Tuesday, November 06, 2007

BOOK REVIEW : Only the paranoid survive

Author: Andrew S grove

Price: 600 INR

Andrew is one of the famous CEOs, who lead Intel into the path of microprocessors. In this book he shares his experiences, which can be applied to individuals’ career as well as organizations. Andy introduces a term called 'Strategic Inflection Points' (SIP), which has got equal probability to make or break any business. The businesses who adapt these SIPs (paranoids) will go successful, failing which will make them to shut the shop. He explains about how the businesses are affected by many factors which he calls as '10X' forces which primarily drive the organization beyond the SIP. These 10X force could be in the form of new technology, innovation, economic reforms, business model etc.

Throughout the book, Andy explains his SIP and 10X concepts with the PC business as an example. In 1970s the PC business was a 'vertical' one which was heavily dominated by companies like Digital Electronic Corporation (DEC). By 'vertical' he means that the hardware, OS, software, support will be provided by the PC manufacturer himself. Companies like DEC where pioneers of this vertical business model and no-one could even question their domination.

However the 10X came in form of two major innovations:

  1. Micro-processors: This innovation brought the computing to become de-centralized and the power shifted from mainframes to Personal Computers (PC). The cost of computing came down tremendously and lot of component manufactures (like memory, keyboard, disks etc...) emerged in the eastern world (Singapore, Malaysia, Japan etc..) from nowhere. Fueled by system integrators (like Compaq) the computing industry was going through 10X amount of change.
  2. Software revolution: The first innovation lead to the change in the way people perceive software. From the 'processor-tied’ approach the software became more of 'usage-tied' and Microsoft rode this wave big time. The perception of seeing software only as a 'freebie' with the hardware changed totally.

Now the only chance to stay in the business is to adapt to this change. Initially Intel was into memory chip manufacturing. When the 10X change happened in the computing industry, Andy made Intel to exit from the memory business and move to the microprocessor business. This caused what is popularly known as 'WINTEL’ phenomenon (Windows + Intel) and the rest is history.

After explaining this 10X, the author extends his discussion into people side. When such chance is going in the industry, its extremely challenging to change the mindset of the people and make them work in the new technology. This is mainly because people still 'perceive' that the old technology (say mainframes) will be alive and PC cannot change the world. Taking people through this change is very challenging for any leader and he calls such changes as 'death-valley'. He also talks about how important it is to listen to lower level employees, who he calls as 'Cassandra'. These Cassandra’s would bring informal but important information about the 10X well before it is understood by the top management.

I would rate this book as one of the classics which mixes Technology and Business very well. I would strongly recommend this book to anybody who is in the technology industry.

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