Part - I

Under Andy Grove's leadership, Intel has become the world's largest chipmaker and one of the most admired companies in the world. In "Only the Paranoid Survive", Grove reveals his strategy of focusing on a new way of measuring the nightmare moment every leader dreads-when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside.

However, the book is not really about Intel but it is about what one can learn from the experience. It is vital though not always easy to recognise a strategic inflection point (SIP). Andy Grove analyses where there can occur, for example, technological changes, regulation, new competition. The result is that all the business rules can suddenly change. A company that is able to spot this and act upon it will be the one moving forward. Frequently, it is not possible to recognise the strategic inflection point until it is actually occurring. For this reason, the most successful companies are the ones that are always questioning and looking over their shoulders. It is important to look much wider than your own business to see this.

The two most important points of strategic management highlighted in this book is about recognizing strategic inflection points in a business when the business and its environment goes through a dramatic change in structure referred to as a "10X" change in the book. A dramatic change in business environment requires that leaders with responsibility of implementing strategic management are able to adapt to the situation and who can come out of the inertia of success caused by the initial shock to derive competitive advantage from the changing trends. Grove categorically states that strategic management has two parts; strategic plans which deal with the unforeseen future and strategic actions which take place in the present.

What causes a SIP? Grove uses the 6 forces analysis (largely based on Michael Porter's work), and suggests that a SIP is caused by a 10X change in one of the following forces:

• Competition (e.g. the Warehouse comes to a small town and closes down small retailers)

• Technology (e.g. when sound took over silent pictures)

• Customers (e.g. Intel's own experience)

• Suppliers (e.g. Airlines telling ticket agents that the commissions are going down)

• Complementors (those who provide complementary products or services to yours, e.g. changes with the Internet and share broking)

• Regulation (e.g. the Federal break-up of AT&T in the USA in 1968)

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* Contributed by -
Arnab Pal,
PGP-1,
XIM Bhubaneswar.