The Thinking Hack That Built Billion-Dollar Companies

A software engineer stared at a performance problem that stumped his entire team. Traditional solutions weren't working. Then he grabbed a random word from a dictionary—"beehive"—and within hours had designed a breakthrough algorithm that saved his company. A marketing manager facing budget cuts asked one backwards question and created the most successful campaign in company history. An airline startup ignored every industry rule and achieved 47 consecutive years of profitability.

These breakthrough solutions didn't come from working harder or thinking faster. They came from lateral thinking—a systematic approach to finding solutions hiding in plain sight. By the end of this article, you'll master this complete system for approaching problems from unexpected angles and generating breakthrough solutions when conventional thinking hits dead ends.

What is Lateral Thinking?

Your team has analyzed the data, brainstormed for hours, and tried every obvious solution. Nothing's working. The problem isn't that you're not thinking hard enough—you're all looking in the same place. Then someone shifts perspective entirely, and suddenly breakthrough solutions appear that were invisible moments before.

This is lateral thinking in action—Dr. Edward de Bono's systematic method for changing your perceptions and breaking out of familiar thought patterns. As he explained it, "To find breakthrough solutions, you have to change where you're looking, not just how hard you're looking."

"Most people solve problems by getting better at what they already know. Breakthrough thinkers solve problems by discovering what they don't know they don't know."

Lateral thinking isn't random creativity or lucky guesses. It's a systematic approach that successful innovators use to breakthrough mental barriers. Dyson revolutionized vacuum cleaners by asking "what if we made the dirt visible instead of hidden?" Dollar Shave Club disrupted the razor industry by wondering "what if we eliminated the retail middleman entirely?"

The difference between conventional and lateral thinking is this: conventional thinking improves the candle to light a room better, while lateral thinking invents the light bulb. But understanding the difference means nothing if you don't grasp why this skill has become absolutely critical for survival in today's world.

For a visual demonstration of these lateral thinking principles in action, watch our companion video "How To Master Lateral Thinking Skills," releasing this Wednesday, where we walk through each technique with real business scenarios and live problem-solving examples.

Why Lateral Thinking Matters Now

You've seen lateral thinking create billion-dollar breakthroughs, even if you didn't recognize it at the time. Airbnb asked "what if strangers' homes became hotels?" and created a $75 billion company. Uber wondered "what if anyone could become a taxi driver?" and disrupted transportation globally. Tesla challenged "what if cars didn't need gas stations?" and sparked the electric vehicle revolution.

While these companies were reimagining entire industries, their competitors were perfecting yesterday's solutions. Hotels improved amenities while Airbnb eliminated hotels entirely. Taxi companies enhanced dispatch systems while Uber made everyone a potential driver. Auto manufacturers improved fuel efficiency while Tesla made fuel irrelevant.

In today's rapidly changing world, the old approach of incremental improvements isn't enough. While everyone else makes slightly better versions of existing solutions, lateral thinkers are reimagining entire problems. They're not just succeeding—they're making conventional approaches obsolete.

The cost of not developing these skills? You'll spend your career playing catch-up, solving yesterday's problems with yesterday's methods, while opportunities pass you by. Yet most professionals remain trapped in thinking patterns that guarantee they'll miss the very breakthroughs that could transform their results.

The Hidden Cost of Linear Thinking

In today's fast-moving world, we've become trapped in linear thinking patterns that limit our problem-solving potential. We see this everywhere—companies launching the "next version" of existing products instead of reimagining what's possible, professionals applying the same solutions to different problems, and entire industries stuck in decades-old approaches.

The Real Cost: HP's $30 Million Lesson

During my time in corporate leadership at HP, I witnessed firsthand how organizations get caught in incremental thinking traps. When HP launched the MediaSmart Server—essentially a home server for consumers—I had serious reservations. In a heated face-to-face argument with Steve Ballmer in the HP boardroom, I questioned the fundamental premise: what consumer actually wanted a "server" product in their home?

HP resisted any lateral thinking approaches to the product concept. Leadership preferred following whatever Microsoft and Intel were willing to fund, rather than stepping back to ask different questions like "What if we stopped calling it a server?" or "What if we focused on what families actually wanted to do with their media?" The company chose incremental improvements to existing server technology over reimagining the entire problem of home media management.

This comfort with partner-directed thinking, while avoiding the unknown of original innovation, cost HP not just this product opportunity but positioned them as followers rather than leaders in the consumer technology space.

The result? We miss breakthrough innovations hiding in plain sight, solve symptoms instead of root problems, and watch competitors who think differently capture markets we never saw coming.

"You can't solve tomorrow's problems with yesterday's thinking patterns."

Most organizations and individuals know they need to think differently. They just don't know how to systematically break free from the mental patterns that limit them. That's exactly what the next section reveals.

How To Master Lateral Thinking

Mastering lateral thinking happens in stages, just like learning any valuable skill. We'll start with the foundational mindset that makes everything else possible, then build through four core techniques that take you from beginner breakthroughs to advanced mastery. The beauty of this system is that you can start wherever you are and see immediate results while building toward long-term expertise.

What separates this approach from generic creativity advice? Each technique builds on the previous one, creating a compound effect that transforms how you approach problems permanently.

Foundation: Develop the Lateral Mindset

Before you can master the techniques, you need to embrace the lateral thinking mindset. This means accepting that your first instinct is probably not the best solution, that "impossible" often means "not yet discovered," and that the best answers might come from completely unexpected directions.

Mindset Shifts for Mastery:

• Suspend Judgment: Ideas don't have to be good to be useful—they just need to move your thinking
• Embrace Absurdity: The most ridiculous ideas often contain hidden insights
• Question Everything: Every assumption is negotiable, every rule can be bent
• Value Movement Over Truth: Sometimes wrong ideas lead to right solutions

The mindset alone won't solve your problems. But it creates the mental environment where breakthrough solutions can emerge. Once you've developed this foundation, you're ready for the first technique that will immediately change how you approach challenges.

Level 1: Break Your Mental Patterns (Beginner)

Your brain loves efficiency—it creates mental shortcuts and patterns that work most of the time but blind you to new possibilities. This first technique deliberately disrupts these patterns in small ways that create big results.

Steps to Break Your Patterns:

1. Change Your Physical Environment: When facing a tough problem, move to a different location. Your brain associates certain thought patterns with specific environments.
2. Alter Your Routine: Take a different route to work, use your non-dominant hand for simple tasks, or change when you tackle challenging problems.
3. Question Your Assumptions: Write down three assumptions you're making about your current challenge, then ask "what if the opposite were true?"
4. Time-Box Impossibilities: Spend 10 minutes seriously considering solutions that seem impossible. Often, "impossible" just means "we haven't figured out how yet."

Southwest Airlines: Breaking Aviation's Sacred Patterns

When Southwest Airlines launched in 1971, the aviation industry followed rigid patterns: hub-and-spoke routes, assigned seating, meal service, premium amenities, and competing primarily with other airlines. Southwest's founders broke these patterns by changing their environment—literally studying bus transportation instead of airline operations.

By observing Greyhound's point-to-point model, they questioned core aviation assumptions: "What if airlines operated more like buses?" This pattern-breaking led to revolutionary changes: eliminating assigned seating, removing meal service, using secondary airports, and focusing on 15-minute turnarounds. Instead of trying to be a better airline within existing patterns, they created entirely new operational frameworks.

The result? Southwest achieved 47 consecutive years of profitability while forcing major carriers to create their own low-cost subsidiaries. Their success came not from perfecting existing airline practices, but from breaking free of industry thought patterns entirely.

Pattern-breaking works because it forces your brain out of automatic mode. But what happens when you want to accelerate this process dramatically? The next technique introduces an element so random that breakthrough insights become almost inevitable.

Level 2: Random Input Technique (Intermediate)

One of the most powerful lateral thinking techniques costs nothing and works anywhere—the random word method. This technique forces your brain to make new connections by introducing completely unrelated elements into your problem-solving process.

Steps for Random Input:

1. Define Your Challenge: Write your problem in one clear sentence.
2. Generate Random Input: Open any book to a random page and point to a word, or use a random word generator online.
3. Force Connections: Spend 15 minutes finding ways to connect this random word to your challenge. No connection is too weird.
4. Extract Insights: Look for useful ideas within even the strangest connections.
5. Build on Breakthrough Moments: When something clicks, explore that direction further.
6. Advanced Variation: Use random images, sounds, or even random combinations of two unrelated words.

Example: If your random word is "bridge" and your challenge is improving customer service, you might explore how bridges connect separate areas—leading to the insight of creating liaison roles between departments.

3M's Billion-Dollar Accident

In 1968, 3M scientist Dr. Spencer Silver was attempting to create a super-strong adhesive for aerospace applications. Instead, he accidentally created a weak, pressure-sensitive adhesive that could be easily removed without leaving residue. For years, this "failed" adhesive sat unused—until Art Fry made an unexpected connection.

Fry sang in his church choir and was frustrated by bookmarks falling out of his hymnal. During a 1974 seminar where Silver presented his adhesive discovery, Fry made a random connection between Silver's "weak" glue and his bookmark problem. The random collision of a failed adhesive and falling bookmarks sparked the idea for repositionable sticky notes.

After 5,127 prototypes and 12 years of development, Post-it Notes launched nationally in 1980. Today, 3M produces over 50 billion Post-it Notes annually, generating more than $1 billion in revenue. This billion-dollar breakthrough came not from planned innovation, but from connecting two seemingly unrelated elements: a "useless" adhesive and a choir member's frustration.

Random inputs work because they bypass your brain's tendency to look for solutions in familiar places. But when you want to challenge the very foundations of a problem, you need a technique that questions everything you think you know.

Level 3: "What If" Scenarios (Advanced)

Transform problems by systematically challenging their fundamental premises. This technique helped Southwest Airlines revolutionize aviation by asking "What if flying was more like taking a bus?" But mastering it requires pushing beyond comfortable questions into territory that feels genuinely uncomfortable.

Steps for "What If" Thinking:

1. List Core Assumptions: Identify the basic assumptions underlying your challenge.
2. Reverse Each Assumption: "What if customers paid after receiving service instead of before?"
3. Exaggerate to Extremes: "What if this process took 10 times longer? 10 times faster?"
4. Remove Constraints: "What if budget/time/resources were unlimited? What if they were severely limited?"
5. Chain "What Ifs": Take your best "what if" and ask "what if" about that scenario
6. Find the Unexpected Value: Look for insights within even absurd scenarios.

Netflix's Self-Destruction Strategy

In 2007, Netflix was successfully dominating the DVD-by-mail market with 7 million subscribers and a proven business model. The entertainment industry assumed that physical media was king—customers wanted to own movies, rental stores provided valuable curation, and broadband was too slow for quality video streaming.

But Netflix applied "what if" thinking to challenge every assumption: "What if customers didn't want to own movies, just access them?" "What if waiting for mail delivery was actually a barrier, not a service?" "What if broadband became fast enough for instant streaming?" Most radically: "What if we cannibalized our own successful DVD business?"

These questions led Netflix to launch streaming in 2007, initially as a free add-on to DVD subscriptions. While competitors like Blockbuster dismissed streaming as a niche market, Netflix was testing their "what if" scenarios in real time. By asking what would happen if physical media became obsolete, they prepared for a future others couldn't imagine.

The result? Netflix's streaming service now has over 240 million global subscribers and generates $31 billion annually, while Blockbuster filed for bankruptcy. Netflix's willingness to challenge their own successful assumptions transformed them from a DVD company into the world's leading entertainment platform.

"What if" thinking reveals possibilities hidden within your assumptions. But the most counterintuitive breakthroughs often come from doing exactly the opposite of what seems logical—which brings us to the final technique.

Level 4: Opposite Thinking (Expert)

Sometimes the best solutions come from doing exactly the opposite of what seems logical. This technique has led to breakthrough innovations like Dyson's transparent dirt compartments (making the dirty visible) and IKEA's flat-pack furniture (making customers do the assembly).

Steps for Opposite Thinking:

1. Identify Standard Approaches: List how your industry/situation typically handles similar challenges.
2. Reverse Each Approach: Write the opposite of each standard method.
3. Explore the Reversals: Spend time seriously considering how these opposites might work.
4. Find Hidden Benefits: Look for unexpected advantages in seemingly backward approaches.
5. Combine Insights: Merge useful elements from opposite approaches with conventional wisdom.
6. Meta-Opposite: Apply opposite thinking to your opposite thinking results.

IKEA's "Terrible" Customer Service Revolution

In 1956, IKEA designer Gillis Lundgren faced a practical problem: his newly designed Lövet coffee table wouldn't fit in his Volvo station wagon for a photo shoot. The furniture industry's standard approach was delivering fully assembled furniture to customers' homes—a service that required extensive logistics, storage space, and high delivery costs.

Lundgren applied opposite thinking: instead of delivering assembled furniture, what if customers took home unassembled furniture and did the assembly themselves? This reversed every industry assumption: instead of convenience, customers would do work; instead of immediate use, they'd invest time; instead of professional assembly, they'd follow instructions.

The "backward" approach revealed hidden benefits: dramatically reduced shipping costs, minimal storage requirements, lower retail prices, and surprisingly, customer satisfaction from the achievement of assembly. What seemed like terrible customer service became IKEA's core competitive advantage.

Today, IKEA generates over €38 billion annually, with flat-pack furniture becoming an entire industry standard. The company that made customers do the work became the world's largest furniture retailer by doing the opposite of what everyone else considered good business practice.

You now have four powerful techniques that can transform how you approach any challenge. But knowing the techniques and mastering them are different things entirely. The next section gives you a practical way to accelerate your skill development while having more fun than should be legal.

Practice Games: Build Your Skills Through Play

You now have four powerful techniques, but knowing them and mastering them are different things entirely. These practice games will accelerate your skill development while making the process genuinely enjoyable. Play them solo when you need a thinking breakthrough, or grab a colleague when you want to tackle challenges together.

Game 1: The Escalation Challenge

Perfect for pushing "what if" thinking to breakthrough levels.

How to Play:

• Start with any real problem you're facing
• Propose a "what if" scenario that addresses it
• If playing with others, take turns making each suggestion more extreme than the last
• If playing solo, keep pushing your own ideas further
• Don't stop until you reach genuinely absurd territory
• Victory: When you find yourself saying "that's completely impossible... but wait..."

Example progression: "What if customers never had to wait?" → "What if they were served before they even arrived?" → "What if we predicted what they wanted before they knew they wanted it?"

Game 2: The Reverse Engineering Game

Turn conventional wisdom upside down to find hidden opportunities.

How to Play:

• List how your industry normally handles your type of challenge
• Systematically reverse each standard approach
• Explore what these backwards approaches might accomplish
• Look for unexpected benefits in seemingly terrible ideas
• Build on any reversal that sparks genuine interest

Example: Customer service helps after problems arise → What if we created problems for customers to solve? → What if customers taught each other? → That's actually peer-to-peer support communities.

Game 3: Random Connection Challenges

Force breakthrough insights using whatever's around you.

How to Play:

• Clearly state your problem
• Grab three random objects from your environment (or use a random word generator)
• Spend 15 minutes connecting each object to your challenge
• No connection is too weird—force relationships that don't make sense
• Extract practical insights from even the strangest connections

Example: Problem = "Improve team meetings" + Objects = coffee mug, phone charger, houseplant = "What if meetings had warmth like mugs, gave energy like chargers, and grew stronger with regular attention like plants?"

Game 4: The Assumption Hunt

Uncover and challenge the hidden beliefs limiting your solutions.

How to Play:

• Write down your challenge
• List every assumption you're making about it (aim for at least 10)
• Pick the three assumptions that feel most "obviously true"
• Spend time seriously considering what would happen if each assumption were completely wrong
• Look for solutions that emerge when those assumptions disappear

Pro Tip: The more ridiculous your ideas become, the more your brain breaks free from conventional patterns. Embrace the absurd—your breakthrough insights are hiding in the seemingly impossible ideas.

This playful approach to skill building works because it removes the pressure that often blocks creative thinking. But what happens when you master these techniques and integrate them into your professional life?

To see these practice games in action and learn advanced variations, check out our upcoming video "How To Master Lateral Thinking Skills," premiering Wednesday, where we demonstrate each game and show how professionals use them to solve real workplace challenges.

The Transformation That Awaits

The benefits of mastering lateral thinking skills compound dramatically over time. Companies investing in lateral thinking training see documented ROI ranging from 5:1 to 20:1, with organizations like DuPont saving $30 million annually from single lateral thinking insights. But the real transformation happens at the individual level.

At the beginner level, you'll notice immediate improvements in creative problem-solving and fewer moments of feeling "stuck." While your colleagues remain trapped in conventional approaches, you'll consistently find solutions they miss. Research shows individuals with enhanced creative problem-solving capabilities demonstrate 25% performance increases compared to their peers.

As you advance through the intermediate and advanced levels, something more significant happens. Colleagues will start coming to you when they face challenging problems, recognizing your ability to see solutions they miss. You'll develop what I call "innovation confidence"—the unshakeable belief that creative solutions exist for every problem, you just need the right approach to find them.

But the real transformation happens as you approach mastery. You'll develop the reputation as someone who finds solutions where others see only problems. In an economy that rewards innovation and creative thinking, this becomes your sustainable competitive advantage. General Electric's creativity training resulted in 60% more patentable concepts, while participants in corporate lateral thinking programs show 300% increases in viable ideas compared to non-participants.

"Innovation confidence isn't believing you're creative—it's knowing that creative solutions exist for every problem."

More importantly, you'll stop seeing problems as barriers and start seeing them as puzzles with hidden solutions waiting to be discovered. This mindset shift alone transforms how you approach your career, relationships, and personal goals.

The question isn't whether you can develop these skills—you can. The question is whether you'll commit to the practice that makes mastery inevitable.

Your Mastery Path Forward

Lateral thinking mastery isn't a mystical talent—it's a systematic skill that improves with deliberate practice. Start with the foundational mindset, then work through the levels at your own pace. Even "failed" lateral thinking exercises strengthen your creative problem-solving abilities because they're building new neural pathways.

To see this complete lateral thinking framework in action, watch our deep-dive video 'How To Master Lateral Thinking Skills', releasing Wednesday, where we demonstrate each technique through real business scenarios.

Remember, the goal isn't to replace logical thinking—it's to develop complementary lateral thinking skills that activate when conventional approaches hit their limits. The world needs more people who can think around corners, find solutions in unexpected places, and break through the limitations that stop others.

While your competitors continue doing what they've always done, you'll be finding solutions they never imagined existed. With these tools and consistent practice, you'll become one of the breakthrough thinkers who shapes the future instead of reacting to it.

This article first appeared on Studio Notes. To ensure early access to future articles, subscribe to Studio Notes on Substack.

Endnotes

1. De Bono, Edward. Lateral Thinking: Creativity Step by Step. Harper & Row, 1970. Edward de Bono coined the term "lateral thinking" in 1967. Academic analysis: Phillips, D.C. "Creative and Lateral Thinking: Edward de Bono." Encyclopedia of Educational Theory and Philosophy, SAGE Publications, 2014. https://www.researchgate.net/publication/304088397_Creative_and_Lateral_Thinking_Edward_de_Bono
2. Edward de Bono official website. Thinking as a Skill. https://www.debono.com
3. Southwest Airlines Reports 47th Consecutive Year of Profitability. Southwest Airlines Investor Relations, January 23, 2020. https://www.southwestairlinesinvestorrelations.com/news-and-events/news-releases/2020/01-23-2020-112908345
4. Schleckser, Jim. "Why Southwest Has Been Profitable 45 Years in a Row." Inc.com, June 5, 2020. https://www.inc.com/jim-schleckser/why-southwest-has-been-profitable-45-years-in-a-row.html
5. "Southwest Airlines is under attack—and it's something founder Herb Kelleher always worried about." Fortune, August 24, 2024. https://fortune.com/2024/08/24/southwest-airlines-is-under-attack-and-its-something-founder-herb-kelleher-always-worried-about/
6. Silver, Spencer. U.S. Patent for pressure-sensitive adhesive. 3M Company, 1968. Development described in: "Spencer Silver and Arthur Fry – In Search Of An Application." The Chemical Engineer. https://www.thechemicalengineer.com/features/cewctw-spencer-silver-and-arthur-fry-in-search-of-an-application/
7. "Art Fry & Spencer Silver." Lemelson Center for the Study of Invention and Innovation, MIT. https://lemelson.mit.edu/resources/art-fry-spencer-silver
8. "Post-It Note inventor Spencer Silver dies at 80." The Washington Post, May 16, 2021. https://www.washingtonpost.com/local/obituaries/spencer-silver-dead/2021/05/13/5ad35534-b406-11eb-ab43-bebddc5a0f65_story.html
9. "History of Post-it® Notes." Post-it Brand, 3M Company. https://www.post-it.com/3M/en_US/post-it/contact-us/about-us/
10. Netflix launched streaming on January 16, 2007. "History of Netflix- Founding, Model, Timeline, Milestones (2025)." VdoCipher, June 16, 2025. https://www.vdocipher.com/blog/2017/06/netflix-revolution-part-1-history/
11. "Netflix Revenue and Usage Statistics (2025)." Business of Apps, February 21, 2025. https://www.businessofapps.com/data/netflix-statistics/
12. "Netflix Subscribers Statistics 2025 (Growth & Demographics)." Demand Sage. https://www.demandsage.com/netflix-subscribers/
13. DuPont lateral thinking savings: "A lateral thinking employee at DuPont eliminated nine steps in their manufacturing process for Kevlar and saved the company 30 million dollars a year." ROI and Testimonials, De Bono Group. http://www.debonogroup.com/services/roi-reports-and-testimonials/
14. "Edward de Bono's Course in Creativity™ Workshop." Indigo Training. Cites David Tanner, former Technical Director of DuPont. https://www.indigobusiness.co.uk/Workshop/de-bonos-course-in-creativity
15. "Creativity and Innovation Skills Training ROI." Creativity at Work. Reports DuPont's multi-million dollar savings from creativity training. https://www.creativityatwork.com/ideas-are-the-currency-of-the-new-economy-numbers-tell-the-story/
16. IKEA Lövet table story: "Constraints Inspire Creativity: How IKEA Started the 'Flatpack Revolution'." Right Attitudes, November 1, 2020. https://www.rightattitudes.com/2020/11/02/constraints-inspire-creativity-ikea-flatpack/
17. "First flatpack furniture." Guinness World Records, March 6, 2013. https://www.guinnessworldrecords.com/world-records/107974-first-flatpack-furniture
18. IKEA revenue figures: "The year in review FY24." IKEA Global. https://www.ikea.com/global/en/our-business/how-we-work/year-in-review-fy24/
19. General Electric creativity training results cited from: Kao, John. Innovation: Breakthrough Thinking at 3M, DuPont, GE, Pfizer, and Rubbermaid (BusinessMasters Series). https://www.amazon.com/Innovation-Breakthrough-Thinking-Rubbermaid-Businessmasters/dp/088730771X
20. "Airbnb Statistics: Usage, Demographics and Revenue Stats." Demand Sage, 2024. https://www.demandsage.com/airbnb-statistics/
21. "The story of Dyson." Dyson Official Website. https://www.dyson.com/newsroom/overview/august-2022/the-story-of-dyson
22. "How Dollar Shave Club's Founder Built a $1 Billion Company." Harvard Business Review, March 2017. https://hbr.org/2016/10/how-dollar-shave-clubs-founder-built-a-1-billion-company
23. "Tesla's Impact on the Auto Industry." McKinsey & Company, January 2023. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-future-of-mobility-is-at-our-doorstep