Innovation and Entrepreneurship: Practice and Principles

Drucker always seemed to be years, if not decades, ahead of anyone in his field, and Innovation and Entrepreneurship was the first book to treat the subject in a systematic, non-sensational way. Drucker is clear that his book is not about the psychology or character of entrepreneurs. It is not the mysterious "invention", or `flash of genius' so often ascribed to the wealth creator that interests him, but actions and behaviour - how innovation and entrepreneurship can be boiled down to a system that can be applied by anyone. By 1914, the time World War I broke out, "invention" had become "research," a systematic, purposeful activity, which is planned and organized with high predictability both of the results aimed at and likely to be achieved. Something similar now has to be done with respect to innovation. Entrepreneurs will have to learn to practice systematic innovation. Successful entrepreneurs do not wait until having a "bright idea"; they go to work. Altogether, they do not look for the "biggie," the innovation that will "revolutionize the industry," create a "billion-dollar business," or "make one rich overnight." Those entrepreneurs who start out with the idea that they'll make it big--and in a hurry--can be guaranteed failure. They are almost bound to do the wrong things. Drucker states that a management team should be already built before the business will grow mid-side; otherwise it would be too late. He gives the examples when the founders of Ford Motor and Honda Motor to not start the venture until they have found a reliable partner who will run administration, finance, distribution, marketing, sales, and personnel. Drucker somewhat envisioned the I.T. bubble of 2001. Many new ventures, especially high-tech, fail because they ignore the basic principles that were known for centuries. He states that high-tech is not intrinsically risky. It is not riskier than any other business, if properly applied. Entrepreneurship is only risky, he observes, when so-called entrepreneurs `violate elementary and well-known rules.' It is not risky when it is systematic, managed, and purposeful. Accroding to Drucker, Innovation does not have to be technical, does not indeed have to be a "thing" altogether. Wherever introduced, it changes the economy from supply-driven to demand-driven, regardless almost of the productive level of the economy. "Innovation," then, is an economic or social rather than a technical term. It can be defined as changing the yield of resources. The book consists of three sections. In the first section, Drucker describes seven sources of innovative opportunity: The Unexpected, Incongruities, Process Need, Industry and Market Structures, Demographics, Changes in Perception, and New Knowledge. He debunks the believe that innovation is "a bright idea" and maintains that dependable innovative ideas come from systematic exploration of the seven sources of innovative opportunity. The second section covers entrepreneurship an

This book was written in the early 80's, yet it still has today's business strategies attached to it. This book was a supplementary reading for my business class, but this should of been used for discussion for the whole semester. If you read on...he pretty much predicts the internet boom.

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.

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).