Natural Disasters and Industrial Change

Change is inevitable in all aspects of life. Even industries change regularly, typically as innovation, culture, and opportunities evolve. Threats can drive industrial change, too, and the threats posed by natural disasters often compel significant alterations to how and why business gets done.

Industrial Evolution: Four Trajectories

Evaluating next steps in industry growth requires the capacity to step back from day-to-day concerns and see the longer perspective. Sometimes, change must occur because the competition is making ‘business as usual’ obsolete. Other times, emerging alternatives offer better opportunities to create improved profitability. Research shows that four evolutionary trajectories drive changes in industries, and that those four courses of action are divided into two camps: those that are driven by threats, and those that are driven by market evolutions.

• Threats to an industry’s core capacities will mandate changes. Until the Internet intervened, car dealerships and salespeople were considered the auto industry experts on what car to buy and why. As the internet expanded, however, consumers embraced the opportunity to research their own car-buying details and data, leaving the showroom floor personnel with nothing to add to the experience except the product itself. This circumstance is an ‘intermediating change’ because the digital innovations challenged the traditional relationship between seller and buyer.
• Threats to an industry’s core assets also suggest altering or eliminating existing practices; over time, almost all products become obsolete as new options offering the same or better services become available. The introduction of the automobile is an early example. That invention, coupled with innovative production capacities, quickly put the horse-and-buggy sector out of business. This circumstance is defined as a ‘radical change’ because the advent of a new and different asset rendered another industry completely moot.

Industries can also evolve without the presence of threats.

• Creativity is a big instigator of industrial change. New employees, for example, often bring insights and imagination to their occupations, seeing the old practices through new eyes. These types of evolutions may result in better versions of the product, as opposed to whole new products. Adding color to motion pictures or using trademarked jerseys to build the presence of sports teams are two examples of ‘creative change’ and how industries can expand without intrinsically changing their product.
• ‘Progressive change’ drives innovation by connecting consumer experience with existing assets to feedback-driven enhancements. Today’s obsession with online surveys and ‘How are we doing?’ quizzes reveals how industries are constantly seeking input from relevant communities to inform and develop their subsequent iterations.

Each of these styles of industrial change reflects how the circumstances occurring at the moment – in the business, the community, or the industry – might impact the industrial organization itself. Corporate leaders who see and respond to emerging influences that suggest viable alternatives to ‘business as usual’ can gain an early lead over their competitors.

Disaster-Driven Industrial Evolution

As tragic as they may be, natural disasters also present opportunities for change that flow from all four types of industrial evolution. As companies evaluate the full extent of losses caused by floods, fires, drought, and other ‘natural’ catastrophes, they may also see opportunities for innovation that can change or modify their past ‘best practices.’

• In some cases, whole corporate divisions may be rendered obsolete if their product or service offers little or no future value in what’s left of the industry. Those organizations will be radically changed by this fundamental change to their corporate structure.
• In other cases, data regarding how the disaster unfolded can inform innovations to existing assets that will enhance their value in the future – entities that are attentive to these factors will effect intermediating change in their evolution.

Each such evolution is driven by the specific factors of the particular cataclysm and how each entity experienced the challenge. Consequently, companies within industries can experience similar impacts and losses due to a disaster, but their unique and individual responses to those deficits can still set them apart from their competitors. Moving through the recovery process, they can implement both creative and progressive changes.

The Construction Industry Offers Constructive Observations

Adaptations within the construction industry offer insights into how foundational industries assess for and embrace new options after suffering losses (from any cause). Today’s construction experts have many tools they can use to improve the quality of repairs or rebuilds of damaged or destroyed buildings. The final iteration after recovery can – and should – provide improved safety and enhanced productivity for the makeover, resulting in both a corporate and industrial evolution. These three innovative assets reflect how the construction industry uses new tools to improve traditional building practices.

• Computer-aided Design (CAD) – Most of today’s built infrastructure was constructed without the use of computer technologies. The emergence of computer-aided drafting, however, suggests that it would be dangerous to approach a construction project these days without using this comprehensive tool to maintain standards and controls. Perhaps its most significant contribution: flagging engineers and builders of discrepancies between design and construction.
• Building Information Management (BIM) – Another technology already informing millions of businesses around the world, BIM capacities provide sensor-derived data that demonstrate where weaknesses lie and offer options to remediate those challenges. In a rebuild setting, the BIM ‘tests’ materials and design against known disaster-type activities, such as high winds, water intrusions, or earthquake-level tremors. In the final build, BIM capabilities track temperatures, energy use, and other processes that impact building performance.
• Modular Construction – ‘Stick-built’ homes and buildings – those that are constructed totally piece by piece on-site – may become obsolete if their capacities to withstand ‘natural’ and environmental pressures can’t compete with modular construction options. Modular buildings are fabricated within environmentally stable facilitities, often using robots and other advanced technologies to achieve near-perfect results. Because they aren’t subject to weather or similar construction-related impediments, these buildings can be completed faster than those done with traditional building processes, and are often stronger, more efficient, and more economical than their stick-built counterparts.

The wildfires in LA, flooding in Kentucky, and tornadoes in Missouri have all altered both the terrain and economies of their communities. As those and other regions consider optimal rebuilding strategies, business and industrial leaders should be looking at how the enforced changes in their circumstances can direct their activities to improve their products and services to keep future generations safe, and ensure that the enterprise can thrive.