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Are You Paranoid Enough?

By APICS CEO Abe Eshkenazi CSCP, CPA, CAE | 0 | 0 | August 30, 2013

The headline might sound ridiculous, but it’s a concept that is gaining traction in the business world. Last week, BBC News global business correspondent Peter Day wrote about one of his interviews that still stands out__former Intel CEO Andy Grove. According to Day, Grove’s sharp observations are summed up in the title of one of his books, Only the Paranoid Survive.

“In essence, this is easy to grasp,” Day writes. “It happens when a company has clawed its way to the top, competed the hell out of its rivals, when everything is going swimmingly, not a cloud on the business horizon. That is when disaster strikes.”

Day pushes past Grove’s observations to note that failure might be implicit in success. Company leaders start to believe they have a business model that will last a long time, and workers are insulated from disruption because of previous investments in plants and equipment.

Day’s thesis reads more like a doomsday novel than a business article: “And then one day [executives] realize that their world has changed … and there is little they can do about it.”

Think about Kodak, a company that dominated photography for almost a century, Day suggests. While the company invented the digital camera, its leaders kept business strategy tied to film. Then, digital cameras left film cameras, and Kodak, in the dust.

Or consider again Intel, the once-dominant semiconductor chip manufacturer. Intel now finds itself in a tough situation. Mobile computing has usurped desktop and laptop dominance, and Intel’s profits have been taking a hit. Day writes, “It is possible that Andy Grove’s successors may have forgotten his warning about the need to be paranoid.”

Staying on your toes

It shouldn’t be surprising that the word “paranoid” isn’t in the APICS Operations Management Body of Knowledge Framework or the APICS Dictionary. “Innovation risk” does appear in the APICS Dictionary, 13th edition, and is defined as follows: “The risk of losing customers because another firm creates more innovative products.” That’s the business dilemma in a nutshell.

Jeremy Gutsche is an innovation expert, founder of Trendhunter.com, and author of Exploiting Chaos. He says that companies that don’t evolve get toppled. In the upcoming September/October issue of APICS magazine, Gutsche outlines the key factors that enable companies to thrive during times of chaos and explains the value of disruption.

“What I like about the concept of disruption is that it’s not something that’s brand-new, but it does speak to the idea of thinking about a completely different way of doing things,” Gutsche says. Look in your mailbox for your issue of APICS magazine in the beginning of September.

Not only can you read Gutsche’s ideas in APICS magazine, but you can see him speak at APICS 2013. He will present Sunday’s general session, “Creating a Culture of Innovation and Customer Obsession.” It’s not too late to register for APICS 2013, September 29–October 1, 2013, in Orlando, Florida. Visit apics.org/conference for more information. Paranoid, disruptive, innovative, and evolution: APICS can help you and your companies use these ideas to get ahead.

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