A conversation with Paul Sloane, professional speaker and expert facilitator on innovation, lateral thinking, and creative leadership
This is part of my series on thought leaders in the innovation space. Check out the other articles here.
A man was driving down a road and passed a sign that said Speed Limit 40. He drove a little further and came to a sign that said Speed Limit 30. He drove on and came to a sign that said Speed Limit 20. He drove on, and he came to a sign that said Speed Limit 10. What did the next sign say?
Named the King of Lateral Thinking Puzzles, Paul literally wrote the book (and the website) on lateral thinking puzzles. After studying Engineering at Cambridge, Paul went on to work for IBM helping to launch the IBM PC in the UK. After working for a series of companies including a US software company called MathSoft, Paul launched his own business with the goal of helping organizations improve innovation. Paul goes around the world hosting master classes and giving talks on how to lead innovation and use lateral thinking inside a business to solve business problems.
Why lateral thinking puzzles?
Lateral thinking puzzles are strange situations in which you are given a little information and then have to find the explanation. Solving them involves a dialogue in which questions are asked to uncover more information in order to devise a solution. Paul was interested in how to use the same techniques for solving the puzzles in business, specifically in innovation.
“It’s not an innovation until you actually make it.”
“The reason you have lateral thinking in business is to come up with new ideas and new ways to do things.” The power of lateral thinking puzzles is the push to move beyond initial assumptions. “In business, we make assumptions all the time. We’re always assuming we understand things. We understand the customer. We understand the situation. We understand the employee. And we go charging in with a solution.” The reality of innovation is that we often misunderstand the premise and get the solution wrong.
“Lateral thinking is about checking assumptions and saying: What if the opposite was true? What if all the assumptions in this situation were just downright wrong?”
By challenging our assumptions we can move forward from ideation to Paul’s defining quality of innovation: implementation. “Innovation is the implementation of something new. Creativity is thinking of something new. It’s not an innovation until you actually make it.” While some say innovation should add value or be profitable, Paul believes an innovation can be a complete disaster and still be considered an innovation. “The landmine was an innovation. It’s a horrible thing that maimed lots of people, but it was an innovation.”
Innovation is not a game for juniors
“Very often, corporations that I work with are very serious about innovation and they’re quite prepared to spend money on it. They’ve got grandiose plans and then they put a team of ambitious young people onto their innovation teams because they think they’ll get lots of enthusiasm and ideas. And they do, but then that team becomes frustrated and cannot achieve its goals because it just doesn’t have the political clout or the senior sponsorship to get things done.”
Paul sees innovation as something that affects the entire organization — not a process, but a culture. It requires investment and leadership from the very top. Rather than a one-time fling, innovation is a continuous pursuit. “It is very difficult to have an innovative organization if the leader is not absolutely committed to it because it’s a leadership issue. It’s not a minor process change, a suggestions scheme, and one or two razzmatazz brainstorm meetings. What you need is a serious commitment. You need to change people’s objectives, and you need to change the mission, the communication, and really get behind it. You need to empower people to try things.”
“One of the greatest enemies of innovation is busy-ness.”
Empowering people to try things can be difficult in its own right in a world where staff are, in a word, busy. “One of the greatest enemies of innovation is busy-ness, people working flat out on the day job. Today they’ve got no time to try new things. They are not rewarded or encouraged to try new things because if they spend time on that, it means they’ll miss their current quarterly objectives.”
Identifying the barriers to innovation is a good place to start in overcoming factors like busy-ness. “If you’ve got serious impediments which are built into the system down below, you can’t just have a layer of innovation at the top. The best thing is to really radically think about the culture, structure, and processes in the organization and tackle some of the big things that [are] stopping employees trying new initiatives.”
Regulation and existing revenue streams aren’t barriers to innovation
One common barrier cited in innovation across a variety of fields is regulation. Rather than a problem, Paul sees regulation as “a bunker to hide behind.” Instead of giving up, he suggests seeking out regulators and pitching ideas. Regulation is a reality for many industries, but regulation doesn’t mean that all aspects of an organization’s operations and revenue streams are subject to regulation. “The regulator might regulate how you promote your medications and drugs, but he doesn’t say how you recruit people for clinical trials or how you train people. The regulator has a certain purview, a certain remit, and within that field, he or she can restrict you. But outside of that there are lots of different things you can try.”
Approaches like Eric Ries’ Minimum Viable Product (MVP) are useful even in highly regulated industries. Paul suggests creating an MVP and starting a pilot. Present the plan to regulators or whatever approval body that applies and find out if the idea is something they could support. “The key thing with the regulator is to sell the benefits, as with anybody. Share how you think this innovation will save money for the hospitals and deliver better outcomes for patients. Every regulator is going to say ‘Oh I’m interested — tell me more.’”
“There are natural antibodies inside any organization which say we’ve got to protect the current revenue flow.”
Diverting resources from current revenue streams is another common difficulty when investing in innovation. “There are natural antibodies inside any organization which say we’ve got to protect the current revenue flow. We’ve got to protect the main products that are paying the rent and paying all our wages. They naturally resist new innovative or cannibalizing efforts which often don’t look very promising.” Paul looks to Clayton Christensen’s The Innovators Dilemma for guidance in this area.
In discussing the evolution of disk manufacturing, Clayton Christensen points out that every new generation was produced by a new entrant into the marketplace. The old incumbents of the industry were passed up because they struggled to change their format and try something new. “Typically what’s new initially looks nasty and cheap and crappy and ineffective. When it first comes around, the existing product is much better. The BlackBerry was a very good phone with superb e-mail messaging services and very good security. The touchscreen phones didn’t look as good initially, but eventually, they just killed the BlackBerry.”
The customer isn’t always right
The tools that improve the bottom line don’t always facilitate the evolution that is the goal of innovation. One piece of counterintuitive advice from Christensen: You can’t always rely on listening to your customers. “It seems a crazy thing to say. I had to read it twice when I read it first in his book. Up to a point, he’s right because the customers will mislead you. They say: ‘We like your product. We think it’s good. Keep doing it. Give us more of it. Give us a better version. Give us a bigger version or a left-handed version or this in German.’ Basically, they’ll say just develop your current product. They won’t say throw it away and try something new and unproven, but the new unproven technology is what comes along and kills you sooner or later.”
“The new unproven technology is what comes along and kills you sooner or later.”
The difficult truth is that sometimes even innovation doesn’t save an organization. Paul references the story of Kodak and their struggle to evolve as the world moved from film to digital photography. “They weren’t complacent. They tried lots of initiatives. They changed the CEOs. They tried diversifying. They did all sorts of things, but it’s not easy to say exactly what they should have done that would have been that much smarter.”
Replacing their primary revenue stream proved to be an obstacle Kodak could not overcome despite embracing change and new ideas.“Sometimes your current business model is just outdated, and the time has come for you as a species to become extinct. It’s just a natural evolution thing. It’s accelerated Darwinism in the marketplace, and sometimes that’s the end of the road. Just innovating for the sake of innovating isn’t the right answer. Somebody’s come along with a much better business model and they’ve set it up. If you’re a big lumbering taxi firm and Uber comes along you know you’re in trouble.”
“Sometimes your current business model is just outdated, and the time has come for you as a species to become extinct.”
For some companies, acquisition provides a way forward. “Acquisition is one route forward if you can do it well. It’s not easy because the big culture tends to kill a small culture. But there are ways to do it. If you can empower the owners of the acquired company and keep them motivated, it can work. So it is a valid strategy to acquire innovation rather than develop yourself.”
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There’s no perfect measure
When it comes to measurement, the number of new ideas implemented is one that drives at the core of how Paul defines innovation. He suggests looking at a series of input, output, and process metrics. Ultimately, though, the answer to what you should measure is: It depends. “There’s no perfect measure. It depends on what business you’re in and what’s important to you. So you might say one big innovation that makes 10 billion dollars is better than a hundred little innovations that make a million dollars each. Of course, it is dangerous to bet on one big innovation.”
One way to evaluate the strength of an innovation program is its ability to maintain commitment from board-level leadership. Paul encourages leaders to embrace the reality that competitors in Japan and China are really innovative, so complacency won’t work. Leaders have to adopt an attitude to keep trying even when things don’t work. Keep rolling the dice and keep making bets.
Full commitment from leadership means sticking with it even when short-term concerns get in the way. “We’ve had this customer complaint with our product recall. Somebody’s quit. We’ve got the regulator on our back. We’ve got the strike. You know there’s all sorts of things getting in the way of innovation because innovation is a long-term process. And the ideas you come up with might not yield results this financial year and you’re under pressure from your shareholders to deliver this financial year.”
While it’s difficult to fit exploratory work into what seem like artificial and arbitrary deadlines like quarterly reporting, Paul believes those goal posts are important. “I do believe in quarterly targets because the future is made up of an infinite number of quarters.”
These targets highlight the importance of keeping the lights on in facilitating innovative work. “If you take your eye off the ball on the day job then you’re in trouble. You can’t just think about the future because you won’t [last] long enough to see it. You’ll be replaced. So you’ve got to look after the current business and the current customers. You’ve got to take care of the customers and employees. Keep them motivated and happy and buying and working and all the rest of it. But you have to invest in the future as well. And it’s that conflict which makes it so tricky.”
Paul views Google’s approach of providing every employee with a percentage of time to pursue new ideas as a worthy goal. “I think that’s the ideal — an organization where everybody is empowered and feels that it’s part of their job to find new ways to do things. Everyone feels entrepreneurial. Now you can’t do that everywhere. If you’re in a hospital you can’t tell everyone to try new things all the time. Some people have got to just do their job. And in some circumstances having an innovation incubator, a separate unit [with] a rotating team of people as an approach is better than doing nothing. There isn’t one size fits all.”
Small bets and loyal rebels
While Paul encourages organizations to get comfortable with placing bets in innovation, he advises against placing all bets on one initiative. His blog post on avoiding the Iridium moment illustrates the danger in taking a big gamble on one huge idea. “Motorola launched a company called Iridium which planned to place 77 satellites around the earth in order to provide mobile telephone coverage. It was an ambitious plan which failed spectacularly. It cost the investors five billion dollars and virtually killed the company.”
Harkening back to Paul’s fondness for lateral thinking puzzles, the Motorola story provides a case study on the importance of challenging assumptions.
“It was a massive gamble based on out-of-date assumptions. The market was moving so quickly that, by the time they implemented it, things had moved on. Technology had moved on and there were better, smarter ways to do it.”
According to Paul, the size of the bet is important. “My advice is if you can avoid it don’t place one huge bet. Place lots of little bets and see what works and what doesn’t. Agility is the key and trying new things. You need an environment where everyone is empowered to experiment in order to find better ways to do things.”
“Place lots of little bets and see what works and what doesn’t. Agility is the key and trying new things.”
He suggests that organizations form teams of, what he calls, loyal rebels. “Loyal rebels are people who believe in the goals of the organization but are dissatisfied with the way you’re doing things. They’re possibly trying to find better ways to meet the needs of customers. You need to encourage that. You don’t need people who blindly follow the leader and do what they’re told.”
The right leadership makeup is another useful component for an organization seeking to innovate and survive in the current marketplace. He applauds companies like Facebook and Novartis for their diverse leadership teams. “I like organizations that have a very diverse leadership team with a lot of different nationalities. I think that’s a strength. You need a team which is very open-minded and intellectually challenging. You need a bit of a contest of brainy people who are always looking for new adventurous things to do where they’re encouraged to experiment.”
“You need a very confident leader who’s prepared to fly slightly out of control.”
In addition to diversity, leaders need to possess the confidence to release control. “You need a very confident leader who’s prepared to fly slightly out of control. He or she is not trying to micromanage people or tell them what to do. They’re empowering everyone to try new things, and some of the things they try just don’t work. But they treat it as a learning experience and keep moving on. Some organizations are really trying hard, but they’re so tightly controlled, so tightly managed that it’s really hard for them to liberate people to try things.”
So after seeing signs for Speed Limit 40, 30, 20, and 10, what was the next sign the man saw? The answer to Paul’s puzzle is this: “The next sign said quite simply: Welcome to Speed Limit.” If you made the, perfectly reasonable, assumption that the speed limit sign was in miles per hour, you’re not alone. However, “Speed Limit” is the name of an imaginary small town that Paul conjured up to make his point. “Because your brain immediately assumes you understand what speed limit is, you don’t consider the entirely different possibility and, therefore, it’s almost impossible to solve.”
By challenging assumptions and embracing the learning process with the fully committed support of a diverse leadership team, organizations can build a culture in which they confidently place small bets on ideas that manifest into innovations to better our world.
If you want to read my other articles about innovation experts and practitioners, please check them all out here.
