Here is a book review from Value and Opportunity on how inflection points affected Intel and spectacular rise of the company as microprocessor powerhouse; and then a little something on Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company by Andrew S. Grove.
I also found the book especially interesting because Intel is one of the famous cases for a “size moat” in Bruce Greenwald’s “Competition demystified”. Greenwald there argues that Intel’s success in microprocessors was more or less given because they had such a size advantage compared to AMD, their major competitor. Reading the book, I got the impression that Prof. Greenwald greatly simplified this. There seemed to have been several junctions on the way where Intel easily could have went “of course”, such as the rise of the RISC processors or the question at that time if multimedia will be won by PCs or TV sets. For me, one of the lessons o f the book is that Moats, at least in technology are always “weak moats” as the development is just too dynamic.
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The most powerful concept of the book in my opinion is the following concept from Andy Grove: If you see someone coming up with a new idea or a competing product, then you should ask yourself the question: Is this a thread to the business if this gets 10 times bigger or better or faster ? His theory (and paranoia) was that if it is a thread at 10x bigger/better/faster than the probability of this actually happening is very big and you have to do something about it. And fast…
More from Value and Opportunity here and on the book below
Only the Paranoid Survive – Description
Under Andy Grove’s leadership, Intel has become the world’s largest chip maker and one of the most admired companies in the world. In Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, 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.
Grove calls such a moment a Strategic Inflection Point, which can be set off by almost anything: mega-competition, a change in regulations, or a seemingly modest change in technology. When a Strategic Inflection Point hits, the ordinary rules of business go out the window. Yet, managed right, a Strategic Inflection Point can be an opportunity to win in the marketplace and emerge stronger than ever.
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: How to Exploit the Crisis Points That Challenge Every Company is a classic of managerial and leadership skills.
The Currency Paperback edition of Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company includes a new chapter about the impact of strategic inflection points on individual careers–how to predict them and how to benefit from them.
Only the Paranoid Survive – Book Review
Massive change is hitting corporate America at a furious and escalating pace, writes Andrew Grove in Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, and businesses that strive hard to keep abreast of the transition will be the only ones that prevail. And Grove should know. As chief executive of Intel, he wrestled with one of the business world’s great challenges in 1994 when a flaw in his company’s new cornerstone product — the Pentium processor — grew into a front-page controversy that seriously threatened its future. –This text refers to an out of print or unavailable edition of this title.
From Publishers Weekly
Keep looking over your shoulder, cautions Grove, president and CEO of Intel Corporation, because the technology that keeps changing the way businesses are run and careers are forged is on the verge of making every person or company in the world either a co-worker or a competitor. And be warned that there’s a pattern to the havoc that forces us to regroup whenever we think we have a grip on things. The pattern is based on a series of revolutionary milestones, inevitable and unpredictable, that Grove calls strategic inflection points. They change things. Every significant development from railroads to superstores to computers has been a point of strategic inflection. Businesses and individuals are never the same once these points zero in to alter the status quo. For Intel, a manufacturer of computer works, a strategic inflection point was the transition from memory chips to microprocessors, and a great deal of this book details the way Intel handled this change, including furor that erupted when a minor flaw was discovered in its Pentium processor. Perhaps the quality that lifts this above other business books is its applicability to individuals.