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Before the 20th century, there were no supermarkets as we know them today. Grocery shoppers would have to travel from one shop to the next, stopping separately at the bakery, butcher, greens, and dry goods stores for their weekly haul. At each stop, grocers would wait in line and interact with fellow customers while assistants gathered, measured, weighed, and portioned their orders. Similar deli shops today. Rarely was anything prepackaged or picked up anywhere but at the front counter. It was a slow and costly process for business owners. 

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Then in 1916, the first self-serve grocery market (without meat and produce) opened when an entrepreneur named Clarence Saunders was inspired by a new concept called cafeterias—where customers would serve themselves. He launched the Piggly Wiggly (Pictured above) in Memphis. The first 'superstore' was tiny by today's standards and had very little of the luxury we're used to, but it had grocery baskets, a self-serve shopping area with priced items on the floor, and checkouts. The Piggly Wigglys' success was phenomenal. Having self-serve shoppers drastically reduced costs, and the concept exploited a brand new sales strategy, the impulse buy. Saunders had built over 600 of them by 1921. 

In 1957, a child clothing retailer named Charles Lazarus was inspired by the Piggly Wiggly when he converted the same business model to work for his toy store. He created Toys'R'Us, another great success. Then in 1986, the evolution continued when Thomas Stemberg posed this question to his co-founder:

"What if we make the Toys R Us of stationery supplies?" And Staples was founded. 

These examples give evidence to a fundamental strategy of innovation named reasoning through analogy (or analogical reasoning). It's the process of drawing from experiences of the familiar (analogies) and extrapolating into the unfamiliar.  Each new superstore drew inspiration from past successes and applied it to unique and novel ideas. This form of innovation is standard and can be seen everywhere, from computer hardware to religious ideologies and marketing strategies; it's our primary mechanism to advance humanity. 

What is Analogical Reasoning?

Analogous reasoning is any form of thinking that converts past experiences and lessons into valuable insights for new circumstances. On a macro level, it drives innovation forward like the examples above, but on a personal level, you use it every day to evaluate problems and make decisions. It's also one of the most common forms of learning used in public schools alongside trial and error, deductive reasoning, and memorization. 

If you look closely, you'll see that most of your thinking and the inventions around you owes their existence, at least partially, to reasoning through analogy. It's an incredible tool, so it's valuable to know how it works and how you can apply it in life effectively. 

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"Analogical reasoning; the process of finding a solution to a problem by finding a similar problem with a known solution and applying that solution to the current situation." - Larry Maguire

There are two primary modes of analogical reasoning. For simplicity, let us name the first one, Analogical Thinking, which summarizes your approach to solving problems and thinking about challenges in daily life. This approach is on a micro level and is personal to you. Within it is all the ideologies, strategies, stories, and psychology (aka analogies) you employ to seek solutions around you. The second is a specific exercise, Reasoning through analogy; it's a methodology for solving ambitious problems in life and the world. Its characterized better as a general but intentional formula—a recipe of steps to achieve new and different results. How about an analogy to help clarify?

Analogical Thinking is part of your mental operating software that runs whether you're aware of it or not. It's always running in the background. Reasoning through analogy is an application you can choose to download and use to solve problems.  

At their core is one creative approach to problem-solving with three fundamental components. 

1. A novel problem: 

• New opportunities to exploit.
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• New information to intake and apply. 

2. A pre-existing pool of knowledge:

• Something you've learned or experienced.
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• Information in a different lane but still relevant. 

3. A transferable solution:

• The solution needs to align enough with the problem to work effectively. 
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• Creativity and lateral thinking (more on this later) play a vital role at this stage. It occurs during periods of muse, brainstorming, and flow. 

These components offer a framework to enhance when and how you employ analogical reasoning. 

How to Improve Analogical Reasoning 

"Modern work demands knowledge transfer: the ability to apply knowledge to new situations and different domains. Our most fundamental thought processes have changed to accommodate increasing complexity and the need to derive new patterns rather than rely only on familiar ones. Our conceptual classification schemes provide a scaffolding for connecting knowledge, making it accessible and flexible." - David Epstein

There are three ways you can improve your analogical reasoning over time. 

1. Increasing your Knowledge Pool 

The strength of your analogical reasoning comes from the range and quantity of your analogies—your knowledge pool. This premise is why public schools teach such a variety of subjects, even if they seem irrelevant to daily life like Cellular Biology, Calculus, or the Roman Empire. Analogies are more than just poetic sentences and simple comparisons. They play a critical role in how we store and utilize information. 

In this way, following your passion is an advantage because it helps accumulate diverse experiences, skillsets, and knowledge that combine and create an inventory of problem-solving tools unique to you. So stay curious in life and learn as much as possible. Never be afraid to try new things. All of it matters, and all of it will benefit you down the road. 

2. Employ and Learn about Lateral Thinking

Lateral thinking is a style of problem-solving introduced by psychologist Edward De Bono, to move from a familiar concept to a new idea using alternative and creative approaches instead of standard and logical steps. It involves thinking outside of the box, disregarding previously held assumptions or rules, and seeking solutions that aren't immediately obvious. I'm not going to deep dive on the topic here, but Edward De Bono is a great spot to start. 

3. Familiarize Yourself with The Problem

The more robustly you understand the topic challenging you, the better connections you'll make between the problem and possible solutions. It's essential to define the situation well and have a deep understanding of the underlying mechanics and forces that are driving it. 

At the beginning of this article, I shared three examples of founders who all had experience in their areas of innovation. Charles Lazarus owned several retail clothing and toy businesses that failed before he launched Toys'R'Us. He understood how to operate a business and had lots of experience in the child retailer market. You'll never connect analogies efficiently without a solid knowledge of the problem at hand.

4. Practice!

Now that you're aware of the dominant thinking style in your life, practice applying it. 

1. Find a novel problem and/or opportunity in your life or the world. (Ie. relationships, career, business, or health)
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2. Find successful solutions from different areas.
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3. Apply those solutions to see if they might work in the current situation. 

By practicing this technique, you'll improve your ability to think laterally and apply unique solutions to current problems. 

Weaknesses in Analogical Reasoning

"It is extremely easy to reason poorly through analogies, and strategists rarely consider how to use them well." - HBR

The weaknesses are essential to cover because, as I said before, everybody is thinking in analogies, but many aren't aware of the downfalls. I can think of three standouts:

1. Accepting the Problem 

People assume they completely understand many problems in life and the world, but this is rarely the case. Many of your problems are supported by faulty assumptions that you've confused as facts. Even experts and authority figures make the mistake of relaying false assumptions for years without defiantly testing them. As a society, we are constantly upgrading our understanding of the world, and as we do, we figure out that things we assume to be correct are wrong.

When you mischaracterize a situation with faulty assumptions, analogical reasoning only adds layers to an already false framework. The solutions you come up with might be workable, but they'll be far from stellar. Look no further than Elon Musk flipping the rocket manufacturing industry on its head with SpaceX as an example of this. For decades, rocket manufacturing only made tiny enhancements to the cost and efficiency of space rockets by thinking with analogies. 

The problem was rockets were expensive. Experts in the field accepted this as an undeniable fact, but Elon denied it. He used the first principles approach to find a solution and has nearly reduced the cost by a whopping 90% of its previous level! This article explains more about the first principles approach and how to complement reasoning through analogy. 

If you falsely assume a deep understanding in a topic, skill, or subject without challenging the current standard practices, you're missing an enormous opportunity. Take the lesson from Elon and don't take the expert standard as final. Be mindful of personal biases that might distort your perspective. Interrogate the problem at hand and question everything. If you don't interrogate the source of the problem, you could be leaving better solutions on the table.

2. Assuming the Solution is a Perfect Fit

Of course, if your problem is correctly defined, but you have a lousy solution, then you're no better off. If you think of an appealing analogy that perfectly fits a solution, but the underlying mechanics don't work, you'll see poor results.  

Ford nearly made this mistake when it attempted to overhaul its supply chain using Dell's successful computer manufacturing process as a template. At first glance, auto and computer manufacturing appeared to be close in nature; both had final products made up of many different small parts, and both required a standard assembly line to bring the parts together. Ford thought it could replicate Dell's process to reduce manufacturing costs. Unfortunately, as they dove into the experiment, they came up with many challenges and decided it was too costly to continue. 

Trial and error go hand in hand with analogical reasoning, but you can avoid tremendous costs by studying the analogy and ensuring it fits before implementing it further. 

3. Becoming Addicted to a Solution

The last significant weakness to analogical reasoning is once you solve one problem, you may repeat your solution continuously. Oncce you have an 'analogy' that works; you'll lean on it for future problems even if it's not credible—never improving your technique. It'll be like you've discovered a hammer and now see every problem as a nail, but not all problems are solved with a hammer; some require screwdrivers. This is a common side-effect in analogical reasoning and thinking, especially when you're unaware you use it so much. It's another reason to develop an awareness of your thinking strategies and address weaknesses within them. 

Final Notes

Analogical reasoning has been a vital exercise and mental model for humanity since we started thinking. It's used continuously in a wide range of industries and your day-to-day personal life. It's an incredible tool to learn and innovate, but it has its weaknesses, and you can only protect against them if you're aware of when and how you're utilizing it. As you gain awareness, you'll grow proactive in enhancing it by expanding the experiences and knowledge you're drawing from and intentionally practicing. I wish you success on your path to sharper thinking.

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