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Part - II

So how do you survive something that you might not see coming? Grove suggests three steps in the transition from the pre-SIP environment to what he calls "the other side of the valley of death":

• Endure the period of confusion, which is inevitable while you try to figure out what is going on

• Experiment and allow some chaos to find the new ways of doing business

• Reign in the chaos and pass through a period of single-minded determination and pursuit of a new direction toward an initially nebulous goal

The decision by Intel to shift from the memory business, which had been their mainstay and identity from inception to the fledgling microprocessor business, was perhaps one of the most strategic decision or fundamental realignment of strategy by any Fortune 500 company in the last 25 years. This strategic decision completely altered the long-term direction of Intel.

Intel's strategy of trying to counter the environmental threats in form of Japanese competitors resulted in dwindling profits and market share thus causing a mini crisis in the mid 80's. Thus taking advantage of environmental opportunities in the microprocessor market and the growing PC market it shifted its production resources to this field. It was a perfect example of matching organizational resources to these threats and opportunities. There would be little point in trying to take advantage of some new opportunity if the resources needed were not available or could not be made available, or if the strategy was rooted in an inadequate resource-base.

Grove also talks about how Intel realized that it had to focus its scope of activities as it could not afford to fight against the Japanese in the memory business while trying to break in to the microchip market. The strategic decision to limit their scope of activities only to chips was perhaps instrumental in ensuring Intel's success.

The decision to systematically shift manufacturing facilities from memory business to chips by supervisors and managers lower down the order was a strategic decision which slowly affected operational decisions, to set off waves of lesser decisions when the actual shift occurred.

The book also discusses about chaos, conflict, debate and experimentation and how they help in formulating new insights and ideas because strategic decisions usually involve a high degree of uncertainty.

The decision by Grove to convince the powers at Intel before bringing about the 10X change in business profile displayed excellent strategic management because strategy values and expectations of those who have power in and around the organization always have to coincide for successful implementation.

Grove underscores his message by examining his own record of success and failure, including how he navigated the events of the Pentium flaw, which threatened Intel's reputation in 1994, and how he has dealt with the explosions in growth of the Internet. The work of a lifetime, Only the Paranoid Survive is a classic of managerial and leadership skills.

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