Only the Paranoid Survive

by Andrew S. Grove

not be going after, is exceedingly important at the late stage of a str...

Most of all, you must be a role model of the new strategy. That is the best way to prove that you are committed to it.

Ask yourself the questions, “Will going to this meeting teach me about the new technology or the new market that I think is very important now? Will it introduce me to people who can help me in the new direction? Will it send a message about the importance of the new direction?”

When you have to reach large numbers of people, you can’t possibly overcommunicate and overclarify. Give a lot of speeches to your employees, go to their workplaces, get them together and explain over and over what you’re trying to achieve. (Take particular care to answer questions of the “Does it mean that…” variety. Those are the ones that offer the best chance of bringing your message home.)

One caveat: if your message is clear, it will provoke questions and responses which will come back to you through the same medium. Answer them.

Be crisp and to the point,

If your employees don’t have an opportunity to test your thinking in live sessions or electronically, your message will seem like so much hot air.

Simply put, you can’t change a company without changing its management.

I’m saying that they themselves, every one of them, needs to change to be more in tune with the mandates of the new environment.

It seems that companies that successfully navigate through strategic inflection points have a good dialectic between bottom-up and top-down actions.

When top

management lets go a little, the bottom-up actions will drive toward chaos by experimenting, by pursuing different product strategies, by generally pulling the company in a multiplicity of directions. After such creative chaos reigns and a direction becomes clear, it is up to senior management to rein in chaos.

This dynamic dialectic is a must.

They must rely on middle management.

Diversity of ideas in important decisions

by necessity their experience is specialized and their outlook is local, not company-wide.

This is why strong leadership matters. To make the decision, to change course when new information is presented in light of the whole picture, the whole vision

had a strategic planning system that was resolutely bottom-up.

These sessions served their purpose as long as the overarching strategy of the company was simply to produce bigger and better semiconductor memories ahead of the competition. They filled in the details: what technology we needed to develop and how we would develop it, what products we would base on these technologies and so on.

In stable times, bottom up is reliable. The best people most informed on a subject often have the best scope when things are predictable

What we needed was a balanced interaction between the middle managers, with their deep knowledge but narrow focus, and senior management, whose larger perspective could set a context.

In turbulent times, mature leadership matters. Empathic listening of diverse ideas matters. To shift the focus of the whole requires the coordination, ownership by the whole. Bottom up and top down putting their picture together.

debate (chaos reigns) and a determined march (chaos reined in)—is

Such an organization has two attributes:

It tolerates and even encoura...

It is capable of making and accepting clear decisions, with the entire organization then supporting the decision.

It turned out that this manager knew all along what he wanted to do,

was hoping to engineer a bottom-up decision to the same effect.

the committee came up with the opposite r...

Coming as it did at this late stage, his dictate seemed utterly arbitrary.

Participate in demonstration, come up with the solution together, set constraints and debate. The leader shares the vision, sets the limits. And then bottom up can deliberate on strategy

I felt that the Internet was the biggest change in our environment over the last year.

I needed to deal with the question, Could it be a “10X” force for Intel? If it is, what must we do?

I think anything that can affect industries whose total revenue base is many hundreds of billions of dollars is a big deal.

Does it represent a strategic inflection point for Intel? Does it change any of the forces affecting our business, including our complementors, by a “10X” factor?

As I look at the above balance sheet, I don’t see that either our customers or our suppliers would be affected in a major way.

There will be new players on the scene to be sure, but they are just as likely to play the role of complementors as competitors.

Let’s test for dissonance. Are we doing things that are different from what we are saying?

All this suggests that the Internet is not a strategic inflection point for Intel.

I think we should put together a group to build the best inexpensive Internet appliance that can be built, around an Intel microchip. Let this group try to derail our strategies themselves. Let them be our own Cassandras.