Strategic

management
Book review
By: Divyesh Shah

ABSTRACT

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