Intel’s Andy Grove and the difference between good fear and bad fear. (2016)

“Excessive internal focus reduced the attention Nokia devoted to processing external threats, generating a mortal combination of high internal fear and low external fear.

Herminia Ibarra
ft.com, 11 April 2016

Ibarra reviews an article analysing the decline of Nokia, written by professors Timo Vuori (Aalto University) and Quy Huy (Insead).

While the “famous paranoia” of Intel’s then-leader Andy Grove helped him shepherd that company through the seismic shift from memory chips to microprocessors, “the fear wrought by Nokia’s leadership failed to produce a next-generation smartphone in response to Apple’s iPhone.”

The authors explain the difference by distinguishing between “external” fear and “internal” fear.

“While (senior) managers at Nokia rightly feared the iPhone, they were more afraid of their shareholders. Jorma Ollila, Nokia’s former chairman and CEO, was known for shouting at people at the top of his lungs. Middle managers, in turn, feared their bosses, and each other.

“Intel’s Grove in contrast was a different sort of “tough boss” from those who ran Nokia into the ground.

“Grove’s notion of ‘constructive confrontation’, for example, meant that decisions were debated fiercely and loudly. True, he loved nothing better than a good shouting match but managers at all levels knew they were expected to speak their mind to superiors and arguments were won and lost with data.”

Ultimately, internally focused fear is ‘bad fear’. “It motivates protection from the discomfort of change in the status quo.

“Good fear, in turn, is always focused externally, on the imminent threat outside.

“Excessive internal focus”, conclude professors Vuori and Huy, “reduced the attention that Nokia employees devoted to processing external threats, generating a mortal combination of high internal fear and low external fear.”

• Access the full article here: Intel’s Andy Grove and the difference between good fear and bad fear.

• Access the original article by Vuori and Huy here: Distributed attention and shared emotions in the innovation process: How Nokia lost the smartphone battle