Characteristics of a Paradigm Shift – Surviving the Techstorm

CHARACTERISTICS
OF A PARADIGM
SHIFT

In times of a maturing GPT, which is the case for IT today, and a rapidly growing successor (nanoscience) a number of traits can be identified. What is interesting here is that this has also been true in earlier shifts between GPTs, for example when steam power was succeeded by electricity and the factory system as enabling technologies.

Looking back and analyzing earlier paradigm shifts, a number of interesting patterns emerge as signs of these changing times:

• An unusual expansion in the number of innovations and technological changes. It seems as if one invention leads to another, and that there are local, regional and national effects working together to form a positive environment for innovation and technological change.

• Improvements and innovations in technology are closely followed by improvements in communication as well as physical transportation.

• Production and distribution of power has paved the way for, or closely followed, innovations. In this ongoing shift, we are still waiting for the breakthrough in energy and battery technologies, although interesting prospects are easily identifiable today.

• Disruptive technology innovation will change business development constantly, but there are some more fundamental ongoing principles that are valid today and tomorrow.

Also, there are a number of individual, corporate and social traits that become visible and change in these times of technological paradigm shifts.

NEW PERSPECTIVE ON TIME

Today businesses instinctively choose speed as a business development strategy, using advanced computer software, social networks and mobile communication to stay agile. We have seen that logistics, transportation and communication systems have been vastly developed during most of the five technological waves, and these have been among the main drivers since then. This is also true in manufacturing where most industries boast that parts remain only hours in factories before leaving as components of a finished product. The definition of real time in this context is that an automated system can actually keep up with the job, processing input with no delay to output. Now companies have real time scheduling, analyzing and action in production as well as in other parts of their daily processes. This has expanded in business and will have a great impact on organizations, individual employees and speed of work.

The notion that society is moving faster will affect everyone, and sociologists have found that increasing wealth and education bring a sense of tension about time.

INCREASING SPEED OF TIME

The move to a real time perspective does not only concern business. The notion that society is moving faster will affect everyone, and sociologists have found that increasing wealth and education bring a sense of tension about time. We believe that we possess too little of it. The increasing speed of time is changing the way we behave in business. “In the world before FedEx, when ‘it’ could not absolutely, positively, be there overnight, it rarely had to. Now that it can, it must. Overnight mail, like so many of the hastening technologies, gave its first business customers a competitive edge. When everyone adopted overnight mail, equality was restored, and only the universally faster pace remained.”50

Not only is this acceleration of time affecting us as people, it is also affecting products and services in the marketplace. The lean start-up philosophy is based on the idea that new products and services should reach the market very early and that customer behavior must be closely monitored in order to provide instant feedback and fast product iterations.

CONSTANT LEARNING

“In the knowledge society, the knowledge base is the foundation of the economy”, said Peter Drucker, the father of management theory.51 The focus on ongoing professional development is still valid, and the fast expansion of the knowledge-based workforce is a clear trend. The body of professionals whom Drucker identified as “knowledge workers” 40 years ago, are most in demand, and will remain so. Professional training schools are growing at 100 times the rate of academic institutions, according to KPMG, which estimates that 75% of today’s workforce needs retraining. Fortunately, we are entering a new era of educational experience. As a result, there will be more progress in terms of educational content and methodology in the next 10 years than there was in the whole of the past century, ranging from interactive education to networked learning and online university degrees. Also, information systems will push organizational evolution towards decentralization. Newer, more open organizational models will attract people who are capable of thinking and making decisions for themselves. Even the best men and women need guidance and ongoing learning to enable them to use and analyze new information and to make the best decisions. Companies also need clear strategies for attracting and retaining talented employees.

KNOWLEDGE TRANSFER IN ORGANIZATIONS

In the transformation phase, it is even more essential for corporations to embrace the wisdom that “knowledge is only valuable and helpful when it is being used.” Many companies have the best pieces of knowledge and information isolated in individual people or systems such as marketing research, financial data and product development. Corporations need to create policies, systems and cultures that encourage the sharing of this knowledge by improving access systems for employees and also developing better interfaces to capture and find information. Furthermore, it is today increasingly common for a company to involve customers in knowledge creation and analysis, often in the development of new products and services. Of course, there is a risk that this knowledge may find its way to the wrong people; perhaps this risk has to be accepted and weighed against the benefits.

It is of high importance to ensure that knowledge stays in the company even when people leave for new jobs. It is also clear that there is a need for better incentives for knowledge transfer programs. Since the value of modern corporations is tightly linked to their employees’ knowledge, an expansion of knowledge transfer and capturing will generate returns in the long term.

Organizations need to pinpoint the knowledge they are lacking and identify the most critical knowledge in order to meet their business goals and to achieve their long term strategies. The next step is to benchmark the quality and speed of transferring knowledge, and to assess how business goals can be linked to existing and future knowledge needs.52

MULTI-DISCIPLINARILY ON ALL LEVELS

With new technologies promising customers, managers, and companies the new thing, it is more important than ever for individual employees, as well as the company itself, to have a clear understanding and knowledge of technology from several different angles.

It is therefore important to be up to date on the development of new technologies. This does not necessarily mean that a company has to adopt every new technology, but that it should be aware of its emergence and potential impact.

With this in mind it is as important for everyone to focus on the right technologies as it is to avoid the wrong ones. This is valid not only for companies, but also for individuals and local and regional industry players, as well as governmental institutions. From this, we will see a need for people with multi-disciplinary competences, preferably with a background in business and technology. For people aiming for a future in business, the most important thing might not be being fully educated on every aspect of a technology, but rather understanding the consequences, and being able to see possible applications. The same is also valid on a company level, where corporations need to have a clear understanding of the different competences needed, and then put together teams with diverse backgrounds and expertise.

For people aiming for a future in business, the most important thing might not be being fully educated on every aspect of a technology, but rather understanding the consequences, and being able to see possible applications.

CROSS-FERTILIZATION OF TECHNOLOGIES

Another trend that is taking us into the future is the increasing convergence and cross-fertilization of technologies. We can see a clear example in the way that the human genome was fully sequenced. Going back to the 1970s, biologists thought this would take centuries, but the original estimate from the Human Genome Project, when initiated in 1990, was for completion in 15 years at a cost of US$3 billion. Through a private initiative headed by Celera Genomics, the invention of automated sequencing machines and vastly increased computing power, the completion date was set for 2005, but was actually achieved in 2001 at a cost of US$300 million.53, 54 Today, full genome sequencing costs roughly US$1,000 and can be completed in 24 hours.55

We now see cross-fertilization between a number of technologies, as described earlier with the BANG analogy. Already we have research groups studying the possibilities of building computers based on strings of DNA. Other scientists are including nanotechnology in their work to develop smaller and faster computers or extremely durable materials. Physicists are teaming up with people from the arts and trying to find new metaphors to explain the complexity of science, and the CERN particle accelerator promotes artists-in-residence programs to gain disparate/different views on their work.

One of the most obvious implications of an interdisciplinary era is that it demands interdisciplinary research. Twenty first century students aiming to become managers will need to know about the interrelationships between biology, physics, philosophy, sociology, and political science, to name a few major disciplines. Universities today remain ill equipped to provide such holistic thinking.

GLOBALIZATION

There has been a globalization peak during the past several hundred years, and companies have evolved from being local to regional, national, multinational, and fully global. We have also seen an enormous increase in mergers and acquisitions activities in the past decades, creating larger and even more global companies. There are more strategic alliances with customers, suppliers and even competitors. The same pattern can be identified among customers strengthening their buying power. This trend is, of course, forced and enabled by the explosion of improved communication technologies, but also by education, freedom, and demographics. Instead of economic imperialism, we see how companies start to practice economic diplomacy, realizing that it is vital to adapt to different cultures. The creation of global marketplaces is also generating highly segmented global bodies of potential customers. We see more and more specialized clusters. No one could have predicted the speed with which Google became a global company. Would it have become market leader if it had only focused on the US market? Globalization is not just a business phenomenon. It is an evolution bringing individuals, organizations, nations and cultures together. Given this significance, every organization is today taking the potential effects of globalization into account when formulating its strategies.