These 4 Paradigm Shifts Will Define The Next Decade
The statistician George Box pointed out that “all models are wrong, but some are useful.” He meant that we create models as simplified representations of reality. They are merely tools and should never be mistaken for reality itself. Unfortunately, that’s much easier to say than it is to practice.
All too often, models take on the illusion of reality. We are trained, first at school and then on the job, to use models to make decisions. Most of the time the models are close enough to reality that we don’t really notice the discrepancy. Other times we notice that the model is off, but we dismiss it an unusual case or anomaly.
Yet the real world is always changing. So models tend to get more wrong — and hence less useful — over time. Eventually, the once-useful models become misleading and we undergo a paradigm shift. Today, as we experience a period of enormous change, we need to unlearn old models and replace them with new ones. They too will be wrong, but hopefully useful.
1. From Value Chains To Ecosystems
The dominant view of strategy in the 20th century was based on Michael Porter’s ideas about competitive advantage. In essence, he argued that the key to long-term success was to dominate the value chain by maximizing bargaining power among suppliers…
