Innovative Lateral Thinking

Interview with Paul Sloane, author of The Leader's Guide to Lateral Thinking Skills and The Innovative Leader, and co-author of many books containing lateral thinking puzzles
By Vern Burkhardt
Innovative leaders "use creative and lateral thinking techniques to transform their organization into a hotbed of entrepreneurial spirit brimming with new ideas." They manage change by focusing "on developing the skills of the team in innovation, creativity, risk taking and entrepreneurial endeavor."

Vern Burkhardt (VB): Is being an 'idea carrier' the essence of lateral thinking in an organization?

photo of Paul SloanePaul Sloane: They are two different things. Lateral thinking is approaching problems from new directions, and it's an essential component of creativity. It's a technique you can develop to improve your creative problem solving skills.

Being an 'idea carrier' is much more about networking and carrying ideas from one place to another. I particularly recommend to sales people, but also to business people generally, that when they call on clients they should focus on their clients' issues and problems. By doing this they can often come up with ideas from other experiences or from other companies or clients they work with, which can help solve issues and problems. Part of the value you can add, the help you can provide, as an 'idea carrier' is bringing fresh ideas to your clients. Doing this doesn't necessarily sell your products or services but it adds value for clients. If you can add value they will value the relationship much more and mutual benefit will be the result.

VB: It may lead to some lateral thinking for your clients.

Paul Sloane: Yes, that's right because something that strikes you as obvious may be blindingly new for them. If you are aware of clients' problems when you go back to your workplace and are browsing through the Internet, are on Twitter or somewhere else, you might see something and think, 'Wow, that's something that John or Mary might find useful.' So you send them an email and advise them, 'You remember that problem we were talking about? Here's the way somebody in Holland is handling it, or here's how somebody in Shanghai is addressing something similar in this area. I thought you might be interested.'

That's what I mean by 'idea carrier'. It's when you're on the lookout for creative ideas for other people, and you might come up with ideas that will also benefit you. When it occurs there is enormous synergy.

VB: In The Leader's Guide to Lateral Thinking Skills you used the term "lateral leadership", but later changed it to "innovative leader." Would you explain this change?

Paul Sloane: Lateral leadership and innovative leader. They originally meant the same thing to me, but lateral leadership as a concept is a little difficult for people to understand.

I think innovative leadership is an easier concept to grasp, and people relate to the need for it. By that I mean a style of leadership which inspires lateral thinking and creativity, and leads to innovation. There is a chapter in The Leader's Guide to Lateral Thinking Skills, which talks about the lateral leader. And I developed that whole theme into the new book, The Innovative Leader. It goes through the characteristics, actions and behaviors of that kind of person. In particular I contrast them with a conventional command and control, directive leader who tells you what to do. The innovative leader questions, challenges, and listens, and then empowers and trusts. In contrast the command and control leader directs, tells and instructs, and controls and checks.


You can be a lateral thinker and come up with crazy ideas all the time without ever delivering an innovation. But the innovative leader encourages lateral thinking, encourages ideas, encourages a selection of prototyping ideas, and encourages rapid implementation which involves committing resources and taking risks. I would say that's the difference between the innovative leader and the lateral leader.

(Vern's note: See my interview with Paul Sloane on November 17, 2008 in which we talk about The Innovative Leader.)

VB: You have said, "Innovation requires a different set of skills. It's about crazy possibilities, trying risky things, and wasting money on things that likely won't succeed." What kind of skills do innovative leaders of a company require?

Paul Sloane: There is a whole range of skills. There are times when you have to be an inspirational, innovative leader and there are other times you have to be directive.

The skilful leader knows when to operate in which mode, depending on the type of people they're with. Some people respond to empowerment, trust, and delegation while others need to be told very clearly what to do. The innovative leader knows when to be tight and when to be loose, when to be directive and when to be questioning, when to be analytical and when to be creative. There is a whole range of skills they have to deploy at the appropriate times.

cover of The Innovative LeaderThe main point is you can't micromanage a large organization nowadays. You can't take care of every detail if you have a thousand people, or even a hundred people. You've got to let go. You've got to inspire, you've got to harness the creativity of your team. And to do that you have to use some of the skills I talk about in The Innovative Leader in terms of setting a vision, setting a goal, and empowering people to achieve their part in that goal.

VB: If you try to limit and control, are you encouraging long-term failure for your organization?

Paul Sloane: You're limiting your organization to the things you can achieve, yes.

Entrepreneurs starting a new business very often have a great idea and need people who will help them execute getting their innovation to market quickly. They surround themselves with people who do what they're told because they've got one great idea to implement. But they are then limited down the line which they need more ideas and fresh ways of thinking, because they've surrounded themselves with people who aren't very good at it.

VB: Can lateral thinking skills be learned or are they primarily innate?

Paul Sloane: Oh, they can definitely be learned. In my books, Edward de Bono's books, and other writings there are various techniques you can use. Lateral thinking is definitely something you can learn.

It's a bit like musical skills. If I ask an audience, "How many people here are musical", two or three people raise their hands. And then if I say to them, "Right, now say I were to offer every one of you one hundred thousand dollars if you come back here in a month with a song you have composed yourself. You can get as much help as you want, but you have to compose the song yourself. Who thinks they could do that?" Everyone raises their hand.

It's the same with creativity. Who thinks they're creative – a handful of people indicate they think they are. Who could come up with great ideas if their life depended on it – they all could. So we can conclude that given the right incentive and environment we are all creative. Some are better than others. If that audience all came back with a song one month later some songs would be mediocre and some would be amazing. But all would have shown they could be creative.

VB: Apparently, if you ask a room full of children, "Who is creative?", all of them will raise their hands.

Paul Sloane: Every child holds up their hand. That's right. We all have imaginations. It's just that the system gradually crushes it out of us as we get older.

VB: In a short paper you've published on the your website you say we should confront assumptions. Would you talk about that?

Paul Sloane: We make assumptions every time we approach a problem, and the more experienced we are the more assumptions we make.

The danger is when you meet a client you assume you understand what their problems are. You assume there are constraints on the solution, and that there are ground rules and limitations to what you can do. But very often there aren't. Very often those ground rules can be challenged. We see this time and time again.

Airlines such as Pan Am and TWA thought there were certain minimum standards they had to meet if they were operating an airline. They had to issue tickets, allocate seating, and sell tickets through travel agents. They assumed they had to give people a free drink on the plane. But they didn't necessarily have to do so.

Southwest and other low-cost airlines challenged all of those assumptions. They don't issue tickets; they have e-tickets. They don't sell through travel agents; they sell over the Internet. They don't have allocated seating; passengers just sit in whatever seat is available when they board the plane. They don't have a free cup of tea or coffee; passengers have to pay for everything.

By challenging assumptions innovators can break the rules and create a whole new game. We tend to think that life is a set of rules you are not allowed to break. When you take exams there are rules you have to conform to. When you play sports there are rules you have to conform to otherwise there is a penalty – there is a referee who judges against you.

We go into business and we are taught that this is the way business operates, and we comply with all the rules, frameworks, and assumptions. Then all of a sudden the really innovative people say, "Just a minute, maybe we can break these rules. Maybe we can challenge these assumptions. Maybe there is a different way to operate this whole model."

VB: Part of the conditioning is the laws, regulations, and government restrictions that reinforce rule-based behavior.

Paul Sloane: One of the things I say to European audiences, which may sound amusing to you, is "Who has been to the U.S. on a holiday?" Most in the audience raise their hands. I then say, "Who has driven a car in the U.S.?", and most of them raise their hands. The next question I ask is, "Who has turned right on a red traffic light in the U.S.?", and most of them raise their hands. In response to the question, "How did it feel the first time you did it?", they agree it's weird – it's really weird because in Europe you are not allowed to do that. If you come to a red light, you have to remain stopped even if the road is completely clear and it's safe to go. In Europe you are not trusted to make that decision. In the U.S. somebody said, "Just a minute, this is a rule which can be challenged. There are times when we should let people break this rule." And so the rule was changed. Once you get used to turning right on a red light, you think hey, this is marvellous! I'm being trusted to make a decision. It's speeding up the flow of traffic.

A lot of the rules in businesses today are red stoplights that somebody put in place at one time to indicate it's dangerous to let people do this. We should let people drive through when it's safe to do so. We should empower people to break those rules under the right circumstances. Turning right on a red light, is a perfect example.

VB: We should ask questions – have a curious mind. Would you talk a bit about that?

Paul Sloane: That is the fundamental aspect of innovation, leadership, and challenging assumptions. You should challenge assumptions, and you should break the rules. You do it by asking very fundamental questions every time you approach a situation. Why do we do this? What is the purpose of this? What is the real value we are providing here? Why are we doing it this way? Is there a better way to do this?

If you ask the question in business, "Is there a better way to do what we're doing?", the answer is always 'yes'. We just haven't found it yet.

By asking very fundamental questions and by constantly challenging we can achieve innovative insights. Jeff Bezos asked the basic question, "Is there a better way to sell books than through bookstores?" Michael Dell said, "Is there a better way to sell PCs than through dealers and retailers?" Eric Schmidt, CEO of Google said, "We run this company on questions, not answers." He encourages people all the time to question everything – every assumption, every ground rule, and every approach. It's a very healthy attitude.

We need to make the current business model work really well, but we also need to look for a way of replacing it with something better. The way we do that is by constantly asking those fundamental questions.

VB: Look forward to change, not the status quo.

Paul Sloane: Oh, absolutely, the status quo is a very dangerous place to be.

VB: You say, "…it is wise to design work so that people can concentrate on a single work activity for a large part of the day, rather than chop and change between many urgent tasks." Would you talk about how you came to this conclusion and why it works?

Paul Sloane: I wouldn't say it's central to my thesis, but I would say we live in a chop and change world. We live in a world where we are constantly 'interrupt-driven', especially with email, the Internet, telephones, the boss, and everyone else. It doesn't allow us time to sit back and think deeply about problems and try to construct better solutions.

Steven Covey and other great management gurus say you should focus on the important things, not the urgent 'stuff'. Yet we tend to thrash around on the urgent things, and at the end of the day think, 'Wow, I haven't worked on the really important things, the really strategic things, the long-term issues, but I'll do it tomorrow.' But when you come back to work the next day you're straight back into fire fighting and spending all your time on day-to-day activities.

I made that mistake when I was a CEO, and time and time again I see other people doing the same. They focus on the urgent, on solving lots of seemingly important things. Then they look back and wonder whether that was strategically important for the business at that time. The answer is almost always 'no'. They should have been working on more important things, the strategic things and the long-term issues which take more thinking time.

The way to resolve the problem of focusing only on urgent things is to delegate the small tasks to other people, or not do them at all if you can manage it. Instead allocate time to focusing on the big issues, getting the major decisions right, and making the big changes that will really have a long-term payback.

VB: Focusing on urgent fire-fighting activities may provide an addictive adrenaline rush, contributing to it becoming a habit and a way of life.

Paul Sloane: Yes, it's the normal thing to do... 'I don't like to sit and think about things and get involved in long, deep processes. I like to be out there and be seen to be active.' There's a tendency to be drawn to the crises and the urgent issues, but we end up thrashing around rather than cracking the major issues.

As leaders that is what we are there to do. To change the business, not to manage it. Managing the business is a management task and should be delegated to managers. Leaders should operate on the business at a strategic level, changing it strategically, and that is a tough thing to do. It takes care, dedication, time, and effort.

VB: And discipline.

Paul Sloane: Discipline. Yes, it's a discipline that many of us lack.

VB: You talk about how we accumulate assumptions in life and how these assumptions "restrict our view of what is possible." Do you think young people growing up in the digital economy, and being educated in our present climate of innovation and rapid change, will have fewer walls or will they just have different walls?

Paul Sloane: It's an interesting question. I suspect they'll have different walls. They'll be quite familiar with all the tools of the digital age, and with all of the ways you can use the Internet, including the social media.

At the same time many young people have been through an educational system which doesn't encourage a great deal of creative thinking, an entrepreneurial approach, leadership, or responsibility. They'll need to learn those things, but I think leaders will emerge as they do in every generation. It will sort itself out.

VB: You talk about using "divergent, creative thinking" to generate ideas and then "critical and analytical thinking" to evaluate them. Should the same people perform both these tasks?

Paul Sloane: I think it should be the same people wherever possible. With proper facilitation people can flip flop between the two modes fairly easily, but they have to be encouraged to do so.

When I lead a brainstorming or an ideation session, during the first part of the meeting we generate a lot of ideas including a lot of crazy ones. We go for a large quantity of ideas. There's no judgement allowed; people are not allowed to criticize. We follow all those things we know about divergent thinking. In the second part of the meeting I take the same people and say, "I want you to rapidly go through these ideas and whittle them down to a shortlist of the best based on criteria we agree upon." Then they have to be critical, judgmental, and use convergent thinking to decide which is the most viable or desirable idea or ideas. Hypothetically speaking, of the sixty ideas we started with, we select the best eight, and then vote to decide which of those is the top three that we are going to implement. That way we can go rapidly from a large number of ideas to a limited number that we take away from the meeting, and subsequently take action on. People feel good about being able to make progress and proceed with implementation. They feel some ownership and very often some of the really creative ideas will make it all the way through to implementation as a major innovation.

VB: Typically, do you set the selection criteria before the brainstorming session starts or does that limit people's brainstorming capacity.

Paul Sloane: Either at the beginning or mid-way through the process. The criteria generally are fairly broad, not too tight. I provide a training module about what kinds of criteria are good to use, and discuss examples of criteria different companies have used.

Some examples of good criteria are: is this idea novel, attractive, and feasible; is it new for us; is it appealing to us and our clients; and can we actually implement or do it?

Today I tweeted on Twitter that the criteria for innovation projects can be described in three words – need, greed and succeed. Is there really a need for this? Can we make money at it? Can we make it work; can we actually hack the technology and deliver on this?

As I said earlier the point is to not make the criteria too tight. If you say one of the criterion is we're looking for ideas that we can implement this month, with no extra resources, and within budget – that's too tight. You will end up throwing away some great ideas.

VB: I read your article on Twitter while I was waiting to call you.

Paul Sloane: Twitter's an amazing thing.

VB: You recommend testing new products as early as possible on a small group of key customers. How does lateral thinking fit into this process?

Paul Sloane: The whole innovation process can be thought of as a pipeline, and the beginning is where you start with a large quantity of ideas. It is at that stage where you really need lateral thinking. You need questioning, challenging of assumptions, and a perspective that everything is up for grabs. Anybody can challenge anything, and people can say things like, "Why don't we sell a cup of coffee for five dollars," which is the Starbucks approach. It must have been an amazing question when it was first asked at Starbucks, when everyone else was trying to drive down the cost of a cup of coffee. Another question might be why can't we sell a computer for $50?

Did you see the announcement of the new Tata cars priced under $2000? That is lateral thinking compared to the assumed market value of new automobiles.

VB: It's amazing.

Paul Sloane: The Tata NANO. At the stage of selling a new car for $2000 anything is up for grabs.

As you start applying the agreed upon criteria, you get more and more convergence until you end up with perhaps five ideas you want to test or build a prototype. It might be a new computer screen design, or a role-play for a service. It might be a prototype built with plasticine, playdough, straws and other available objects and materials, and which is then shown to customers who are asked, "What do you think about this? If we did this for you, how would you feel?"

You're not at the lateral thinking stage when you test your innovation, your new idea. You're at the analytical stage. You're listening, trying to remove yourself from your emotions, and enthusiasm for the project. You're observing your clients to determine how they feel about the innovation. Clients will often say, "I like this, but I don't like this aspect of it, or that's a horrible idea and we wouldn't do that." Or they might say, "Yes, but not at that price point, not in that color, or not at that weight". You are looking for quick feedback which will help you in the innovation process. Do that with successively better prototypes, and then introduce the innovation to marketplace rapidly.

The analytical stage is a learning process, and you are trying to get rapid feedback which you can use to either kill the project or determine it's a winner. You are trying to eliminate the things that aren't going to be winners and thereby save yourself a lot of money. You are trying to refine the best ideas to make them successful the first time out so you get a competitive advantage. You want to be ahead of the competition by being the first to bring something out that works. You don't want to follow the Apple Newton example, which was a great idea but didn't quite work and therefore the momentum was lost.

It's also important to kill some projects during the innovation process. Life's too short to implement all the ideas, even all the good ideas.

VB: Some people may think they don't have new ideas, and yet some entrepreneurs and companies say, "We have more new ideas, more innovations than we can implement."

Paul Sloane: Most people have many ideas but, having said that, you want a lot. If you've got fifty ideas that's great, but if you have five hundred ideas that's better.

Even if you've got no ideas and you've got nobody in your organization who is creative, which is never the case, you can still go outside and get ideas. My advice is pinch other people's ideas. It's useful to consider whether other people may have solved your problem. They may not be in your state, country, or industry but somebody else has likely cracked this problem with a great idea. Pinch their idea. Look at what they're doing about this problem in Hong Kong, Berlin, Capetown, and all the other possible places around the globe. Look at other industries and ask how are Nokia, BMW and other innovative companies are handling the same problem. Even if you don't have any creative people and you haven't got a single idea, you can still be innovative.

VB: You say teams put together to solve problems shouldn't be too large or too cosy. There should be some "constructive tension" on the team. What do you mean by "constructive tension" and how can a leader know how to go about choosing such a team?

Paul Sloane: I now call it constructive dissent. Jim Collins talks about it in his book Good To Great. He says there is a paradox in that you want your team to be 'challenging and not aligned' and then 'challenging and aligned'. At times you want them to challenge your policy and say, "Just a minute, I think there is a better way to do this. I think we're getting this wrong. I think we need to change." And then once you decide on something, the group discusses it, and you say, "The policy we are going to try to make work is as follows, is everyone agreed?" When there is a decision everyone gets aligned behind it, and they push very hard for its successful implementation.

The leader needs to be able to flip flop, and allow the team to flip flop between the two modes at various times. Adolf Hitler had a team that was totally aligned. He never had any divergent thinking. He never allowed anyone to challenge his approach, and in the end he crashed and burned. At times you've got to allow challenges, allow your generals to say, this isn't going to work.

VB: In Adolf Hitler's case, if you challenged him, you were shot.

Paul Sloane: Yes, that's right. You need to allow constructive dissent. You've got to create a forum where that is allowed. The leader has to say, "On Wednesday afternoon, we are going to go offsite and review this whole issue. Anybody can challenge anything, and I want your views on how we can make the whole thing better even if it means tearing up the current processes." The employees will know dissent and honesty is allowed.

It's important to set those constructive dissent rules, because in a normal meeting people may be inhibited about challenging things. This is especially true if there's a dominant, strong-willed, dynamic, and decisive leader, which most leaders are. People are a bit worried about going up against the leader in front of everybody, but you can use techniques such as 'six thinking hats', 'what-if questioning', or other techniques to encourage that process. You need to create a time and space in which it's allowed.

VB: Good innovation leaders should encourage all ideas from everyone in their company, and there is no such thing as a 'bad' idea. Would you share a case where a 'bad' idea led to a great success?

Paul Sloane: There are many examples from all walks of life. Pfizer had a drug on trial with men to reduce their blood pressure. It didn't have the intended effect of reducing blood pressure, but the men wanted to carry on using it. It was Viagra. Viagra, in its original concept, was a failure. It didn't do what it was intended to do, but there was a side effect that was highly beneficial and Pfizer had the wit to recognize its potential and do something with it.

There is an example I give about why you need crazy ideas at the beginning of a brainstorm. There was a company that was involved in packing vases, cups, and delicate glassware objects to be sent all over the country. They packed them in newspapers, because newspapers are cheap, convenient and good packaging materials. The company found that the people who did the stuffing and packaging were constantly stopping to read the newspapers, and as a result weren't working efficiently. Whenever you pick up a newspaper, there is always something interesting to read in it even if it's an old edition. They had a brainstorm about this, and the Vice President of Sales said, "Why don't we poke people's eyes out, they won't be able to see, and then they'll focus on packing?" This comment stimulated somebody else to suggest, "Why don't we employ blind people?" They checked with a local home for blind people, and were told there were lots of blind people desperate to work and who would love to do that kind of work. They tried them and found they were excellent packers and they never stopped to read the newspapers! By starting with a wild idea – let's poke people's eyes out – they permitted it to trigger further ideas. They didn't close down idea generation, people didn't say, "No, you can't do that because it's against the law." 'Poke people's eyes out' led to employing blind people, which not only resulted in very good quality work it also improved their image as a socially responsible employer. That's an example of a bad idea leading to a successful good idea.

VB: In working with companies that are putting into practice the methods in your book do you find that during evaluation of ideas it is difficult for most people to participate in an egoless way? What can be done to encourage this?

Paul Sloane: Edward de Bono's 'six hats' is a very useful technique but there are others as well. In the six hats process you wear the different hats in sequence. One is the yellow hat where you have to say something good about the idea even if you think it's lousy, it came from your worst enemy in the company, or you think it would result in a disaster. Everyone takes turns contributing from the point of view of the yellow hat. Then everyone figuratively-speaking puts on the black hat and, even if it's your idea and you think it's terrific, and it's definitely what the company should do, you've got to find fault with it. You've got to say, "Well, there's a risk early on that we'd lose some staff when we make this change, they won't be able to cope with the pace of the change." At that stage everyone's got the black hat on.

I've been in meetings with powerful egos in the room where if we'd used the six hats, we would have got a much more rounded and balanced view of the pros and cons. The problem is egos get lined up either totally for or totally against an idea. And then they use that ego – their power and their influence – to drive the idea through to implementation or to prevent it from happening.

VB: In chapter 18 you point out how important it is for small companies to think laterally and innovate rather than follow their natural tendency to incrementally fix problems, and get better and more efficient at doing what they do. Does an inability to constantly look for ways to innovate new products, services, processes, and business models explain a large percentage of small business failures?

Paul Sloane: I think small businesses have a lot of problems. Resources are a problem, cash flow is a problem, and just getting things right is often a problem.

Generally speaking the advantage a small business has is agility. You can change quickly. You try something and if it doesn't work you stop and try something else. If you're not agile as a small company then you've lost the benefit of being a small company.

If you're a small company you can change your website during the weekend and on Monday morning you've implemented a new policy, procedure, or process. You can change your pricing or try things in different ways. That's the great thing about being a small business, and that kind of flexibility is to be encouraged. A lot of employees in small businesses get frustrated with the constant and rapid change. They may ask, "Why can't we have one policy that we follow through to completion instead of chopping and changing?" But it's the ability to chop and change until you find something that works that's the great benefit of being small.

In a big company it's much harder to change a product once it's rolled it out across the globe. It's much harder to roll the product back, and make modifications.

Clayton Christensen points out in The Innovator's Dilemma that large, successful companies have difficulty innovating because they make the fatal mistake of listening to their customers. The customers say, "We like what you're doing, do more of it." While small innovative companies say, "Just a minute, there is a better way to do this." They have a new, cheaper, 'nasty' little technology which will do the task better, and they push forward. It may be a technology the large companies ignore, and thus the small company wins. Christensen gives many cogent examples of that in his book.

VB: A number of the examples you use to stress the need to think innovatively are stories about companies that lost out because they were focusing on improving what they were already good at rather than innovating. They lost big time when other companies appeared out of the blue with newer, better technologies. One example is the vacuum tube radio manufacturers in Europe and America being made obsolete by transistor radios from Japan. In these cases the older companies had considerable investment in equipment, training, materials, and marketing. How do you convince business leaders that they must prepare to abandon everything their companies do today?

Paul Sloane: By talking about major companies that have come to grief. Polaroid was a very successful company in its day, it had a great technology, and it produced wonderful cameras that produced pictures virtually instantly. At the time, it was a major innovation but they didn't adapt to digital technology. Kodak also nearly went under due to the onslaught of digital technology.

You have to be prepared for everything to change. Very often low quality new things beat out high quality old things. Encyclopaedia Britannica, which was a fantastically high quality product, was put out of business by a low quality competitor, Microsoft Encarta. In turn, Microsoft Encarta was put out of business by an amazing new business model – Wikipedia. You can't be sure of the accuracy of anything in Wikipedia, but everyone uses it and it's free. And it may be put out of business by something else.

We may assume we will still be using everything we use today in ten years time, but chances are all will have been replaced by something new. It's good to assume that every method, process, system, product, service, and business model in our line of business will have been replaced by something better and different within no more than ten years.

VB: And you want to be the one who is out in front making those changes.

Paul Sloane: Yes, you want to be aware of the fact that changes are coming. You want to try some of the changes and you want to be watching very carefully what other people are doing so you can react quickly.

You're not going to invent every change yourself – it's impossible. But you've got to be aware of what's coming. You've got to be open to things like what happened with digital camera technology or Wiki technology. And you have to ask, "How can we use this new technology, and what areas of our business will be affected?" You've got to constantly think that the methods you're using are temporary.

If Twitter is going to really take off, what should we be doing about Twitter in our business? How should we be harnessing that innovation instead of using something else such as a newsletter? Should we be doing more blogging, micro-blogging, and using social media? How can we do that to the benefit of our company and our customers?

VB: When you are speaking to business leaders or other people in business, do they get your message about lateral thinking? About the urgency of change, trying weird combinations, and changing their companies' approaches to the design of products, processes, and business practices?

Paul Sloane: I think so. It's rare for anyone to say, "I disagree with you Paul, and I think we don't need innovation. We don't need lateral thinking. We just need better execution. We've got everything we need."

Most business leaders recognize the need for innovation. They tend to be frustrated because they are not getting enough innovation in their companies, and they often don't know why. They say, "We've got great ideas, but it's taking too long for them to come to the surface." "We're not getting enough good ideas." "It's taking too long to get them to market." "We're not getting enough counter-cultural thinking in the company, we need more of it."

When you ask people within the organization what's happening they say, "We're not encouraged." "We're not empowered." "We're not trusted." "We're not given the time." "We're constantly ground down with so many things to do, and things that are coming down the pipe at us. As a result we don't have any time to try new things." In many organizations everybody is a bit frustrated and working flat out. Consequently most people are not achieving the level of innovation they need and want.

My message is generally well received and people say, "Yes, we know we need more lateral thinking, how do we do it?"

VB: When you make your presentations to groups of business people, a lot of them must tell you that what you say rings a cord with them.

Paul Sloane: Yes, generally speaking it goes down very well, and I am often invited back to speak at another conference or meeting.

I see myself as an evangelist for innovation and a story-teller about how other people do it. I give tips and hints but I'll be the first to advise it's not easy.

The skills you need to be innovative are different than the skills needed to run a slick, efficient, and high quality operation. In some ways they are pulling in different directions so you've got to be a bit schizophrenic. You've got to be both an arsonist and a fire fighter if you're going to be an innovative leader.

Part of the time you're running a tight operation and grinding out variation and errors. Other times you're running a loose operation and inviting variation, trial and error, and even failure.

VB: You recommend brainstorming as a good way to get ideas. You also mention that brainstorming is considered passé in some circles. Why do you think some consider it an outdated technique?

Paul Sloane: Because it's been around a long time and some people have had bad experiences with it. I often ask the question in a meeting, "Have you been in a brainstorm in the last three months?" Often the majority of the audience haven't been in one for the last three months. Only a handful is doing them regularly. I advise if you're not running regular brainstorms with your team you're missing a trick because they remain the single most powerful way of generating a lot of ideas quickly.

Instead of brainstorming they have a meeting to discuss and try to resolve an issue or problem, or to make a decision. They fall into all the bad habits of running a planning meeting. The manager dominates, and they focus on his particular idea. They don't explore all the options. They don't challenge. They don't use divergent thinking and then convergent thinking. They get mediocre results and wonder why.

VB: They probably using the term brainstorm but they're not really doing a brainstorming session.

Paul Sloane: That's right. They say, "Lets have a brainstorm about my idea." That's not a brainstorm. It's very easy to do it wrongly.

There are basic methods you need to follow to properly do brainstorming. Ideally you need an external facilitator. That's somebody who is only interested in managing the process because people are embedded in the content. People that have a vested interest in the content find it very difficult to facilitate the brainstorming meeting effectively. If the manager facilitates the meeting, and is the scribe and process censor at the same time, it's a formula for failure.

VB: Of the six great ways to ruin a brainstorm, which are most troublesome?

Paul Sloane: All six are bad. Diversity is a key for success in innovation and creative thinking. You don't want a group in which all members are really happy and cosy with each other, a homogenous group.

A problem we need to avoid when recruiting new employees is the tendency to look for people who are like us, people who will fit in. Have you ever heard the expression he won't 'fit in'? "We're looking for someone who will 'fit in' with the team." On the contrary, you want some mavericks, irritants, and rough diamonds who will challenge the team in a constructive way. You want constructive tension and diversity.

If the same group of people who have looked at a problem sit in a room and try to come up with new ideas, the chances are very high that they will quickly be treading the same path they've trod before. When having a brainstorm fortunately you can introduce diversity. You can include people from other departments, one or more suppliers, customers, and even people who are not associated with your industry at all.

I facilitated a brainstorm for a German company where they had a customer in the room. Because they were discussing new products and ways to delight customers, the customer contributed a lot of useful perspectives because he was coming from a different starting point.

VB: The role of challenging ideas can't be filled by brainstorm facilitators because they should be focussing on the process?

cover of Lateral Thinking SkillsPaul Sloane: They should be focusing on the process and not the content. Ideally the facilitator introduces techniques for generating ideas rather than the ideas themselves. They'll say, "We're going to reverse the problem." "We're going to do a 'random word'." "We're going to do a 'pass the parcel'." "We're going to do 'brain writing'." "We're going to do 'nominal method'." "We're going to do something else to juice it up so we can generate more ideas."

Every time someone offers an idea the facilitator writes it down and says, "Yes, what does that lead to?" "Anyone else have an idea on that?" "What does that idea suggest to you?" The facilitator is constantly prompting the group and trying to get more ideas. The facilitator is encouraging the quiet people to contribute, and when the noisy people in the group are dominating they ask them to hold off discussing their idea, with a clarification that the group will review it later when they are doing convergent thinking,

The facilitator role is to encourage a proper flow of conversation and generation of ideas, not to shape or influence the content. Sometimes they have to in order to keep the conversation flowing, which may occur more often when the facilitator is chosen from within the brainstorm group.

VB: How does your approach to lateral thinking differ from de Bono's?

Paul Sloane: Good question. I agree with his general principles of lateral thinking. Generally speaking, I'm an admirer of his. I have met him and seen him in operation. And I've read most of his books.

He would probably not agree that what I call lateral thinking puzzles are lateral thinking puzzles. The criticism he would raise, which is a valid one, is that in a lateral thinking puzzle there is only one answer whereas in real life there are many answers. I buy that argument. Nonetheless lateral thinking puzzles serve the useful purpose of using your imagination, checking your assumptions, and asking searching questions.

VB: Has the pace of innovation in the UK generally slowed as businesses and customers cope with the economic downturn?

Paul Sloane: That is a very interesting question because when you talk about the recession most people agree that innovation is the answer to coping with and emerging from it.

If I ask business leaders, "How are you going to fight your way out of the recession – is it going to be by hunkering down, spending less money, and doing less innovation or is the solution to find new ways to deliver the goods and the services that your customers need?" People agree that it's innovation.

But if you ask the acid question, "Are you spending more time and effort on innovation", the answer is generally, "No." People are cutting back significantly on discretionary spending which means fewer conferences, offsite meetings, brainstorm meetings, and workshops. They are focussing on their core business, their core customers, protecting cash, and those sorts of things. So I conclude that the talk is different from the action at the moment.

People are hesitant to focus heavily on innovation and put more effort into experiments until they see what's going to happen in the economy, their industry, and their business. When you are worried about whether you can survive the next twelve months, your agenda is dominated by a focus is on cash flow and cutting costs.

A lot of my customers who last year were still spending on innovative programs, have cut back on these programs, I'm sorry to say.

VB: Do you think the opportunity now exists for lateral thinking to be used to overhaul the world's financial systems in a positive way?

Paul Sloane: Yes, I do. I think there is great opportunity for that. The failure in the financial systems was not a failure of innovation even though innovation led to some of it. It was a failure of risk management.

Innovation involves taking risks. Every time you take a risk, you've got to review it. How bad can it be? What's the worst that can happen? Can I have a portfolio of risks that balances things out? What could happen given various scenarios? It appears the banks didn't do that. They all went along in the same way. They assumed that property prices must rise. They assumed a number of other things including outstanding loans to customers could be paid off. They assumed there would not be a major recession, which would pull everything down and stop lending between banks. Most of their mortgage-backed securities became virtually valueless. They didn't assess the risk properly so I would say that the financial problems that we've got at the moment are the result of poor risk management rather than poor innovation.

There's a great opportunity for us to remodel the whole banking sector. There's a marvellous little website in the UK called Zopa.com, which is like a modern variation of a bank. It's a matchmaker between lenders and borrowers. I've put money in. It gets split up into lots of little sections, and loaned out to lots of people who meet various strict criteria. I'm getting about 9% interest on my loans at the moment. People are borrowing and getting a better rate than they would from the banks. It's a sort of micro financing.

VB: And some may be able to qualify for a loan through Zopa but not from a bank.

Paul Sloane: Yes. Many people can't get loans from banks at the moment so they go to somewhere like Zopa – which is like a matchmaker. It's almost a dating service between lenders and borrowers. It's like BASIX which provides micro credit in India. Vijay Mahajan started this approach by giving small loans to groups of women to start small cooperatives. I think this new model of banking could take off.

Bailing out the commercial banks by pouring lots of money into them doesn't feel right. I know there are strong arguments for doing it. If they collapse the consequences will be severe, but pouring loads of money into the banks has still not eased the credit crisis. The time has come for more creative thinking.

VB: Big bonuses are continuing in the United States.

Paul Sloane: Yes, the AIG example is a real hot potato. We had the same thing over here with the Royal Bank of Scotland. In some ways the bonuses are a side issue. They're a remnant of the old culture, and they need to be swept away. I think that will be done at least by the next generation, but maybe we need an entirely new approach to banking worldwide.

VB: When we spoke in November 2008 you said you are working on a new book. Is it also about innovation, how is it coming, and do you have a projected publishing date?

Paul Sloane: The title of the book is How To Be A Brilliant Thinker. I've just finished the script, and it's going to the publisher, Kogan Page, this week. It will probably come out sometime in the fall of 2009.

It's more generic than innovation. It's about how you can use your brain to solve problems in different ways, and how you can be more brilliant in your thinking, more creative and more analytical, a better problem solver, and use different approaches. It's more of a self help book for everyone rather than an innovation toolkit for leaders.

VB: We'll look forward to reading it. How did you, as a Chartered Engineer, become interested in, and an expert about, lateral thinking skills?

Paul Sloane: I became very interested in lateral thinking puzzles. I really enjoyed solving them. I looked around and there was no book on the subject so I assembled a book, Lateral Thinking Puzzles. It was published in 1990 or 1991, and it went on to be a best seller. It sold over 300,000 copies or thereabouts.

Then I became interested in whether you could use those lateral thinking techniques in business. Could you use those questioning and imagination techniques to solve business problems? I started speaking and running workshops on lateral thinking and found a niche nobody else was in. The niche was the overlap between lateral thinking puzzles and business issues.

I found that lateral thinking was leading to innovation, and creating solutions to problems. As a result I gradually moved my emphasis to innovation.

VB: Based on your presentations and the sales of your books, would you say that your message about lateral thinking and the interest in innovation is extensive throughout European countries, or is it more prevalent in places like the UK and Germany?

Paul Sloane: I'd say there is a lot of interest throughout Europe about the need for innovation. Generally speaking it is well understood in Europe, as it is in the U.S., that we can't compete with China on price and production capabilities. We are not going to beat them by chasing after them in terms of manufacturing productivity.

The only way we are going to compete in the world is by offering services that are special in terms of design, creativity and innovation. We need high value-added services to offer the world, rather than commodities whether services or products. India and China are better places to produce commodities, and it's therefore a natural consequence that a lot of commodity production will move to the Far East. What we are going to have to do is design new products and services that add value in a way that we can. They're very good at this in Northern Europe, especially in Scandinavia. Nokia and other companies in Sweden, Finland, and Denmark are very good at it. They invest in high tech and bio tech, and they do it well.

Large parts of the USA are good at it as well. It's the Silicon Valley approach. We've seen it with large companies – the Googles, Apples, Microsofts and others. Also, in the UK it's well understood.

What's new recently is recognition that we can't solve the problems in the government sector by just spending more money. We've got to find smarter ways to do things because the demands are increasing, and the resources are severely constrained. The way to solve the problems is by doing things smarter, not by working harder. The recognition that we need more lateral thinking, cleverer ways to do things, and fresh ways of thinking is very well accepted.

VB: Any final tips on how we can develop our lateral thinking skills in order to unlock our creativity and innovation abilities?

Paul Sloane: Keep asking questions and every time you approach a situation approach it as though it's for the first time. The first time you walked into your company you asked a lot of 'dumb' questions. Why do we do it this way? What's the purpose of this? Ask the same questions again and again.

When you go into your office on Monday imagine it's the first time you've ever been there, and that you're taking over from a guy that has it all wrong. You are going to challenge everything that he or she assumed and stood for. And that person you are taking over from is you from the previous week. Be prepared to challenge everything you did and assumed as givens.

VB: And consider new employees as a precious source for challenging the status quo.

Paul Sloane: Absolutely. New employees are very valuable and we should ask them, "What looks strange to you here?" "What strikes you immediately as a process, policy, assumption, or aspects of our products and services that we should change or improve?" Generally we don't do that. We say, "This is the way we do things around here, learn to do it our way. On Tuesday you've got to get this report in and make sure you follow our format." Conform, conform, conform. Instead we should be saying, "Because you're new here and because you're an immigrant to our culture, you can see things the natives can't see. Tell us what you see that doesn't make sense to you."

VB: Don't say, here's our Policy and Procedures Manual, spend the next three days reading it.

Paul Sloane: Spend the first day reading all about us so you can conform to the way we do business. That's not a good approach.

VB: Challenge our assumptions and use lateral thinking skills. Thank you very much for talking to me today.

Conclusion:
Innovative leadership "starts with a shared vision, develops through effective communication, and delivers by empowering staff to be creative and entrepreneurial. But the team needs more than exhortation and mission statements. Creative principles, lateral thinking techniques and targeted training are all needed to make the transformation of the organization from dozing dullard to innovative champion."

Paul Sloane's bio:
Paul Sloane worked for the United Kingdom's Ministry of Defence in electronic instrumentation before joining IBM in manufacturing. At IBM he moved into sales and was part of the team which launched the IBM PC in the UK in 1982. In 1984 he joined Ashton Tate as UK Marketing Director and later became Northern European Managing Director. In 1993 he became Vice President of International Sales for Mathsoft Inc. In July 2001 he became CEO of a leading British software company.

Working through Destination Innovation, a company that he founded, Paul Sloane provides motivational presentations on innovative leadership, organizing for innovation, lateral thinking in business, and creative selling and marketing. He also offers creative leadership workshops covering problem analysis, what is impeding innovation in your business, lateral thinking methods, idea generation and evaluation techniques, and organising for innovation.

Paul Sloane is the author of The Innovative Leader: How to Inspire Your Team and Drive Creativity (2007), The Leader's Guide to Lateral Thinking Skills: Unlocking the Creativity and Innovation in You and Your Team (2006), and co-author of many books with creative thinking puzzles such Outside-the-Box Lateral Thinking Puzzles (2009), Captivating Lateral Thinking Puzzles (Mensa) (2008), Outstanding Lateral Thinking Puzzles (2005), Classic Lateral Thinking Puzzles (2004), Colorful Lateral Thinking Puzzles (2004), and Infuriating Lateral Thinking Puzzles (to be published in 2010).

Paul Sloane studied engineering at Trinity Hall, Cambridge and graduated with a first class honours degree. He is a Chartered Engineer.

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