You can’t outspend the big chains, says Britain’s top lateral-thinking author… but you can outrun them.

“Only the paranoid will survive…”

As business philosophies go, that’s an attention-getter.  It came from the chairman of Intel, the computer chip people, and it has a major truth behind it – it means that if you do not keep thinking, then you will fall behind the field, and that really is something to worry about.

It comes in a more practical form from Paul Sloane, the leading British authority on creative business thinking:  “If you are concentrating on ‘best practice’, then you’re only replicating what happens today – but doing the current thing better isn’t good enough.”

Paul Sloane is the top man on creative thought for the business community – he regularly addresses audiences of the great, the good, and the extremely rich from Britain’s business community, he is the author of books on lateral thinking and innovative thinking for the business community, and he is enthusiastic about the concept of lateral thinking when applied to small businesses, as in the coffee-shop and café-bar trade.

Is lateral thinking a luxury that can only be practiced by big companies with management departments? Is it practical for the one-man café?

“Indeed it is, and it must be for survival.  Quality and efficiency is not sufficient – efficiency is not a guarantee of success, and many efficient companies have gone under.

“Most innovation comes from small businesses – you can’t outspend Costa and Starbucks, but you can outrun them.   The Americans have a phrase ‘ready, fire, aim’, which means that agility of a small business gives them the ability to have an idea on Monday morning, and have it on the specials board by Monday afternoon, and if it’s selling by Thursday, then think about how to market it.  Or, if it isn’t selling, the agility to chuck it and move on!

“It is more important to be different than to be better. Selling better coffee than the next dozen coffee shops isn’t good enough by itself – selling something different is what sets you apart.”

The key to doing something different, says Paul Sloane, is to avoid being trapped in the existing pattern of a job.

“You have only one weapon to use in your work, and that’s your brain. Your brain fires up instantly every morning, and continues perfectly… until you get to work. And then it falls into a pattern.

“Lateral thinking is about coming at a question from a different direction, and in the catering business this can mean a different way of delivering services.  In the 1920s, when shoppers would ask the assistant for what they wanted, one man wondered what would happen if they could pick them up for themselves – and invented the world’s first supermarket.  He did it by turning the existing thinking around.

“I bet that when the supermarket concept was invented, everyone else said ‘that won’t work!’  Try new methods of handling queues – there is nothing to say the Starbucks method can’t be improved on.  The opportunity to move sideways always exists.”

There are other parallels, says the lateral-thinking man.  In the motor-insurance industry up to the 1980s, it was accepted that applicants would have to fill in forms full of data.  One man wondered why… he created Direct Line and took a quarter of the market from a standing start.  In the coffee trade, it was assumed that drivers would queue up at the counter in motorway service areas for their coffee – until Coffee Nation changed all that, sufficiently successfully to eventually sell to Costa for sixty-odd million.

“This shows that innovation is not just in food and drink, but in changing the experience,” says Sloane. “In Texas, the Legal Grounds coffee shop is a combination of café and lawyer’s office – they were lawyers to begin with, and realised that they would get more clients coming in to a welcoming atmosphere. So now, with a coffee, you get a few minutes’ introductory legal advice. And of course, coffee houses like Look Mum, No Hands! in London have done the same with cycling and other business.”

It is a radical shift which changes things, says Sloane. “Big companies will always tell you they listen to their customers and improve their products – but that’s only their existing products. That’s why Polaroid made better instant cameras… and went bust because of digital technology! Smith-Corona kept on making better typewriters although nobody wanted them any more.”

Where do new ideas come from? “Einstein was a genius, but you don’t have to be,” says Sloane. “You just have to be open.”

When Starbucks came up with the My Starbucks Idea website, he explains, the best idea of all was that they adopted the principle of ‘crowdsourcing’, which is the act of inviting suggestions from the general public – literally, a café-bar’s own customers.

“It is a great idea to look at your own customer base for your new ideas, but only if you are open to them. Don’t invite ideas if your views are fixed, or if you are hoping to confirm what you already think, or if you haven’t planned how you will follow up ideas.

“The best example of this is Threadless, which is a small T-shirt company in America. They don’t design their T-shirts at all – they get their customers to design them, through monthly competitions. They put the entries up on their website, customers vote for their favourites to be made, and they sell millions. They have effectively crowdsourced their design department!”

Some big ideas have been developed through crowdsourcing, even before the word was known.

“The Linux operating system made big grounds on Microsoft because of a radically new idea. Whereas Microsoft would make their data known to only a few trusted staff, Linux published the whole idea for everyone to see – lots of people experimented and came up with new ideas, which everybody shared.

“The man who bought the Red Lake gold mine in Canada didn’t keep his mine secret. He published, on the internet, the geological data on the mine, and invited suggestions. He adopted some of the suggestions, and his revenue went up ten times.”

(It is no surprise that Paul Sloane’s next book is ‘a guide to open innovation and crowdsourcing’!)

Many great ideas have come through a similar route – either ‘influenced’ or simply ‘pinched’.

“The telephone was based on the human diaphragm.  The roll-on deodorant was based on the technology of the ballpoint pen. When Clarence Birdseye saw country people keeping their vegetables fresh by heaping ice all over them, he turned it into the frozen-pea industry.

“The Gutenberg press produced moveable type by combining the technology of the wine press with the way they punched coins… he took two existing ideas and came up with one mighty new one.  The idea of combining clockwork and radio seemed a stupid idea – except to people in Africa, who have no electricity.

“So – borrow with pride!”

What can this mean in the café-bar trade?

A golden rule, says Paul Sloane, is to follow Einstein’s motto that imagination is more important than knowledge. Business, he argues, often does exactly the same thing and expects people to fall into an existing pattern.  The big question is : ‘what if…?’

When faced with increasing coffee prices, and indeed increases in virtually every other item bought by a catering business, the ‘what if?’ question will open up new ideas. The best question is ‘what will happen if my trading situation changes dramatically?’  What if, for example, coffee is no longer available?

Constant increases in coffee prices will probably not stop you running a coffee shop and turn to tea, says Sloane, but facing the problem with an extreme ‘what if?’ will open up the situation in which you may consider the opportunities in chocolate more creatively than you would otherwise have done.  A whole new menu extension might be the result… although you may not wish to copy it, remember the frappucino and what that led to.

Curiously, says Sloane, innovation in business is not always about adding products or services. It can be about removing them.

For decades, it was assumed that airline passengers would buy tickets, would be allocated seats, and would be served complimentary inflight drinks.  Everybody knows that the budget airlines discarded all those assumptions, but what was the unexpected benefit?  Easyjet discovered that stopping the handout of free drinks had the result that passengers visited the loo less during a journey.  That in turn meant that Easyjet could reduce the number of onboard loos, which in turn meant they could increase the number of seats to be sold!

Encourage your staff to think in different ways, says Paul Sloane, because the cafe-bar which always follows the set pattern of café-bars will always be a step behind.  Remember, he says, the example of the second world war – the French generals saw a threat from Germany, and made the obvious precaution of building a defensive blockade between the two countries. The Germans broke the rules, went against accepted thinking, and entered France by the sideways route.

“Feel free to break the accepted rules. A guy in the Dec computer company once went to his boss and said he had found a way to manipulate figures onscreen, and his boss told him to stop fooling around and get back to the work he was paid for.

“The man quit, and invented the spreadsheet.

“So, please spend some of your time thinking about crazy ideas.  If you don’t, you’ll never find that clockwork radio… or the next café-bar concept.”

Paul Sloane’s books:

The Leader’s Guide to Lateral Thinking Skills, ISBN 0-7494-4002-3
The Innovative Leader, ISBN 0-7494-5001-0

1 Comments

1. What a good opening article. Free business advice to get one thinking (and doing). Thanks!

Mark Heather on August 9th, 2011 at 12:29 pm