To Think Outside The Box, Go Outside The Box | Technological Leadership Institute
One of the most common clichés in business today is that you should think outside-the-box (OTB). However, corporate culture and performance suggests that employees (sorry, team members) are often only encouraged to “think” OTB – not really “go” OTB.
For many corporations, the reluctance, or inability, to shake the corporate core by going OTB and jumping from a maturing trend to an emerging one can be dangerous, especially when revolutionary trends are disrupting the industry – and the corporation. Ask Sears. Wards. Borders. Barnes & Noble. Taxicab companies. Eastman Kodak. And others that have failed when revolutionary trends changed their industry and killed their companies.
Going OTB can also represent a real risk for corporate managers’ careers because the right strategy or needs to succeed in a revolutionary trend and emerging industry are not always obvious at the start. Going OTB can also be a marked departure from existing practices and policies. It can mean trying new business models where the existing strengths of the corporation may be useless. So there may be a reluctance to jeopardize corporate careers by trying alternatives that may be risky. After all, only one percent of VC investments are home-runs, and VCs invest after Aha to reduce their risk. When will the corporations have to invest? And how many failures will they have? And do they know how to develop home-runs?
This corporate problem, however, is an entrepreneurial opportunity.
Look at some of the iconic billion-dollar entrepreneurs of the last 50 years. They built giant companies based on high-potential innovations in emerging industries – by both thinking and doing OTB.
Bill Gates built Microsoft into a giant in the emerging PC trend by buying the operating system and then licensing it to IBM. Obviously no one from IBM was innovative enough to do this, so Gates who was not an employee of a large company in the industry went OTB and built Microsoft.
Steve Jobs was not an employee of the IT industry who was asked to think OTB. He was just another precocious teenager who was OTB when he started Apple. When Apple stumbled, the VCs who controlled the company brought four corporate executives who nearly drove it into the ground. They had to bring Jobs back to resuscitate the company.
Michael Dell built Dell by being OTB and developing an innovative business model of selling directly to consumers. Many corporations used established channels.
Larry Page and Sergei Brin built Google into a dynamo on the Internet by developing an innovative search engine. They were not part of the IT industry.
Jeff Bezos built Amazon.com into a giant in Internet commerce by being OTB and first destroying his corporate book-seller competitors. He was not part of the bookselling industry.
Travis Kalanick innovated his way to the top of the online car-transport business by being OTB and developing a peer-to-peer model. He was not part of the transportation industry.
So what’s common among all of the above? These billion-dollar entrepreneurs were not insiders in the industries they dominated. Nor were they executives or employees in the industry. They were outsiders – the unwashed hordes. They thought outside the box because they were outside the box. So to think outside the box, it helps to be outside the box.
Why is it that outsiders seem to do better at really innovative thinking? Here are some of my reasons:
- No constraints: When you are outside the industry, you don’t know all the reasons why it cannot be done and you seek a way to get it done – without capital because you have none.
- Blank-slate thinking: You start from a blank state without letting all the previous baggage destroy your thinking. You don’t let current “wisdom” and the “laws” of the industry constrain you. You create new rules based on the reality of emerging trends and revolutionary technologies.
- Revolutionary trending: You use major revolutionary advances for an edge rather than seeking small, evolutionary changes. When industries are emerging, making a small change is like re-arranging the deck chairs on the Titanic.
- Bottom-up analyzing: Not being an employee in the industry allows you to determine from the bottom-up how to make customers happier without the constraints of existing practices.
- Guerilla doing: Most importantly, when a revolutionary technology is introduced, those outside the industry try new ways to serve the market rather than making minor changes to existing practices.
MY TAKE: Being in the industry can hurt how you think and what you do. So if you are truly interested in innovative OTB thinking and doing, get out of stifling corporations – until the large corporations learn how to do revolutionary innovations. Get out physically by exiting the industry, or metaphysically by placing yourself outside the box (if you are risk averse). Then ask yourself what you would do from that vantage point. To start a major company, especially in an emerging industry or with an emerging technology or trend, don’t be confined by the shackles of the existing industry. Go OTB.
Dr. Dileep Rao has more than 20 years of experiencing financing businesses and ventures using venture capital, leases, debt and subordinated debt. He also bought and turned around several companies. Since retiring, he has been writing, teaching, and hopefully thinking. He has also interviewed extremely successful entrepreneurs such as Glen Taylor and Bob Kierllin. Currently, he is writing books about how to build giant businesses without capital. Dr. Rao teaches in the Master of Science in Management of Technology degree program.
This article was originally written for Forbes, and republished with the author's consent.
They thought outside the box because they were outside the box.