Making Decisions When You Are Stuck

“Why shouldn’t you and I walk out the door, come back and do it ourselves?”

Almost every manager, business owner, or non-profit leader, at some point in their career, faces a crisis that causes their entire strategy to become obsolete and in need of quick revision. How they handle it can be the difference between success and failure.

A great example of this was from Intel in the 1980s. According to Andrew S. Grove, an executive of the company and later CEO, Intel suffered a “strategic inflection point.” In his book, Only the Paranoid Survive, Grove explains that Intel’s foundation was building computer memories and had been very successful in this industry. In the early 1980s, Japanese memory producers started to overtake the company to make them better than Intel.

What was the initial reaction from Intel? They denied that there was a problem. They refused to look at the data objectively. Once they acknowledged there was a problem, they panicked.

Intel did what any profitable business would do. They decided to compete, and for a while, they did, but in 1984, demand went down, and they started rapidly losing capital. Some people in Intel wanted to double down and produce nothing but computer memories, while others wanted to upgrade technology to create memories better.

Intel debated this problem for nearly a year. While their business was on the verge of collapse, Grove was in his office with Intel’s CEO at the time, discussing what they should do.

Our mood was downbeat. I looked out the window at the Ferris wheel of the Great American amusement park revolving in the distance, then I turned back to Gordon, and I asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, and then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”

That was the only question to answer. With that, Intel got out of their losing business model and succeeded with processors.

If you are plagued with a problem in your business or organization and can’t find an answer, ask the question that Grove asked, “If I got replaced tomorrow, what would my successor do?”