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TECH TALK: Techs 10X Tsunamis

July 16th, 2002 · No Comments

If there is one constant in life and business, it is Change. Change happens with relentless regularity. It impacts us personally and at work, and it causes upheavals in business. If we look back at the last 7-8 years, in whatever industry and wherever we have been, our lives could have escaped the remorseless onslaught of Change. It is little wonder then that one of the best-selling books of recent times has been Who Moved My Cheese?. As Dr Spencer Johnson says in his book, “Noticing small changes early helps you adapt to the bigger changes that are to come.”

But there are some changes which are more than just incremental. They disrupt the old order and create new ones. They are like tidal waves. They are the 10X Tsunamis. They dramatically alter the status quo and create new opportunities. Indias 1991 liberalisation programme unleashed by then finance Manmohan Singh was one such 10X change for business in India. The Asian economic crisis in the late 1990s, the Internet bubble on the stock market and its bursting, the recent accounting scandals in the US are all examples of these disruptive forces.

The impact of 10X change is best captured by Intels Andy Grove in his 1996 book Only the Paranoid Survive. Writes Grove:

When a change in how some element of one’s business is conducted becomes an order of magnitude larger than what that business is accustomed to, then all bets are off. There’s wind and then there’s a typhoon, there are waves and then there’s a tsunami. There are competitive forces and then there are supercompetitive forces. I’ll call such a very large change a “10X” change.

In the face of such “10X” forces, you can lose control of your destiny. Things happen to your business that didn’t before, your business no longer responds to your actions as it used to.

Grove goes on to describe, what he calls, a Strategic Inflection Point:

Mathematically, we encounter an inflection point when the rate of change of the slope of the curve (referred to as its “second derivative”) changes sign, for instance, going from negative to positive. In physical terms, it’s where a curve changes from convex to concave, or vice versa. It’s the point at which a curve stops curving one way and starts curving the other way.

So it is with strategic business matters, too. An inflection point occurs where the old strategic picture dissolves and gives way to the new, allowing the business to ascend to new heights. However, if you don’t navigate your way through an inflection point, you go through a peak and after the peak the business declines. It is around such inflection points that managers puzzle and observe, “Things are different. Something has changed.”

Put another way, a strategic inflection point is when the balance of forces shifts from the old structure, from the old ways of doing business and the old ways of competing, to the new. Before the strategic inflection point, the industry simply was more like the old. After it, it is more like the new. It is a point where the curve has subtly but profoundly changed, never to change back again.

In the coming columns, we will explore the 10X forces we are experiencing in the world of technology, how they are changing our lives and businesses, and what are the new opportunities that they are creating. But first, to set the foundation for the future thinking, well take a quick journey over the past two decades of computing and communications to look at some of the major 10X tsunamis.

Tomorrow: The Past

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