The new paradigm of business is being defined in real time. The new paradigm is an emerging movement of thoughts and research being put into practice successfully by entrepreneurs all around the world. It’s the idea of building a business motivated first and foremost by a higher purpose.
Entrepreneurs are innately creative, innovative and responsive, so it’s only natural to see some of the world’s most successful companies working with new paradigm principles in place. Companies like Google, Toms and Zappos.com. Simple business ‘success hacking’ of trying and testing what works ironically brings a company organically to a new paradigm business model. It’s just smart business practice. And the reality is the old paradigm is not working anymore.
So what is the old and new paradigm of business?
At its core a new paradigm business is a company which is driven by a higher purpose. Old paradigm businesses in contrast are driven by profit alone. What has become commonly known as ‘shareholder value’ is probably the biggest definer of the old paradigm. It’s a linear success idea and is diametrically opposed to the new paradigm model I call ‘multi-dimensional success.’
The old paradigm is motivated by short term bottom line wins, which are an immediate product of having a purely financial goal. And with all due respect old paradigm businesses have tried to evolve, the problem is they are inherently flawed due to the collective beliefs we all have held around the purpose of a business. The idea that the purpose of a company alone is to increase shareholder value is being challenged by the new paradigm of business. You will probably have heard the term ‘Corporate Social Responsibility’ to clarify CSR is not the new paradigm of business. Corporate Social Responsibility is a nice idea but ultimately is a band-aid solution for a much bigger problem rooted in old paradigm business models.
Essentially the very foundation of many companies is just to make money and then through CSR, some of that is given away to a good cause. This is old paradigm because the source of the money creation is still motivated by pure profit targets, not to solving the problems the money is given away to solve.
Recently I read there is a move within corporates to give away skills and talents instead of money to their causes, this is a move in the right direction, but until a company is operating with a holistic success model in place at a foundation level it’s still old paradigm. And not all new paradigm businesses are social enterprises either. New paradigm business is a philosophical overriding intention rather than the product it produces.
The good news is as I mentioned, the more successful, innovative companies in the world are, as a process of effective business practice realizing that there are more effective ways to operate and are organically and intelligently adopting new paradigm thinking.
Three core outdated beliefs of old paradigm businesses
1. People are motivated by money.
Innately people are not motivated by money. There is a small window of productivity that can be stimulated with a financial incentive on mechanical based tasks, but overall productivity does not increase with increased financial rewards. Dan Pink talks about this in his great RSA talk and in his book Drive: The Surprising Truth About What Motivates Us. So for a company to be motivated by profit alone is in many ways unproductive across the board and it is definitely not the most effect way to improve motivation and innovation in a team. This has been proven with many studies, so it’s ironic that old paradigm businesses which are motivated by the bottom line have not adopted this new data, because essentially they would actually make more money. But it’s because our paradigm is stuck in a certain mindset hence my inspration to educate and inspire people on the new paradigm of business.
2. The purpose of a business is to increase shareholder value.
Profit motivated goals result in unsustainable business models. Short term financial gains end up producing unethical choices in the pursuit of recreating more instant wins. When the sole mission is for the bottom line to grow, executives, by definition do not take into consideration the whole vision of the company or the impacts of their decisions on other factors, like the environment.
Increasing profit for the sake of it becomes a senseless act when the planet is destroyed, people are abused and inferior products are produced. For many years this thinking went unnoticed but with the transparency made available by the internet the problem is now very visible, along with the quantity of the extensive damage being done to our environment alone it’s basically reaching critical mass.
Something has got to give, our addiction to money is costing us a lot. And pretty much like any other addiction, it becomes obvious when the addict will harm themselves to get their fix.
3. Cut throat competition is the way to win
Our mother’s were right! Sharing is good. While ‘beating out’ our perceived competitors can produce more money it is old paradigm and is rooted in fear and the idea that there is not enough. Using the logic of win-win in a multidimensional sense there is greater value for all stakeholders who work together around a company to collaborate and co create. This includes creating wins for staff, suppliers and customers.
One of the world’s greatest creations, ‘The Internet’ is a profound example of collaboration. And one of the highlights is Wikipedia, an international collaboration which is a far greater product than if it had been millions of single pages created by single page owners. Technology is close to my heart and the open source movement is another example showing the power of sharing. Working to develop technology together, standing on the shoulders of giants so to speak, open source is a beautiful mirror of consciously working together for a greater good. It throws traditional business thinking on its head. But it’s totally new paradigm that is intelligently a great solution to innovation when competition is taken of the equation.
The new paradigm begins to infiltrate into all areas of business, success and happiness when we start looking for what works. Naming it ‘new paradigm’ is really just a collective of trends within the movement emerging among evolutionary entrepreneurs. I am seeing common threads and patterns and have bought them together to start solidifying and codifying these innovations, so they can be replicated and accessible to all entrepreneurs.
The new paradigm is what works, what is working is redefining success beyond money and power. It is questioning the core of the old paradigm. After all a paradigm is simply a set of beliefs which appear to be real, not because they actually are. There are millions of people internationally who are working to make the world a better place to live happier, more fulfilled lives, I know with the most innovative business thinking backed up with results it’s only a matter of time before the paradigm shifts completely.
For now we all need to create it, in real time with our choices and actions. We need to learn new things and let go of our old paradigm, fear-based, lack consciousness. The new paradigm starts with you knowing who you are and what your purpose is, and choosing into it with all your heart.