The book, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company by Andrew S. Grove (former CEO of Intel), is a must read for any business leader. Steve Jobs, when he was CEO & founder of Pixar Animation and Apple Inc once said about the book:
“This book is about one super-important concept. You must learn about Strategic Inflection Point, because sooner or later you are going to live through one.”
Under Andy Grove’s leadership, Intel has become the world’s largest chipmakers and one of the most admired companies in the world.
In the book, 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. 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, Grove says that the ordinary rules of business go out the window. Yet, if managed correctly, a Strategic Inflection Point can be an opportunity to win in the marketplace and emerge stronger than ever.
Grove also underscores his messages by examining his own record of success and failure, including how he navigated the events of the Pentium CPU flaw which threatened Intel’s reputation during 1994.
Taken directly from the book word for word, a Strategic Inflection Point is "a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. However, it may just as likely signal the beginning of the end. Strategic Inflection Points can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient. They build up force so insidiously that you may have a hard time even putting a finger on what has changed, yet you know that something has."
In conclusion, in South Africa we have heard announcements from MultiChoice, Standard Bank, IBM and Nedbank that they will be retrenching thousands of staff. In some cases, technological change has been said to be the cause of the retrenchments.
Are they facing a Strategic Inflection Point in their business?
Read the book and make up your opinion.