Topics: Peter Drucker, Innovation, Entrepreneurship Pages: 16 (4702 words) Published: September 16, 2013
The Discipline of Innovation
by Peter F Drucker .

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August 2002

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The Discipline

of Innovation
by Peter F Drucker .
How much of innovation is inspiration, and how much is hard work? If it’s mainly the former, then management’s role is limited: Hire the right people, and get out of their way. If it’s largely the latter, management must play a more vigorous role: Establish the right roles and processes, set clear goals and relevant measures, and review progress at every step. Peter Drucker, with the masterly subtlety that is his trademark, comes down somewhere in the middle. Yes, he writes in this article, innovation is real work, and it can and should be managed like any other corporate function. But that doesn’t mean it’s the same as other business activities. Indeed, innovation is the work of knowing rather than doing. Drucker argues that most innovative business ideas come from methodically analyzing seven areas of opportunity, some of which lie within particular companies or industries and some of which lie in broader social or demographic trends. Astute managers will ensure that their organizations maintain a clear focus on all seven. But analysis will take you only so far. Once you’ve identified an attractive opportunity, you still need a leap of imagination to arrive at the right response – call it “functional inspiration.”

In business, innovation rarely springs from a flash of inspiration. It arises from a cold-eyed analysis of seven kinds of opportunities.

Despite much discussion these days of the “entrepreneurial personality,” few of the entrepreneurs with whom I have worked during the past 30 years had such personalities. But I have known many people – salespeople, surgeons, journalists, scholars, even musicians – who did have them without being the least bit entrepreneurial. What all the successful entrepreneurs I have met have in common is not a certain kind of personality but a commitment to the systematic practice of innovation.

Innovation is the specific function of entrepreneurship, whether in an existing business, a public service institution, or a new venture started by a lone individual in the family kitchen. It is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth. Today, much confusion exists about the proper definition of entrepreneurship. Some observers use the term to refer to all small businesses; others, to all new businesses. In practice, however, a 5

Copyright © 2002 by Harvard Business School Publishing Corporation. All rights reserved.


great many well-established businesses engage in highly successful entrepreneurship. The term, then, refers not to an enterprise’s size or age but to a certain kind of activity. At the heart of that activity is innovation: the effort to create purposeful, focused change in an enterprise’s economic or social potential.

Sources of Innovation
There are, of course, innovations that spring from a flash of genius. Most innovations, however, especially the successful ones, result from a conscious, purposeful search for innovation...
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