How to anticipate wrenching change: CEOs can avoid being blindsided if they heed key signals.

How long can you wait to change your company's strategic direction? How long before it's too late? These haunting questions have more relevancy today than ever before. Fortunately, they now have glimmers of an answer.

Industry tsunamis, or major shifts in the competitive landscape in the form of disruptive new competitors or technologies, may seem to appear overnight, but in reality usually evolve quietly over a number of years. CEOs usually have enough time to adapt to the shift once they observe uncertainty creep into the competitive picture--but only if they embrace the changes.

One of the most notable cases of a company being overtaken by a tsunami involves Eastman Kodak's failure to adjust to the beginning of the consumer digital camera revolution. It is now playing catch-up by slashing dividends and pouring money into a digital initiative.

The wave that engulfed Kodak began way before the first digital cameras appeared in the mid-1990s; it was in 1979, according to Minoru Ohnishi, CEO of archrival Fuji Photofilm. This was when silver prices (silver is a key ingredient in film) temporarily jumped to stratosphericlevels, raising doubts about silver's longterm viability for film.

After the furor died down, Kodak went back to business as usual. Fuji, however, sensed something fundamental occurring, and became convinced of it a few years later with the arrival of Sony's first low-resolution digital camera, the Mavica. Fuji caught Kodak napping, and last year at this time, Fuji had nearly 5,000 mini digital processing labs in chain stores throughout the U.S.; Kodak had fewer than 100.

Sun Microsystems also failed to recognize important signals well over 15 years ago, nearly from the time the company was founded in the mid-1980s. The signals included small, less-expensive, more powerful workstations, followed by opensource software and cheaper RISC chip alternatives that undercut Sun's proprietary Java-based systems and proprietary chips. These changes allowed so-called industry lightweights, such as Dell, to push past Sun.

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Here are three ways to avoid being over-whelmed by inevitable change:

1. Learn to appreciate--and internalize--the fact that major changes in your industry are inevitable. Analyze potential changes on the basis of certainty and impact. For example, a group of senior managers at a certain health care company told me recently that of the many trends swirling about the pharmaceutical industry, the matter of whether new delivery technology will replace some of their company's therapies is both uncertain and potentially high impact to their business. This means it is worth watching but not necessarily acting on. This was exactly the position that executives at Kodak and Sun found themselves in--facing an uncertain yet potentially high-impact trend.