Knowledge, creativity and boldness: Deeply required pillars for success in practicing true

entrepreneurship in the new economy

Author: José dos Reis Gonçalves Rodrigues

Affiliation: Fiber Consulting and CEPEAD/UFMG
Address: Rua Santa Rita Durão, 444, Funcionários - Belo Horizonte-MG, Brazil
Telephone: +55 31 3287.7036
Fax: +55 31 3282.7430
E-mail: josereis@fiber.com.br

Track theme: Entrepreneurship and economic development

Type: Paper

Key-words: Entrepreneurs hip, creativity, knowledge, new economy, innovation

Abstract: This paper focuses on three main pillars that enable the entrepreneur to succeed in the
new and highly challenging economy. General knowledge concerning the business, the internal and
external environments and the additional forces that are playing on the marketplace; creativity which
brings about breakthrough and generates sustainable competitive advantages and, finally, boldness
to take risks and to go anywhere that no one has gone before, are essential attributes to complete a
good entrepreneur profile. The effort to acquire these three attributes altogether many times produces
a very frustrating result and leads people to believe that a good entrepreneur must be born this way
and can not be made by schools, including the entitled "life school".

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I - Introduction

The entrepreneur label was created based upon the French verb "entrependre", that means to launch
one's own business. According to KILBY (1971), around 1700 there was a concept of the
entrepreneur as a man who makes decisions and provides management inside organizations.

CARLAND et alli (1988), referring to MILL (1848), say that discussions arose around 1850 concerning
differences between entrepreneurs and managers and this discussion still exists. Since the emerging
of these ancient theoretical references, many times entrepreneurs are classified in two groups:
individual entrepreneur, who is usually an innovative business man that takes risks with his own
money, and collective entrepreneur, who is an employee that takes risks with the money of his boss,
working in any innovative organization. As a matter of fact, the approach focused on throughout this
paper does not propose to talk about the second group, because according to that approach, the real
entrepreneur is a person who loves taking risks by himself and also gathering the result of his
boldness as a risk-taker. In spite of that, it is relevant to remember that LAWLER & DREXLER (1981)
say that large organizations are an excellent field to practice entrepreneurial virtues because they
have good teams and financial and technical resources to support the innovation process. So,
innovative organizations exists because they have innovative employees. The economic system
needs both groups of entrepreneurs to get along.

According to KAPLAN (1987), entrepreneurship as a buzzword has origin in the 80's, when Ronald
Reagan became the president of the United States. The years preceding, during the Jimmy Carter
government, were remembered as painful years due to economic troubles such as inflation,
unemployment and also a foreign affair policy considered submissive, that reached the top during the
invasion of the American embassy in Tehran. This context allowed victory for Republicans, whose
campaign was based upon the economic turnaround and an aggressive policy to deal with
international issues. This was the beginning of the neo-liberal philosophy that brought the bankruptcy
of the welfare state not only in the United States but also in England led by Margaret Thatcher and in
Germany led by Helmut Kohl. Years later, this economic system would be spread to many rich and
poor countries around the world.

This episode raised many opportunities to launch new and small companies to solve unemployment
problems, so that according to STORHOLM & SCHEUING (1994), 80% of employment generated in
the USA during the 80's was concerning companies with less than 100 employees and 40% was
concerning new businesses. Therefore, the legendary American self-made-man was born as a bold
capitalist that could make fortune and glory quickly, from something near to nothing. This character
was a myth to help in teaching youth how to reach their dreams of freedom. All these favorable
circumstances brought a legion of enthusiastic followers crazy about entrepreneurship and led people
to follow this mindset. KAPLAN (1987), as a member of this legion, says that a real capitalist gives to
the world much more than he usually gets from it, because he spreads out many new ideas and
products to run the economic system and that is why the entrepreneur is considered a hero and a real
representative of the nationalist ideal.

Following a trace of prosperity and an entrepreneurship fury hardly ever seen, many adventurers are
failing and adding to a big roster of losers. Maybe this leads LEVITT (1987) to say that
entrepreneurship is about sensationalism and can be looked at as an LSD in the 80's, referring to the
illegal drug that leads people to see wonderful, strange and amazing things, as well as things that do
not exist. So, in order to face this bogus concept, let us here analyze an old one that discusses
wisely the entrepreneurial profile.

II - The Schumpeterian concept of entrepreneurship

According to SCHUMPETER (1952), the crucial role of an entrepreneur is to improve and

revolutionize the goods production and delivery system, exploiting an invention or an unpublished
technical possibility. Therefore, the ability to innovate is a key virtue of an entrepreneur. This person
should be able to interpose in to the process that generates the wealth, through his skills to add value
to things that did not have it before. Something that is useless in the common people’s eyes, many
times has at least possibilities in the real entrepreneur’s point of view. He is always thinking how to
turn the useless into useful. Thus, the entrepreneur has a role to create usefulness. According to SAY
(1981), usefulness is the ability that something holds to fulfill people’s needs. Someone has to

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discover and anticipate needs and to find usefulness that matches these needs and finally, to find the
best way to conduct it to everyone who needs it. According to DRUCKER (1991), the real
entrepreneur should be an innovator. Innovation is a specific tool that belongs to the entrepreneur
spirit and means the act that endows resources with the new features to create wealth. In fact,
resources do not exist unless someone finds something and endows it with economic value. Just to
exemplify, the penicillin fungus was a plague and not a resource. The bacteriologists used to do
everything aiming to protect their plantation against fungus contamination. However, around the 20's,
a British doctor named Alexander Fleming found that said plague that everyone was fighting against
was exactly what he was looking for, because it was a bacteria murderer. Since the 20's, the
penicillin fungus has been a valuable resource.

The entrepreneur starts up the economic changes and teaches the marketplace, if necessary, how to
call for new products and services that differ from the old ones that it used to buy. He improves
economic development through production, that means to combine both reachable materials and
productive forces to create results that the marketplace is calling for. Thus, the breakthrough in
economic development is on the fast track as long as new combinations of resources are begotten by
the innovative process, which should be fostered by a strong entrepreneur spirit.

Summarizing, the innovative ability required to become a Schumpeterian entrepreneur can be

revealed through at least five dimensions as listed on the table below:

Dimension Mean
Product and Creating a new product or service, unpublished, aiming to fulfill consumers'
services explicit or hidden needs
Production and Introducing a new and revolutionary method to change the producing and
delivery delivering process, or an extraordinary mechanism comparing to the existing
ones, aiming to improve access between organizations and their
marketplaces
Marketplace Finding an untamed marketplace that can lead the business to conspicuous
economic results
Materials Finding a new source of materials to foster the production process, in such a
way that both producer and consumer can gather benefits such as low
reducing costs and prices
Management Finding a new approach to manage the business that leads the organization
to increase their market share, profits and, as a result, to be perennial

III - The pillars to guarantee success in practicing entrepreneurship

Achieving success as an entrepreneur requires more than a strong desire to get fortune and glory
quickly. In fact, sometimes this desire becomes important in nurturing efforts to acquire the core
requirements, but it is really too far to be considered as an enabler to succeed in entrepreneurship.

Doing business successfully in a fast changing world, a highly competitive economy based upon on
the new technologies and very unpredictable events that occur outside the regular business
environment but that impact organizations widely, is, probably, the greatest challenge to be coped
with by entrepreneurs.

As far as that goes, "approaches" such as "head or tail" and "God will lead me" aren’t strong enough
to avoid failures. Henceforth, a set of skills to prevent entrepreneurship misuse or underuse is on
discussion: general knowledge concerning the business, the internal and external environments and
the additional forces that are playing on the marketplace; actionable creativity that becomes
innovation which brings about breakthrough and generates sustainable competitive advantages and,
finally, boldness to take risks and to go anywhere that no one has gone before – even if it is known
that sometimes someone can not ever get back to tell his tale -, are essential attributes to complete a
good entrepreneur profile.

3.1) Knowledge

According to DAVENPORT & PRUSAK (1998), knowledge means information combined with
experience, context, analysis and reflection. The real knowledge should be actionable so that it can

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be helpful in dealing with embarrassing or threatening situations, detecting and correcting problems,
and learning other new knowledge to improve the way to overcome barriers that come up
continuously in daily operations. In fact, learning is the key point about knowledge issues. ARGYRIS
(1993) says that there will always be a gap between our stored knowledge and the knowledge
required to act effectively in a given situation. Hence, in order to fill the gap, learning about the new
context is highly required.

Actionable knowledge is the first core pillar to achieve success as an entrepreneur. This knowledge
should embrace at least the three following sets of themes:

• The six competitive forces as described by GROVE (1996), namely: existing competitors,
complementors, customers, suppliers, potential competitors and the process of doing business
• Additional variables from the external environment that can impact the business in either short or
long term somehow or other
• Underlying issues - such as organizational culture, infrastructure and so forth - concerning the
operational and business processes running to outcome products and services to fulfill customers’
needs

The entrepreneur should have a clear and actionable vision. Concerning vision and visionary
companies, COLLINS & PORRAS (1994,1996) say that usually the corporate vision is presented
through a very vivid description, in order to motivate the people, showing them the essential tenets
and the core purpose of the company. So, this is very important for the effectiveness of a company. In
order to avoid running behind schedule, an entrepreneur should be able to translate his vision into
action and spread it widely across his organization (KAPLAN & NORTON, 1992,1993,1996,1997,
2001), because, on one hand, he is just a strong leader that needs people to help him to achieve his
goals, and people, on the other hand, should know on time what the entrepreneur wants.

A large amount of this knowledge on discussion can be gathered and stored as explicit knowledge to
reuse at the right time, by loading it during decision-making process. A 80/20 rule can be adopted
successfully to address the entrepreneur in managing the actionable knowledge required to perform
his mission. Following this rule means that he can store 80% as explicit knowledge and learn about
20% as tacit knowledge. This bipolar strategy to manage knowledge was previously discussed by
HANSEN et alli (1999).

That being so, this first pillar is acquirable as long as the entrepreneur has: first, a strong desire to do
it; second, a pro-active behavior in looking for what he needs and third, the self-discipline to complete
his learning process and begin a new one on time and continuously.

3.2) Creativity

LEVESQUE (2001) defines creativity as the ability to consistently produce different and valuable
results. According to this definition, creativity can be continuously improved by everyone who wants to
do it, since it does not belong to one specific group of individuals who were born with a certain and
special set of traits. This author says that creativity is raised through a combination of a set of eight
creative talents, namely: 1) the adventurer: skilled improvisation, 2) the navigator: thoughtful
adaptation, 3) The explorer: pulsating possibilities, 4) The visionary: far-reaching insights, 5) The pilot:
analytical strategy, 6) The inventor: paradigm shifting, 7) The harmonizer: human solutions and 8) The
poet: values-based solutions. Despite people having access to all talents described above, usually
they develop over time a preference for one over the other talents.

Creativity is the virtue that allows innovation as a progressive mindset and its adoption means the
strongest strategy to overcome competition in the changing economy nowadays, to increase returns
and optimize efforts to become the perennial organization. WELLMAN (2001) says that to lead the
changes in business today, it is necessary to think like an artist and master the imagination.
Innovative ideas work like a currency.

There is a group of authors who believe that everyone has large potential to be creative. However, it
is easy to see that if it is true, surely this should require methodological intervention to fetch it up.
Creativity that produces innovative solutions in doing business is about deep imagination and

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paradigm breaker insights. The imaginative entrepreneur is always thinking about how to surpass
frontiers, how to create a new paradigm, even if the current one is on the top.

This second pillar seems more difficult to acquire than the first one, namely the knowledge. In
addition, actionable knowledge is the strongest enabler to acquire abilities concerning creativity.

3.3) Boldness

Knowledge and creativity do not work without boldness, the third pillar to succeed as an entrepreneur.
There are many circumstances during decision-making process that require strong boldness to act
and translate knowledge and creativity into real solutions that match expectations. Through boldness,
entrepreneurs feel confident to follow their dreams and transform them into reality. Because of
boldness, many entrepreneurs have failed and many others have won. However, if they didn't have
boldness to try, no one ever would know the results and no one ever would get the benefits of this
daring. Many times, a bold entrepreneur has gone alone bound for an unknown place and some times
his solitary failure means a collective victory because he gives himself to a destination where no one
should go from now on, he does something and fails in doing it and teaches everyone what not to do
and how not to do it.

The opposite of boldness is fear, cowardice and unbelief. An entrepreneur can not go ahead bound
with feelings such as fear and unbelief, because his pathway is hard and unpredictable. He is like a
beater that must go alone and by his own expense to untamed places looking for new opportunities,
the newest and easiest ways to solve problems and the best features to meet the marketplace
expectations.

When an entrepreneur does not have anything to lose, it is easy to seem bold. However, the boldness
becomes real as long as the risks are getting higher. There are many entrepreneurs that have failed
because they did not have boldness enough to decide on time concerning the future of their business
when the businesses were going well. When the business starts its decline phase, it is too easy to
decide about changing route and, at the same time, too difficult to achieve success through this
delayed decision.

This is why it is feasible to believe that the third pillar seems more difficult to acquire than the two first
ones.

The result of the analysis of these three pillars described so far, about how each one interacts with
the others, can be summarized according to the table that follows, that outcomes seven types of
entrepreneurs as a result of one or more pillars that the entrepreneur profile holds:

Knowledge Creativity Boldness Resulting typology of entrepreneur

ü ü ü The eagle
ü The theoretical
ü ü The turkey
ü The dreamer
ü ü The alchemist
ü The mad
ü ü The conservative

Everyone who has at least one pillar can classify him or herself as an entrepreneur. Nevertheless, in
launching one's own business it is helpful to certify about the ideal entrepreneur profile, in order to
avoid troubles and frustrations. Some predictable results of an entrepreneurship practicing can be
shown according to the following table:

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Typology of Predictable results
entrepreneur
The eagle This type has everything it is needed to succeed systematically, with no "head or
tail" or "my fate belongs to God" only. Eagles can fly and live at highness and
also have eyes to see very far.
The theoretical This type knows everything concerning entrepreneurship. However, this
knowledge isn't actionable, because he can not create and also he does not have
boldness to launch himself to real life.
The turkey This type has the first two pillars but lacks the last and more difficult one to
acquire. Without boldness, he can not go away. He lives in a minimalist, frittered
and shrunken world. Turkeys can not fly like eagles.
The dreamer The dreamer lives in a imaginary world. His ideas can not be translated into
products to fill gaps, first of all because of lack of knowledge and then due to lack
of boldness.
The alchemist The alchemist is the nearest to the real entrepreneur, because he needs just to
acquire knowledge to be more effective. He has creativity and boldness and
usually uses experimentation to launch his ideas. If he has luck he can achieve
his goals as a real entrepreneur, but if not...
The mad The mad entrepreneur usually has a short life in doing business, because he
does not have both knowledge and creativity. With just boldness, he acts like a
xiita who destroys himself aiming for an ideal that only he believes in and only he
can see clearly. Usually, mad is a very faithful entrepreneur and he acts so
because he believes that faith really moves mountains, in real life. He still exists
because sometimes it works.
The conservative The conservative entrepreneur is a hazardous profile in the new faster changing
economy. As he lacks creativity, he can not follow the marketplace demands for
innovation.

Holding just one or two pillars does not mean failure in entrepreneurship practice. Also, holding all of
them does not mean unconditional success. However, holding or not holding these pillars should be
helpful in addressing success or failure.

IV - Conclusions

Entrepreneurs have one of the most important roles in supporting the harmony between people and
countries around the world. If they keep in mind this role, they always will choose to help people to
live and not to die, to help countries to practice peace and not to practice war, and help themselves
to experience fairly success achieved to last and not to experience ephemeral bubble gum success
based upon exploiting business opportunities pushing on, no matter what the cost.

Through the action of the entrepreneurs the whole worldwide economic system should run
harmoniously. Macro issues concerning unemployment, quality of life and freedom, among many
others, can be radically impacted depending on the entrepreneur mindset. If they understand this
complex network where their business takes place, they always will care about how to deal with all the
peers on the network, since losses or gains occurred anywhere across the network will come back to
impact them, sooner or later.

Finally, entrepreneurs should be rewarded for their knowledge, creativity and boldness. As the
employee gets his salary monthly and the soldier get his sold, entrepreneurs also need to eat and
usually they need large amounts of financial resources to put their ideas on the track. That is why
many times the real entrepreneur's reward comes quickly through fortune and glory.

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