Strategies & Analysis
Are these events or product introductions
disruptive or transformational?
Environmental Protection Agency creation:
The U.S. Environmental Protection Agency (EPA or sometimes
USEPA) is an agency of the federal government of the United
States charged with protecting human health and the environment, by writing and enforcing regulations based on laws
passed by Congress. The EPA was proposed by President and
began operation on December 3, 1970, after Nixon submitted a
reorganization plan to Congress and it was ratified by committee hearings in the House and Senate. The agency is led by its
Administrator, who is appointed by the president and approved
by Congress. The current administrator is Scott Pruitt. The EPA
is not a Cabinet department, but the administrator is normally
given cabinet rank. The agency has approximately 18,000 full-time employees. (2)
Until the end of November, 1970, the US coatings and paints
industry was essentially marketing one technology to most of the
end-users in North America. This coating technology was generally described as a low solids, solvent borne paint or coating. The
coatings industry environment was slow in growth and marketed
as a necessary afterthought in OEM overall design considerations.
Then, in December, 1970 EPA came upon the scene demanding not insignificant but monumental changes in solvent emissions causing our industry to change in an unprecedented manor.
Our industry was truly “disrupted” by the intrusion of these new
regulations. We had to change not only from a technology offering but we had to change the way we did business as well.
So, we conclude that the creation of EPA was a direct disruptive
event to the paints & coatings industry causing downstream transformational wave (not ripple) effects, fragmenting our coatings & paints
industry forever. These aftershock waves from the introduction of the
EPA regs, were NOT disruptive in and of themselves since by definition, they did not change the appeal to a new customer base and they
were “coatings” themselves and not “coating” replacements.
Those of us who were there when EPA came into prominence could certainly argue the term ‘disruptive’ since this
event forced us collectively into uncharted technical as
well as managerial waters since these new under developed
technologies caused major disruption throughout the value
chains of market activity. Labs would have to add headcount;
spray/emersion equipment would have to change in labs & at
the point of application; coatings manufacturing equipment
would be expanded; training at all levels of the organization
would have to be incorporated; inventories would be fragmented to match the market, etc.
Now, almost 47 years later, we have seen significant consolidation due to many influences from globalization to the
Wal-Mart effect of end-user price back-pressures and yes, the
disruptive event of EPA creation.
What about the future disruptions in our industry? Can we predict their occurrence and their effect? The answer is, only partially.
The future of our industry’s profitable success lies in two
broad business sectors: Management & Technology:
In general, management must move down from its abstract
insular environment into more of the realistic portion of the or-
ganization and even into the marketplace. Don’t get me wrong,
in our consultation we know some of our industry management
is doing this now and some degree of being abstract and insulat-
ed is good, but extremes in either direction is not going to work
in the global business we find ourselves in today. Is the transfer-
ring of time, attention and intelligence from the C-Suite to the
“street” a disruptive event or a transformative event? Probably
the latter but importantly it will change how we do business.
Historically, coatings have served two primary purposes: to protect the underlying surface and to decorate. Functionality has not
been a part of our industry’s offerings to any great degree until now.
With the advent of biotechnology, we are seeing the emergence of
new, “smart” surfaces that are capable of autonomously recognizing the environment and reacting into it. Currently being introduced
are functional additives. These naturally occurring additives are designed to provide intelligence to coatings. Some of the intelligence
provided is: self-healing, detoxification, non-toxic and non-polluting
biocides, self-degreasing surfaces and nerve agent neutralizer.
There are other new functional coating systems being discussed. One such system of high interest is an additive that
when incorporated into a marine coating, through its interaction with the naturally occurring metals and minerals in
the ocean, sets up a battery effect eliminating the growth of
barnacles, thus providing less weight, more “slip” resulting in
enormous fuel saving for ocean-going vessels.
Another coating system, utilizing additive made up of a commercially ready carbon-nano-tube technology, can reduce needed film thicknesses/costs in epoxies and urethanes; strengthen
the film integrity; making the film 5-7 times more flexible while
increasing corrosion protections more than 4 times.
Are these latter innovations disruptive? Very much so! We feel
they provide a whole new life for a coating/paint system in their
respective applications and markets. They will drive other innovations more quickly. Most importantly, they will drive coatings and
paints from an after-thought reactive technology to a front-row
seat, proactive in the design of new products to be coated. CW
1) Christensen, Clayton M. &
Overdorf, Michael. (2000).
2) Wikipedia
