Paradigm Shifts, Creative Destruction And How You Change The World

Most people pass their entire life doing things the same way, never considering that it is not the only way of working. Yet sometimes things change and the old ways don’t work anymore. That’s when you need to step up in order to survive.

Aesop’s Fables have been told to kids for thousands of years to teach them moral lessons and help them navigate in a complicated world. One such fable is that of “The Crow and the Pitcher”.

The allegory starts off with a crow flying around on a hot, dusty day. The crow is exhausted from thirst, but keeps on circling in the sky, eyes alert, but struggling to find anything to drink.

Finally, he spots a pitcher. Excited, he descends down to it, only to discover that it contains very little water.

He puts his beak into the pitcher, hoping to be able to reach at the water, but can’t. He tries pushing it over, but it doesn’t fall. He attempts all kinds of different ways to get at the water, but no success.

Then an idea pops into his head. He collects stones nearby and stacks them next to the pitcher.

Picking them up with his beak, he starts dropping these stones into the pitcher, one by one. Slowly, but surely the water level starts rising and gets a little higher with each stone thrown in.

Finally, he puts in the last few stones, and the water level in the pitcher rises high enough for him to put his beak into it and drink.

There are several moral lessons to be learned from this little story. Hard work, persistence and ingenuity are all things that ancient commentators saw as the things you were supposed to take out of it.

The little crow failed several times, but got back up and tried in a different way, persisting where others would have given up. He was also smart in noticing how the world works around him and applying that to solve the problem. The crow had a goal and didn’t stop until he achieved it.

One moral stands above the rest though: necessity is the mother of invention.

Old ways of doing things didn’t work any more. The crow tried all the traditional ways of getting at the water, but not one of them worked.

In order to survive, he needed to start thinking outside the box.

As a result of that little incident, the crow experienced an internal paradigm shift. However this was not only a change in how he views the world, but a change in how he works in the world.

He realized that he didn’t need to rely only on his own body to do things, but that he could use other objects lying around to help him perform different jobs better.

The crow became a tool user.

The story is not far from the truth, in fact modern crows have been studied and have exhibited similar problem-solving and tool-using techniques.

Once you learn that you don’t need to rely on what nature gave you in order to do your daily activities, but instead can pick up different objects in your vicinity and use them to help you, it’s a huge revelation and it completely changes the way you live.

You expend less energy, and need less resources to do daily things. You can also do new things, things you have never been able to do before.

It opens up a world of possibilities. Possibilities that had been closed to you before.

Chimpanzees and other primates have also been seen using tools in the wild. Different groups use different tools and techniques, which means that it is not an instinctual behavior, but instead a learned one.

It has been observed how when one individual discovers a new technique to do a certain activity, the technique spreads to many of the other individuals in the community. This new way of doing things completely changes their lives.

They experience a paradigm shift.

Technological Revolutions and Paradigm Shifts

When our ancestors picked up tools for the first time, they also experienced the first technological revolution.

This type of a revolution is the result of what has been termed disruptive innovation.

This is a term coined by Clayton Christensen after his analysis of the behavior of companies in the market.

Innovation is what drives change. However not all innovation is made equal and not all types of innovation have the same impact on how things are done.

One basic division of innovation is between incremental innovation and radical innovation.

Incremental innovation means adding slight improvements towards existing products and processes. You tweak a thing here, add a feature there.

Radical innovation on the other hand means that completely new technologies and processes are created.

However radical innovation itself can be further divided up into three sub-categories based on the impact of the innovation.

The lowest type of radical innovation is a breakthrough innovation. This is a radical solution to a pressing problem.

The crow in the allegory above had a pressing problem and solved it in a radical way.

Further up the radical innovation chain we have disruptive innovation. This is a term that has been very “in” in the last two decades and has expanded from its original meaning as coined by Christensen.

In its original meaning it means this:

Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

So in itself, a disruptive innovation can be, but does not have to be, a new technology. It just has to be another way of doing things, oftentimes at the start even with a worse performance than the product it is replacing.

One example that is used to illustrate this (besides the disk drive industry) is Wikipedia. This is a free encyclopedia on the net that can be edited by anyone.

It started with a few articles and then expanded rapidly displacing huge market players like the Encyclopedia Britannica in book form or Encarta, which was an encyclopedia for PCs.

The original meaning of disruptive innovation is a small niche player coming in from nowhere and displacing the incumbents.

However now the term is often used to include also up-market innovation, such as what Apple did with the iPhone and its total discruption of the phone, music-player and the camera markets.

A disruptive innovation creates a new market and value network, replacing the old market and processes.

The old ways of doing things die, soon forgotten, to be replaced by new ways. This is the essence of creative destruction, a term used by the economist Joseph Schumpeter to describe periodic cycles in the economy.

The cause of all this are disruptive technologies. Innovation is what drives the transformation.

There is one further type of radical innovation, one that not only transforms the market, but also the society: game-changing innovation.

Game-changing innovations not only bring in revolutionary technologies, but they transform societies. The result is a paradigm shift.

The crow in the allegory did come up with a radical solution to a problem, but this at the end did not result in a radical transformation of the crow society.

Birds are only at beginning of the spectrum of radical innovation. Except for nests, they use tools only rarely and in very specific contexts. So there is no systematic use of tools.

Chimps on the other hand, have more systematic use of tools. For example Mike, who rose to the leadership position through his clever use of different tools.

This was disruptive, but not game-changing yet.

Out of all the species on this planet, only humans have experienced game-changing innovation. The use of tools has transformed society numerous times.

We have moved through different stages, from the old stone-age cultures of our ancestors, to the agricultural revolution, and through various other stages to arrive at the industrial revolution.

Today, we are in the midst of another fundamental game-changing technological revolution.

The past three decades have seen enormous changes in how people live and work. The main reason for this has been the advent of the internet and all the technological innovations around it.

It has changed the way you search information, the way you work, and even the way you communicate with other people. All these spheres have undergone paradigm shifts.

The changing meaning of paradigm shifts

Originally, the concept of a paradigm shift as introduced by Kuhn, only meant scientific revolutions, but over time, it has widened to encompass all the different things that come together not only with a new way of thinking, but also a new way of working.

In 1986, M.L. Handa coined the concept of a social paradigm shift:

Paradigms are ways to envision the world that subsume concepts, values and practices shared by communities. In the scientific meaning, a paradigm introduces and justifies a set of assumptions and basic principles that further constitute the fundamentals. Based on principles, a framework of the system can be build. Through and analogy with Kuhn’s paradigm shifts, for the social sciences the term describes experiences and values that affect how individuals perceive reality and respond to it. The social meaning of paradigm shifts, as described by Handa (1986) entails a significant change in the way societies are organized. Paradigm shifts transcend the boundaries of economics, politics, geography or culture.

This is not only about a change on how you view the world, but it implies a change in how you work in the world.

There are three main types of paradigm shifts: scientific, social and technological.

Scientific paradigm shifts are changes in how you understand the world. Technological paradigm shifts are changes in how you work in the world. Social paradigm shifts combine both, a change in how you understand the world, but also how you work in it.

The way disruption happens in the market resembles the way how it can happen in society.

One important aspect of Christensen’s analysis of disruptive innovation in the market is that the disruptive technology or product isn’t necessarily better than the incumbent it is overtaking. Oftentimes it is worse.

It is similar with paradigm shifts in society. Social paradigm shifts are not always shifts for the better, sometimes things actually turn out worse. For example, the social paradigm shift in Roman Empire that led to Dark Ages was worse than what was worse.

Or today, some dangerous paradigms seem to be getting stronger. With the rise of populism and false news in Europe and North America, or salafism in the Middle East. All these things started off small, but snuck up on us.

Paradoxically, this danger came together with an advance in technology.

The internet is the enabler for a social paradigm shift. It doesn’t change the fundamental way you understand the world, in fact it is based on the application of the fundamental scientific principles that have been the prevalent way of thinking since the 19th century, but it has fundamentally changed how people do things and how society is organized.

However, this change in how people do things has two sides of the coin. It allows greater access to information and products and makes the world a more connected place. On the other hand, it also brings about social isolation, rise of narcissism, and false news.

Societal vs. Personal Paradigm Shifts

A societal paradigm shift is something that transforms society, such as the way the internet is changing the way things are done for almost everyone. However on a lower level, some technologies can create personal paradigm shifts.

One little innovation in your own life can have a huge impact on how you think and do things. For one person it can be one thing, for another person something else.

For example, adding this one little tool for daily planning could be the trigger towards you adopting a whole different mindset and lifestyle.

Instead of doing things haphazardly, you would be able to take a more structured and agile approach towards living your life and achieving your goals. This is disruptive innovation in practice for daily life.

Societal paradigm shifting technologies such as the internet will create personal paradigm shifts in ways of doing things for most people, however there are some technologies which while not game-changing on a societal level, can create paradigm shifts in ways of doing things on an individual level for certain people.

Many of these technologies might not even be that revolutionary or modern, but disruptive innovation is not just about new things, but also old things applied in new contexts.

Take a moment to reflect on this and think which ones would do this for you?

How does innovation happen?

Innovation requires having at least three things: a great idea, the engineering talent to execute it, and the business savvy (plus deal-making moxie) to turn it into a successful product.” Walter Isaacson

Innovation is a process which is dependent on creativity. It’s not straight-forward and usually requires a lot of trial and error.

Sometimes it gets confused with invention. However invention is only one step in the entire process and by itself does not necessarily equal innovation.

With invention you create something new. However you still need to apply this new technology to the outside world:

Invention is an act of intellectual creativity undertaken without any thought given to its possible economic import, while innovation happens when firms figure out how to craft inventions into constructive changes in their business model.” Joseph Schumpeter

So what does it take in order to proceed through all the steps towards changing the world?

Invention requires a leap of faith. To quote Jeff Bezos, the founder of Amazon:

Invention requires a long-term willingness to be misunderstood. You do something that you genuinely believe in, that you have conviction about, but for a long period of time well-meaning people may criticize that effort, and when you receive criticism from well-meaning people it pays to say — first of all, search yourself — are they right? And if they are you need to adapt what you’re doing. If they’re not right, if you really have conviction that they’re not right then you need to have that long term willingness to be misunderstood.

Oftentimes the spark for an invention comes from a basic need that you have. Just like the crow found out when it needed to get to the water, necessity is the mother of invention.

This is something that already Adam Smith observed in his “The Wealth of Nations”:

A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it. Whoever has been much accustomed to visit such manufactures must frequently have been shown very pretty machines, which were the inventions of such workmen in order to facilitate and quicken their particular part of the work.

In the first fire-engines, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his playfellows. One of the greatest improvements that has been made upon this machine, since it was first invented, was in this manner the discovery of a boy who wanted to save his own labour.

Richard Dron in his post on innovation lists several examples where a person had a need (in the examples usually stemming from a health issue) and went on to try to create something that would solve their problem:

“In this situation users innovate and solve their own problems. People are even driven do this at their own expense. Then instead of profiting they release their disruptive innovations for the benefit of others.”

One example that he gives is that of John Cousins, a guy who had problems with his kidneys, so started working on a way to use 3-D printers to print a kidney for himself. A life or death need led to an effort to try to find a solution and resulted in a process that could save countless other lives as well.

This is already an example of innovation, taking an invention and then adapting it for mass production. This could then have a potential to disrupt the entire way hospitals treat their patients.

An important part of whether a technology takes root or not are the users.

The growth of the internet demonstrates another concept that is key in order for an innovation to be successful: network effects.

The success of many technologies is a function of their networks. Take telephones as an example.

If only two people in the world have telephones, then their usefulness is limited. However as the number of owners of telephones increases, the value of your telephone increases exponentially.

Once a critical mass of users is reached, a tipping point is created and the technology literally explodes and takes over the market.

Sometimes it takes a while for something to take root. The internet started off in the 1960s and originally was just a radical invention/innovation for a small niche, and not disruptive at all.

It only became disruptive and later game-changing when other things were added to it in the late 1980s and the early 1990s, things like personal computers and the world wide web.

This shows the importance of a technology support net for the growth of a specific technology like the internet. These are all the peripheral things around the core technology, and could consist of things like software, hardware and other types of infrastructures.

One reason why it has been so hard to disrupt the car market is all the infrastructure around it. Cars run on combustion engines that use gasoline and a huge network of gas stations has been set up in order to service them.

If electric cars (or in the future hydrogen-powered cars) want to displace the gasoline cars, then a similar network needs to be set up. This is incredibly hard to do.

This shows how support nets also lead to major problems and that is by creating barriers to the displacement of the core technology by something better and more efficient.

They set up path dependent processes that only end up reinforcing themselves.

Probably when reading this you have a keyboard in front of you. Look at the first first five letters on the keyboard. They are most likely QWERTY.

This means you have a QWERTY keyboard (unless you are French, then you have an AZERTY keyboard).

Why these letters? Well, it goes back all the way back to the 19th century and the first typewriters.

The letters could have been placed in many different ways, for example alphabetically. The earliest typewriters did have other arrangements of letters, many of which were quite optimal for fast typing.

However the problem with fast typing was that the technology was not caught up and the keys kept jamming. So in order to slow down the speed of the typists, Christopher Scholes, the guy who came up with the most successful type of typewriter, decided to arrange the keyboard the QWERTY way.

This became the standard keyboard for all typewriters. Later, when the technology improved, it was hard for the standard keyboard setup to be switched.

A classic case to illustrate path dependency and how hard it is to switch once a standard is in place, is the QWERTY vs. Dvorak keyboard case.

In the 1930s, August Dvorak came up with a new more optimal keyboard layout, which proved to be faster in typing tests.

However he did not succeed in replacing the old QWERTY standard. Why? Because people already got used to it and learned how to use it.

For example, even me, I learned how to do 10-finger touch typing using the standard QWERTY keyboard and am pretty fast using it. I have lived in French-speaking countries and came across AZERTY keyboards. It’s a pain to use them, especially considering that you have to resort to old school two finger typing if you are a QWERTY guy.

This is a very good case to illustrate how even sub-optimal processes or products can became entrenched over time and result in lock-in. That’s why it can be very hard to dislodge incumbents who have this kind of lock-in power.

One little random decision in the past resulted in a movement in one direction, which kept on piling up and resulted in a current effect. How easily things could have been different, if other types of circumstances or a different decision had taken place.

Innovation itself is a messy affair. What is incremental can also be radical. It depends on the context. For example social networks such as Facebook are incremental in the technological sense, in that they only add on existing internet technologies, but radical in a societal context in that they create new ways of working and interacting on a personal level and later societal level as well.

This means that anyone can possibly add a valuable idea to the mix and create innovation, no matter their background.

As Walter Isaacson, the biographer of creatives such as Einstein or Steve Jobs states in an interview, there is no secret formula to being a successful innovator:

Yeah, there’s not one formula, which is fortunate for those of us that write biographies, otherwise you wouldn’t need a lot of biographies. Albert Einstein was much more of a loner, whereas Ben Franklin’s genius was bringing people together into teams. Steve Jobs’ genius was applying creativity and beauty to technology. But the one thing they had in common is they were all imaginative. They all questioned the conventional way of doing things. And as Einstein once said, imagination is more important than knowledge. And that’s sort of been a theme of all of my books.

Every innovation changes the world, whether in a small way or a large way. It is also key to the continuous prosperity of all humans.

Ever since Robert Solow wrote his paper, it has been recognized that innovation is one of the main factors in economic growth.

Not every innovation starts a technological revolution or a societal paradigm shift, but even small innovations can make a difference on the individual level. Sometimes it is possible to change the world, but sometimes just improving the life of even a single person can be a reward in itself.

Read More:
Frequently, whether an innovation is radical or incremental depends on the way you set up the problem. To quote the book “Hidden Solutions All Around You” by Daniel Castro, it is often the question that you are solving for that makes the difference:

“Why didn’t Sony see the iPod and iTunes before Apple did? Sony was asking “How can we make a better Discman?” instead of “How can we make it easier for people to listen to music?”

I explore how to set up the right questions to ask in my series on first principles thinking:
How to think like Elon Musk and come up with creative solutions to problems

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