#150: How to Identify Paradigm Shifts and Explode Your Business

Horses as the primary mode of transportation, candles used for lighting, wood used for cooking and heating, windmills for pumping water, wind-up mechanical watches, mimeograph machines, are all extinct. These were not bad products, but none the less they are gone.

Paradigm Shifts

What happened? Paradigm shifts occurred. Technology made new products possible, new products replaced old products, and in some cases, created whole new markets.

Consider the Swiss. Up through the 60s the Swiss were world renowned for their prowess at making mechanical watches. The Swiss invented the minute hand and the second hand. They were the undisputed leaders in gear and bearing technology. It was the Swiss who first developed the waterproof watch and the best self-winding watches. The Swiss were innovators. By 1968 they had a remarkable 65% of watch sales in the world. No one was even a remote second.

In 1967 the Swiss developed the first electronic quartz movement. Even though the Swiss manufacturers decided the new watch wasn’t noteworthy they displayed it at the World Watch Convention. A small Japanese company named Seiko liked the idea of an electronic watch, and the rest as we say is history. By 1980 the Swiss share of watch sales dropped to below 10% worldwide.

The electronic watch revolutionized watch production; they were more accurate, more durable, and less expensive to manufacture. A paradigm shift had occurred. All the conventional rules about making and selling watches were changed in a matter of two years.

The greatest paradigm shift of all time came when Jesus preached the gospel. The impact of that simple message has been felt throughout the world for over two thousand years. People changed, societies changed, and governments changed, all because of one man and His message.

Leveraging a Paradigm Shift

The trick leveraging a paradigm shift is to 1) forecast the paradigm shift, 2) recognize its development in the early stages, and then 3) position your company to take advantage of the shift. To illustrate this three-step principle, let’s review the history of transportation:

In the beginning man walked. Probably for hundreds of years there were no paradigm shifts. But there were problems with walking; your feet got sore. Once the problem was identified someone went about finding a solution; sandals to protect the feet. There were still problems with walking however; you get tired walking all day long carrying heavy loads. Another problem identified. Someone realized that if they could get a donkey to carry the load they could walk a lot further. Another problem solved. But you still couldn’t get very far in a day; donkeys are not speed demons. Someone tamed a horse to ride and another problem was solved. For hundreds of years man’s primary mode of transportation was horses. Industries developed around the breeding of horses, making tack, wagons, etc.

Eventually, someone realized that horses and wagons just didn’t make sense to cover the long distances across countries. A wagon was fitted with a steam engine and laid on rails, and another problem was solved with the birth of the railroad. Railroads solved many transportation problems. They were able to carry enormous loads across great distances at high rates of speed, but they were confined to those tracks! To get to Aunt Mae’s house across town you still had to saddle your horse or hitch up a buggy.

Someone decided to put a steam engine on a wagon with steerable wheels, and the automobile was born. The automobile solved lots of problems; it was personal, you could go wherever there were roads, and whenever you wanted. As reliability increased, popularity grew and the automobile evolved into the remarkable piece of modern day technology that we enjoy today. As revolutionary as the automobile was it still took a long time to get across the country, they didn’t work very well in the snow, and you certainly couldn’t get across the ocean in one!

Then of course the Wright Brothers bolted an internal combustion engine onto an airframe and the aviation era was born. Airplanes solved the problem of covering great distances at high rates of speed. They could be small enough to be personal, or big enough to carry the whole neighborhood. More problems solved.

Do you see the pattern above? There are known needs and unknown needs, paradigm shifts occur when someone meets these needs with a new product that solves the problems of the old product. There are the minor shifts like sandals and then shoes.

And there are major shifts. A major shift occurred when man moved toward the donkey and the horse to replace walking as the primary mode of transportation. Another shift occurred with the development of railroads, another with automobiles, and another with airplanes. Another major shift will occur when we can say, “Beam me up Scotty,” and be instantly transported from LA to New York.

Each of these major shifts solved some of the problems of the previous product, but they also created a new group of problems to solve. These new groups of problems led to the next major paradigm shift.

In many cases paradigm shifts occur because new product technology creates new, previously unknown, needs. But the lack of “known need” didn’t stop someone from creating a product that created “new needs”!

Getting Started

If you are a leader and you want to develop an organization capable of forecasting, recognizing, and taking advantage of paradigm shifts then the following five points will be helpful:

1. Don’t trust the experts!

Experts who develop technology often don’t even understand the import of their actions. Simon Newcomb, a noted astronomer, said in 1902, “Flight by machines heavier than air is unpractical and insignificant, if not utterly impossible.” In 1913 the American Road Congress reported that, “It is an idle dream to imagine that…automobiles will take the place of railways in the long distance movement of…passengers.” Thomas Edison said in 1880 that, “The phonograph…is not of any commercial value.” If you want to recognize paradigm shifts you might want to look to someone other than the “experts” for answers.

2. Forecasting

Get a group of individuals together and have them write “future” scenarios. What will this industry look like in 20 years, 50 years? These “future” scenarios will help you see major paradigm shifts. If you’re in the home building business you may see the concern for the environment as a precursor to a major shift in home building technology; new heating systems, new building materials, new super insulation materials, etc.

Get another group to write about what problems exist in the industry today, and to forecast future problems and needs. For example, if you’re in the plastics business you might consider oil supplies as a future problem. You might see pollution control legislation as a problem. You might see a need for a new type of plastic that will meet certain consumer needs, etc.

3. Flexibility

As leaders we tend to focus on problem solving. In the crush of our workloads we tend to be very comfortable with current solutions to problems. What we don’t realize is that there are some new ways of doing old things and that we must be willing to accept these new solutions, even while the old solution is still working.

4. Search and Reapply

This is a big opportunity area for most businesses. One department gets a good idea and uses it to solve a problem, but nobody else in the organization ever hears about it. We need to create systems for publicizing ideas throughout our organizations. Once this is being done we need to teach people to constantly look at the way other people do things as fertile ground for ideas that will help them do their jobs better.

5. Listen

As a leader you need to understand that the people who have the ability to spot paradigm shifts are probably working for you right now:

  • They are the young people who have not been so socialized by years of experience that they are capable of seeing things a different way.
  • They are the experienced people who just took on a new job.
  • They are the odd ducks who are always challenging the status quo, never content with the way things are, they are forever trying to change things.
  • They are the inventors who get ideas and build prototypes. They often don’t even realize how valuable their ideas are in terms of solving other problems.

Now that you know who is most likely to spot paradigm shifts, listen to them and record their ideas. You never know when what seemed like a silly idea for one project will turn out to be a brilliant solution to another project.

One Final Thought

Any organization that wants to be successful in the 21st century will need to be: 1) future oriented; capable of anticipating changes in technology and consumer needs, 2) innovative; not only in the way they apply technology but in the way they approach it, and 3) focused on quality; total quality will be the bare minimum in the next century.

To be successful, you will need all three of these components; not one or two, but all three. Getting to the point where your organization has these attributes may represent a major paradigm shift, but you might as well start right now.

Join the Conversation

As always questions and comments are welcome. What paradigm shifts have occurred in your business in the last 50 years? What might happen in the next 50 years?


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Category: Skills |Innovation Change