Home > Disruptive Change > Business Tsunamis: Giant Wave of Destruction or of Opportunity?

Business Tsunamis: Giant Wave of Destruction or of Opportunity?

What do you drive? An SUV? A luxury sedan? Maybe a Smartcar?

The advent of the automobile in the 20th century provides a good example of when a disruptive invention is a fundamental building block but by itself is not enough to create a breakthrough business. It took the combination of a number of innovations to create the automobile industry that changed the world. What actually happened?

First, the gasoline-powered engine (a truly disruptive technology) was invented in Europe. Then Karl Benz invented and patented (1886) an automobile powered by this technology. He continued improving on his initial concept and eventually formed a company that sold his “motorwagens”. By the end of the 19th century, Benz was the largest automobile company in the world, having produced over 500 vehicles. However the market for these vehicles (and other similar vehicles sold by smaller companies) was small since they were expensive, and since the supply was limited due to their one-at-a-time production. Not anything world-changing yet.

However, the Ford Motor Company had a vision for how to combine the gasoline-powered engine with the then new innovation of “mass production” to rapidly produce automobiles that were inexpensive.  The additional  Ford innovations – automobiles made up of more common parts and assembly-line production. Ford designed a car and built a factory based on these concepts. And in 1908, the Ford factory produced the Model T Ford – a car much quicker and cheaper to build than any other, which made it the world’s first “affordable” car. Yes, Ford used disruptive technology (someone else’s), but it was the combination of manufacturing-based innovations that quickly led to the birth of the modern automobile industry, the death of the “horse and buggy” era, and the rise to industry leadership of the Ford Motor Company, at least for a number of years.

Automobiles are just one example of how disruptive innovations and/or disruptive changes in the business environment can have a dramatic impact that reaches far beyond one company or one industry. We call disruptions such as these Business Tsunamis.” Just like tsunamis in the ocean, Business Tsunamis are powerful waves that bring irreversible change. Whatever their causes, these giant disruptive waves can alter the business world as you know it. They can create new companies and industries, provide dramatic growth for existing companies, or lead to the demise of a company, a business segment, or an entire industry.

So why is understanding the concept of Business Tsunamis important? It’s all about managing change. Business Tsunamis are waves of corporate destruction for those who are caught unaware. But they also are waves of opportunity – for those who can successfully “ride” them through the uncharted waters of today’s chaotic world.

The next time you sip your Starbucks… think about how many business opportunities came with the mega-success of Starbucks. They didn’t require disruptive technology, but they did incorporate disruptive innovations of many kinds.

Categories: Disruptive Change
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