In praise of paranoia

I hope there will never be a Nobel Prize for business thinking because if there is, it will doubtless go to all the wrong people. Business school experts would, I expect, scoop the prize year after year. They, after all, say more clever things more articulately than practitioners, despite mostly never having run a proper business.

My nominee for such a prize would have been Andy Grove, who took Intel from being Yet Another Semiconductor Company to decades of leadership in a very tough sector. Fortunately for us all, Andy did not just show what it took and how to do it, but summarized his key message in ten immortal words: “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”

Paranoia at Intel

The logic in this observation makes immediate sense to anyone with any life experience. And engineers everywhere will love the simple and faultless logic it articulates so economically. Nor can the Andy Grove solution, paranoia, be challenged. Paranoia, with which he himself was blessed, fueled him to push everyone around him not just to fix problems fast, but to anticipate them way before they materialized. Andy Grove never turned gloomy employees away from his door: he really wanted to hear about their worries in case he had failed to spot a major threat. Then he acted. Result: for decades Intel beat its competitors every step of the way.

There will be some who would pity such a restless, worried man and hate the thought of having to work with him, and certainly not want him as their boss. But everyone at Intel benefited from knowing that their chances of being laid off were lower as a result. Paranoid Andy made sure of that. Intel and most of its people survived.

Mission: spreading paranoia

Some might dismiss Andy Grove’s ideas as less relevant outside the fast moving tech sector. But Mark Stevens, in his memorably-named book, Your company sucks, focuses on issues that arise in all companies: how they treat their customers. His aim? To infect readers everywhere with a stiff booster shot of life-saving paranoia. Stevens focuses on how attitudes to customers underlie the success-to-failure cycle. Once we get a customer, Stevens says, we mostly forget about them. From success to complacency in a heartbeat. Reading Mark’s book is like getting a 200-volt shock. Here are some sound bites:

“Customer satisfaction is a curse in disguise.”

“No matter how high you rank in the quality hierarchy, you simply cannot be content with the quality standard you have in place.”

“Unfortunately, teddy bear leaders put their companies’ futures into the hands of tenured slackers.”

Those might not get Mark the Nobel Prize for business thinking but they would surely get the Andy Grove vote.

Just because I’m paranoid…

Paranoia may sound like an illness but, in business, it really isn’t. Nowhere is the old quip more true: just because I’m paranoid doesn’t mean they’re not out to get me. In a business operating in a free market, they really are out to get you. CEOs should operate in the knowledge that rival companies will, every day, be plotting their downfall and allocating resources with that specific end in mind. It is sobering to remember how great names such as Digital Equipment Corporation, Amdahl,

EDS, ICL, Sperry, Data General, and many more fell behind, allowing others to ease into their place or buy them. Those who eased into their place are now struggling. And interesting to reflect that, someday, most of today’s successful tech companies like Amazon, Apple, Facebook, Google, Microsoft and more will go the same way: the grand sweep of history demands it. When they do, the causes will include insufficient supplies of paranoia.

The modern CIO: paranoid?

Paranoia is not just needed at CEO level: CIOs need it too. In the early years, CIOs’ predecessors – DP managers or IT Directors – had none. With no real external network, external security threats were minimal. System outages were low impact and rarely visible outside the company. Though well-funded, they were not subject to scrutiny, because no-one really understood what they spent company money on. Survival was possible without paranoia.

But today, paranoia stalks – or should stalk – the corridors of every IT function. Security is obviously a constant and constantly increasing worry. And service outages seem destined to grow in scale and/or impact. But because systems now

offer competitive advantage, paranoia is now also directed at the functionality of the company’s application systems. Consider, in its sheer terror-inducing potential, the discovery, by the CEO, that a business competitor’s information systems are actually taking market share off the company.

In 2017 there’s so much more for CIOs to be paranoid about than there has ever been. So how’s it done?

A problem shared: a problem everyone has

CIOs who survive spend a ton of time making sure they are well informed of possible and actual service issues, security issues and risks. And they have to be more knowledgeable about business applications than ever before: these can now make or break the company. So CIOs must deploy their paranoia both on strategic plans and on more immediate worries. This is a huge burden, and CIOs cannot do it on their own. They must transmit their own paranoia to the whole tech team. People across IT now must dispel complacency, stop taking success for granted, always believe that no matter how good things are they could always be done better. If a boss thinks like that, the habit will spread.

Each IT manager must be expected to know, for their domain, how the opposition is performing. How good are business competitors’ systems? Their security arrangements? And disaster recovery capabilities? What are the competitors’ records on security breaches? On downtime? On staffing levels? On costs? And how do ours measure up? What do we have to do better?

If the thought of spending your life looking over your shoulder, checking and rechecking details, etc. does not appeal, that’s understandable. But that’s the IT world today: not just exciting but dangerous. But one more time: only the paranoid survive. Choose survival: get paranoid.