Innovation and Entrepreneurship Quotes

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Innovation and Entrepreneurship: Practice and Principles Innovation and Entrepreneurship: Practice and Principles by Peter F. Drucker
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“This defines entrepreneur and entrepreneurship - the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”
Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles
“Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society - and especially in the economy - as doing something different rather than doing better what is already being done. That is basically what Say, two hundred years ago, meant when he coined the term entrepreneur. It was intended as a manifesto and as a declaration of dissent: the entrepreneur upsets and disorganizes. As Joseph Schumpeter formulated it, his task is "creative destruction.”
Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles
“Entrepreneurship is "risky" mainly because so few of the so-called entrepreneurs know what they are doing.”
Peter Drucker, Innovation and Entrepreneurship
“The companies that refused to make hard choices, or refused to admit that anything much was happening, fared badly. If they survive, it is only because their respective governments will not let them go under.”
Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles
“The husband and wife who open another delicatessen store or another Mexican restaurant in the American suburb surely take a risk. But are they entrepreneurs? All they do is what has been done many times before. They gamble on the increasing popularity of eating out in their area, but create neither a new satisfaction nor new consumer demand. Seen under this perspective they are surely not entrepreneurs even though theirs is a new venture. McDonald’s, however, was entrepreneurship. It did not invent anything, to be sure. Its final product was what any decent American restaurant had produced years ago. But by applying management concepts and management techniques (asking, What is “value” to the customer?), standardizing the “product,” designing process and tools, and by basing training on the analysis of the work to be done and then setting the standards it required, McDonald’s both drastically upgraded the yield from resources, and created a new market and a new customer. This is entrepreneurship.”
Peter F. Drucker, Innovation and Entrepreneurship
“The people who work within these industries or public services know that there are basic flaws. But they are almost forced to ignore them and to concentrate instead on patching here, improving there, fighting the fire or caulking that crack. They are thus unable to take the innovation seriously, let alone to try to compete with it. They do not, as a rule, even notice it until it has grown so big as to encroach on their industry or service, by which time it has become irreversible. In the meantime, the innovators have the field to themselves.”
Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles
“Entrepreneurs, by definition, shift resources from areas of low productivity and yield to areas of higher productivity and yield. Of course, there is a risk they may not succeed. But if they are even moderately successful, the returns should be more than adequate to offset whatever risk there might be.”
Peter F. Drucker, Innovation and Entrepreneurship
“And it is change that always provides the opportunity for the new and different. Systematic innovation therefore 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.”
Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles
“3. An innovation, to be effective, has to be simple and it has to be focused. It should do only one thing, otherwise, it confuses. If it is not simple, it won’t work. Everything new runs into trouble; if complicated, it cannot be repaired or fixed. All effective innovations are breathtakingly simple. Indeed, the greatest praise an innovation can receive is for people to say: ‘This is obvious. Why didn’t I think of it?’ Even the innovation that creates new uses and new markets should be directed toward a specific, clear, designed application. It should be focused on a specific need that it satisfies, on a specific end result that it produces.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurs see change as the norm and as healthy. Usually, they do not bring about the change themselves. But – and this defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurship, then, is behavior rather than personality trait. And its foundation lies in concept and theory rather than in intuition.”
Peter F. Drucker, Innovation and Entrepreneurship
“4. Effective innovations start small. They are not grandiose. They try to do one specific thing. It may be to enable a moving vehicle to draw electric power while it runs along rails – the innovation that made possible the electric streetcar. Or it may be as elementary as putting the same number of matches into a matchbox (it used to be fifty), which made possible the automatic filling of matchboxes and gave the Swedish originators of the idea a world monopoly on matches for almost half a century. Grandiose ideas, plans that aim at ‘revolutionizing an industry’, are unlikely to work.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurs, by definition, shift resources from areas of low productivity and yield to areas of higher productivity and yield. Of”
Peter F. Drucker, Innovation and Entrepreneurship
“Innovations had better be capable of being started small, requiring at first little money, few people, and only a small and limited market. Otherwise, there is not enough time to make the adjustments and changes that are almost always needed for an innovation to succeed. Initially innovations rarely are more than ‘almost right’. The necessary changes can be made only if the scale is small and the requirements for people and money fairly modest.”
Peter F. Drucker, Innovation and Entrepreneurship
“3. Finally, don’t try to innovate for the future. Innovate for the present! An innovation may have long-range impact; it may not reach its full maturity until twenty years later.”
Peter F. Drucker, Innovation and Entrepreneurship
“Above all, we know that an entrepreneurial strategy has more chance of success the more it starts out with the users – their utilities, their values, their realities. An innovation is a change in market or society. It produces a greater yield for the user, greater wealth-producing capacity for society, higher value or greater satisfaction. The test of an innovation is always what it does for the user. Hence, entrepreneurship always needs to be market-focused, indeed, market-driven.”
Peter F. Drucker, Innovation and Entrepreneurship
“For the existing enterprise, whether business or public-service institution, the controlling word in the term ‘entrepreneurial management’ is ‘entrepreneurial’. For the new venture, it is ‘management’. In the existing business, it is the existing that is the main obstacle to entrepreneurship. In the new venture, it is its absence. The new venture has an idea. It may have a product or a service. It may even have sales, and sometimes quite a substantial volume of them. It surely has costs. And it may have revenues and even profits. What it does not have is a ‘business’, a viable, operating, organized ‘present’ in which people know where they are going, what they are supposed to do, and what the results are or should be. But unless a new venture develops into a new business and makes sure of being ‘managed’, it will not survive no matter how brilliant the entrepreneurial idea, how much money it attracts, how good its products, nor even how great the demand for them.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurial management in the new venture has four requirements: It requires, first, a focus on the market. It requires, second, financial foresight, and especially planning for cash flow and capital needs ahead. It requires, third, building a top management team long before the new venture actually needs one and long before it can actually afford one. And finally, it requires of the founding entrepreneur a decision in respect to his or her own role, area of work, and relationships.”
Peter F. Drucker, Innovation and Entrepreneurship
“In the early thirties IBM built a high-speed calculating machine to do calculations for the astronomers at New York’s Columbia University. A few years later it built a machine that was already designed as a computer—again, to do astronomical calculations, this time at Harvard. And by the end of World War II, IBM had built a real computer—the first one, by the way, that had the features of the true computer: a “memory” and the capacity to be “programmed.” And yet there are good reasons why the history books pay scant attention to IBM as a computer innovator. For as soon as it had finished its advanced 1945 computer—the first computer to be shown to a lay public in its showroom in midtown New York, where it drew immense crowds—IBM abandoned its own design and switched to the design of its rival, the ENIAC developed at the University of Pennsylvania. The ENIAC was far better suited to business applications such as payroll, only its designers did not see this. IBM structured the ENIAC so that it could be manufactured and serviced and could do mundane “numbers crunching.” When IBM’s version of the ENIAC came out in 1953, it at once set the standard for commercial, multipurpose, mainframe computers. This is the strategy of “creative imitation.”
Peter F. Drucker, Innovation and Entrepreneurship
“What makes demographics such a rewarding opportunity for the entrepreneur is precisely its neglect by decision makers, whether businessmen, public-service staffs, or governmental policymakers. They still cling to the assumption that demographics do not change – or do not change fast. Indeed, they reject even the plainest evidence of demographic changes.”
Peter F. Drucker, Innovation and Entrepreneurship
“Finally, goals and objectives for each area need to be set. Everyone who takes on the primary responsibility for a key activity, whether product development or people, or money, must be asked: ‘What can this enterprise expect of you? What should we hold you accountable for? What are you trying to accomplish and by what time?’ But this is elementary management, of course.”
Peter F. Drucker, Innovation and Entrepreneurship
“The earlier changes are discerned, the earlier the opportunities they create can be converted into innovations.”
Peter F. Drucker, Innovation and Entrepreneurship
“1. Purposeful, systematic innovation begins with the analysis of the opportunities. It begins with thinking through what I have called the sources of innovative opportunities. In different areas, different sources will have different importance at different times. Demographics, for instance, may be of very little concern to innovators in fundamental industrial processes, to someone looking, say, for the ‘missing link’ in a process such as papermaking, where there is a clear incongruity between economic realities. New knowledge, by the same token, may be of very little relevance to someone innovating a new social instrument to satisfy a need created by changing demographics. But all the sources of innovative opportunity should be systematically analysed and systematically studied. It is not enough to be alerted to them. The search has to be organized, and must be done on a regular, systematic basis.”
Peter F. Drucker, Innovation and Entrepreneurship
“The literature is full of discussions of these questions; full of stories of the ‘entrepreneurial personality’ and of people who will never do anything but innovate. In the light of our experience – and it is considerable – these discussions are pointless. By and large, people who do not feel comfortable as innovators or as entrepreneurs will not volunteer for such jobs; the gross misfits eliminate themselves. The others can learn the practice of innovation. Our experience shows that an executive who has performed in other assignments will do a decent job as an entrepreneur. In successful entrepreneurial businesses, nobody seems to worry whether a given person is likely to do a good job of development or not. People of all kinds of temperaments and backgrounds apparently do equally well. Any young engineer in 3M who comes to top management with an idea that makes sense is expected to take on its development.”
Peter F. Drucker, Innovation and Entrepreneurship
“1. The first is simply not to try to be clever. Innovations have to be handled by ordinary human beings, if they are to attain any size and importance at all, by morons or near-morons. Incompetence, after all, is the only thing in abundant and never-failing supply. Anything too clever, whether in design or execution, is almost bound to fail.”
Peter F. Drucker, Innovation and Entrepreneurship
“2. Don’t diversify, don’t splinter, don’t try to do too many things at once. This is, of course, the corollary to the ‘do’: be focused!”
Peter F. Drucker, Innovation and Entrepreneurship
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurs innovate. Innovation is the specific instrument of entrepreneurship.”
Peter F. Drucker, Innovation and Entrepreneurship
“Entrepreneurs innovate. Innovation is the specific instrument of entrepreneurship. It is the act that endows resources with a new capacity to create wealth. Innovation, indeed, creates a resource. There is no such thing as a ‘resource’ until man finds a use for something in nature and thus endows it with economic value. Until then, every plant is a weed and every mineral just another rock.”
Peter F. Drucker, Innovation and Entrepreneurship
“DuPont, for 130 years, had confined itself to making munitions and explosives. In the mid-1920s it then organized its first research efforts in other areas, one of them the brand-new field of polymer chemistry, which the Germans had pioneered during World War I. For several years there were no results at all. Then, in 1928, an assistant left a burner on over the weekend. On Monday morning, Wallace H. Carothers, the chemist in charge, found that the stuff in the kettle had congealed into fibers. It took another ten years before DuPont found out how to make Nylon intentionally. The point of the story is, however, that the same accident had occurred several times in the laboratories of the big German chemical companies with the same results, and much earlier. The Germans were, of course, looking for a polymerized fiber—and they could have had it, along with world leadership in the chemical industry, ten years before DuPont had Nylon. But because they had not planned the experiment, they dismissed its results, poured out the accidentally produced fibers, and started all over again.”
Peter F. Drucker, Innovation and Entrepreneurship

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