Lateral thinking in management

Imagine two managers who are responsible for product development and innovation management in their companies. One of these managers has a so-called “linear” thinking style. This means that he approaches idea generation and idea development with conventional methods. The other is a lateral thinker looking for unusual ideas from which radical innovation could emerge. Both managers want to launch a new fruit juice on the market. They’re both looking for the right mix. The lateral thinker considers using a novel type of fruit and tests it with consumers. The first reactions are rather disappointing.

“Tastes awful.”

“It’s not very juicy. And not very refreshing either.”

“Well, they don’t taste that good with raw food.”

None of the consumers surveyed would like to buy the type of fruit from which the unconventional thinker would like to produce a new lemonade. The interviewers keep asking.

“Would you be interested in anything that tastes like this fruit? Like a soft drink?”

“I don’t.”

“I wouldn’t buy it.”

“There are fruits that are more suitable.”

The fruit isn’t even beautiful: Like “an ugly apple,” judges a consumer. “Reminds me a little of my first car. With the bumps and all.”

The vertically thinking manager approaches the surveys differently. In a representative sample, he examines which fruit varieties meet with the greatest approval. “Strawberries,” most respondents say. Cherries and bananas also find approval.

What does a reasonable manager do in this situation? Probably what the majority of vertically thinking managers would do. They would never put the new fruit variety on the market. Instead, they bet on fruit varieties that people like. Like strawberry, cherry or banana.

Why lateral thinking is important in management

Vertically thinking managers think rationally. They develop products that their customers want, provide them with marketing messages that consumers like to accept and meet all expectations. Vertical thinkers bring strawberry lemonade to market and use a slogan that matches the product. The advertorial shows a pretty model. The slogan is: “Strawberry lemonade. I like it.” And because vertically thinking managers play it safe, they test the advertisement campaign to make sure all customers like it.

There is also another type of manager: Lateral thinkers. Their philosophy is different. “We’ll do it anyway!” Just like the German company Bionade did. It launched a lemonade, the main ingredient of which is a fruit called “quince”. Bionade broke all the rules of market research and was successful. “Of course it would have been easier to sell apples or pears,” said Peter Kowalsky, then managing director of Bionade. “But from the beginning, we have deliberately focused on unusual flavours.” After a few weeks the drink was sold out. “Spirit of Georgia”, Coca Cola’s competitor product, and many other beverages that market research has shown should have worked, had a much harder time.

Tools that encourage lateral thinking in management

The power of the Internet makes it easier than ever to encourage lateral thinking and establish innovation networks. Using methods such as Open Innovation and Co-creation, consumers are directly integrated into the development process of products and digital business models. Companies can use the swarm intelligence of customers and external experts. Software platforms such as Innolytics^® Idea Management Software and Innovation Management Software support both the development of an Open Innovation Community and internal innovation networks. On the platform, interdisciplinary working groups are formed. These working groups pursue both conventional ideas for improving processes and cross-cutting ideas for disruptive innovation. Innolytics^® software allows companies to pursue extraordinary ideas and implement them in a targeted manner.

What do laterally thinking managers do differently?

Lateral thinkers in management turn rules upside down instead of blindly following them. They believe in visionary goals – often without having concrete measures confirmed in hundreds of tests. They have the courage to irritate their customers. And the others? They are managers who have learned perfectly how to map markets and key figures in PowerPoint slides, to develop conventional strategies and to set up processes. Lateral thinkers try things out, average managers call the next meeting. Lateral thinkers take risks, others implement average ideas without risks. Lateral thinkers are explorers, whereas average managers would never break new ground.

Lateral thinkers have principles that are considered bold in today’s management world. They are unusual principles through which they can achieve the unusual. Principles that help companies and their managers to become more creative.

For lateral thinkers, work is the greatest adventure there is

Lateral thinkers live in their visions. They’re not creating just another drink, but “the official drink of a better world.” Like the dishwasher manufacturer Hobart, they are not just producing the next generation of appliances, they are setting up a bold vision: “Washing without water”. They would never think of copying others in the market. They follow philosophies like the cosmetics manufacturer Kenzo: “Don’t follow consumers.”

Conventional thinkers have largely turned off their intuition and assigned market researchers to explore segments for their new beverage. They ask consumers which slogans they would like to hear. Their philosophy is, “If you follow consumers you can’t be wrong.” Lateral thinkers remain rebels, even if they wear ties. They’re pioneers. For lateral thinkers, work is the greatest adventure there is – for many others, it’s just a safe job.

A company without lateral thinking is the fastest track to boredom

“Oh, yeah, that’d be great. That would be fantastic. I’d like to have that much courage, but we can’t.” That’s a common statement you hear from average managers when it comes to new ideas. Actually, they would like to be pioneers, but they are trapped in systems that only allow small excursions. A company full of employees who think and decide similarly.

Just imagine the following scenario: One of your employees develops an idea for an innovative business model. You are thrilled by the idea – despite criticism from the management. You ask your customers whether they would like the business model. The answer: “We don’t know exactly.” You interview the different departments in your company: Marketing, sales, purchasing. You neither get clear approval nor clear rejection. You are committed to the idea because you are personally convinced of it. You fight and you get a budget. But the idea doesn’t work as expected.

What happens if lateral ideas do not work?

Half a year later, the decision for the next career stage is due. Who gets promoted first? The conventionally thinking manager who was able to achieve success with proven methods without making any mistakes? Or the lateral thinker? As a reward for thinking innovatively and creatively, even if not everything worked out as planned? If you tend towards the first answer, you know why lateral thinkers in management have such a hard time. They fail more often. When a conventionally thinking manager fails, he does so because the market research has delivered wrong results, because the consultants have given bad advice or the advertising agency has failed. But not because his thinking was wrong. When a lateral thinker fails, he does it because he’s crazy. At least that’s how it’s seen in many companies.

Take-away

Of course, traditional tools for innovation processes are crucial to business innovation. At least as important, however, is an innovation culture that nurtures creative ideas. A company full of like-minded people turns bold lateral thinkers into normal managers in no time at all. Unless they’ve previously quit and left the field to the linear thinkers.

• Reward innovative thinking – even if the successes are not immediately visible!
• Look for employees who think differently than the majority of your executives. Make sure there’s a mix of conformity and rebellion.
• Create a space for lateral thinking! For example, our customers set up virtual innovation labs in the Innolytics Innovation Software. In these, cross-cutting approaches can be pursued and worked out.