What could sink your business? From Intel’s AI stumble to TikTok’s crisis, today’s biggest threats show the cost of ignoring what’s coming. True leadership means spotting the icebergs—and steering clear in time.
Andy Grove, the late former CEO of Intel, was a true Silicon Valley giant who steered the semiconductor company through multiple crises. In his 1996 memoir Only the Paranoid Survive, he preached the need for leaders to be constantly alert and ready to adapt to threats that could undermine their business’s competitive edge.
Perhaps his latest successors at Intel should have read it more closely. In just three years, Intel has lost over half its market value and gone from seeking acquisition targets to becoming one itself. Ironically, the biggest reason for its downfall is that it wasn’t paranoid enough.
As CEO Pat Gelsinger tried to regain Intel’s position in CPU manufacturing, he was blindsided by the rapid emergence of generative AI and the explosion in demand for a different kind of chip—the GPUs that power AI models. Producing those GPUs has fueled NVIDIA’s dramatic rise as the new king of global chipmaking. Gelsinger’s sudden resignation highlights the stakes of missing critical threats. Intel may rise again. But the crushing price it’s paid for missing the AI wave underscores how crucial it is for leaders to be clear about the doomsday scenarios that could cripple their business.
Recognition: What’s Coming To Kill You?
It’s not that most leaders are too blinded by pride to face reality. In fact, 40% of CEOs acknowledge their business won’t be viable in a decade if they stick to their current path.
But future-focused leadership demands more than just general anxiety—it demands clarity. Leaders need to make a list of specific, realistic doomsday scenarios and regularly update it based on what they’re seeing. Do you know the five biggest things that could kill your business? A wise captain has a keen understanding of the icebergs in the distance that could sink their ship.
Sometimes those doomsday scenarios are clear and present. TikTok, for example, is staring death in the face. Its parent company ByteDance said it has no intention of selling the social media app, despite the U.S. passing a law forcing it to either sell or be banned in America. That followed a report that ByteDance was considering selling TikTok without its precious algorithm—the app’s core intellectual property that bestows a vast amount of its value. For TikTok’s leadership, it’s a clear existential crisis either way.
Doomsday scenarios are rarely so obvious, though. I was speaking recently with a leader of a food company who was eager to talk about their emerging AI strategy. AI is certainly an important opportunity and threat for many companies, but it’s also a bright, shiny object that can distract leaders from much bigger risks.
I’m skeptical that AI would make the top five doomsday scenarios for a maker of packaged foods. There are much scarier ones out there, such as the shift to healthier eating habits, the impact on snacking from GLP-1 inhibitor drugs like Ozempic, and supply chain disruptions linked to climate change. The recent severe shortage in cocoa supply, for example, has raised concern about the long-term viability of that delicate plant—something that could have dire implications for cereal and candy makers.
Acceptance: Do You Feel Urgency?
Recognizing the thing that’s coming to kill you is the first step. But leaders then need to actually believe it and accept it as an urgent threat, rather than playing it down. Of course, powerful psychological forces often prevent leaders from responding with the required urgency.
Doomsday threats often emerge stealthily, lulling companies into a false sense of security, until the consequences suddenly hit home. For example, social media platforms may seem all-powerful today. But growing bipartisan concern and legislation over their products’ impact on mental health (for children in particular) may point to a future in which they are much more tightly regulated and stigmatized. The tobacco industry knows a thing or two about that.
The most consistently successful companies and leaders are in a constant state of focused, controlled paranoia, scouting the horizon for threats, accepting them as real, and addressing them proactively.
Microsoft, for example, has maintained its dominance over the past half-century, riding massive changes in technology that have eliminated many other Silicon Valley firms. It’s done so by being permanently on alert to threats and proactively turning them into opportunities—its successful pivot to GenAI is the latest example.
This seems to be a consistent habit for Microsoft. It confronted a similarly huge threat to its survival in the mid-1990s when program manager J Allard wrote a seminal memo for Bill Gates titled “Windows: The Next Killer Application On The Internet.” The 1994 missive warned that the Internet was an existential threat to Microsoft, prompting Gates to make the web central to everything the company did.
Action: Do You Have a Plan?
The final step is to translate that recognition and acceptance into positive action. Humans have an uncanny tendency to avoid or delay action even when they know they’re at risk.
My friend and podcast partner, Michelle Loret de Mola, lives in a beachfront property in Miami despite the clear and growing threat that Florida is facing from more frequent, more intense hurricanes and rising sea levels. Of course, I can’t really criticize her, because my house in Northern California is a few miles from the San Andreas fault. I should really move or at least pay the extortionate amount it costs to buy earthquake insurance. But, like most Californians, I don’t because it’s easier to delay action. After all, the major expense or upheaval in response to a danger may not materialize in my lifetime. But it could also strike tomorrow…
The Gift of a Near-Death Experience
TikTok’s leadership will benefit greatly from the current experience, especially if the company emerges intact. I’m reminded of what happened to IBM. The company has radically transformed its business model several times over the last hundred years, from making fruit scales to cash registers to punchcard machines to mainframes to PCs to consulting services and now artificial intelligence. Of course, it hasn’t always been a smooth ride. The company nearly went out of business in the early 1990s.
But that near-death experience seems to have been a healthy thing. Back in 2006, the company was fighting off the threat of new Indian competitors like TCS, Wipro and Infosys. As part of its response, IBM decided to hold its annual meeting in Bangalore that year. I remember having a conversation with IBM’s CMO Jon Iwata. I told him how impressed I was that IBM was future-focused enough to go to India. After all, IBM meeting in Bangalore was like GM meeting in Yokohama. Jon laughed. “Dev, we’re not doing it because we’re future-focused. We’re doing it because we’re terrified. You have to remember that most of us lived through the near-death experience of the nineties. And we’ve kind of sworn to never let it happen again. Not on our watch.”
Do you know what might kill you? Do you have a plan?
