Strategic management Book review

ABSTRACT

By: Divyesh Shah

Every Tybba manager 157 in every industry must assume that something will change very soon. ONLY THE PARANOID SURVIVE is a classic lesson in leadership skills that every manager will benefit from.

About the author

Andrew S. Grove emigrated from Hungary to the United States in 1956. He became the president of Intel in 1979 and remained chief executive officer from 1987 to 1998. Under Groves leadership Intel had become the worlds largest computer chipmaker, 5 th most admired company in America and 7th most profitable company among the Forbes 500. Andrew S. Grove has won numerous industry awards including the IEEE Medal of Honor in 2000 and was also chosen as Man of the year by Time Magazine in 1997. Grove also taught strategic management at the Stanford university graduate school of business.

About the book

Andrew S. Grove recounts takes us deep inside the workings of Intel, by informing about the strategies used by other companies and how he dealt successfully with Intels crisis including the fierce competition from Japanese, flaw in Pentium and changes brought on by the internet. The two most important strategies highlighted in the book are strategic inflection point (SIP) and 10X force The strategic inflection point is the point in life of any business or project when its fundamentals are changing significantly. Usually this point or period of change is a misnomer and tends to be long, at times painful. The arrival of this point is usually recognizable when (1) Key competitor of Business is about to change, (2) Key complementor of Business is about to change or (3) People who are usually competent are giving up. Strategic inflection point occurs due to many reasons some of them being- change in technology, change in competitors etc. the SIP leads to a full scale change in the way a business is conducted and hence it is difficult to accept the change easily. When a change in how business is conducted becomes an order of magnitude larger than what the business is accustomed to, then all bets are off. The change develops to be of a magnitude that sometimes is out of control. Such a change can be called a 10x change suggesting that the change has become 10 folds then what it was recently.

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BOOK REVIEW

Things I liked about the book

The lessons imparted by the author Andrew S. Grove in this book is not applicable only in the computer industry but in all the industries even in the military The book talks about the practical aspects that work in the real world. The best line I liked from the book in this aspect is Don't differentiate without a difference. Don't introduce improvements whose only purpose is to give you an advantage over your competitor, without giving your customer a substantial advantage. To stand out amongst the competitors one has to have a competitive advantage, but that advantage should serve some purpose to the end users as well, only then the company stands out of the rest. The ideology I liked the most in the book is the authors belief in the importance of commitment. The author states that organizations fail not because they are wrong but rather because they fail to commit to a decision. The author Andrew S. Grove also mentions the prime responsibility of a manager in this book with various examples which is to guard the business against the competitors attack and pound this attitude in the people under his management. Author also differentiates good managers in this book by saying that they are the ones who do not have a linear thought process which enables them to see the conditions of the world around them and forecast what may be coming next that will affect their business.

Things I didnt like in the book

This book mentions how a large organization can take advantage of a strategic inflection point and become big but nowhere mentions what a new start up or a company should do to create a strategic inflection point which hinders growth for existing large organizations and help the new company to grow The author Andrew S. Grove mentions in his book that People who have no emotional stake in a decision can see what needs to be done sooner. I would counter argue to this as usually people who have an emotional stake in the business knows the business in and out and can forecast the problem well before anyone else can as they tend to be more dedicated. This book also doesnt mention the role of organizational development and its application in the change process which is must required in any organization to carry out a change process.

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O N LY T H E P A R A N O I D S U R V I V E

Strategic inflection points provide an opportunity to break out of a plateau and catapult to a higher level of achievement.

Key learnings from the book

A manger should always lookout for signals that a strategic inflection point is about to come and so that he can be prepared for it. The secret to success is identifying the oncoming crisis early and reacting sensibly. If an oncoming crisis is left unattended to the company will be weakened and most likely will never be restored back to its full potential. An organization should focus more on outside world as the majority of the threats a business face comes from technological changes and shifts in consumers demand which should be acted upon to aid the survival of a business but the focus should not be removed from within the organization also as change can be influenced by organization itself. For example, if a business develops a new product that is not fit for the market then it will bring the business down. Strategic inflection points do not always mean disaster. They can also bring about opportunities for new period of growth for companies. The more successful your business is, more people would want a chunk of your business and then another chunk and then another until there is nothing left. To survive the change, it is important to anticipate the change. To understand the change stay in touch of the people around you, they are usually in touch with impending change sooner than you are.

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BOOK REVIEW

Businesses fail either because they leave their customers i.e. they change a strategy that worked for them in the past or because their customers leave them.

Questions raised by the book

When an industry goes through a strategic inflection point then the established players may face trouble. Whereas, a 10X change provides an opportunity for outsiders to join and become part of the action. But a question arises that how a small competitor can take advantage of the situation when an established player is going through a strategic inflection point? Also how a new company or a small competitor can take benefit of the SIPs and grow? Also another question raised by the book is how the massive changes in companies affects its workers and how much assistance top management provides to the workers in the change process during such situations?

These are the question that arises after reading this book which definitely requires research from my part to find the answer to it.

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O N LY T H E P A R A N O I D S U R V I V E

In times of change, managers almost always know which direction they should go in, but usually act too late and do too little.

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BOOK REVIEW