The Golden Opportunity of Paradigm Shifts

We have identified the six major paradigm shifts that are disrupting how we see the world and do business. Recognizing these shifts will help innovation leadership discover opportunities in a wide variety of fields and develop game-changing business models.

The current leading paradigms are being challenged by new approaches based on different beliefs and assumptions. New paradigms lead to new business models and production techniques, new forms of collaboration and cooperation, new forms of financing and ownership, and new forms of learning. What paradigm shifts are playing out in your field? If you are not aware of them, then perhaps you should be. If they are not yet playing out in your field, you may have a golden opportunity.

What are paradigms and how do they differ from trends?

Trends are tendencies occurring in the world that shift our reality. Trend-watchers and trend-spotters discover weak signals and ripples that may grow to become established trends. Megatrends are massive changes in our world that affect all of us, such as the growing scarcity of resources, the aging population in Europe, or China’s increasing power on the world stage. Trends are based on facts, and are supported by data. Trends can be measured.

A paradigm, by contrast, is a way of looking at the world. It is a perspective on the facts. The ruling paradigm up until the 1970s was that waste is normal, a natural by-product of efficient manufacturing in a world in which resources are plentiful. When we became aware of resource constraints and of pollution, we gradually acquired a new perspective: waste is bad. This new paradigm became more powerful and led to cleaner production and recycling. Another paradigm shift is already underway: the idea that waste is food, or that waste is wealth – the cradle-to-cradle paradigm. The new rallying cry is not to produce less, but to produce differently.

Let’s consider the megatrend about the aging of Europe’s population. One way of looking at it would be to think of seniors as a problem; a different perspective would think of them as the solution. The underlying trend hasn’t changed, and it is unlikely to. What has changed is our perspective on the problem, and a paradigm is a way of seeing the world- a specific set of glasses that frames what we are seeing.

While a new paradigm helps us to look at the situation from a different perspective, innovation leadership needs to be vigilant about a common fallacy called the “observational selection bias”. Once you are interested in a buying a specific car, say a red VW Beetle, you end up seeing them everywhere. Seeing the world through a different lens has great advantages, but we need to check whether our novel approach is an innovative way of looking at the problem, or whether we are just victims of seeing what we want to see – that is, the observational selection bias.

There are three steps to our approach. First, innovation leadership needs to be knowledgeable about megatrends anchored in facts. Second, it needs to become aware of new paradigms, which are new perspectives on these facts, and how these paradigms are shifting. Third, innovation leadership can explore opportunities and business models emerging from these new paradigms. For example, if innovation leadership can shift its perspective from the idea that the elderly are a problem toward a notion that makes them a solution, then it can conceive of all kinds of interesting opportunities for commerce and employment.

The THNK paradigm shifts model

We have captured in a visual what we believe to be the most exciting and powerful paradigm shifts for innovation leadership. We continuously invite established experts for our THNK forum sessions and ask them about the major changes they see in their field. We also invite young disruptors and ask them to share how their thinking, attitude, and solutions differs from the status quo.

Amazon CTO Werner Vogels discussed the effect of the shift from push to pull on business models. Clay Shirky talked about his notion of cognitive surplus and how to engage with volunteer creative capacity. We recognize that this is never a conclusive selection and is always a work in progress, so we have left some blank spaces for future additions. The aim is not just to make innovation leadership aware of these shifts, but also to keep on the lookout for more.

The 6 major paradigm shifts:

  1. Push to Pull
  2. Consume to Create
  3. Assets to Access
  4. Linear to Complex
  5. Scarcity to Abundance
  6. Universal to Unique

 

  1. Push to pull is the shift from pushing structures and products to pulling in resources and demand. We are moving from marketing existing stocks to manufacturing on demand; shifting from top-down allocation to pulling resources for projects; moving from fixed structures to varying constellations, and understanding and responding to emergent patterns of user behavior.
  2. Consume to create is the shift from passively consuming to actively contributing and creating. We are shifting to a more participatory experience, in which the customer is actively involved, co-creating the product or experience. We are becoming prosumers who bring content to platforms such as YouTube and Facebook. People are using their cognitive surplus to create communal projects such as Wikipedia and open-source software. This is not limited to the digital realm. Amateur hobbyists are challenging established companies during events called “Maker Faires”, for example by building cheap and versatile drones.
  3. Assets to Access is the shift from acquiring and hoarding knowledge to spreading and sharing knowledge. In education, it means shifting from memorizing facts to knowing where to find information. The new skill is searching for and evaluating information. In media, we see a shift from an emphasis on authoring to an emphasis on curating. In scientific research, the difficulty has shifted from being able to find data to navigating and mining massive databases.
  4. Linear to complex is the shift from independent and predictable systems to interdependent adaptive systems. We are transitioning from seeing the world in a linear way, in which small causes have small effects and large causes have large effects, to realizing that it’s perfectly possible for large marketing campaigns to have almost no result, while small things go viral and flood the market. When we are moving from a predictable world to a world that is unpredictable in principle, we must shift our strategy from planning to preparing.
  5. Scarcity to abundance is the shift from scarce natural resources to using natural abundance. Where a specific situation may have had a limited set of choices, it now specializes on an abundance of renewable resources.
  6. Universal to unique is the shift from mass production to tailored and individualized artifacts. In the health-care field, it is shown by the emergence of individualized medicine tailored to the genetic make-up of the user, and by the rise of individual quantified self-data. In terms of consumer empowerment, it is the possibility to design your own clothes, shoes, consumer products, and to 3D-print your own version of consumer goods.

Paradigm shifts lead to opportunities for innovation leadership

There are amazing opportunities for innovation leadership to experiment with new approaches and new business models. Sharon Chang, whose company Yoxi invests in young disruptors that she calls Innovation Rock Stars, finds that paradigm shifts lead to business opportunities in several fields. Take the paradigm of the sharing economy. The problem that is solved is excess inventory with a lot of downtime. One solution is to create secondary usage for that resource through sharing it, for example by renting out empty bedrooms through Airbnb or through car sharing. As an investor, Chang sees trends as focal points that influence their surroundings. For example, Airbnb is constantly being sued because the legal framework is not yet in place.

Innovation leadership should ask: what are the three other things surrounding the system? What are the banking systems and legal systems surrounding the sharing economy? A paradigm shift in one area will cause shifts in adjacent fields, and also be dependent on them. Innovation leadership should investigate how banking is disrupted; what are innovative payment systems or alternative currencies? The legal framework is also outdated; a paradigm shift in the way we form contracts is needed. If a new value system is about to mature, Chang would rather bet on the supporting elements shifting, because everyone else is already betting on car-sharing.

A paradigm shift is a change in the way we understand and approach our world. Innovation leadership sees opportunities from a single paradigm shift across multiple fields. The Push to Pull paradigm shift, for example, can be fruitfully applied in innovation leadership approaches to education, politics, healthcare, and energy.

Innovation leadership sees opportunities from a single paradigm shift across multiple fields.

Where can innovation leadership find opportunities in the push to pull paradigm as it applies to education? Future job requirements are less and less clear; half of the jobs of the future do not even exist yet. This makes current education useless if the only goal is to prepare students for future employment. At the same time some countries are experiencing massive dropout rates, another sign that education demand is not being met by education supply.

University education pushes knowledge at students, who passively memorize and regurgitate it during exams. Instead, how can the learning needs of students be pulled in? Innovation leadership can promote new business models based on flexible curricula, education on demand, and individualized educational advisors.

The political process is still very much a push process: pushing programs and candidates unto the electorate in order to score a four-year term, rather than pulling needs and proposals from voters. What about models of participatory democracy in which politicians pull in issues and proposals from their constituency? Gavin Newsom, former mayor of San Francisco and currently California’s Lieutenant Governor, is a strong advocate of this approach and a great example of innovation leadership in politics.

What could be a participatory form of healthcare? What if the patient is no longer passively awaiting diagnosis and treatment, but the co-creator of his or her health, together with doctors and insurers? There are plenty of opportunities for innovation leadership in collaborative models, backed by advances in personal data monitoring.

The current infrastructure of energy production and distribution is another example of a push paradigm: pushing electricity at consumers. The opportunity for innovation leadership lie in possible pull models such as networks of co-producers of energy, partnerships between individuals with solar panels and an energy exchange platform – perhaps the energy company of the future will look more like eBay.

These are just some examples of innovation leadership using its understanding of paradigm shifts to experiment with disruptive approaches and business models. Applying the THNK paradigm shifts model to your own field as a thinking tool can generate plenty of new ideas, approaches, and golden opportunities.

Sources

  • Hagel, John, John Seely Brown and Lang Davison: The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion.
  • Johansen, Bob. Leaders make the future.
  • McDonough, William and Michael Braungart. Cradle to cradle: remaking the way we make things.
  • McDonough, William and Michael Braungart. The upcycle: Beyond Sustainability – designing for Abundance.
  • Newsom, Gavin. Citizenville: How to Take the Town Square Digital and Reinvent Government.
  • Shirky, Clay. Here  comes everybody.
  • Shirky, Clay. Cognitive Surplus.
  • THNK 2013 forum sessions with Werner Vogels, Roland Kupers, Esther Wojcicki, Clay Shirky, and Sharon Chang.
  • Header image: businessman standing with back opening door from Shutterstock.com

 

This article was originally published on THNK.org.

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