Business Strategy by The Economist

Author:The Economist
Language: eng
Format: epub
Publisher: PublicAffairs

Overall, George argues:

Optimistic, forward-thinking leaders are sitting on a rare opportunity, and they must be systematic in how they take advantage of it if they want to make positive changes.

Another valuable, proven perspective on managing in turbulent times is provided by Andy Grove, a former CEO and chairman of Intel, one of the world’s leading manufacturers of computer chips and a driving force behind the technological revolution of the late 20th century. In his book Only the Paranoid Survive,5 Grove describes the lessons learnt from building a profitable firm in a market characterised by disruptive innovation and turbulence.

He highlights the concept of a “strategic inflection point”, a time in the life of a business or project when its fundamental situation is changing significantly. The term “point” can be confusing, as it may be a longer event. It is important to distinguish between change and a strategic inflection point. Change is routine; in contrast, strategic inflection points are seismic events, and Grove provides a framework for determining whether one is near. A useful technique is to consider who the main competitors are. If this is unclear, it may be a sign the marketplace is approaching an inflection point. Does the company that dominated in the past suddenly seem less important? Does it look as though another company is about to eclipse it? This may be a sign of a shifting balance of power. Similarly, Grove calls for a major rethink when one of the competitive forces in an industry changes and becomes a “10x change”: that is, it has become ten times what it once was. In a 10x change a company can lose competitive advantage and there is an opportunity for outsiders to enter the market.

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