“Past success can breed complacency and constrain future innovation.” — Robert Alexander Burgelman
Imagine you’re a fighter pilot in a chaotic dogfight, adrenaline surging as you zero in on an enemy plane. Your vision tunnels on that target, and you start to lose awareness of everything else. Pilots call this target fixation — becoming so focused on one object that awareness of other hazards fades. In such moments, you risk missing critical cues (like another enemy on your tail or a mountain in the background) because your peripheral vision has essentially shut off.
Now, swap the cockpit for the boardroom: business leaders can fall prey to the same phenomenon. A leadership team can become so fixated on executing a chosen strategy or hitting a specific goal that they lose sight of changes in the broader environment. In the heat of competition and success, laser focus can become blinders. While a narrow strategy might energise people to innovate within the box, it can discourage exploration outside it.
This Thursday Thought revisits Intel’s journey, from memory-chip pioneer to microprocessor giant, and how triumph led to target fixation. It’s a tale of co-evolutionary lock-in, a concept from Stanford professor Robert Burgelman’s evolutionary theory of strategy, and a cautionary metaphor for any business facing inflection points today. Which is just about all of them.
Intel’s Strategic Inflection: From Memory to Microprocessors
There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment — and you start to decline. — Andy Grove
In the 1970s, Intel was known primarily as a memory chip manufacturer. The startup’s identity and revenue were tied to DRAM (dynamic random access memory). By the early 1980s, however, Intel’s memory business was under siege. Japanese competitors had perfected manufacturing and driven memory chips into commodity territory. Intel’s market share plummeted from almost 83% in 1974 to just over 1% in 1984. Yet inside Intel, many clung to what Andy Grove (Intel’s legendary CEO) later called the “self-evident truth” that Intel was a memory company. This was corporate target fixation in action. A deep, emotional attachment to the business model that had once delivered success, despite mounting evidence that the world had irreversibly changed!
Grove, known for his unsentimental focus on reality, recognized that Intel had hit a strategic inflection point. He later admitted he initially failed to see the Japanese threat coming, and he urged leaders to remain “vigilant to, even paranoid about,” such inflection points. Once he did grasp the situation, Grove made the gut-wrenching decision to quit the memory business and bet the company’s future on a then-second-tier product line, microprocessors.
As he later recalled, “The fact is that we had become a non-factor in DRAMs… Yet, many people were still holding to the ‘self-evident truth’ that Intel was a memory company. One of the toughest challenges is to make people see that these self-evident truths are no longer true.” In other words, Grove had to break Intel’s target fixation on memory chips by confronting the harsh truth that past formulas were now obsolete.
This pivot was anything but easy, one manager equated exiting DRAMs to Ford abandoning the car business. The bet paid off massively and throughout the 1980s and 90s, Intel emerged as the undisputed king of microprocessor chips for PCs, riding the wave of the personal computer revolution. With its “Intel Inside” marketing and tight partnership with Microsoft (the Wintel alliance), Intel achieved what Burgelman described as and Grove called a powerful strategy vector, a clear, focused strategic direction that propelled the company to dominance.
Under Grove’s leadership as CEO from 1987 to 1998, Intel’s annual revenues skyrocketed from $1.9 billion to over $26 billion. Grove had effectively refocused Intel’s strategy-making process. Instead of letting various projects duke it out organically (what Burgelman terms an “internal ecology”, autonomous model of strategy), Intel under Grove shifted to a more deliberate, top-down “rational actor”,induced strategy approach. The company collectively pointed all its guns at the microprocessor target — and collectively fired. This laser focus brought riches and a “golden decade” of growth.
However, as every case study in disruption shows, such focus, like target fixation, comes with a trade-off, some hard truths and ultimately, a cost.
Success and Co-Evolutionary Lock-In: When Focus Becomes a Fortress
“During this extraordinarily successful period, Intel’s capacity to manage the autonomous-strategy process had withered.” — Robert Alexander Burgelman
Ironically, the very success that Intel’s focus created would later become a source of strategic rigidity. Our guest on the 3-part series on Resource Allocation Robert Alexander Burgelman calls this co-evolutionary lock-in. Intel had co-evolved and coupled tightly with the PC industry. Its fortunes rose with the proliferation of personal computers, and in turn, the PC ecosystem standardized around Intel’s x86 microprocessor architecture.
Intel’s strategy vector provided tremendous momentum, but it was also narrowly aligned to one world — the world of desktop and laptop PCs. The company’s processes, culture, and investments were all optimized for one goal: making ever-faster, more powerful chips for computing devices plugged into the wall.
This created a form of strategic inertia. Burgelman’s research on Intel highlights that Grove’s top-down focus, while highly effective in the PC era, reduced the effectiveness of Intel’s “internal ecology”. The company’s bottom-up innovation processes that generate new ideas atrophied. In plainer terms, Intel became less adaptive and closed to new opportunities. They became so fixated on their target that they struggled to do anything different. Burgelman describes co-evolutionary lock-in as a condition where an organization gets “stuck in the holes of previous successes at the expense of innovation”. Intel, encased in the armor of its past victories, was now facing the danger of target fixation in a new form.
The cracks in the armor appeared with the next inflection point: mobile computing. As smartphones and tablets emerged in the 2000s, the rules of the semiconductor game shifted again — this time emphasizing low power consumption over raw processing power. Intel, however, was fixated on making the fastest chips for PCs. The company initially dismissed or downplayed the mobile trend. (In fact, Intel famously turned down the chance to supply the processor for the original iPhone, believing the phone wouldn’t sell in big numbers — a misjudgment to say the least.)
By the mid-2010s, it was clear Intel had missed the smartphone boom; the company remained a minor player in mobile devices, while chips based on an upstart competitor architecture (ARM) dominated that market. Intel’s co-evolved relationship with the PC had become an evolutionary strategic straitjacket. The habits and assumptions bred by years of success (high-performance chips, Wintel compatibility, Windows-centric thinking) left Intel a step behind in a world shifting toward portable, battery-powered computing. The target fixation on its core business meant Intel underestimated new signals — much like a pilot so focused on one target that they don’t see the next threat coming.
The very focus that drives greatness in one era can become a company’s Achilles’ heel in the next if it isn’t periodically questioned. As Bertrand Russell put it, “In all affairs it’s a healthy thing now and then to hang a question mark on the things you have long taken for granted.” In Intel’s case, Andy Grove’s paranoia was an asset that saved the company once; it needed that same willingness to question assumptions to adapt again.
Breaking the Spell: Lessons for Leaders at Inflection Points
“Focus is not an excuse to ignore everything else- — that would be naive and dangerous. Rather, in providing operational focus, top management simply predetermines the trade-offs it expects operating employees to make when, inevitably, they must allocate scarce time and resources.” — Gary Hamel and CK Prahalad
Intel’s journey holds powerful lessons for business leaders, especially those steering companies through inflection points of their own. Here are a few takeaways to consider:
Keep Peripheral Vision in Business: By all means, set a clear target and focus — but don’t become target-fixated. Maintain “peripheral vision” on your business environment. Regularly scan for technological shifts, emerging customer preferences, or new competitors. Encourage those “at the edges (not on the leadership team) to surface bad news and external insights, even if those insights challenge the strategy.
Question the “Self-Evident Truths”: What long-held beliefs about your business might no longer be true? In Intel’s case, it was the identity of being a memory company — an assumption that had to be shattered for the company to survive. Create a culture where it’s acceptable to ask, “If we were starting fresh today, would we still do it this way?” Andy Grove famously put it this way: If the board kicked us out and brought in new leadership, what would they do? If the honest answer is “they’d change our core strategy,” consider why you aren’t doing that already.
Balance Exploitation with Exploration: Burgelman’s evolutionary theory of strategy draws a distinction between induced strategic processes (the deliberate plans from the top) and autonomous strategic initiatives (grassroots innovations from within). Both are vital.
Stay Paranoid (Within Reason): As Grove advised, remain vigilant — even a bit paranoid — about the inevitability of change . Complacency is the enemy. That said, channel that paranoia productively. Continuously ask “What’s next?” and “What could disrupt us?”
Lead the Change Before It’s Forced Upon You: Finally, leadership at inflection points means having the courage to pivot before crisis hits. Grove’s decision to exit the memory business was made when Intel still had revenue from it — but he saw the writing on the wall. Proactive change is always less costly than reactive change. It’s a lot easier to pull up before you hit the mountain than to try to recover after a crash.
In business, focus is a double-edged sword. It’s essential for execution and rallying an organization, but as Intel’s experience shows, unchecked focus can turn into target fixation, leading even the mightiest companies into peril.
Robert Burgelman’s work on Intel reminds us that strategy is evolutionary — a continuous interplay between the firm and its environment. Companies are not static rational actors playing out a set plan; they are more like living ecosystems that must evolve or risk extinction. Andy Grove’s legacy at Intel, with all its dramatic strategic twists, illuminates this truth. His story is a vivid illustration that sometimes a company must unlearn what made it successful in order to stay successful. For today’s leaders, there is a hyper relevant mantra from the New Zealand All Blacks Rugby Team, “Celebrate your successes but forget them quickly, remember your losses more than your wins.”
Or to put it more bluntly, as Radiohead frontman Thom Yorke said, “As soon as you get any success you disappear up your own aR$e.” And once you’re stuck there, good luck spotting the next inflection point.
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Target Fixation: Intel’s Strategic Focus and the Trap of Success was originally published in The Thursday Thought on Medium, where people are continuing the conversation by highlighting and responding to this story.
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