Great advice for an uncertain age

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	• Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company Andrew S. Grove Doubleday Business, 1999 - 240 pages average customer review:based on 28 reviews view larger image
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highly recommended

How to survive in the new economy

This a good book based on facts. Andrew Grove goes on describing how Intel managed to shift from a semiconductor to the microprocessor company while he was the CEO... (now it is shifting again under Paul Otellini).
Although the example a bit outdated since it was written in 1996, the same principles still apply. A must read if you want to understand why some great and big companies suddenly go down while others emerge quickly.
You always need to learn the history to understand the future.

Great advice for an uncertain age

Intel was one of the pioneers of Silicon Valley, one of a handful of household brand name companies that helped to create, and constantly reshape, the information technology landscape in the US, and the rest of the high-tech world. Andrew Grove was at the center of this company from its inception, and this is his story in his own words.

The information-economy industry, unlike the giant manufacturers such as GM that faced more stable markets, was singularly brutal and fast-changing. Roughly every eighteen months, newly minted microprocessor chips arrived with double the circuit density of the preceding generation, increasing both their capacity and speed. For decades, Intel had been an exemplar of success, assessed in 1998 as the third most valuable company in the world by market capitalization. Known for their loyalty and hard work, virtually all Intel employees shared in the ownership of the company via stock options.

Nonetheless, the company's success was constantly portrayed internally as tenuous and hard-won: in the mid-1980s, facing ferocious Japanese competition in the memory chip market segment, Intel re-engineered itself, focusing instead on the emerging microprocessor market segment. This is the core of Grove's book, and is a remarkable achievement - I vividly still recall how, in the late 1980s, we thought Japan was going to take over the PC industry - and it was Grove and his team that did it.

To do so, Grove engineered Intel's corporate culture so that it melded "control-freak management" with creative chaos: anyone could compete in an open, yet authoritarian "culture of innovation." As a symbol of this, Intel Chairman Grove continued to work in a cubicle alongside everyone else, but he reveled in challenging employees down to the smallest detail, which included the correction of grammar in the memos sent to him. To promote equality of access as well as economies of scale, Intel's offices and chip-manufacturing facilities ("fabs" in the industry jargon) were virtually indistinguishable world-wide; all the walls were one color, cubicles identical in size, even the same vocabulary permeated company meetings from Taiwan to the U.S. This "copy exact" uniformity provided security for customers and helped in problem solving; should the defect rate appear high at one facility, it allowed the engineers to call any of the other facilities for advice; in effect, they could discuss identical processes with great precision, which was a key to the quality and reliability of Intel chips. Another aspect of the company's culture was its "paranoia," that is, its obsessive attention to the demands of the market and to the actions of competitors.

If this sounds like a tough place to work, it certainly was. I interviewed several employees there, who emphasized the "sink or swim" nature of the place: you either found a way to create value, or soon you were out. One of them described it like his stint in the Green Berets, when they are "plunked down in the middle of the chaos of war...You have an overall strategic goal...with near-complete freedom to find whatever works best to push towards that goal. It's like we accept the rules of the game and the parameters within which we communicate and compete. But inside the circle, virtually anything goes." It was a competitive meritocracy per excellence.

Not only can this culture (paranoid, chaotic yet authoritarian, and ultra-competitive) serve as a paradigm - I know, that word is over-used - for other industries, but it is a key to the astounding creativitiy that has emerged in some American companies since the days of the "Japanese challenge". And Grove's company not only symbolized many of these innovations but drove them.

Warmly recommended as a must for all students of business.

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reviews: 1, page 2, 3, 4, 5, 6

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