Study Guide #1

Question 1

Understand the two things paradigms do

Answer 1

• Establish boundaries

- Provide rules for what constitutes success

Question 2

Explain the paradigm effect

Answer 2

Paradigms act as mental filters, causing one to see that which fits the paradigm, and perhaps ignore data that doesn’t fit the model. “What may be perfectly obvious to a person with one paradigm may be totally imperceptible to someone with another.”
Examples:
(1) Believers in alternative medicines often ascribe cures to practices which non believers ignore or disdain.
(2)The unusual practices of Hindu Sadhus (holy men) are often considered bizarre by non Hindus.

Question 3

Understand the back to zero rule

Answer 3

When a paradigm shift occurs, the playing field is leveled so that everyone (even leading companies in the old paradigm) starts from ground zero. Past success guarantees nothing.
Examples:
(1) When the telephone was invented, the field was opened for anyone to succeed. It is interesting that Western Union, the big telecom company of that era, was not the one to succeed at telephony.
(2) When digital watches emerged, great skill in manufacturing analog watches did not prepare manufacturers on how to produce good digital watches.

Question 4

List the six key observations about paradigms

Answer 4

1. Paradigms are common—you see them in all aspects of life
2. Paradigms are useful means of understanding—they show us what’s important and what is not; they focus our attention
3. Sometimes YOUR paradigm can become THE only paradigm you recognize. When you reject all other paradigms, that is called “paradigm paralysis” because you can’t see what else is possible outside of the prevailing paradigm.
4. The people who create new paradigms are usually outsiders of the prevailing paradigm. Look to the fringes or edge for innovations. They occur there because only there do people typically look for ways of doing things that are significantly outside the old paradigm.
5. Those practitioners who choose to adopt a new paradigm, the “paradigm pioneers,” must be very courageous, have faith, trust in their judgment, and be willing to take risks.
6. You can choose to change your rules and regulations – your paradigm.

Question 5

Understand difference between disruptive and sustaining technologies

Answer 5

• A disruptive innovation is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.
• sustaining innovation does not create new markets or value networks but rather only evolves existing ones with better value, allowing the firms within to compete against each other’s sustaining improvements. Sustaining innovations may be either “discontinuous”[1] (i.e. “transformational” or “revolutionary”) or “continuous” (i.e. “evolutionary”).

Question 6

sustaining

Answer 6

An innovation that does not affect existing markets.

-Help your company do what you already do better
Improved business process, product, or service..
More efficient coal burning plant
Book stores use computer kiosks in store to help customers find books

Question 7

disruptive

Answer 7

An innovation that creates a new market by applying a different set of values, which ultimately (and unexpectedly) overtakes an existing market. (e.g., the lower priced Ford Model T)

-Entirely new way of doing things. A new paradigm
An entirely different business process, product, or service that replaces the previous one.
Cold-fusion
All books can be purchased online; no need to go in the store

Question 8

Why do managers in organizations often fail to perceive the importance of adopting technologies that might improve or broaden their products and services?

Answer 8

What they have shown is that good firms are usually aware of the innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining innovations (which are needed to compete against current competition). In Christensen’s terms, a firm’s existing value networks place insufficient value on the disruptive innovation to allow its pursuit by that firm.

Question 9

Paradigm paralysis

Answer 9

• You believe your paradigm is the ONLY reasonable paradigm

- You reject all other paradigms regardless of their actual value

Question 10

Paradigm Pioneer

Answer 10

Those practitioners who choose to adopt a new paradigm, the “paradigm pioneers,” must be very courageous, have faith, trust in their judgment, and be willing to take risks.

Question 11

Digital Darwinism

Answer 11

Digital Darwinism is the evolution of consumer behavior when society and technology evolve faster than the ability to adapt. Today, people have uninhibited access to platforms, channels and tools to express themselves at will.

-an era where technology and society are evolving faster than businesses can naturally adapt.

Question 12

Paradigm flexibility…

Answer 12

allows you to see change as an opportunity rather than a threat.