What Is Lateral Thinking And Why It Matters In Entrepreneurship

Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Understanding lateral thinking

Lateral thinking was coined by Maltese psychologist Edward De Bono, who argued that the concept was useful in forcing business executives to think outside the box. Traditional methods of introducing new products to the market involve analyzing market needs and then creating products suited to specific audiences. 

In mature markets however, this approach leads to a proliferation of niche offerings that in turn increases market fragmentation. Inevitably, the individual segments become so niche that businesses cannot turn profits in them.

Lateral thinking is an alternative approach to this way of thinking. While there is an obvious need for creative thinking in gaining a competitive advantage, creativity itself is difficult to define. Indeed, many individuals have trouble summoning creativity at will and others may simply view themselves as uncreative individuals.

So what is the answer? Provocation.

Provocation causes mental instability in an individual and as a result, it forces them to develop new ideas. Importantly, the provocation must be outside of the experience or comfort zone of the individual or business concerned.

The four categories of provocation in lateral thinking

Consumers in modern society are quick to take offense, so businesses often find themselves appeasing the masses. But to stand out, provocative lateral thinking is the best way to verify whether creative ideas have potential.

Here are the four categories of provocation that such ideas may fall under:

  • Exaggeration – where normal properties of products or services are exaggerated. Given that Guinness beer takes longer to pour than some competitors, the company exaggerated the slow preparation time through its “great things come to those who wait” advertising slogan.
  • Escape – which forces businesses to cancel, negate, drop, remove, or deny what they take for granted. A car manufacturer may take for granted that their cars have wheels, but what would happen if cars didn’t have wheels? While it is obviously not viable to sell a car without wheels, perhaps the company could design a car where the wheels were hidden from view.
  • Reversal – where conventional wisdom is replaced by any form of an opposite, perverse, or backward viewpoint. In an Australian government-run ad campaign on the dangers of speeding, advertisements described the consequences and depicted accident scenes. 

However, the campaign had little effect on speeding among male drivers. The campaign was later revised, showing footage of young men speeding and being judged negatively by women in their age group. The message caught on and was highly successful, with over 60% of young male drivers admitting to reconsidering their driving habits.

  • Wishful thinking – where a business turns a fantasy wish into a provocation. Wishful thinking is often related to vision, mission, and company values and is perhaps one of the simplest ways to put creative ideas into practice.

When a marketing team brainstorms potential provocations, many of them will be unrealistic, politically incorrect, ineffective, or just plain ridiculous. 

However, a combination of unreasonable provocations may subsequently result in a good idea coming to mind. Therefore, it is important to write down ideas – irrespective of potential viability – and move through the process regardless.

Key takeaways

  • Lateral thinking is an indirect, creative, and non-linear approach to problem-solving.
  • There are several lateral thinking techniques, but the mental instability caused by provocation forces individuals and businesses to consider a range of creative possibilities.
  • Lateral thinking can produce a variety of unrealistic solutions, but it is important to explore them thoroughly. Doing so may subsequently yield better, potentially viable ideas.

Connected Business Frameworks

First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Other related business frameworks:

Additional resources:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"