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The experience of paradigm shifts in science can teach us a good deal about the ongoing paradigm shift in management, about which I wrote recently: Don’t Diss The Paradigm Shift In Management: It’s Happening! Common sense is commonly wrong No amount of tweaking the shareholder model of capitalism can fix it, because the goal of making money for shareholder entails a set of management practices-hierarchical bureaucracy-that are inherently incompatible with the goal of delighting customers: each tweak entails a new set of problems, that sooner or later lead the firm to regress back to the norm of hierarchical bureaucracy. The shift in management is a shift from shareholder capitalism in which the firm revolves around the manager to a customer capitalism in which the firm revolves around the customer.
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The paradigm shift is as fundamental as the shift from a geocentric to a heliocentric view of the heavens, the realization that genes work over multiple generations, or the discovery that stomach ulcers are caused by a bacterium. The fact that it’s also better for those doing the work and for those for whom the work is done will also help accelerate the transition. It’s a shift from a firm-centric view of the world in which the firm’s purpose is to make money for its shareholders to a customer-centric view of the world in which the purpose of the firm is to add value for customers.Īmong many factors driving the shift is the realization that the new paradigm not only makes more money for the firm than shareholder capitalism: when correctly executed, it makes tons more money, as one can see from the results of firms when they implement the new paradigm, like Apple, Amazon, Salesforce, Costco or Zara. Now, whether the business schools or managers want it or not, a discontinuous paradigm shift in management is happening. Instead, scientists have to look at the problem in a fundamentally different way to solve the problem. Working ever more diligently within the existing paradigm leads to frustration, not progress. He had to look at the problem in a totally different way to solve the problem. The breakthrough that won for Marshall the Nobel Prize for Medicine didn’t come by improving the conventional theory of stomach ulcers. They knew that no bacterium could possibly live in the human stomach, given the presence of acid as strong as that found in a car battery. So they ignored Barry Marshall, an Australian physician, when he presented evidence that peptic ulcers are caused by a bacterium living in the stomach. In 1982, scientists knew that stomach ulcers were caused by stress, spicy foods, and stomach acid.
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Scientists had to look at the problem in a completely different way to solve the problem. No amount of tweaking the old theory led to progress. Mendel’s work in pea plants showed that genetics works over multiple generations with hybrid, dominant and recessive genes. The prevailing theory was that all genetic characteristics were passed from parents to the next generation in an average fashion. In 1865, Gregor Mendel presented a paper in Moravia that eventually jettisoned decades of scientific work in genetics.