In the sudden demise of Dr CK Prahalad in San Diego, USA, the world of strategy has lost one of the most perceptive, innovative and influential strategic thinkers of all times. Strategy would not have been what it is today but for the innumerable path-breaking conceptual and analytical constructs that Professor Prahalad developed and propagated over the years. With indefatigable energy and passion he taught, wrote, consulted and mentored, on a global platform for over 44 years, leaving behind his unique and distinguished stamp on management thought and practice.
CK Prahalad (CK or CKP as he is popularly called) represented the very best of Indian intellect that found a global home. Born into a large family of Sanskrit Brahmin scholars in the South Indian city of Coimbatore in August 1941, Coimbatore Krishnarao Prahalad obtained his B Sc degree in Physics from Loyola College, University of Madras in 1960. After graduation, he worked in Union Carbide as industrial engineer and later in India Pistons as training manager. Setting sights on management education, he earned his PG diploma in Business Administration from the prestigious Indian Institute of Management, Ahmedabad, as a student of the first batch in 1966. His stint at Union Carbide and the move into the management studies were perhaps the critical inflexion points of his life.
Prahalad, armed with the MBA from IIMA, proceeded to Harvard Business School, USA where he earned his Doctor of Business Administration in 1975. He returned to India to teach at his Alma Mater, IIMA during 1976-77. He thereafter joined University of Michigan, USA and made his mark as a foremost management teacher in the United States. He served as the Distinguished University Professor of Corporate Strategy at the Stephen M Ross School of Business in the University of Michigan. Dr Prahalad was the recipient of several honors and awards globally. Honorary doctorate degrees from global universities and high-ranking civilian awards from the Government of India such as Padma Bhushan were part of the recognitions.
Though a bit dated, one of the best accounts of CK Prahalad’s passions expressed as his reflections can be found in the paper “C.K. Prahalad’s Passions: Reflections on His Scholorly Journey as a Researcher, Teacher and Management Guru” co-authored by Lynn Perry Wooten and Anne Parmigiani from University of Michigan and Nandini Lahiri from Indian School of Business (Journal of Management Inquiry, Vol. 14, No. 2, June 2005, pp 168-175).
This blog post presents Dr Prahalad’s genius from diverse perspectives based on the author’s understanding of his works and the author’s attendance in Dr Prahalad’s speaking forums.
Sweeping in canvas
Throughout his long distinguished career Professor Prahalad helped reshape strategy and set new directions for business. He had an unparalleled genius for developing seemingly abstract yet elegantly simple constructs, marked by lateral and out-of-the-box thinking. His teachings helped future managers and leaders acquire leading-edge conceptual, analytical and strategic skills. His articles and books, which went on to become bestsellers, shaped innumerable professionals, across domains and countries, to think differently. His consultancy assignments helped companies plan and grow existing and new businesses or turnaround the ailing ones. His speeches and presentations in several global forums helped strategy acquire a distinctiverecognition as a critical domain. More importantly, his mentoring of corporate boards, chief executive officers, entrepreneurs, bureaucrats and ministers helped India, Inc recognize its global potential.
If there is one factor that characterized all of CK’s contributions it is the unique trail-blazing nature. While several management gurus are content to spin extension and analogue theories around their first fundamental premise, CK constantly and consistently propounded new trail-blazing concepts and theories. As a result, CK made a more complete and holistic contribution to business management than any other exponent, save perhaps the legendary Peter Drucker. Each of Dr Prahalad’s bestselling books and award-winning articles exemplifies a thought process that is refreshingly different and genuinely creative.
Prahalad’s books institutionalized new ways of strategic thinking through elaborate paradigms, well-illustrated with real time case studies. His notable works include “Competing for the Future”, co-authored with Gary Hamel (1984), “Multinational Mission: Balancing Local Demands and Global Vision” (1987), ”The Future of Competition: Co-Creating Unique Value with Customers”, co-authored with Venkat Ramaswamy (2004), “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits” (2004), and “The New Age of Innovation: Driving Co-Created Value through Global Networks” (2008), co-authored with MS Krishnan. Each of the books created a new strategy paradigm completely different from the previous ones and laid new trails of strategic thinking.
Prahalad’s award-winning articles almost inevitably churned management thought and laid new pivots of strategic thinking. Prahalad’s “The Dominant Logic: A New Linkage between Diversity and Performance” (1986), co-authored with Richard Bettis,” Strategic Intent” (1989) and ”The Core Competence of Corporation” (1990), both co-authored with Gary Hamel,” The Role of Core Competencies in the Corporation” (1993), “A Strategy for Growth: The Role of Core Competence in the Corporation” (1993),” Weak Signals Vs. Strong Paradigms” (1995), “The End of Corporate Imperialism” (1998), “Serving the World’ Poor, Profitably” (2002), co-authored with Allan Hammond, “The New Frontier of Experience Innovation” (2003), and “Twenty Hubs and No HQ” (2008), co-authored with Hrishikesh Bhattacharyya, have each led to entirely new waves of thinking in corporate strategy.
Unlike many management gurus who preferred to plough their own lonely paths, Professor Prahalad believed strongly in collaborating with other management thinkers, including his students who evolved into independent thinkers in their own right. The array of books and articles he co-authored with such experts, some of them listed above, is proof of his cross-institutional, cross-border collaborative research and writing, often taking years of dedicated work before a publication is made. Quite often, however, it fell on his shoulders to present and communicate thoughts to several learned forums across the globe. While there could be effective class room teachers and public orators, Dr Prahalad had a unique capability to connect with the audience, influence listeners of varied mindsets, and instill a sense of purpose in each listener.
Pioneering in theory and practice
Amongst the many conceptual contributions of Prahalad, ‘strategic intent”, “core competency” and “bottom of the pyramid” have been the truly game-changing ones. Though these were initially proposed by Dr Prahalad as case based theoretical constructs and caused intellectual upheavals in management thought when they were first presented, all of these have now become viable practices.
The construct of strategic intent comprised three attributes of direction, discovery and destiny. It required a company to think of a long term and differentiated competitive position that a firm must seek over a decade or so, which in turn would motivate the employees explore the new terrain with a sense of purpose. Prahalad advocated upward movement of new ideas from all across the organization to help the company chart out a competitive future stating that a company’s strategic orthodoxies would prove to be more dangerous than its well-financed rivals. The prime message was one of doing things differently to achieve desired differentiated outcomes.
The concept of core competencies made fundamental departure from the established concepts of strategic business units and outside-in models of competitive strategy by arguing that only the core competency of a firm could truly drive its strategy and business. Each firm could have its own core competency or a portfolio of core competencies but a true core competency would be one that remained difficult to replicate by the competitors. The theory advocated building of core competencies that support a strategic intent. It proposed a core competency mind-set that would unchain talent from the imprisonment of business units, identify projects and people who embody core competencies and a game plan to identify next-generation competencies.
The paradigm of “fortune at the bottom of the pyramid’, was India-centric theory with truly global implications. It argued that by developing low cost products and services that serve the poorest of the poor, corporations would actually earn profits with a social purpose. It hypothesized that by focusing on the demand at the bottom of the social pyramid companies would help eliminate poverty. The book supported the theory with several actual case studies from India. While it had its share of skeptical critics it is now well established that Prahalad’s BoP theory has become viable industrial practice. Tata’s USD 2,000 dollar Nano small car, Nokia’s and Samsung’s USD 20 mobile phones and Yunus’s Grameen Bank demonstrate how profits get generated by focusing on, rather than shirking away, from poverty.
Equally path-breaking have been Dr Prahalad’s other concepts; for example, that the consumer and the firm are intimately involved in jointly creating value that is unique to the individual consumer and sustainable to the firm (“The Future of Competition”) or that the emerging markets can be a source of innovation, which can be captured by accessing global resources and talent to create customized co-created experiences for consumers. The attempts of global automobile firms and innovator pharmaceutical firms to collaborate with Indian partners indicate that the time has arrived, as always, for Prahalad’s futuristic propositions.
Passion for India as a global force
CK Prahalad was perhaps the only Western management thinker who believed that India would be a global leader sooner than later. He appreciated and forecast global competitive dynamics as much as he understood and formulated dynamic corporate strategies. He held that leadership was all about the future, about hope and change.
In 1994 Dr Prahalad addressed a select group of CEOs of India, Inc in Windsor Club. He suggested to them that they must build multinational firms from India (Indian MNCs) rather than be paralyzed by the entry of multinationals into the Indian market. Very few of the assembled CEOs thought then that it could happen. Probably saddened by this reaction he started working with Indian corporations and individual CEOs to prompt a multinational mindset. Surely to Prahalad’s satisfaction, he saw in his lifetime the concept of Indian MNCs becoming reality. Today virtually all industrial sectors of India are significantly globalized while several top Indian corporations have made major global acquisitions.
In 2007-08, as the celebrations of India@60 wound down, he formulated a new vision for India@75, ie., India by 2022. He argued that India’s success in this endeavor would depend on economic strength, technological vitality and moral leadership. He set several exciting goals for India. He urged the governments to convert the huge population into a distinct advantage through quality education. He believed that India would account for 10 percent of global trade. He exhorted India, Inc to get 30 of its firms onto Fortune 100 list. He wanted India to have 10 Nobel Prize winners based on research conducted in India. He believed that India’s unique manufacturing and R&D paradigms could be developed to develop cost-effective breakthrough innovations.
Dr Prahalad advocated game changing accomplishments for India to move to the next higher trajectory. He said: “ Focus on the future, and not on the present or the trajectory of the past; Aspirations must exceed the resources; and Imagination is more important than analysis”. By focusing on inclusive growth that would emphasize the larger rural landscape as micro-producers and micro-consumers as much as the more visible urban landscape as major producers and consumers he felt that India with its 1 billion plus population could turn his India@75 vision into reality.
People power of strategy
Prahalad’s works are characterized by an unflinching faith in people as shapers of strategy and drivers of growth. Prahalad never looked at strategy as an impersonal corporate construct or as a mere structural enabler. CKP’s recent works have focused explicitly on consumers as the co-creators of value; however, even his earliest works integrated people as the essential component of strategy development.
In Prahalad’s framework people emerge as the primary constituency, either as generators of demand or creators of products, with his strategy linking both. For example, in Strategic Intent Prahalad dwelt with an active management process that would include: focusing the organization’s attention on the essence of winning, motivating people by communicating the value of the target, leaving room for individual and team contributions, sustaining enthusiasm by providing course corrections and using the intent consistently to guide resource allocations.
Needless to say, his work on core competencies is completely people focused. Here, however, he focused on the intellectual competencies of people. According to Prahalad, core competencies are the collective learning in the organization, signifying a unique ability to coordinate diverse skills and integrate multiple technologies. He argued, correctly so, that several individualized skills would not lead to the competitiveness of an organization, unless they were woven into a core competency that was distinctive to the organization. In his view, core competence would many levels of people and all functions, with top management looking at the company as an amalgam of skills and not as a collection of departments or products.
It is, however, in the “Fortune at the Bottom of the Pyramid” that an entirely new human dimension of CK Prahalad emerged. By all accounts, no management guru (or any corporate honcho) until then considered poverty-stricken sections of the society as one deserving of any mention in strategy formulation. In an era where consulting organizations and corporate strategists encouraged companies to focus on advanced markets to drive revenues, Prahalad in his landmark book advocated creation of fortune by focusing on poor people in emerging markets. The tag line “enabling dignity and choice through markets” is evocative. Post-publication of this book, creation and delivery of low cost but high quality products for customized applications became a board room topic, finally.
A loss, a void and a duty
Typically, Prahalad never stayed in a zone of comfort. If consulting assignments to top ranking global firms provided early challenges and opportunities, his passion to evengalize his strategic philosophies globally with a special focus on India made Dr Prahalad a truly jet-set global management guru. Very often, he is reported to have placed his external commitments ahead of his personal comfort and health. He founded and personally ran entrepreneurial ventures (Praja, Inc) which sought to harness the power of the technology and Internet. As with the philosophy he advocated for others, he set aspirations higher than resources and aimed to push the boundary farther, ever often.
The passing away of Dr CK Prahalad has snatched one of the most innovative and prolific management thinkers from the business world. Many academic institutions, industry associations, corporate boards and chief executives, directly served by his thoughts through association and indirectly influenced by his written and spoken thoughts, will be orphaned. More than anything else, the employee-on-the-frontline and the man-on-the-street would be impacted by the snapping of his creative thoughts that targeted common good, globally.
In Professor Prahalad’s demise, companies have lost a mentor who encouraged managements to engage the apparently ordinary people in their organizations and feel their extraordinary potential in strategy formulation and execution. Societies have lost a benefactor who could develop new business constructs which would harmonize the profit motives of a capitalistic corporation with the equity needs of a handicapped society.
Needless to say, India has lost a towering icon of great intellectual capability, acclaimed as the most influential management thinker of the world. Converting Dr Prahalad’s vision for India into a reality is the most relevant homage that India’ strategists can pay to his unique and distinguished memory.
Posted by Dr CB Rao on April 18, 2010
Sunday, April 18, 2010
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