Solving Hard Business Problems with Lateral Thinking: Overcoming the Brain’s Biases
- Renee Roth
- Feb 9
- 4 min read
Business leaders and entrepreneurs constantly face tough decisions—market downturns, operational inefficiencies, and fierce competition. Yet, the biggest challenge isn’t always the problem itself; it’s how our brains process the problem. Psychology tells us that our minds aren’t always wired to solve complex challenges optimally. We tend to overemphasize risks, default to easier solutions, and resist unconventional thinking. This is where lateral thinking comes in—a method of problem-solving that breaks free from rigid, linear thought processes to uncover innovative solutions.
Why Our Brains Resist Hard Problems
Before diving into lateral thinking techniques, it’s crucial to understand why solving difficult business problems is inherently challenging.
The Brain Overweights Negative Experiences
Neuroscience research shows that negative experiences—such as a failed investment, a lost client, or a downturn in revenue—carry more psychological weight than positive ones. This negativity bias makes business leaders more risk-averse, often leading to overly cautious decisions that stifle innovation.
We Fear Losses More Than We Value Gains
According to prospect theory (Kahneman & Tversky), losses psychologically outweigh equivalent gains. This means a CEO may resist a bold strategy that could generate massive growth simply because the risk of failure feels disproportionately greater. This fear of loss keeps businesses stuck in outdated models rather than pursuing disruptive innovation.
We Default to Simpler Questions
When posed with a complex question like “How do we increase profitability in a declining industry?” the brain often replaces it with a simpler question, such as “How can we cut costs?” This cognitive bias, called substitution bias, prevents deeper exploration of more creative solutions.
How Lateral Thinking Overcomes These Biases
Lateral thinking helps bypass these psychological traps by shifting perspectives, challenging assumptions, and generating creative solutions. Here’s how businesses can use it:
1. Reframe the Question
Since our brains tend to simplify complex questions into easier ones, force yourself to ask a different question—one that shifts the perspective.
Instead of: "How can we compete with this market leader?"
Ask: "How can we change the rules of the game?"
Example: When Cirque du Soleil launched, instead of competing directly with traditional circuses (which were declining), they redefined the experience by blending circus acts with theater, targeting an entirely new audience.
2. Reverse the Assumptions
Our decisions are shaped by existing assumptions, many of which are unquestioned and outdated. Lateral thinking forces us to flip them.
Instead of assuming "Customers want cheaper products,"
Challenge it with "What if customers want premium, exclusive access?"
Example: Apple’s iPhone disrupted the market not by competing on price but by redefining the smartphone as a luxury, experience-driven device.
3. Introduce Random Stimuli
When a solution isn’t obvious, the brain benefits from unexpected connections. Lateral thinking can be sparked by introducing random elements into brainstorming sessions.
Try this exercise: Open a book or website and select a random word. Now, force yourself to relate that word to your business challenge. This unexpected association often triggers new perspectives.
Example: A travel company struggling with customer engagement might land on the word “theater” and develop immersive, storytelling-based travel experiences instead of traditional tours.
4. Use Provocation & Absurdity
Sometimes, the most effective way to break mental barriers is by deliberately proposing absurd solutions. These ideas may seem unrealistic at first, but they often lead to breakthrough thinking.
Ask: “What if we did the exact opposite of what everyone expects?”
Ask: “What if money, time, or resources weren’t a constraint?”
Example: Tesla didn’t ask, “How can we make a better gas-powered car?” Instead, they asked, “What if we built cars that never needed gas?” This radical shift led to a revolution in electric vehicles.
5. Apply the ‘Six Thinking Hats’ Method
Developed by Edward de Bono, this technique forces teams to approach problems from six different perspectives:
White Hat: Focus only on facts and data.
Red Hat: Consider emotions and instincts.
Black Hat: Identify risks and flaws.
Yellow Hat: Focus on optimistic outcomes.
Green Hat: Generate creative and alternative solutions.
Blue Hat: Oversee the thinking process and ensure all angles are explored.
Using this structured approach prevents businesses from getting stuck in negative or fear-driven thinking, which is common when facing high-stakes problems.
Real-World Application: A Company That Used Lateral Thinking
A famous example of lateral thinking in business is Netflix. When Blockbuster dominated the home movie rental market, Netflix didn’t ask, “How can we improve DVD rental stores?” Instead, they reframed the problem: “How can people access movies without ever going to a store?” This led to mail-order rentals, and later, the streaming revolution.
Blockbuster, trapped by loss aversion and negativity bias, dismissed this approach, fearing lost revenue from late fees. Their inability to break conventional thinking led to their downfall.
Conclusion: Thinking Sideways is Thinking Forward
Hard business problems will always exist, but the way we approach them determines whether we stagnate or innovate. Lateral thinking counteracts our brain’s biases, helping us break out of predictable patterns and discover bold, game-changing solutions.
So next time you’re facing a difficult challenge in your business, pause before defaulting to the “safe” answer. Instead, ask:
What assumptions can I reverse?
What if I asked a different question?
How can I introduce randomness or absurdity to spark new ideas?
The best solutions don’t come from thinking harder—they come from thinking differently.
