OVERVIEW
Based on Andrew’s experience as the CEO of Intel, this book is about how to deal with challenging crises as a corporation. He offers a strategic strategy for adapting to crises, as well as exploiting and thriving in the face of them. SIPs (Strategic Inflection Points), as he calls them, are attempts to make the most of a company’s watershed moments.
Here IS a SHORT SUMMARY & SOME KEY POINTS FROM THIS BOOK.
KEY POINTS
- It’s a bad idea to trust someone who is emotionally invested in the company’s success.
- It’s important to have open lines of communication with outsiders.
- Keeping secrets isn’t always a good idea.
SHORT SUMMARY
Strategic inflection points: When the market undergoes a significant transition, any organization requires a SIP (Strategic Inflection Point). It’s time to rethink the company’s entire strategy. Companies must review their plans whenever the market conditions change. There are six elements that can cause the SIP in any organization: competitor’s strength, supplier’s strength, existing customer’s strength, future customer’s & partner’s strength, and the chance that your business could be done differently. A change in any of these characteristics will result in a change in the company’s environment.
IBM was one company that experienced similar changes. Because customers could combine components such as microchips, hard drive software, and other items, IBM’s computers were strongly influenced by how they were created. As a result, consumers chose to design their own PCs rather than buy pre-built ones from IBM.
Despite IBM’s efforts, they were too late and failed to produce PCs for the masses. Other businesses selling computers with better technology had already cornered the market. Although a firm can sometimes succeed with its own strategy (e.g., Apple), changing course when the environment or industry trends change can be challenging.
Some of these six forces are more difficult to detect than others. Many a times, one might be surprised by a competitor’s strength. As a result, businesses should be proactive in monitoring any changes to these.
Employees must respond to strategic inflection points in their organization as well as the broader market. SIPs can even result in the entire business being closed down, with all employees losing their employment and certain jobs go extinct entirely. When industrialization first began, for example, most craftsmen were forced to close their shops and work in factories instead, because factories could create items much more cheaply and quickly. Only those that stood out for outstanding quality or specialty were able to maintain their independence. When technological shifts occur, individuals can evaluate their specific position and either specialize or gain new abilities. The corporation can also restructure by reassigning employees to new roles in which they will deal with unknown business areas. As a result, SIPs are a problem for everyone in the organization, not just the CEO.
SIPs have an impact on every employee and how they do their job. When “talkie” movies initially came out, for example, all actors were pressed to conform to “pictures with sound,” and some, like Charlie Chaplin, fought back hard. After being forced to adjust, he landed his first speaking role in “The Great Dictator.” Other actors were hesitant to adjust their behavior in response to such changes.
An SIP might either spell disaster for a firm or open up huge opportunities. Intel was no longer able to compete with Japanese memory chip makers. They spent more money in an attempt to compete more aggressively, but they were still unable to compete. Intel was on the verge of bankruptcy as a result of this. Managers are frequently hesitant to recognize new developments because they are emotionally invested in their current business practices.
If SIPs are implemented at the correct time, the organization can take the lead in a whole new market. Repositioning a business in a new market that necessitates a comparable business plan might be beneficial. Instead of creating memory chips, Intel implemented a SIP that transformed them into a microprocessor firm. They quickly rose to the top of the market.
FINALLY BEFORE LEAVING
There are complex business circumstances where danger might emerge from a variety of directions, including many unknown scenarios in some cases. So, rather than being reactive by keeping watch, it’s sometimes necessary to be prepared for certain events in advance. This may be the case if the outcome of a market situation is unpredictable, necessitating the consideration of all options. Some resources will be wasted, but the skills gained from these endeavors may prove useful in the future. Making a DVD player that functioned for both Blu-Ray and HD-DVD, even if one of these technologies was expected to fail eventually, is an example of being prepared for both market scenarios.
To boost its chances of becoming first with a new product, SIPs should devote resources to innovation and development. In times of uncertainty, such as SIPs, technical experts can also give essential knowledge.
Managers and employees should be prepared for crisis situations (SIPs). Look for objective feedback from outsiders. Maintain open lines of communication with and between leadership and intermediate management. Attempt to get managers to look at the situation as objectively as possible. When a SIP occurs, act quickly.
Kunal Jauhari 