Andy Grove, former CEO and chairman of Intel, wrote a book called Only the Paranoid Survive in which he promoted the idea of inflection points, times when companies have to respond to change or die.
'Often in the course of traversing a strategic inflection point your people lose confidence in you and in eachother and, what’s worse, you lose confidence in yourself’, writes Grove, ‘then at some point you, the leader, begin to sense a vague outline of the new direction.’
‘I think of this hostile landscape through which you and you company must struggle – or else perish – as the valley of death.’
“To make it through the valley of death successfully,’ says Grove, ‘ your first task is to form a mental image of what the company should look like when you get to the other side.’
In the 1985/6 inflection point when the Japanese entered the memory business like a steam-roller knocking Intel and all the other US companies, except TI and Micron, out of the memory business, the vision which Grove conjured up was: ‘Intel, the microcomputer company.’
No one knew in 1986 whether microprocessors alone could support a semiconductor company. Intel, which had nearly $40 billion of microprocessor revenues last year, could be said to have rather amply validated Grove’s belief that they could.
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