I read this piece in The FT about Andy Grove, who sadly died last week; he was the long-standing, tough and very successful CEO of Intel during the 1980's and 90's.
The way he turned the company on its head to focus on micro-processors rather than memory chips is a great lesson in business.
Once you become successful in a market the tendency is to defend your position and believe (or hope) that things will continue on as they are. You have invested so much time, money and energy into getting the business to where it is today. Surely it makes no sense to change things now?
There is always a new generation of competition aiming to hunt you down. You have to step back and look at the facts rather than get caught up in sentiment and emotion. You have to make tough decisions that may run contrary to what you stand for and what you have invested in as a business. This is very very hard to do. You need a great leader like Andy Grove to make it happen.
But the alternative is to be a company increasingly losing its relevance in the world and left behind by the new generation of competitors...
It was very painful when Mr Moore and Grove changed course, pivoting to focus on microprocessors, then a smaller business for Intel than memory chips. “Intel equalled memories in all of our minds. How could we give up our identity?” Grove wrote. Grove’s determination to confront reality rather than to indulge in sentiment may have been instilled by being an immigrant. He was born Andras Grof to Hungarian Jewish parents, changing his name when he fled to the US as the 1956 uprising was put down by the Soviet Union.