- Home
-
Private banking
-
LGT career
Lateral thinking involves looking at problems from new and different perspectives. It's a powerful way to promote innovation and uncover growth opportunities that might otherwise remain hidden.
"Innovation distinguishes between a leader and a follower," said Steve Jobs. His zealot-like pursuit of creative solutions and ability to foresee market trends through non-linear thinking revolutionized technology and consumer behaviour.
Apple under Jobs was a powerful reminder that a culture of creativity and experimentation can lead to breakthrough innovations and significant competitive advantages.
In a business world facing rapid technological change, new working arrangements driven by the pandemic, and ever-shifting consumer preferences, the ability to think differently has become even more critical. Traditional, linear problem-solving approaches often fall short in this dynamic environment.
By embracing lateral thinking, many companies are transforming challenges into opportunities, spurring invention and driving sustainable growth. Adopting a mindset that values creativity and strategic flexibility can help businesses to navigate the complexities of the modern market and emerge as leaders in their fields.
The term "lateral thinking" was coined by business and management guru Edward de Bono. It's a problem-solving approach that approaches challenges from new and unusual angles rather than following step-by-step logic. In other words, it's about thinking outside the box.
Lateral thinking emphasizes creativity and looking beyond the obvious to find solutions that are not immediately apparent. It challenges assumptions and encourages new ideas, leading to breakthrough innovations and fresh perspectives. For leaders, it means promoting a culture that prioritizes creative thinking and experimentation to help overcome obstacles and identify new growth opportunities.
Looking at what businesses can learn about the impact of lateral thinking from the sports field, some of the most successful athletes share a common trait: the ability to think beyond conventional boundaries and see what others cannot.
The Australian cricketer Ricky Ponting, one of the game's best batsmen and finest captains, said, "Every batsman surveys the field before taking strike, and usually the fielders get imprinted on his mind. They can almost see every fielder in their mind's eye. But in my head, I don't see the fielders. I only see the gaps!" This mindset reflects lateral thinking, which focuses on opportunities rather than obstacles.
The sporting legend, boxer Mohamed Ali, constantly seemed to challenge conventional thinking. He had a mindset that didn't see limitations, saying: "Impossible is just a big word thrown around by small men who find it easier to live in the world they've been given than to explore the power they have to change it. Impossible is not a fact. It's an opinion. Impossible is not a declaration. It's a dare. Impossible is potential. Impossible is temporary. Impossible is nothing."
Strategic, lateral thinking is not confined to sporting legends, it is a cornerstone of innovation and growth in the business world.
There are numerous examples of companies that have successfully applied lateral thinking to their business strategies by reimagining their products or services, finding new ways to market them, or even structuring their organizations to foster innovation.
The 3M Post-it® Note, for instance, was born from a failed attempt to create a strong adhesive. Instead of discarding the weak adhesive, a 3M scientist saw an opportunity to use it for a different purpose. This led to one of the company's most successful products, now available in over 150 countries, with 3M selling more than 50 billion individual notes each year that analysts estimate generate well over 1 billion USD in revenue.
Similarly, the partnership between Swatch and Mercedes-Benz that created the Smart Car is a testament to lateral thinking. Swatch, known for its fun, well-designed and affordable watches, partnered with Mercedes-Benz to develop a compact and efficient city car. The result of combining Swatch's design and cost-efficiency expertise with Mercedes-Benz's engineering prowess was a groundbreaking product that created a new market. With its unique design and cost-effective engineering, the Smart Car has been a success, generating 4 billion USD in revenue since its launch in 1998.
Conversely, the absence of lateral thinking and the inability to embrace new technology can lead to missed opportunities and stagnation. Blockbuster's failure to anticipate the rise of digital streaming is a classic example. The company stuck to its traditional business model of physical rental stores while Netflix, employing lateral thinking, disrupted the market by offering DVD rentals by mail, then used new technology to provide streaming services. Blockbuster's inability to pivot and adapt led to its eventual downfall.
Interestingly, when it comes to public policy, the ongoing UK pandemic inquiry has brought to light the dangers of 'groupthink'. This is a phenomenon where uniformity of thought stifles innovation and critical analysis, particularly when people fail to ask the right questions, or refuse to consider information they don't like, or are unwilling to challenge the status quo. There are many famous examples of groupthink, including the failure of Swissair, the Challenger space shuttle disaster.
Lateral thinking can serve as an antidote to groupthink by fostering diverse perspectives and encouraging unconventional approaches to problem-solving. By challenging assumptions and exploring new ideas, organizations can avoid the pitfalls of homogenous thinking and better navigate complex crises.
For entrepreneurs and investors, adopting lateral thinking can unlock new opportunities, drive innovation, and uncover growth avenues that traditional methods might miss.
According to a McKinsey study, 90 % of executives predict significant upheaval in their businesses by 2025, yet only 21 % feel equipped to capitalize on new growth opportunities. This highlights the crucial role that lateral thinking can play in preparing businesses for future challenges and opportunities.
According to the Design Management Institute, design-driven companies, which often employ lateral thinking strategies, outperformed the S&P 500 by 219 % over ten years.
By fostering a culture that values creativity, experimentation, and strategic flexibility, businesses can navigate the complexities of the modern market and seize new opportunities for growth and innovation. Encouraging employees to challenge assumptions, explore new ideas, and take calculated risks can help to overcome obstacles and identify new avenues for success. In this way, lateral thinking can become a powerful tool for driving sustained business growth and maintaining a competitive edge.
Reward innovation
Curiosity and questioning are vital. Companies should encourage employees to ask "why" and "what if" questions. Regular brainstorming sessions and idea-sharing platforms are essential. Additionally, rewarding innovative thinking through recognition programs and incentives can significantly boost creative efforts.
Invest in training
Training programmes focused on lateral thinking techniques will equip employees with the skills needed for creative problem-solving.
Embrace diversity
Forming diverse teams brings a variety of perspectives crucial for lateral thinking. Cross-team collaboration and inclusive leadership can drive innovation. Numerous studies indicate that diverse teams are likelier to introduce unique ideas and approaches.
Experiment to succeed
It is crucial to create a workplace that fosters experimentation, and where failure is seen as a learning opportunity, not a disaster.
Promote open communication
Ensuring open communication across all organizational levels allows ideas to flow freely. Regular town halls, internal social networks, and muti-team projects enhance collaboration and idea exchange.
Challenge assumptions
Regularly questioning established processes and encouraging employees to look at problems differently can break traditional thinking patterns. Using "what if" scenarios helps explore alternative possibilities.
Make space for creativity
Designating physical and mental spaces for creative work, and allowing flexible work arrangements, can promote fresh thinking. Implementing "innovation time", when employees can work on passion projects, fosters a culture of creativity.
Lead from the front
Leaders should demonstrate lateral thinking in their decisions and share success stories of innovative solutions within the organization. They must also be open to unconventional ideas from all company levels.
Look outside the box
Encouraging employees to seek inspiration from diverse sources, such as guest speakers from different industries and external conferences, can introduce new perspectives and stimulate creative thinking.
Turn problems upside down
Training employees to redefine problems using reverse or analogical thinking techniques can help them view challenges from different angles and find unique solutions.
