Creative Thinking for Small Business – Part 1

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Someone recently asked me,“What’s the one thing that distinguishes extraordinary businesses from ordinary businesses?”

My response: “Creative Thinking!”

I read a lot, typically finishing about three books a month on topics such as business growth, marketing, copywriting, sales, customer service, or psychology.  Occasionally,  I’ll stumble across a book that I consider to be a complete “game changer.”

And that’s exactly what happened when I recently read Thinkertoys by Michael Michalko.

This book really helped me see my business, and what our mission should be, in a completely different light.  I contacted Michael and he graciously agreed to do a Q & A.  So, over the next few days I’ll post a question, followed by his response.

I think you’ll find what he shared immensely valuable for your business (or any other endeavor you choose to pursue).

Win a Copy of Thinkertoys:

Want to win a copy of Michael’s book – Thinkertoys?  All you have to do is leave a comment below, and I’ll randomly select one winner.

What is creative thinking, and why is it important for small businesses?

Michael’s Response: We were all born spontaneous and creative. Every one of us. As children we accepted all things equally. We embraced all kinds of outlandish possibilities for all kinds of things. When we were children we knew a box was much more than a container. A box could be a fort, a car, a tank, a cave, a house, something to draw on, and even a space ship. Our imaginations were not structured according to some existing concept or category. We did not strive to eliminate possibilities; we strove to expand them. We were all amazingly creative and always filled with the joy of exploring different ways of thinking.

Remember how when you were a little child you felt that you were everything. You formed the thought that there was no limit to what was possible. You had this bright, shining self- image and were laughing and curious about everything every day. And then something happened to us – we went to school. In school we were taught how past thinkers thought. We were not taught how to think; we were taught how to reproduce what past thinkers had done in the past. It’s as if we entered school as a question mark and graduated as a period.

This is why we so often fail when confronted with a new problem that is similar to past experiences only in superficial ways and is different from previously encountered problems in its deep structure. Interpreting  problems by excluding possibilities through the prism of past experience will, by definition, lead the thinker astray. This kind of reproductive thinking leads us to the usual ideas and not to original ones. If you always think the way you always thought, you’ll always get what you’ve always got.

When confronted with a truly original idea, we experience a kind of conceptual inertia comparable to the physical law of inertia which states that objects resist change; an object at rest remains so, and an object in motion continues in the same direction unless stopped by some force. Just as physical objects resist change, ideas resist movement from their current state and change in their direction of movement. Consequently, when people develop new ideas they tend to resemble old ones; new ideas do not move much beyond what exists.

The more educated and expert the person is, the more change is resisted. They see what they expect to see, not what is there. At one time, ancient astronomers believed that the heavens were eternal and made of ether. This theory made it impossible for them to observe meteors as burning stones from outer space. Although the ancients witnessed meteor showers and found some on the ground, they couldn’t recognize them as meteors from outer space. They only sought out and observed only those things that confirmed their theory about the heavens.

Many business people are like the ancient astronomers and actively seek out only that information that confirms their theories about their business and their markets. History is replete with examples of how experts were unable to see the merit or even give fair value to new ideas. In 1899 Charles Duell, the Director of the U.S. Patent Office, suggested that the government close the office because everything that could be invented had been invented. Duell was not able to think beyond the conventional paradigms of the times. Other examples are:

  1. The computer is not for business. When Univac invented the computer, they refused to talk to business people who inquired about it, because they said the computer was invented for scientists and had no business applications. Along came IBM.
  2. The computer is not for personal use. IBM once said that according to their past experiences in the computer market, there is virtually no market for the personal computer. In fact, they said their market research experts were absolutely certain there were no more than five or six people in the entire world who had need for a personal computer. Along came Apple.
  3. The copier is not for business. In 1938, Chester Carlson invented the electronic copier. Every major corporation turned down his ideas, because carbon paper was so cheap  and plentiful no one would buy an expensive copy machine.
  4. It is not a watch. In 1968, the Swiss dominated the watch industry. The Swiss themselves invented the electronic watch movement at their research institute in Neuchatel, Switzerland. It was rejected by every Swiss watch manufacturer. Based on their past experiences in the industry, they believed this couldn’t possibly be the watch of the future. After all, it was battery powered, did not have bearings or a mainspring and almost no gears. Seiko took one look at this invention that the Swiss manufacturers rejected at the World Watch Congress that year and took over the world watch market.
  5. No business will use Federal Express. Fred Smith, while a student at Yale, came up with the concept of Federal Express, a national overnight delivery service. The U.S. Postal Service, UPS, his own business professor, and virtually every delivery expert in the U.S. doomed his enterprise to failure. Based on their experiences in the industry, no one, they said, will pay a fancy price for speed and reliability.

Innovation Key #1

The first key to innovation is the ability to think beyond conventional paradigms and to examine traditional constraints using non-traditional thinking. You have to be able to go outside your own frame of reference and find another way of looking at the problem. Before Fred Smith created Federal Express, overnight delivery did not exist at the national level. The U.S. Postal Service and UPS both believed that overnight point-to-point was not economically feasible.

Fred Smith realized that computers were replacing human functions, but the dependability of those products and the delivery systems for repairs were not up to par. Where the Postal Service and UPS were satisfied with the available delivery systems, Fred saw an opportunity for a new business.  His solution was to create a delivery system that operates essentially the way a bank clearinghouse does: put all points on a network and connect them through a central hub. If you take any individual transaction, that kind of system seems absurd — it means making at least one extra stop. But if you look at the network as a whole, it’s an efficient way to create an enormous number of connections. If, for instance, you want to connect 100 markets with one another and if you do it all with direct point-to-point deliveries, it will take 100 times 99 — or 9,900 — direct deliveries. But if you go through a single clearing system, it will take at most 100 deliveries. So you’re looking at a system that is about 100 times as efficient. The same idea was subsequently employed, of course, in the airline industry.

He did something else a little bit unusual, which was to combine the airplanes and trucks into one delivery system. This combination seems innocuous today but at the time all the traditional people felt that it was highly iconoclastic. So that’s the genesis of Federal Express.

Innovation Key #2

The second key to innovation is to be able to discern the important issues and to keep your goal in view. Fred Smith said he didn’t understand what his real goal was when he started Federal Express. He thought he was selling the transportation of goods. In fact, he discovered what he was really selling was “peace of mind.” After he figured it out, he made it possible for customers to track packages right from their desktops.

The Postal Service and UPS got in trouble when they confused the means with the end. They were complacent and were reluctant to change or innovate because they were afraid of failure. They followed the old “If it ain’t broke, don’t fix it” rule.  Innovative companies and people understand that whenever we try to do something and fail, we end up doing something else. The two most important questions to ask when we fail are: “What have I learned?” and “What have I done?”

3M Post-It Notes

A change in perception does not alter facts. It changes the meaning. You do not see things as they are, you see them as you are. There was a time when no one wanted to use the 3M Post-It notes invented by Spencer Silver. When the notes were introduced as a new product, there was no interest. Advertising didn’t work so, of course, no one at 3M believed there was a market for it. Silver had to plead with management not to kill the idea. Desperate, he launched his own innovative campaign to generate interest. He had the Mid-Atlantic sales manager, Mr. Fry, give away Post-Its to secretaries and other key people in companies up and down the east coast. Then, abruptly, he stopped giving out free samples. Within a short time, everyone realized how much they had come to rely on those notes. They had become addicted to them. Fry realized that the only way to change the market’s perception about the notes was to get people to try them by giving away samples for free.


Another way to look at things with a new perspective is to hire people from some other industry. Citizens Financial Group in Providence R.I., hires people who have experience outside of banking– creative people who can apply what they’ve learned from other industries to the Group’s traditional business. For example, they’ve put full-service branches into grocery stores run by a person with a sales background. Their ATM division is run by someone who was in real estate. One of the chief executives has a background in packaging.

Employing people with diverse skills and talents helps the group to continually challenge the status quo when developing business strategies. Most banks, for example, concentrate on being a service for existing customers. Citizens uses their grocery store branches to acquire new customers. The staff goes into the grocery aisles wearing their Citizens aprons pushing Citizens shopping carts with promotional offers, and getting into friendly conversations. Their objective is to develop relationships with store customers. Then when shoppers have banking needs, they’ll find a friendly, familiar face at the bank.

To truly understand the necessity of creative thinking in your business, sit down and prepare a trial P&L for your business dated five years from now, assuming no new products, services, or improved business processes. People who have done this suddenly realize that innovation is their lifeline to the future and the time to grab it is now. If you wait too long, it may be beyond your reach.


About Michael

Michael Michalko is one of the most highly-acclaimed creativity experts in the world and author of the best-seller Thinkertoys (A Handbook of Business Creativity), ThinkPak (A Brainstorming Card Deck), and Cracking Creativity (The Secrets of Creative Genius).

Michael has provided speeches, workshops, and seminars on fostering creative thinking for clients who range from Fortune 500 corporations, such as DuPont,  Kellogg’s, General Electric, Kodak, Microsoft, Exxon, General Motors, Ford, USA, AT&T, Wal-Mart, Gillette, and Hallmark, to associations and governmental agencies. In addition to his work in the U.S., Michael speaks and provides workshops in countries around the world.

You can learn more about Michael on his website at:

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15 thoughts on “Creative Thinking for Small Business – Part 1”

  1. I am excited about this challenge and look forward to putting this creative thinking to work more than what it has now. I have an idea for a new type of lawnmower but due to the lack of funds and experience do not know how to get it off the ground and into markets. In other words being creative makes total sense when building and establishing a business, especially one that has so many people doing the same thing, mowing lawns or landscaping. Everyone should take the challenge and try to be more creative, find the need that is missing and replace it with a solution!! Awesome!

  2. There can be no more relevant area to explore than creativity in small business. The rapidly evolving paradigms – finance, funding resources, generational issues, marketing tools and techniques, business models…etc, etc. are all coming together creating a new world for business, and one in which creativity will a much sought after skill.

  3. Wayne, I must say that I really like the different angles you see. I have been in the lawn business since 1989 and have attended many seminars on how to run a lawn business. I sold my successful business in 2008 and after only 3 months I started another. (For some sick and twisted reason I missed all the daily I bought your on-line course because my old ideas were just not working like they used to. Your idea of looking at my business as a marketing business really opened my eyes. It made it all new, fun and interesting again. The fire within still burns!! Thank you

    1. Thanks for the kind words Tom. The lawn industry provides a platform to showcase creative thinking since most are stuck running “traditional” businesses.

  4. I absolutely loved the book, I sleep with it under my
    pillow hoping there will be further transference of
    wisdom !

  5. Congratulations to Shawn. He won a copy of Michael Michalko’s GREAT book Thinkertoys.

    Watch for the next post and your chance to win.

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Likes, Shares, & Comments WON'T Put Money In Your Bank Account.

In Our Free Course:

Crush It On Facebook In 30-Days Or Less

You'll Discover:

A Simple Facebook Strategy We Used To Take a Client From Losing $10k Each Month To Making Thousands...In Only 86 Days.

The 3-Step Formula We Used To Increase Another Client's Sales By Over $9,000 per Month (and they're spending less than $400 per month on Facebook Ads)

We'll Also Share Our "24-Hour Audience Identifier Campaign"

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