Page 199 - (DK) The Business Book

WORKING WITH A VISION 197

See also: Reinventing and adapting 52–57 ■ Changing the game 92–99 ■ Hubris and nemesis 100–03 ■ Learning from failure
164–65 ■ Porter’s five forces 212–15 ■ Coping with chaos 220–21 ■ Forecasting 278–79 ■ Feedback and innovation 312–13

such a moment a “strategic inflection A strategic inflection point is the point at which a
point.” This is not necessarily a major change (such as the arrival of the Internet) takes
single point in time, but it is usually place in the competitive environment. If the company
recognizes it and adjusts, the company may soar; if it
accompanied by a noticeable period Business goes on
ignores the change, the company will decline.
of unrest within the organization. It to new heights
may be initiated by changes in the
external environment, or by new
Inflection point
competition, and senior managers
are often among the last to notice
what is happening.
Intel’s first strategic inflection
point came when Japanese
companies began to produce better- The arrival of new
quality, lower-cost memory chips technology, new
than US companies in the 1980s. industry regulations, or
It took Grove three years and huge a change in customer
values or preferences
losses to realize that only through
Business declines
rethinking and repositioning could
Intel again become a market leader.
10X change complement a company’s own to be alert to such major change—a
In the 1970s, US professor Michael product or service by adding value “10X” change—because it requires
Porter summarized five competitive to mutual customers; for example, a fundamental change in strategy.
forces that face companies: software products complement Depending on the actions leaders
competition, substitute products, those produced by computer take at this point, the change can
new entrants, suppliers, and buyers. hardware manufacturers. either take the organization to new
Grove added a sixth force: Grove describes all these forces heights or send it spiraling down
complementary products. This as “a steady wind,” but if one force into oblivion. The important thing
is the impact of other businesses becomes ten times stronger it acts for leaders is to discern between
that sell a product or service that more like a typhoon. Leaders have expected change and profound
change, when the balance of forces
shifts from old to new.
In his book, Grove uses the
example of the growth of the
Internet. The Internet was a “10X”
change for every company, but
some failed to recognize its force
or were complacent and did not
take action to exploit it. Many
companies in the book industry
were guilty of these failures—even
those who had been extremely ❯❯

The Intel Corporation in California,
US, became the world’s largest
computer-chip maker under Andy
Grove’s leadership. He encouraged
employees to bring him bad news.