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CHIP WARRIOR

ONLY THE PARANOID SURVIVE
By Andrew S. Grove
Currency/Doubleday -- 210pp -- $27.50

Few companies ever face a decision as wrenching as the one Intel Corp. confronted in the mid-1980s. The inventor of dynamic random access memory, Intel watched almost helplessly as lower-cost Japanese producers took over the DRAM market. Staring oblivion in the face, the company's leaders did the unthinkable: They walked away from the memory business. And then a surprising thing happened. With a sharpened focus on microprocessors, Intel became much more prosperous, growing quickly into the world's largest chip company.

The transformation indelibly altered Intel and its outspoken president and CEO, Andrew S. Grove, who tells the story of this and other crises in his latest book, Only the Paranoid Survive. The title is taken from a maxim credited to Grove, who continues to abide by it as Intel adapts to the Internet era.

Situations such as Intel's DRAM crisis typify what Grove calls ''strategic inflection points'' or ''10X'' changes--when forces affecting your business multiply by 10. Some companies rarely have to confront one of these, while those in fast-changing fields may encounter one every few years. Grove doesn't have an easy time describing a 10X change. ''You know only that something has changed, something big, something significant,'' he ventures. But, he warns, ''the ability to recognize that the winds have shifted before you wreck your boat is crucial to the future of an enterprise.''

Grove identifies three major inflection points in Intel's 30-year history: the memory crisis from 1984 until 1986; the problem of whether to switch to the emerging RISC chip architecture in 1990 (Intel didn't); and the Pentium bug that made global headlines in 1994. In each case, he argues with a certain amount of comfortable hindsight, Intel woke up and took the correct course.

Unfortunately, many readers will find Grove's lack of detail frustrating. The memory crisis is most vividly told; other incidents lack the same fly-on-the-wall perspective. Only the Paranoid Survive is more of a folksy explication of Grove's business philosophy than a serious examination of Intel's strategic decision-making. But the book will make enjoyable airplane reading for anybody who wants a peek inside Intel. And even if you think you understand the dynamics of change in your business, it provides a helpful reality check.

By Andy Reinhardt


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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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