Abstract for: Business tsunami: in between black swans and little white lies

This talk introduces business tsunami as an important strategic supply chain phenomenon. Like their ecological counterparts, business tsunami occur with relatively long time intervals which makes it easy to mistake them for unique events, instead of a recurring phenomenon. Different from ecological tsunami, they can be prevented through timely and adequate managerial perception and action. In the short term, their effects on companies can be very disruptive. In the long term, business tsunami tend to have strong formative structural effects on how companies are run, on supply chains and networks and even on industry structure. They are fundamentally different from both the bullwhip effect and black swan events. Unlike the bullwhip effect, they do not operate all the time but take a long time to accumulate pressures that are suddenly released, to the surprise of management. Unlike black swan events such as ecological tsunami, they can be prevented if management is able to scan the business environment for their early warning signs and is willing to face up to the unwelcome realities they tend to represent, rather than deny their potential threat through little white lies. This talk gives examples of how management of several top companies chose to ignore the buildup of problems that in the end exploded into business tsunami, with severe effects for their businesses and their own personal careers. It explains the mechanisms through which these business tsunami operate. It provides a simple system dynamics model as a dynamic hypothesis of how these mechanisms work. It also, in the best tradition of Forrester's Industrial Dynamics from 1958, links the notion of business tsunami with a broader need to revive strategic Operations Management research, as business tsunami are foremost supply chain phenomena and living proof that Operations still remains, after about half a century, the missing link in corporate strategy.