BOOK REVIEW: “Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career” by Andrew S. Grove (1996)

Only the Paranoid Survive by Andrew S. GroveThe legend has it that Intel employees saw the impression “Only the Paranoid Survive” as they walked into the building every morning. Andrew Grove Intel’s first employee is certainly happy to own the expression. Despite the fact that Intel has come to dominate the semiconductor market particularly in the PC industry. Despite the fact they had 80% market share on stage and despite the fact that the company was so successful that it was even investigated by antitrust and abuse of monopoly power by the US government. Groove was right clear on the fact that competitors were out there to bring Intel down. This book is a fascinating read on one of the most successful technology companies in the past few decades.

Key words

Semiconductor, Grove, Intel, Moore, Strategy, Pentium

Summary

Only the Paranoid Survive shows it with a great deal of honesty that success is a phase of Intel since its creation in the late 1960s. It explains the impact of a now famous knows novel. The statement by Gordon Moore a colleague of one of the founders of Intel expresses that micro processors would become twice as quick every eighteen month whilst simultaneously becoming half of expenses. This is reminding surprisingly true over the past 50 years that some people bring into question today.Quotes of Andy Grove

Grove outlines the growth and successes of Intel and explains why it came to dominate the semiconductor industry. From a strategies views point it is a very interesting book to read since Grove is happy to share some of the diagrams and some of discussions the company had during their regular strategy meetings. This even goes that far to posting up the diagrams there were put up during those discussions. However the CEO is not shy about talking of its own failings either. Many pages are given to two particular instances. The first concerns the famous Pentium bug a bug found in the spreadsheet that seems so insignificant from a statistical point of view that Intel shows to ignore it. Unfortunately the public expected much greater things from Intel and when they were discovered this let the public outcry. Grove for many days decided to ignore this thinking that would blow over. I did not. After ten days of heavy media criticism the company and Grove himself were required to apologize under guarantee that they would fix the problem.

Interesting quotes

“I am often credited with the motto, “Only the paranoid survive.” I have no idea when I first said this, but the fact remains that, when it comes to business, I believe in value of paranoia. Business success contains the seeds of its own destruction.”

Change management processes

Creating new environments requires internal change processes

“I was one of the last one to understand Pentium crisis. It took a barrage of relentless criticism to make me realize that something had changed – and that we needed to adapt to the new environment.”

“Of all the changes in the forces of competition, the most difficult one to deal with is when one of the forces becomes so strong that it transforms the very essence of how business is conducted in an industry. There are plenty of historic examples, such as how railroads revolutionized transportation, and many contemporary ones, such as how small retailers are being wiped out by superstores.”

“In short, Jobs thought PCs were a mess. The thing is he was right. But what Jobs missed at the time was that the every messiness of the PC industry that he despised was the result of his power: many companies competing to offer better value to ever larger number of customers.”

“People who have no emotional stake in a decision can see what needs to be done sooner.”

Michael Porter's Competitive Advantage

Porter describes “competitive advantages” within the four field matrix

“Most strategic inflection points instead of coming in with a bang, approach on little cat feet. They are often not clear until you can look at the events in retrospect. Later, when you ask yourself when you first had an inkling that you were facing a strategic inflection point, your recollections are about a trivial sign hinting that the competitive dynamics had changed.”

“Snow melts first at the periphery because that’s where it is most exposed. Factoring in the news from the periphery is an important contribution to the process of sorting out signal from noise.”

“The most important role of managers is to create an environment in which people are passionately dedicated to winning in the marketplace. Fear plays a major role in creating and maintaining such passion. Fear of competition, fear of bankruptcy, fear of being wrong and fear of losing can all be powerful motivators.”

“I tend to believe Mark Twain hit it on the head when he said, “Put all of your eggs in one basket and watch that basket.”

Andrew Grove about his understanding of employees within the technology industry

See more book reviews:

BOOK REVIEW: “Making Strategy Work: Leading Effective Execution and Change” by Lawrence G. Hrebiniak (2005)

Cover

“Making Strategy Work” is a fairly long, but easily readable book, by Lawrence Hrebiniak, a professor at Wharton University, and consultant.  The book draws on the author’s 25 years’ experience of teaching senior executives, and the underlying premise that runs throughout it is that, while setting a strategy is a good thing, it is the execution that is crucial for the success of an organization.  Successful execution requires that a company looks very closely at such things, as power within the firms, and how to manage change. 

BOOK REVIEW: “Steve Jobs” by Walter Isaacson (2011)

Biography of Steve Jobs

This is the hottest business book of the moment and Amazon’s best selling book of 2011. 577 pages look fairly daunting but there is a nice mixture of personal detail and professional development which makes it fairly simple to read.  Jobs was adopted which made him feel “Abandoned”, “Chosen” and “Special.” He frequently got into trouble at school and then dropped out of Reed College in his second year. He had regular temper tantrums and big mood swings but also a remarkable gift for improving products and making them simple to use. He spent hours and hours fussing over tiny details including those legendary ‘spontaneous’ presentations.

BOOK REVIEW “Competitive Strategy” by Michael Porter (1998)

Competitive Strategy by Michael E. Porter

Written in 1980, Competitive Strategy, has formed the basis of modern strategic thinking for three decades. Amazon says that the book is now in its 60th edition and has been translated into 19 languages. It is still a great book to read though the recent bankruptcy of Michael Porter’s company, Monitor Group, has someone tarnised the image of the management guru.

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Filed under Book Review, Innovation, Leadership, Management, Strategy, USA

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