"Perspectives work like filters. They help to identify what is really critical and what can wait for another day. They show where you should allocate resources, capital and talent in order to master today's challenges," says Felix Oberholzer-Gee, professor at Harvard Business School and speaker at the Academy of Behavioral Economics 2022. Changing perspectives is never easy, he says, because you don't really know when the old perspective is no longer valid, and many resource allocations and activities are based on old ideas about our perspectives.
Oberholzer-Gee cites Silicon Valley as an example of this: "The idea that in a digital economy, companies that benefit from network effects will always win was a fantastic story in Silicon Valley 25 years ago and led to a massive inflow of capital. Today, we know that's not the right perspective." Over and over, we see that companies with network effects are not going to be winners. Nevertheless, the old perspective that fast growth, scale or the number of users is what counts is still prevalent today. Even though different ways of adding value have proven to be at least as valuable.
"The key is to understand the fundamental economics. Am I applying a tool or a framework that worked in the past but doesn't work today?" says Oberholzer-Gee.