"You cannot dig a hole in a different place by digging the same hole deeper." Edward De Bono
I was preparing for a strategy program with a client recently and came across some notes on one of the more invigorating topics on creativity: lateral thinking. The term and concept of "lateral thinking" was coined and popularized through the writings of Edward de Bono, the famed and very pedigreed author and consultant. de Bono offers the following non-technical explanation for lateral thinking:
With logic you start out with certain ingredients just as in playing chess you start out with given pieces. But what are those pieces? In most real life situations the pieces are not given, we just assume they are there. We assume certain perceptions, certain concepts and certain boundaries. Lateral thinking is concerned not with playing with the existing pieces but with seeking to change those very pieces. Lateral thinking is concerned with the perception part of thinking. This is where we organise the external world into the pieces we can then 'process'.
I've observed in both my corporate and consulting lives that organizations and management teams frequently get stuck in a strategic rut, assuming that the premises and forces that guided their market(s) historically, will prevail in the future. This assumption can lead to disaster whereas the leap of faith required for a laterally developed strategy might be filled with risk, it can lead to rich rewards as well. Consider some examples:
- A Japanese electronics company invented both the first electronic cash register and the first credit authorization terminal and had a big head start on some notable competitors. Convinced that the markets for these products would develop in an orderly fashion according to well understood rules, the company's management failed to see the mass adoption opportunity that developed around low-cost models sold through alternative methods of distribution. Within a few short years, the company moved from innovator and inventor to almost non-existent. Within a decade, the firm withdrew from the markets that it created.
- Two companies of approximately the same size in the same capital goods business each dominate a specific market segment. Both covet their competitor's respective market and both invest considerably but to no avail to unseat the other. Competitor "A" recognizes the futility of this approach and completely rethinks its business along non-traditional lines. Instead of creating more of the same capital goods at different price points, "A" recognizes the tremendous opportunity that exists to extend their products and services along the value-chain. "B" resists value-chain extension due to their lack of expertise and perceived risk factors. Fast forward 8 years and "A" has grown revenues 20X and "B" is slightly smaller than it was at the time that "A" changed the game.
- In another technology/systems business where the ultimate sale was to a small group of powerful franchisees, one firm recognized the futility of competing purely on the basis of price and performance and decided to redefine the rules of the game. This firm chose a strategy of customer intimacy, investing considerably in creating forums to identify and help solve issues important to the large franchisees, even though many of the issues were fundamentally unrelated to the firm's products. The competitor could never match the level of intimacy that the firm developed and withdrew from the market.
Opportunities for the application of lateral thinking in our daily professional lives are plentiful, and one needs to read no further than the cover of any daily newspaper to both see examples of traditional and lateral thinking at play. Consider the geopolitical situation in the middle east, Iraq, Iran, Afghanistan, North Korea the approach of the U.S. to the challenges and the evolving approaches to terror and torment of the bad guys. One begins to wonder why the wrong side seems to have the monopoly on lateral thinking, while we go about solving problems we don't quite understand against adversaries that we definitely don't understand, using very traditional approaches. OK, sorry for the segue...back to business.
As you look at your environment and think about your business strategies, it is reasonable and proper for you to consider approaches that not only change the rules, but that fundamentally change the game. Last year's market dynamics are ancient history--don't let them guide tomorrow's strategic choices, or you might just end up like several of the firms that I described above. At the risk of being redundant with another recent posting of mine, it's good to follow the advice that the author/philosopher Ayn Rand drummed into her students during her lectures and debates: "Always check your premises." A dose of lateral thinking might just be appropriate for your situation.