I'm not here to talk about the book, but rather the results of the research on which it is based.
We studied 4,500 organizations $7 million in syndicated research over a four year period and all this research came to a bunch of conclusions that centre around the theme that the information age is not one big continuous bewildering series of events, but is in fact discontinuous.
We are going through our first fundamental shift or paradigm shift.
We are entering a second era of information technology where basically everything is different in terms of the nature of the technology itself and also its role in our organization and our society.
We became convinced that organizations that understand this change have a chance of succeeding, as do societies. And those who don't are toast. They will tend to become bypassed, fail, be irrelevant, cease to exist. So, the stakes are very high in understanding this change.
What exactly is a paradigm shift?
Essentially, a paradigm is a set of assumptions that is so strong in our lives that we don't even know we're there. It is sort of like a fish in a bowl and the paradigm is the water. The flat world was a dominant paradigm. Communism, evil empire as the enemy, that was a whole view or paradigm.
This is what's happening in the world right now and especially with the information technology computing.
There is a new promise from information technology and it holds the promise of the re-invention of the organization; the transformation of our economy and the transformation of our society to create learning organizations and a knowledge-based economy and a learning society.
The starting point for all of this, as the theme of this conference quite correctly points out, is not technology, but it is in big changes that are happening in the global environment or this global change.
Linked to this is a fundamental transformation of the business environment. The walls of competition are falling just as the walls are falling in the world. Xerox has had to deal with Canon, GE has had to deal with Sony, GM has had to deal with Honda and so on.
Forty per cent of the Fortune 500 companies that existed 15 years ago are not listed today. Remember the four pillars of finance banks, trust companies, insurance companies, brokerage houses. Who did you get your R.R.S.P. from? It could have been any one them. Walls falling.
The old smoke stack industrial economy is giving way to a new innovation in knowledge-based economy. Now that doesn't mean that industrial production or agriculture are going to go away. So long as we need to eat, be clothed, be mobile and be housed, we are going to need agriculture and production.
Just as the industrial revolution transformed the agricultural economy, the information technology is transforming the ways that we produce things. We have robotics, just-in-time production and mass customization of products and process control. But it's also transforming the way we do agriculture. Farmers now have PC's on tractors and when a cow is sick they might log on and do an interactive diagnosis and, while logged on, they may just check the commodities market for grain.
And just as the highways and the railways and the power grid were the infra-structure for the old economy, so the information super highways are becoming the infra-structure of the new economy that will deliver stuff directly to your house. Your TV, telephone, and computer are all going to be the same device interacting over a network by the end of this decade.
This is creating a big push for some huge changes in our organizations. We need to re-invent the enterprise. Why? Well, the old model doesn't work any more.
So what is the new model of the enterprise? Well it is called an open networked learning organization. It's flatter; it is team based. Professionals working together, multi-disciplinary groups that cut across the old organizational boundaries. It's outwardly focused or open, focused on the customer. It is responsive, it is modular. You are motivated out of a desire to achieve team goals rather than to satisfy superiors. Many of these teams are self-managed.
Let me give you a couple of examples.
At the Shell Brockville Lubricants Plant, the organization chart is three circles; three overlapping circles. There is a general manager at the plant. He is at the bottom. He is the support person, and he supports three self-managed teams. And this is enabled through technology.
There are work stations everywhere in the plant, they are all networked together, they have a whole new structure and among other things, people can rotate their job. And they are involved in a learning organization, a new experience.
The day you get stuck doing one of the lousy jobs like putting labels on a drum, you are not just labelling a drum, you are correctly labelling the product being shipped on time to the customer and you know the implications of not doing it right. Because the day before, you might have been telemarketing, you might have sold the business. And two days before you were running the accounting system and know the financial impact of drums not being correctly labelled.
City Bank, at one of its divisions, implemented the work group system. Everybody including the senior executives, clerical people got a work station. They redesigned all the jobs, the business process, the organizational structure, and they saved marketing people over three hours a day by eliminating all this paper routine activity and they re-invested that time that was saved in customer contact which went from 7% of the day to close to 40% of the day. Revenue went up by 240%, profit centre earnings by 170% over an 11 month period.
Let me give you an educational example.
At River Oaks school in Oakville, kids have a Mac on their desktops. This is primary school and they have these work teams; they are all networked together. These kids are learning CADCAM (Computer Aided Design, Computer Aided Manufacturing). You create your family logo on the screen and you take that picture and you run it through the output manufacturing devise and it embroiders the logo onto the tee-shirt.
These are Grade four kids. They are doing collaborative projects with kids in Tokyo on the Internet on the topic of spiders. They can't speak Japanese, the Japanese can't speak English, but somehow they are part of the same team and they work together enabled by information technology.
I have focused on private sector examples to generate more competitive organizations and we need to compete in this world market to create new high paying, high value jobs, but we could also go through this and think about all kinds of opportunities to have an impact on the society as a whole.
What has this got to do with learning?
Whenever there is a paradigm shift it usually creates a crisis of leadership. Paradigm shifts involve dislocation, conflict, confusion, uncertainty and vested interests often fight the change. The leaders of the old are often the last to embrace the new. Look at the information technology market. Who are the big vendors facing multi-million dollar losses? The leaders of old.
And this is true within our organizations and in our society as a whole. We have a full blown bona fide crisis of leadership in this society.
We can continue business as usual and in doing so fall behind, or we can start out on a new course a new direction in partnership, working together, organizations and individuals.
Second, we need learning. There are lineups to get into community colleges like George Brown in Toronto, because they don't have enough physical seats in the building or enough teachers. Yet, there is the National Technical University in the United States, which has 30,000 students enroled in degree granting programs that has no buildings. It is all done through networks, correspondence, broadcasting technology. We need the new technology for learning.
Finally, I believe every institution in this society has to change.
I think the business community needs to change. Certainly a lot of business people. Our evidence is that there is many Canadian businesses that are falling behind the shift in re-engineering and redesigning their organizations enabled by the new technology.
Secondly, many governments don't get it. You know the federal government Prosperity Initiative, this multi- million dollar thing; collaborative, involved all kinds of people. The final report says we need to invest in infrastructure. I was ready to cheer, until I read the report. Infrastructure to them is roads and bridges; the infrastructure of the old economy.
The unions could play a critical role in moving forward. I think we do need a new Social Contract. Not necessarily one that deals only with reduction in government costs, but one where unions actually can be leaders in this society and can share the power. But there has got to be some big changes for that to work.
And finally, will our teachers, our educational institutions be able to respond to this change? We have wonderful examples like River Oaks, George Brown, the University of Waterloo...but, we need a big change in education.
I believe Canada needs to make a turn, we need to go on a campaign footing. We need to launch a campaign all of us in government, business, labour, community, educational institutions need to focus ourselves and work together in different ways for this transformation in the paradigm.