The golden opportunity of paradigm shifts

Trends are tendencies 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 ageing 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 a natural by-product of efficient manufacturing in a world in which resources are plentiful. Once 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 currently underway: the idea that waste is wealth – the cradle-to-cradle paradigm. The new rallying cry is not to produce less, but to produce differently.

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.

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 effects 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 major paradigm shifts are:

1. Push to pull is the shift from pushing structures and products to pulling in resources and demand. We move 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 shifts passive consumption to active contribution and creation. Here we shift to a more participatory experience, in which the customer is actively involved in co-creating the product or experience. We become 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.
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.

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: it solved the problem of 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 or cars through Airbnb, or through car sharing. As an investor, Chang sees trends as focal points that influence their surroundings.

Innovation leadership should ask: what are the three other elements 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.

Innovation leadership sees opportunities from a single paradigm shift across multiple fields. The Push to Pull shift, for example, can be fruitfully applied in innovation leadership approaches to education, politics, healthcare, and energy.

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.

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.