Sooner or later, something fundamental in your business world will change.” Andy Grove
While I have been writing about my own personal transformation, I think you will start to see a change in the emphasis towards more leadership and business-based materials as I make my transition from personal development to include entrepreneurship. Also, my mindset material will be focused on start-ups and entrepreneurs, so the intersection of mindset with entrepreneurs will be of great interest to me.
As I start to think about what kind of companies I want to create and the skillsets I will need, I have been especially interested in company cultures and leadership (“culture eats strategy for breakfast” per management guru Peter Drucker). I have been reading a few books now that reference the culture of Intel as the source for many of Silicon Valley’s great management techniques and a lot of that has been traced back to Andy Grove, the ex-CEO of Intel, and the author of Only the Paranoid Survive. This book was written in 1999, just before the Internet was about to explode and cause the havoc we are seeing today across industries globally.
The book, as its subtitle says, is about “how to exploit the crisis points that challenge every company.” It is as much about companies, as it is about careers. In 1999, the book was a canary in the coal mine warning companies about the Internet and the 10X changes that were to unfold in their industries.
It is extremely well written and what I found most fascinating was how managing changes in a company paralleled managing changes in your personal life. Andy Grove talks about beliefs, character and envisioning the future with clarity. However, let me back up a little.
As a leader (to yourself and others), it is important to identify changes. The most disruptive of these changes i.e. strategic inflection points, Grove labels as the 10X change (humungous change) in one of the industry 5 forces of Porter’s Competitive Strategy Framework: Competition (eg Walmart moving into small town), Technology (Shipping Container technology giving rise to Singapore), Customers (GM beating Ford in 1950s due to changing tastes), Suppliers (Airlines cutting commission on travel agents), Regulation (breaking up of Ma Bell) Grove adds a 6th force complementors (rise of Microsoft in the software industry and importance to Intel).
Grove talks about how Intel navigated the demise of Intel’s role in the memory chip as a 10X change in Japanese competitors rose, and how Intel then transitioned to microcomputers and also the 10X change arising in that industry as it went from being vertically integrated to horizontally integrated.
His basic message is that leaders must be aware of 10X changes in industries and forewarned (like Cassandra, the priestess who foretold the fall of Troy) of the changes that the Internet was going to make across several industries like media, advertising, communications, software, and hardware. Businesses either decline significantly or rise significantly at these 10X changes.
Once the change is understood, navigating these changes can be difficult. Grove uses a couple of great metaphors and examples to help to understand the challenges of navigating a 10X change.
“The instructor played a scene from the World War II movie, “Twelve o’Clock High”. In this movie, a new commander is called in to straighten out an unruly squadron of fliers who had become undisciplined to the point of self-destruction. On his way to take charge, the new commander stops his car, steps out and smokes a cigarette, while gazing off into the distance. Then he draws one last puff, throws the cigarette down, grinds it out with his heel and turns to his driver and says, Okay Sergeant, let’s go.” Our instructor played this scene over and over to illustrate a superbly enacted instance of building up the determination necessary to undertake the hard, unpleasant and treacherous task of leading a group of people through an excruciatingly tough set of changes—the moment when a leader decides to go forward, no matter what.” A great story was when he finally decided to make the change. He walked into Gordon Moore’s office and Moore asked him what a new CEO would do, and Grove, said, get out of the memories business and into the microprocessor industry. Moore, replied, well that is what we must do.
What was most insightful about the challenges were about changing Corporate Beliefs that were ingrained in Intel. Changing personal beliefs and corporate beliefs are very similar. Both are very ingrained and have systematically been the reason for the success of the company or yourself (keeping you safe). However, without changing these beliefs, the company will fail or the person will not change and meet the new challenges. For Intel, memory chips were the founding product of the company and memories were the “technology drivers”. All technologies first were tested and produced on memories. Second, the salesperson needed a “full-product-line” (microprocessors and memories). So, getting out of the memories business and going into microprocessors only was culturally almost impossible, yet that is what Grove had to do in order for Intel to survive in the mid-1980s.
However, what enabled Intel to be able to make those tough decisions were another part of its culture—the ability to have full debates without fear of losing their job, and the prominence allowed to the technical and marketing teams (knowledge workers) and the balance it holds with management (the decision-makers). We see time and time again in the great companies, that there is respect for the knowledge or technology workers, especially in growth companies. A great company will have a balance of both strong top-down actions and bottom-up actions. “An organization that has a culture that can deal with these two phases—debate (chaos reigns) and a determined march (chaos reigned in)—is a powerful, adaptive organization.” Once a decision is made, march!
The Valley of Death
Grove goes on to say, “When I think about what it’s like to get through a strategic inflection point, I’m reminded of a classic scene in old western movies in which a bedraggled group of riders is traveling through a hostile landscape. They don’t know exactly where they are going; they only know that they can’t turn back and must trust that they will eventually reach a place where things are better.”
This describes so well what personal transformation feels like and also what dramatic company changes feel like. “I think of this hostile landscape through which you and your company must struggle—or else perish—as the valley of death.”
In order to get through the valley of death, like in personal transformation, “your first task is to form a mental image of what the company should look like when you get to the other side. This image not only needs to be clear enough for you to visualize but it also has to be crisp enough so you can communicate it simply to your tired, demoralized and confused staff.” Grove also recommends you come up with a single phrase (or I believe an avatar in personal development) to describe what your vision is about and what it is not. For Intel, “Intel, the microcomputer company.” This simple phrase said it was also not a memories company (which was the founding business of the company). Grove drives home the point that clarity of vision and the communication of that vision is paramount. It’s so similar to personal transformation, where getting clear what you want is one of the first steps.
As a leader, how you allocate your time (i.e. to new priorities), the company resources, and most of all, the action steps (versus plans) are the true signaling tools of leadership—again, like in personal development, action, action, action and where you spend your time are paramount for success (versus just planning or thinking).
Of great note and importance. when a company transforms through one of these 10X changes, the people must also change. “it required casualties and personal transformation; it required accepting the fact that not all would survive and those who did would not be the same as they had been before.” At Intel, when he made the change, it was decided that over 50% of the company in the future would probably be software engineers instead of mostly hardware engineers. This is so similar to personal transformation. In life, there are challenges or the valley of death. We pursue single-mindedly with determination towards some initially nebulous goal and we either survive or we transform, and in most cases, we transform.
Career Inflection Points
“Career inflection points caused by a change in the environment do not distinguish between the qualities of the people that they dislodge by their force.”
Interestingly, Grove’s final chapter is on how people who are affected by 10X changes can understand the 10X changes and thereby transition their career quickly without becoming a casualty. Today, this advice is even more relevant and the important points are to be on the lookout for 10X changes, which technology, globalization and other powerful trends, continue to create. Have an escape plan and it is better to leave early, than it is to wait until the changes have happened. As Grove says, “Your career is your business….Get in shape for change….Train your brain in preparation for the big change.”
In one final ode to the power of visualization. Grove says, “It is very important to visualize what you want to achieve before you start to traverse the career equivalent of the valley of death….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.”
Gratitude
While reading this book and the recommendations by Grove on careers, I was happy that I had just spent the last year training my brain in preparation to be an entrepreneur (i.e the big change). And I have great clarity and also great conviction in moving forward into 2020 as an entrepreneur with my first two businesses being Jamaican patties in Jakarta and training others to train their brain i.e. mindset for entrepreneurs.
Action Items:
- Are you on the alert for 10X changes in your industry and career? Who are your Cassandras?
- Have you trained your brain in preparation for the big change?
- Once you have decided you need to change, do you have clarity and conviction?