Only the Paranoid Survive

by Andrew S. Grove

You need to plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.

The sad news is, nobody owes you a career. Your career is literally your business. You own it as a sole proprietor. You have one employee: yourself. You are in competition with millions of similar businesses: millions of other employees all over the world. You need to accept ownership of your career, your skills and the timing of your moves. It is your responsibility to protect this personal business of yours from harm and to position it to benefit from the changes in the environment. Nobody else can do that for you.

IBM was composed of a group of people who had won time and time again, decade after decade, in the battle among vertical computer players. The managers who ran IBM grew up in this world. They got selected for their excellence in developing products and competing in the marketplace within this framework. Their long reign of success deeply reinforced and ingrained the thought processes and instincts that led to winning in the vertical industry. So when the industry changed, they attempted to use the same type of thinking regarding product development and competitiveness that had worked so well in the past.

When an industry goes through a strategic inflection point, the practitioners of the old art may have trouble. On the other hand, the new landscape provides an opportunity for people, some of whom may not even be participants in the industry in question, to join and become part of the action.

the person who is the star of a previous era is often the last one to adapt to change, the last one to yield to the logic of a strategic inflection point and tends to fall harder than most.

I remember a time in the middle of 1985, after this aimless wandering had been going on for almost a year. I was in my office with Intel’s chairman and CEO, Gordon Moore, and we were discussing our quandary. Our mood was downbeat. I looked out the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and I asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”

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

If existing management want to keep their jobs when the basics of the business are undergoing profound change, they must adopt an outsider’s intellectual objectivity. They must do what they need to do to get through the strategic inflection point unfettered by any emotional attachment to the past. That’s what Gordon and I had to do when we figuratively went out the door, stomped out our cigarettes and returned to do the job.

Peter Drucker quotes a definition of an entrepreneur as someone who moves resources from areas of lower productivity and yield to areas of higher productivity and yield.

If you are in middle management, don’t be a wimp. Don’t sit on the sidelines waiting for the senior people to make a decision so that later on you can criticize them over a beer—”My God, how could they be so dumb?” Your time for participating is now. You owe it to the company and you owe it to yourself. Don’t justify holding back by saying that you don’t know the answers; at times like this, nobody does. Give your most considered opinion and give it clearly and forcefully; your criterion for involvement should be that you’re heard and understood. Clearly, all sides cannot prevail in the debate but all opinions have value in shaping the right answer.

Simply put, fear can be the opposite of complacency. Complacency often afflicts precisely those who have been the most successful. It is often found in companies that have honed the sort of skills that are perfect for their environment. But when their environment changes, these companies may be the slowest to respond properly. A good dose of fear of losing may help sharpen their survival instincts.

Looking back over my own career, I have never made a tough change, whether it involved resource shifts or personnel moves, that I haven’t wished I had made a year or so earlier.

Management writers use the word “vision” for this. That’s too lofty for my taste. What you’re trying to do is capture the essence of the company and the focus of its business. You are trying to define what the company will be, yet that can only be done if you also undertake to define what the company will not be.

One more word about your own time: if you’re in a leadership position, how you spend your time has enormous symbolic value. It will communicate what’s important or what isn’t far more powerfully than all the speeches you can give. Strategic change doesn’t just start at the top. It starts with your calendar.

What’s the difference? Strategic plans are statements of what we intend to do. Strategic actions are steps we have already taken or are taking which suggest our longer-term intent. Strategic plans sound like a political speech. Strategic actions are concrete steps. They vary: They can be the assignment of an up-and-coming player to a new area of responsibility; they can be the opening of sales offices in a portion of the world where we haven’t done business before; they can be a cutback in the development effort that deals with a long-pursued area of our business. All of these are real and suggest directional changes.

While strategic plans are abstract and are usually couched in language that has no concrete meaning except to the company’s management, strategic actions matter because they immediately affect people’s lives. They change people’s work, as was the case when we shifted capacity from memory production to microprocessor production and our sales force had a different product mix. They cause consternation and raise eyebrows, as did the transfer of the Intel manager from the tried-and-true microprocessor business to an ambiguous new area.

Strategic plans deal with events that are so far in the future that they have little relevance to what you actually have to do today. So they don’t command true attention. Strategic actions, however, take place in the present. Consequently, they command immediate attention. Their power comes from this very aspect. Even if any one strategic action changes the trajectory on which the corporation moves by only a few degrees, if those actions are consistent with the image of what the company should look like when it gets to the other side of the inflection point, every one of them will reinforce every other. That’s ...

The point is this: you can’t hedge in a choice of direction and you can’t hedge in your commitment to it. If you do, your people will be confused and after a while they will throw up their hands in resignation. Not only will you lose direction, but you will continue to sap the energy of your organization as well.

Your new thoughts and new arguments will take awhile to sink in. But you will find that repetition sharpens your articulation of the new direction and makes it increasingly clear to your employees. So speak and answer questions as often as possible; while it may seem like you’re repeating yourself, in reality you will be reinforcing a strategic message.

An organization that has a culture that can deal with these two phases—debate (chaos reigns) and a determined march (chaos reined in)—is a powerful, adaptive organization. Such an organization has two attributes: 1. It tolerates and even encourages debate. These debates are vigorous, devoted to exploring issues, indifferent to rank and include individuals of varied backgrounds. 2. It is capable of making and accepting clear decisions, with the entire organization then supporting the decision. Organizations that have these characteristics are far more strategic-inflection-point-ready than others.

I have long held that each person, whether he is an employee or self-employed, is like an individual business. Your career is literally your business, and you are its CEO. Just like the CEO of a large corporation, you must respond to market forces, head off competitors, take advantage of complementors and be alert to the possibility that what you are doing can be done in a different way. It is your responsibility to protect your career from harm and to position yourself to benefit from changes in the operating environment.

There are two things that will help you get through the career valley: clarity and conviction. Clarity refers to a tangible and precise view of where you’re heading with your career: knowing what you’d like your career to be as well as knowing what you’d like your career not to be. Conviction refers to your determination to get across this career valley and emerge on the other side in a position that meets the criteria you have determined.

Going through a career inflection point is not an easy process. It is not without many dangers. It calls upon all your best resources. It calls upon your understanding of the new world that you wish to become part of, your determination to take control of your career, your ability to adapt your skills to that new world and your resolve as you deal with the fear and anxiety of change. It’s a bit like emigrating to a new country. You pack up and leave an environment you’re familiar with, where you know the language, the culture, the people, and where you’ve been able to predict how things, both good and bad, happen. You move to a new land with new habits, a new language and a new set of dangers and uncertainties. At times like this, looking back may be tempting, but it’s terribly counterproductive. Don’t bemoan the way things were. They will never be that way again. Pour your energy, every bit of it, into adapting to your new world, into learning the skills you need to prosper in it and into shaping it around you. Whereas the old land presented limited opportunity or none at all, the new land enables you to have a future whose rewards are worth all the risks.