Perennial Gale Of Creative Destruction

Books on business management are often viewed with a fair degree of scepticism. Many criticisms are offered. It is said that these books tend to be all-encompassing in their treatment, saying something about everything, nothing substantive about anything. That, these jargon-ridden books convey little meaning to the reader. And that the practitioners and teachers of this inexact science often get away with specious logic.

But when the CEO of one of the most admired (and highly profitable) companies in the world takes to talking about management, expectations are naturally high. This book by Andy Grove of Intel Corporation does not disappoint.

 

And no, Only the Paranoid Survive is not another do-it-my-way story by one more corporate chieftain who got it right. It does not present any grand vision of the future, nor does it unravel a hot new strategic tool to the world.

Groves subject of discussion is change, big changes that are threatening to remake the business environment. Markets, competition, speed of technological development these are altering fundamentally as the structures and mechanisms of the Industrial Age are cast aside. The mega successes of the past, the IBMs and the Apples, are struggling to find a formula for survival today. The Age of Knowledge has unleashed new forces amidst us.

To survive, businesses have to identify these forces of change, says Grove. He takes the case of his own company. In the mid-80s, Intel tried to hold on to its dominance in the memory chips market against fierce competition from the Japanese chip makers. From a position of total dominance when memory chips automatically meant Intel chips, the company got blasted out of the market in no time.

The game changed fundamentally. The Japanese found a way to sell better quality chips at lower prices. To survive, Intel had to change fundamentally. It got out of the memory business. Andy Grove led the company into the (then unknown) business of computer microprocessors. Today Intel has nearly 80 per cent of this market.

But in 1994, Intel faced another crisis, which threatened to ruin its business yet again. A flaw, quite insignificant, in the Pentium chip had thousands of customers calling up the company to take back its product.

Another crisis point in the business of the company. Grove defines it as a strategic inflection point (Yes, it looks like a jargon. But to be fair, it is a very precise description of the conditions described in the book.)

At this stage, Grove was convinced that the management of these strategic inflection points needed a more structured understanding and analysis. This book is just that. Drawing upon his experiences, the author presents a framework to understand and manage these crisis points threatening corporate survival.

It is a very powerful, and credible work chiefly due to the style of treatment a clear, precise, analytical approach to the subject. Every single assertion is either logical, or backed up by data/ observation, unlike most books of this genre.

Funnily though, in his quest for clarity, Grove does not even spare the chapter headlines. So a chapter does not start with an itsy-bitsy headline like Signal or noise. One full page is devoted to it, which goes onto explain the headline further How do we know whether a change signals a strategic inflection point? The only way is through the process of clarification that comes from broad and intensive debate. Whew!

Preciseness too has made its own demands. For instance, the term, strategic inflection point, finds its way into almost every page of the book. Mumble it ten times to yourself, and feel that vague irritation begin to gnaw at you. Then there are references which crop up once too often. The writer would have done well to keep this book down to 150 pages.

Minor literary objections aside, the acid test of a model or a theory is its predictive capability. Grove fulfills this condition too rather impressively. The framework developed is put to understand the phenomenon of the Internet and the impact it can have on various industries. Correct or not, the author arrives at some definite conclusions (Another first for a management book.)

So is it a book worth buying? Definitely, if you are a CEO. The book, quite oddly, addresses itself to leaders only (A mind-set that, perhaps, inadvertently crept into a CEOs writing). But that does not detract from its universal appeal.

Managing chaos in business suddenly begins to seem possible.