It's been almost two decades since Andy Grove, the former CEO of Intel, published one of the best business books I have ever read.
In Only the Paranoid Survive, Grove spends a lot of time talking about what he calls "strategic inflection points," the moment when massive change (think about what happened to the recording industry when iTunes came along) occurs, and you have to adapt and respond quickly or risk going out of business.
The way not to be caught off guard, Grove argues, is to understand that "only the paranoid survive."
He is right, of course.
The problem is we are only human. When something has the potential to attack our creation--one of our products or the very survival of our company--we tend to dismiss it. We don't want to seriously consider how horrible it could be.
And that threat you dismissed as no big deal could ruin you.
Blockbuster Video didn't take Netflix seriously, until it was too late; no one in book publishing ever thought that Amazon would become the force it did.
How do you avoid this situation?
YOU may not be able to. As I said, it is difficult for most of us to imagine how we could be rendered meaningless.
If you do think about how you might be vulnerable, you are probably going to go down a traditional path, doing a SWOT--Strengths, Weaknesses, Opportunities, and Threat--analysis.
And although that will identify the easy stuff (people want better service), the big threats are not likely to pop out at you, because you simply can't imagine they could happen. It is incredibly hard to make a list of things you haven't thought of.
Given that, you need some help. My suggestion? Turn to some of your youngest staff members--those who don't necessarily know how your business and industry traditionally work--or an outside company and give them the assignment of creating a new product, service, or company that could render you obsolete.
I will leave it to you to provide them with the specific challlenges you want them to take on, but here are five questions you may want them to consider:
1. If a company had unlimited resources, how would it attack us? Where would it hit first? Where are we most vulnerable?
2. If someone just starting out with extremely limited resources wanted to do what we do, how would he or she enter the market; i.e., where are we weakest?
3. How would you go about stealing away our biggest client? How difficult do you think it would be?
4. What would be the best way to block us from expanding (either into new markets or keep us from going after new customers)?
5. Which company would you acquire to put us out of business? Which group of people would you hire away from us to do the most damage to our company?
You want to ask these questions--and take the appropriate action based on the response.
Rest assured, if you don't, a competitor will--to your detriment.
Grove was right. Only the paranoid survive.