Regulations and codes of behavior that determine people's behavior in an almost invisible way are paradigms. Paradigms can determine the behavior of individuals in a particular company or industry, resulting in restrictions on their business. The paradigm may be appropriate for the original business environment, but if it is unable to adapt to environmental changes, it becomes out of date. This is particularly the case with organizations which have recalled powerful past successes. Even if the product life cycle or applicable approaches in the market change, they are bound by prior paradigms and often continue to apply their previous ways of working as if that were the most obvious thing to do.
For example, in the semiconductor industry, the rise of collaborations between companies developing EDA (electronic design automation) software and foundries, which are contracted to produce hardware, has dramatically changed the business environment. Despite this, Japanese companies have found it difficult to move away from methods which have previously proved successful. As a result, Japanese semiconductor manufacturers have, for structural reasons, fallen into to a poor competitive position. This is a typical example of how working harder and harder to try and apply previous winning formulas leads to greater and greater difficulty.
The factors required for innovation are thought to be simple: a good vision, good research themes, motivated talented personnel and an environment that gives the team the chance to fully concentrate. However, as companies increase in size, the departments responsible for technology become divided into units handling narrow technological areas, and their employees work in narrow and specialized fields. Highly-specialized organizations are weak in the face of environmental change. Each individual starts to see that their work is simply to attack the problems in front of them, and unconsciously starts to believe that doing so will prove a source of strength for the corporation.
How can we prevent such situations from developing? Leaders in the field should not simply be satisfied by working to resolve only their immediate issues. They also have to consider the more fundamental problems lying behind the individual issues and create an environment in which everyone in the workplace cooperates to try and address the deeper chain of events.
If the environment is static, then companies simply need to improve their ability to cheaply and rapidly produce appealing products. However, in today's rapidly changing environment, companies can only survive by taking a broader view of the overall trends encompassing their technology, and making comprehensive adjustments to the way they work.