The essence of this statement is to decide upon the most obvious or most likely solution first when faced with multiple possibilities.
The problem arises when the obvious doesn't work or when a more efficient way is yet to be discovered.
The way of science involves taking into account all known variables and calculating probabilities to arrive at a hypothesis and to then test it in all known instances to arrive at a theory.
Lateral thinking is the consideration of unknown variables along with possible new parameters, trying them and if the experiment succeeds...the previously unknown variable becomes a known and new parameters are set...and so a new solution has been found.
In the real world, many problems are time dependent. Lateral thinking involves questioning the implied parameters...expanding, altering, or erasing them and trying anew. A quick mental run through usually brings forth possibilities.
To think laterally initially is not usually the best way to go as the obvious would, so often, be missed. Where the obvious has been considered...and fails...lateral thinking is a strength. Fix it men...whether in business, science, law....etc...the specialists in their fields, utilize lateral thinking to a great extent. They may quickly review the situation to ensure the obvious has been considered...they may then concentrate on what has been missed considering all the possibilities...not just on the standard.
An example of simple lateral thinking:
What is 1 + 1?
Typical thought pattern: 2
What a lateral thinker thinks:
When does 1 + 1 not equal 2? How can 1 + 1 equal anything else?
Or even zero when you have a chemical reaction that converts the components to energy and no leftover mass...etc.