GURU MANTRA

From company chairmen to entrepreneurs to students of management,

Prahalad’s popularity has transcended that of most other thinkers of his
times. While his name is synonymous with the Bottom-of-Pyramid theory in
more recent years, his impact on management literature and the practice of
business globally has been significant for a long time
Vikas Kumar 

No change in my schedule. It will not affect, beyond a knee-jerk reaction,

investors. 
That was the terse reply CK Prahalad sent in response to a set of emailed questions
immediately after the 26/11 terrorist attacks, where we asked him how the events
would affect his regular trips to India, and trade inflows into the country in general.
For most business journos CKP, as he was more commonly referred to, was a bit
difficult to reach, often curt, but almost always in demand for his ideas and views.
It’s not hard to see why. From company chairmen to entrepreneurs to students of
management, Prahalad’s popularity has transcended that of most other thinkers of
his times. While his name is synonymous with the Bottom-of-Pyramid (BoP)
theory in more recent years, his impact on management literature and the practice
of business globally has been significant for a long time. 
Take his first big idea-core competence. It’s a term many use quite loosely in
business circles but one that has informed hundreds of important decisions. If
management theoreticians have been guilty of turning logical business concepts
into jargon, then CKP was equally responsible for his ideas becoming buzzwords.
But even as terms like re-engineering were being bandied about by consultants to
get corporations rid excess flab (read: people), Prahalad took upon himself to
dispel such myths and convince business leaders to see through the clutter. The
Core Competence of the Corporation, which he coauthored with Gary Hamel in
1990, jolted Western corporations from their inward focus and start thinking about
the external forces that were shaping the future of their industries. This was the day
and age of strategic business units (SBUs) and diversification drives by American
companies, which were up against the onslaught of Japanese companies and their
unique management styles. 
Prahalad and Hamel exhorted companies to uncover what’s at the core of their
business. They showed that successful companies into apparently diverse streams
managed to do well because they viewed these not as SBUs but a portfolio of core
competencies that were unique and integral to their success and enabled them to
conquer competition. 
If the first book was about companies rediscovering what they knew or did best,
the next big idea in Competing For the Future, was that ‘incrementalism is dead’.
Shaving costs, and employees were not the best way to create competitive
advantage, it proferred-it was time for the revolutionary leap in strategy. This was
the beginning of the Internet era and like some of his contemporary thinkers,
Prahalad too understood that technology’s effects were going to be deeper and far-
reaching than was being imagined. In this book Hamel and Prahalad sought to
explain that strategy wasn’t the lazy activity of armchair theorists (as opposed to
the immediacy of operational excellence) but a serious, intellectual and demanding
exercise that envisions a gamechanging approach to the future. Sixteen years
hence, strategy continues to be a debated and oft-interpreted subject among CXOs
and senior professionals. It took a step further by de-mystifying the ‘elitist’ view of
strategy and taking an ‘activist’ approach-that frontline and middle level people
were equally responsible for steering their companies’ and their own destinies. 
    Over the years, as the business environment began changing faster than before,
Prahalad’s ideas were trying to keep pace with the new realities-fickle consumers,
saturated urban markets, and the growing irrelevance of traditional business
techniques. The next line-up of books sought to address these issues. The Future of
Competition: Co-Creating Unique Value with Customers (2004) with Venkat
Ramaswamy, was about the new rules of engaging with consumers who were no-
longer passive recipients of products and services. Co-creating value with the help
of experiences was the way forward in an age of connected and informed
consumers. 
    Then followed The Fortune at the Bottom of the Pyramid (2006). His recent
book, The New Age of Innovation: Driving Co-Created Value Through Global
Networks with MS Krishnan (2008) outlined the new rules for companies in the
21st century. 
    As Prahalad’s interest in India and its potential became more pronounced, he
proudly showcased Indian success stories such as Aravind Eye Care and HLL’s
Project Shakti, to prove the practicality of his ideas. Companies too swore by his
philosophy in a changing environment where disruptive growth could only come
from the rural and urban poor. A regular visitor to India in recent years, Prahalad’s
frequency of visits had gone up owing to his consulting engagements with many
Indian corporates such as the Tatas and HLL and even emerging companies like
inverter maker Su-Kam. 
    Critics of the BoP thesis argued that the apparently lucrative market of 5 billion
underserved and unserved consumers was not actually as large and attractive as it
seemed. But Prahalad maintained that his consumption-led model of poverty
alleviation had sufficient merit. In fact, he applied what he had preached to the
West, to his own country and its problems. 
    His India@75 vision was about tackling the three issues of ‘economic strength,
technological vitality and moral leadership’. And BoP theory was a cornerstone of
this vision. Most of what Prahalad spoke about-inclusive growth, sustainability,
good governance, entrepreneurship-led innovation, and next practices-wasn’t
exactly new. Yet, it was just what a nation grappling with the twin challenges of
fast-paced economic growth and sustainable social development, wanted to hear.
Source: Economic Times: 18-Apr-2010