by Simon Bond

Everywhere you look in industry the winds of change are blowing harder. As the rate of change accelerates, the challenges of staying in business become more difficult seemingly on a daily basis. Today the world to many is a scary place.

When we look at the investment landscape we see businesses and strategies being upended constantly, just the challenge of remaining relevant in the age of change is a strategic issue.

We look at so many business models that are under threat, it seems whatever sector you are in, there is always something new to worry about, and the speed of it seems to be just a blur.

This makes the investment landscape increasingly tougher to navigate and the list of companies that are seeing their margins eroded by newer, nimbler entrants grows daily. The chances of being overtaken (rather than taken over) grows at an increasingly faster pace.

The old worlds of industry have been turned on their heads. 

Change however has been years in the making. To some it feels like the ground had shifted under their feet overnight, but this of course is not the case, very reminiscent of the lilies in the pond. No one sees them growing in size every day until you look out the window and the whole pond is covered by the leaves that have been doubling every day. Some just haven't noticed it, but now they see it, and fear is creeping up on them as they realise that their comfortable world of solid margins and price increases has gone up in smoke.

Over 15 years ago I read a book written by Andy Groves of Intel, titled; "Only the paranoid survive." Clearly a book full of predictions that many wrote off back then as fanciful. Now the chickens, as they say, are coming home to roost.

Below are two dozen quotes from the book that are as relevant today as they were when published in 1996.

“The Lesson is, we all need to expose ourselves to the winds of change” 

Andrew S. Grove, Only the Paranoid Survive

“Strategic changes doesn't just start at the top. It starts with your calender” 

Andrew S. Grove, Only the Paranoid Survive

“In Technology, whatever can be done will be done” 

Andrew S. Grove, Only the Paranoid Survive

“The person who is the star of previous era is often the last one to adapt to change, the last one to yield to logic of a strategic inflection point and tends to fall harder than most.” 

Andrew S. Grove, Only the Paranoid Survive

“if you're wrong, you will die. But most companies don't die because they are wrong; most die because they don't commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is in Standing still” 

Andrew S. Grove, Only the Paranoid Survive

“How can you motivate yourself to continue to follow a leader when he appears to be going around in circles?” 

Andrew S. Grove, Only the Paranoid Survive

“Businesses fail either because they leave their customers or because their customer leave them !” 

Andrew S. Grove, Only the Paranoid Survive

“Business success contains the seeds of its own destruction. The more Successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing” 

Andrew S. Grove, Only the Paranoid Survive

“You can be the subject of a strategic inflection point but you can also be the cause of one” 

Andrew S. Grove, Only the Paranoid Survive

“In short, strategic inflection points are about fundamental change in any business, technological or not” 

Andrew S. Grove, Only the Paranoid Survive

“People in the trenches are usually in touch with impending changes early” 

Andrew S. Grove, Only the Paranoid Survive

“It's harder to be the best of class in several fields than in just one” 

Andrew S. Grove, Only the Paranoid Survive

“The implication was that either the people in the room needed to change their areas of knowledge and expertise or people themselves needed to be changed” 

Andrew S. Grove, Only the Paranoid Survive

“A strategic inflection point is a time in the life of business when its fundamentals are about to change. that change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end” 

Andrew S. Grove, Only the Paranoid Survive

“While the story is unique to Intel, the lessons, I believe, are universal” 

Andrew S. Grove, Only the Paranoid Survive

“The ability to recognize that the winds have shifted and to take appropriate action before you wreck your boat in crucial to the future of an enterprise” 

Andrew S. Grove, Only the Paranoid Survive

“As we throw ourselves into raw actions, our senses and instincts will rapidly be honed again” 

Andrew S. Grove, Only the Paranoid Survive

“The strategic inflection point is the time to wake up an listen” 

Andrew S. Grove, Only the Paranoid Survive

“In fact, we might as well say "proprietary", which, in fact, was the byword of the old computer industry.” 

Andrew S. Grove, Only the Paranoid Survive

“When people in the company start asking questions like @But how can we say "X" when we do "Y"? more than anything else this is a tip-off that a strategic inflection point may very well be in the making” 

Andrew S. Grove, Only the Paranoid Survive

“if you base your business on the volume leader, you will be going after a larger business yourself” 

Andrew S. Grove, Only the Paranoid Survive

“Except for one last thing. What if the people who believe in the cheap Internet appliance turn out to be right?” 

Andrew S. Grove, Only the Paranoid Survive

“Peter Drucker quotes a definition of an entrepreneur as someone who moves resources from areas of lower productivity and yield to areas of higher productivity and yield.” 

Andrew S. Grove, Only the Paranoid Survive

“Admitting that you need to learn something new is always difficult. It is even harder if you are a senior manager who is accustomed to the automatic deference which people accord you owing to your position. But if you don’t fight it, that very deference may become a wall that isolates you from learning new things. It all takes self-discipline.” 

Andrew S. Grove, Only the Paranoid Survive

So what do we do? We look for actionable ideas and we constantly revise and look for opportunities to innovate.

I remain of the view that Interest rates will remain lower for longer, and that the threat of Deflation and increased unemployment are what keeps central bankers awake at nights.

Expect ongoing and innovative "stimulus" the world over.