Strategic Inflections Points Can Strengthen Organizations

Not all strategic inflection points spell disaster for an organization and its managers. Says Grove:

Strategic inflection points offer promises as well as threats. It is at such times of fundamental change that the clich "adapt or die" takes on its true meaning.

How can this be? Because companies that adapt in response to profound pressures often reinvent themselves, adding important new skills and competencies as they adjust to the external change. In most cases, early detection of the strategic inflection point is key. By acting before the potential damage inherent in the SIP occurs, organizations can not only fend off the near-term threat, but also develop an inner strength that can help them through difficult times for years to come:

Businesses are about creating change for other businesses. Competition is about creating change; technology is about creating change....So the ability to recognize that the winds have shifted and to take appropriate action before you wreck your boat is crucial to the future of an enterprise.

As the organization approaches and comes to terms with an SIP, it's the corporate mind-set that counts. And, as stated earlier, complacency is the worst possible mind-set. It is much better to be fearful, says Grove, for fear keeps companies skeptical, sharp-edged, and on their toes. Therefore, when Grove was CEO at Intel, he worked to instill a healthy amount of paranoia into the organization, in the conviction that vigilance was one of the ingredients of the company's success:

I attribute Intel's ability to sustain success to being constantly on the alert for threats, either technological or competitive in nature. The word paranoia is meant to suggest that attitude, an attitude that constantly looks over the horizon for threats to your success.

And prompt action, once vigilance has served its purpose, is equally important. Says Grove:

It is best when senior management recognizes and accepts the inevitability of a strategic inflection point early on and acts before the vitality of the business has been sapped by the "10x" forces affecting it.