We are the slaves of our assumptions; they dictate the way we behave. Retroduction involves changing an assumption. This may serve two purposes. First, our assumptions may be wrong. Second, even if our assumptions are correct we may gain valuable new perspectives from looking at things from a different angle. Albert Einstein, for instance, revised Isaac Newton’s assumption that space is flat to the assumption that space is curved and developed a new perspective on time and space.

As a simple example of the power of assumptions, consider paper clips, the subject. The standard Gem paper clip, invented in 1899, accounts for most of the 20 billion paper clips sold every year. More than 100 alternative designs have patented, varying  in size, material, and shape. “Ring” clips, “owl” clips, “arrowhead” clips, “butterfly” Innovation clips, and many others have been offered, and their inventors present compelling cases for their superiority. Nevertheless, they haven’t made a noticeable dent in Gem’s market superiority. The reason is that inventors share a common and incorrect assumption, that paper clips are used to clip sheets of paper. In fact, research shows that only 20 percent of paper clips are used to hold papers. The rest are twisted or broken by people during phone conversations, unwound to clean pipes, nails, or ears, used to reinforce eyeglasses, or put to other creative uses. The Gem, unlike its competitors, can easily be taken apart and reshaped.

One retroduction technique says, “Suppose X were Y.” For instance, “suppose custodians were chief executives.” Another technique pairs apparently distinct concepts, such as power and satisfaction or perception and structure, and sees what new alternatives might be suggested. Yet another asks “What if?” for example, what if employees could design their own jobs? What if we viewed customers as owners of the firm? One individual who applied these retroduction techniques generated such questions as “what are the structural irregularities of semiconductors?” and “can arteries have rashes?” Each of these questions is now the subject of study and debate, the first among physicists and the second among researchers and disease processes. Henry Ford questioned the practice of moving workers to material asking “What if we moved the work to the people?” This questioning led to the birth of the assembly line. Retroduction offers new perspectives and helps free people from mental ruts.

Here’s a final example: For years, bankers assumed that customers preferred human tellers. In the early 1980s Citibank felt that installing automotive tellers would help it cut costs. However, since Citibank executives assumed people would prefer not to use machines, they reserved human tellers for people with large accounts and relegated smaller depositors to the machines. The machines proved unpopular and Citibank stopped using them, taking the failure as proof that its assumption was correct. Later, another banker challenged this assumption. He asked, in effect, “What if people really like to use automatic teller? What if the Citibank customers who used the machines simply resented being treated as second class citizens?” He brought back the automatic tellers with no “class distinction” and they were an immediate success.