrepreneurs already tend to be focused on a particular industry or market and large-scale demographic changes wouldn't induce them to change their company's focus. Plus, there are entrepreneurial opportunities even in declining industries.

Sometimes, there is a dissonance between reality and the perception of reality in an industry. This may offer innovative opportunities, according to Drucker.

For example, Drucker mentions the evolution of the ship container industry. While established shipping companies focused on cutting transit time and cost by making ocean-going ships faster and more cost effective, this really wasn't the key. Ships were already very efficient in transit.

Rather, the real problem with the shipping industry was the loading and unloading of cargo, which kept ships in port and tied up valuable harbor space. When the shipping container was developed, it could be pre-loaded on land before the ship arrived. The pre-loaded container could then quickly be loaded onto the ship when the ship arrived in port. This made ocean transit much more cost effective and efficient. Drucker notes that the big cost of ocean transit was having ships held up in port, effectively tying up a capital asset without being able to utilize its full earnings capability.

Drucker discusses entrepreneurial management, claiming three keys to building a successful new organization are:
--having a market focus
--financial foresight, i.e., cash flow budgeting and planning for capital needs
--assembling a top management team

Other topics covered in "Innovation and Entrepreneurship" include creative imitation, entrepreneurial judo, and filling a specialized, ecological niche. "Innovation and Entrepreneurship" provides great insight into seeking entrepreneurial opportunities.

Peter Hupalo, author of "Thinking Like An Entrepreneur."

With the publication of this book, which goes all the way back to the mid-eighties, Drucker has set the standard for serious entrepreneurship. Drucker tells the reader that innovation and entrepreneurship go hand in hand, and that both innovation and entrepreneurship can be practiced by large and small companies.

Using a plethora of available case studies, Drucker shows how many companies large and small, known and unknown, have successfully implemented entrepreneurial practices. Drucker tells the reader how to go about implementing an entrepreneurial culture, and more importantly, what not to do when trying to develop such an outlook and culture in the organization.

Drucker identifies seven sources of innovation, and explains very clearly how to go about sowing the seeds of and nurturing an innovation. He then lays down the principles of entrepreneurship, and gives the reader some entrepreneurial strategies. Throughout the text, he gives both the pluses and the minuses of his ideas.

This book, first published in 1985, was way ahead of the curve. It literally predicted the profound effects of the IT revolution, coined the concept of lifelong learning, and identified the pivotal role of sound managerial practices in entrepreneurship and the new venture. Those of us who are active participants in the 'New Economy' should sit up and take notice of this book.

These days, it is very fashionable to call oneself an 'entrepreneur', but only Drucker has a clear concept of what an entrepreneur really is. Any person who wants to practice serious entrepreneurship, whether they work for a big company or are involved in a new venture, must read this book.

Drucker has a remarkable ability to deflate any self-styled entrepreneur and "innovator." His book discusses the sources of innovation, concluding rather significantly that knowledge-based innovation is rarely successful-that innovation generally works best when all the factors are known and put into new combinations that work exceedingly well-and that successful innovations start small, focus on the simplest element that can be understood by any half-wit, don't cost a lot, and are never grandiose.

Peter Drucker wrote an excellent book on innovation and management. One of the reasons I really enjoyed the book is that it gave numerous examples of well known companies throughout the world. In addition, he gave historical information which was enlightening and educational. By giving concrete evidence of his theories, the reader is convinced of the evidence and able to absorb the material. I gained a lot of insight from his work and will be reading more of his books.

This book is filled with insights about management. Peter Drucker considers innovation and entrepreneurship to be part of the executive's job. Drucker's premise is that the attitudes and skills of a successful entrepreneur can be cultivated and that the search for innovation can be systematized and managed.

The writing style is fluid and many industry examples are given to illustrate the author's point. There is a lot of meat in this book which provides a framework for the thought process. I don't necessarily agree with all his concepts. He considers entrepreneurship to be an organized process and not a by-product of talent. I personally think it is a combination. You need resources but you also need to know how to use it. In some segments of the book, he offers no explanation for certain successes and treats entrepreneurship as something that happens despite planning to the contrary. There are some minor contradictions. Still, some of his thoughts are timeless, thought provoking and valuable. The purpose therefore is to continue to explore new ideas and try it on for size.

The implication of Peter Drucker's thesis is that innovation, in the context of entrepreneurship, can be viewed as a practice or discipline that is accessible to virtually anyone who is willing to apply the knowledge. I was personally struck by the realization that here was a formula for accomplishing what for most people would seem to be achievements associated with moments of exceptional personal creativity...or just plain luck.

Peter Drucker gave us the thought that "the purpose of a business is to create a customer" a thought that can get lost by entrepreneurs pulled in many directions at once. Innovation is also a subject that few have written about knowledgeably. You will find this book to be a good reference for the principles that will always determine whether or not your focus is proper. And no one needs proper focus more than innovators and entrepreneurs. I also think that you would find it helpful to get an overview of all of Peter Drucker's work by reading Jack Beatty's The World According to Peter Drucker. Also, Peter Drucker's newest book, Management Challenges for the 21st Century, is a good companion piece for Innovation and Entrepreneurship by bringing your attention to the primary trends that will be dominant in the early part of the new century. One of the things that I like about all Peter Drucker books is that they are very well written. This is rare in business books, and a great accomplishment when you realize that Peter Drucker's native tongue is German (he was born in Austria).