Only the Paranoid Survive! - Andrew Grove

Here is a scintillating book I just read and thought of sharing some of its ideas. The story is about Intel – how it managed the most critical point of its corporate life when its memory business was at the brink of extinction and they had no idea how to fight Japanese and other low cost competition. Instead of digging the memory grave deeper, Chairman Gordon Moore and CEO Andrew Grove used that crisis point as a spark to change the fortunes of their company to a higher level of success.

Books about change management and crisis management etc. are aplenty but mostly have a theoretical construct or have sure shot formula on ‘how to do it’. What makes Andrew’s tale different is because it is real and when those crisis points arrive in the life of an organization or even in your own, nothing is clear ever. There is confusion, diffidence, inertia and most importantly it is hard to unlearn the old ways and re invent a new path. As the tale unfolds, that confusion, uncertainty, pessimism and diffidence is there in the Intel team as well and Grove is so honest enough to lay it all bare.

How they brought about this quantum shift? First the top 2 guys asked themselves that if we were to sack ourselves and hire a new guy what he would do. The answer was he would get us out of the memory business (at that point Intel’s identity and core business was the memory business). So, they decided to lay all bets off and decided to do just that. But what would they do instead? So, they would be letting go of what essentially they knew how to do in search of something that they’d have to learn all from scratch, also not knowing for sure if they would succeed or not.

To bring about change, they allowed everyone to ‘question’ everything and debate, argue and just let the whole organization come to a boiling point. But if the chaos continued too long, they would just have withered away. After they had sufficient inputs and new directions, they decided to rein in the chaos. Here too, unlike theoretical ‘How to’ books, the risks were many and confusion continued to mar their progress. It was clear to them that they had to set a new direction and that required the top management to do it. What was most important was ‘clarity’ – what they were going to focus on (microprocessors) and also what they are going to get away from (the memory business that defined them actually till that point). Having set a clear direction, they communicated it as clearly and then went all out for it. It was a risky decision as the road ahead was uncharted and they were going to be the pioneers in that line, so it was tough to ‘know’ for sure that what they were doing would pay off. It did and thus there is the success and hence the story. But no denying that the risk also might not have had paid off.

The key lesson I think here is that they recognized the strategic inflection point when the games of the industry were changing and rather rapidly. They needed to reinvent themselves and seize the day. They acted at the right moment. Two, also every crisis point is like standing at the edge of a precipice with threats closing in on you. What looks like doom could be a strategic inflection point when you see an opportunity for a take off in a totally new direction akin to paragliding to a new reality. Three, there is a madness to change which necessarily involves confusion and conflict as those are essential to questioning everything. But finally there has to be a method to the madness as well when the top leader/ team takes a call and says, ok this is the way we need to go. Accept the risks but spell out clearly what the strategy will be and then go for it. To repeat his statement, let the chaos reign but then do manage to rein it in.

To me Andrew grove and Moore’s management of this success is almost miraculous as it is normally difficult to see that inflection point when you are part of a system. It is easier for an outsider to see it though. It is even harder to change old ways and reinvent yourself – it is easier with an outsider’s help who could guide you through it. But of course you have to find the right outsider / helper (the usual consultancy firms are well, the lesser said the better. Though to be fair, they are not bad for moderate change but never quantum jump).

The book is poignant, precise and powerful and I’d recommend it to anyone. Andrew’s style is honest, and clear without any undue dramatization of the turnaround. We get to live the remarkable journey with him and if you’ve been through a crisis point, you’d relate to it even more. Inspiring!