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Transcript of Purely Prahalad
Purely Prahalad
Business Wisdom from theLate Dr. C.K. Prahalad’s Thoughts
EDITED BY
B.N. Dastoor
i
2 Purely Prahalad
February 2011
Purely Prahalad: Business Wisdom fromthe Late Dr. C.K. Prahalad’s Thoughts
Edited byB.N. Dastoor
Published byAhmedabad Management AssociationCore-AMA Management House • Torrent-AMA Management CentreATIRA-AMA Centre for Textile StudiesDr. Vikram Sarabhai Marg, Ahmedabad 380 015, [email protected], www.amaindia.org
Shilp Gravures-AMA Media Outlet
Printed byN.K. Printers, Rakhial, Ahmedabad
iii
Dedicated to the
fond memory of
late Dr. C.K. Prahalad
AMA
4 Purely Prahalad
Foreword
Every January, as we welcomed a new year, we at AMA
would eagerly await the visit of Management Guru
Dr. C.K. Prahalad.
Most unfortunately, he left us suddenly for his heavenly
abode, and AMA will never be the same again without
his great contribution to the overall growth of
management education.
This book is published as a mark of respect, love and
gratitude for Dr. Prahalad. I am sure, this collection will
greatly benefit entrepreneurs, business leaders,
managers, as also teachers and students of management.
I thank our own Shri B.N. Dastoor for his skill and speed
in preparing this very useful book.
January 2011 Pankaj R. Patel
President, AMA
Preface
During his visits to Ahmedabad, for fourteen long years,
Dr. C.K. Prahalad had enlightened us with his lectures,
seminars, workshops, free-flowing discussions, and
interviews.
This attempt to collect the important glimpses of
Dr. Prahalad’s business wisdom, expresses Ahmedabad
Management Association’s deep gratitude for his salutary
contribution in the exciting and dynamic field of
management.
I consider myself very fortunate to be assigned the task
of presenting Dr. Prahalad’s thoughts in a concise form.
B.N. Dastoor
The author is a Motivational Trainer specialising in Sales andMarketing. He is an author and columnist and presentlyinvolved in several social and educational assignments.Email: [email protected]
6 Purely Prahalad
Contents
Foreword
Preface
1. Next Practices and Not Best Practices
2. Leveraging India
3. Fortune At the Bottom of the Pyramid
4. Quotable Quotes
Leaders of India Inc. Speak
8 Purely Prahalad
1Next Practices andNot Best Practices
Best practices lead to agreement on
mediocrity. I do not have much interest
in best practices. Because all of us
benchmark each other, we gravitate
toward mediocrity in a hurry. What we
really need to ask is “What is the next
practice?” so that we can become the
benchmark companies and benchmark
institutions around the world.
8
Inauguration of Golden Jubilee Management Convention.Seen are M/s. Janak Parikh, Rajiv Vastupal, Dr. Prahalad and Venkat Chengavalli
9
10 Purely Prahalad
NEXT PRACTICES AND NOT BEST PRACTICES
Quality-Cost Equation
There was a lot of debate about whether quality
will increase cost. What did we find? That if you
deeply understand quality and you put methodology
in place, costs automatically come down.
Sustainability
Sustainability can be the next quality challenge.
It’s going to drastically reduce cost and increase
consumer acceptance. Don’t look at sustainability
as compliance and regulation, but an opportunity
for breakthrough innovation.
Sustainability and Inclusiveness
You can design a product, service or supply chain
with sustainability and inclusiveness together. You
do not do it as an afterthought.
Customers Research Companies
We always assume that we are researching the
customer… But it is the customer who is researching
the brands and companies…
Disruptive Business Models
There are five criteria for “disruptive business
models”
1. Does it radically alter the economics of the
industry?
Next Practices and Not Best Practices 10
2. Does it maintain and improve functionality? It
is not just about lower cost. In fact, both of
them together
3. Does it make it difficult for incumbents to react?
In other words, you do not want other people to
be able to copy what you have done rapidly.
4. Is it sustainable? Is it based on logical internally
consistent business principles?
5. Does it enlarge the size of the market?
Change the Game
Once you establish an aspiration level wanting to
be a global leader, wanting to be No.1, wanting to
pursue excellence, then you can only do it one of
the two ways: leverage the resources that we have,
or alternatively, change the game to your
advantage.
Thinking Differently
Going there is about thinking differently, not being
just efficient. We have to be efficient, but we have
to develop a distinct point of view about
opportunities and disruptive business models. We
cannot play the game by other people’s rules, we
have to invent our own rules.
Customers Switch Brands
In many products, because the unit packs are small
and even expenditures are small, if people are not
satisfied, they can now switch brands. They will
12 Purely Prahalad
switch either if they are not satisfied or better value
is available.
Staying Afloat
My one mantra to stay afloat during the
manufacturing slowdown is that this is the good
time to become even more efficient. I always say
that the only trees that don’t fall during the storm
are those that have seen the drought, because their
roots go very deep.
Making Globalization Work
Globalization is like gravity. There is no point in
denying gravity. We should defy gravity and build
an airplane… I am often asked whether globalisation
is good or bad for the poor. To this I say that, this is
a wrong question. The question that we need to
ask is how to make globalization work for all.
Creative Solutions
There is no challenge which is impossible. The more
ingrained the thought process, the more creative
solution it demands. So, the real trick lies in finding
out such thought processes and then dealing with
them.
Helping People
If you are honest about helping others, rather than
showing how smart you are, things are very easy.
But the important thing is that people should realize
that you care about them, you want them to
Next Practices and Not Best Practices 12
succeed. As long as they understand that, people
will accept innovative approach.
Problems Vs Trajectory
You need to differentiate between problems of the
moment with the long term trajectory… The most
important challenges are, how can we become
technically agile and directionally consistent. No
economy goes uninterrupted.
Managing Volatility
The world will be witnessing extreme volatility, be
it in the political, economic or the regulatory
environment. For example, the price of oil went
from $60 to $145 to $45 in one year; same with
commodities. We need to have the capacity to
manage volatility in addition to quality, cost, scale
and speed as sources of competitive advantage. It
requires the capacity to scale up and scale down
quickly and the ability to anticipate… we also need
to learn to shift people rapidly to new opportunities.
Constraints Create Opportunities
When resources are low and aspirations are high,
innovations take place and not when the condition
is the other way round. Constraints create
opportunity for creation of innovation.
Creating a Surplus
If you don’t make a surplus, how will you have the
money to do anything for others? So, it is important
14 Purely Prahalad
to be profitable and successful to be able to do
good.
Innovation is the Key
If you are not profitable, you cannot afford the
future, and if you are not innovative, you have no
future… The key is innovation. It is about creating
awareness, accessibility, affordability and
availability.
Allow People to Co-create
Consumers will get informed through dialogue and
relationship with the community. When you allow
people to co-create, you get a lot of inputs. The
process does not only benefit companies to learn
what people do and how they use products, but it
also informs consumers better.
Continuous Change
I am not interested in a “charismatic leader”
approach to innovation. Companies need continuous
changes – not just episodic breakthroughs.
Point of View on the Future
Top managers must ask the question: how will the
world would be and not how the world is. They
must have a point of view on where we are, what
we want, what are the gaps to reach, where we
want to be.
Next Practices and Not Best Practices 14
Need for Excited Employees
Make sure that people are energized enough. You
don’t need satisfied employees, you need excited
employees.
Customers Are Not Stupid
The key point is, don’t treat your customers as
stupid… Consumers can dump you because of lower
switching costs… I think CEOs must behave like call-
centre executives. Instant response is the key or it
may be too late.
Organizational Legacies
Organizational legacies can erode the capacity of
a company to innovate and create value. Even
mergers and acquisitions bring with them disparate
systems.
Don’t Wait Too Long
Finding the motivation to affect change is very
difficult when the existing business models seem
to be working well. But the question to ask is: “Will
their zone of comfort force them to wait too long
before they make the transition?”
People Participation
Co-creation reduces risk because consumers are
already involved in thinking through what they
want. But that doesn’t mean that you don’t have
ideas of your own. You got to check the prototypes.
16 Purely Prahalad
It also reduces time and investment because more
people and suppliers participate in development.
Being Flexible
Raw materials may still be important in some
industries like oil, but in most industries you can
get raw materials. Technology and capital is freely
available… now it is becoming possible to hire global
talent. The real differentiating factor is the ability
to be flexible to change. We need resilient, flexible
processes… we need analytics. I need to be able to
understand the behaviour of a customer among 100
million. I need large database and analytics to focus
on the behaviour and needs of an individual.
Value-based Pricing
Value-based pricing is a strategy under which price
is set depending on how much the product or service
being offered is worth to the customer. This
obviously differs from the conventional cost-plus
pricing model where things like the actual cost of
product, competitor’s prices, or the historical price,
are taken into account.
Organizational Orphan
The change to value-based pricing needs changes
to the underlying structure of business processes
as well as changes in the way managers in the
industry are socialized, and in the way they keep
score of personal success. That is not happening
because it is one thing understanding the need to
Next Practices and Not Best Practices 16
change and another implementing it … Business
processes are not easy in any company… few
managers want to be responsible for it, much less
pay attention to it. It is often an organizational
orphan.
Next Vs Best
Best practices lead to agreement on mediocrity. I
do not have much interest in best practices. Because
all of us benchmark each other, we gravitate toward
mediocrity in a hurry. What we really need is to ask
what is the next practice, so that we can become
the benchmark companies, benchmark institutions
around the world.
Human Currency
People and employers are changing their
relationships to meet the new economy. Human
beings are the new form of currency and valuation
in companies.
Excitement Vs Satisfaction
Satisfied employees don’t mean anything.
Excitement is what creates energy and innovation.
Democratise information, change the game, and
leverage the resources. Five year budgets do not
equal strategy. We can imagine the future we want
to create. Aspirations excite people.
18 Purely Prahalad
Talent Management
Talent management connects social and technical
business processes. Without understanding who is
doing what, without having the business processes
in place to understand the social aspects and focus
on the individual, talent management cannot occur.
Building Global Teams
Talent is about competitiveness, so we should focus
on importing great talent rather than losing jobs.
The global search for talent changes the way we
manage companies. Cultural differences between
countries change corporate approaches to building
seamless global teams. Intellectual diversity
requires ways to train for collaboration.
Attitudes and Skills
It is important to test for attitudes as well as skill.
It is important to have diverse people and not put
lemons together. (It is) important to balance
intellectual needs with interpersonal demands. It
is also important to have methodologies in place to
get rid of friction and posturing between cultures.
Discontinuous Change
We are in an era of discontinuous change. We are
no longer talking about fine tuning or improving
the organization’s efficiency. We are talking about
nothing less than reinvention – reinventing the
business in fundamental ways.
Next Practices and Not Best Practices 18
Reinventing Business
Reinventing (the business) requires a new skill mix
and new ways of approaching the business. It may
require different business models. It may also
require different people.
Looking Outside
The same people who are socialized with the
standard way of doing business, and who understand
a certain recipe for how to manage, cannot change
very quickly and become the inventors of the new
business models. Look outside your basic industry
for people who can thrive in the new environment.
Experimental Learning
(To see the big picture and their place in it) you
train people. You do it by getting people with
different functional background to work together
on common tasks under time pressure. You do it by
getting them to achieve goals, where they must
understand what the other person can contribute
and why the other person’s contribution is
important. The learning has to be experimental,
not intellectual.
Quality-Speed-Innovation
… the search for talent has gone well beyond cost
arbitrage. Lowering costs is still a concern but it
should be coupled with the need for better quality,
speed and innovation.
20 Purely Prahalad
Freeing Talent
Companies (should) pull together teams of people
from all around the globe based on their skills,
attitudes and experiences to work on specific
projects. (There should be) a breakdown of the
traditional hierarchial systems in which business,
functional and geographical groups owned people.
Focusing On Next Practices
It is an attitude of the mind that you meant to focus
on the next practice and not on the best practice.
You never know fully whether what you are saying
will happen or not, because you are amplifying weak
signals and connecting the dots and trying to see a
pattern when the pattern is not fully evolved.
Creating Values
Hi-tech is no longer the privilege of only the rich.
If industry boundaries are cracking up, and social
networks are emerging, it must have something to
do with value creation. And it must change the very
locus as well as sources of innovation.
Micro-innovators
Instead of a small group of people thinking about
innovation, you can have three billion people not
only being micro-producers and micro-consumers,
but micro-innovators. This cannot happen
overnight. But everybody has an opportunity to
contribute to innovation.
Next Practices and Not Best Practices 20
Co-creation
Co-creation by definition is voluntary. You can’t
force a person to co-create with you. And co-
creation is about experience and experience is
always contextual and personal. You have this
experience and you have your own reference groups
to give meaning to that experience.
New Look Market Research
Market research is about asking your questions and
getting responses from, say, focus groups. But co-
creation is not about asking your questions. It’s
trying to understand their questions. That’s very
different … you have to have access, transparency,
dialogue and a deep understanding of risk and
benefit.
Getting to the Future First
Substantial challenges face any organization intent
on getting to the future first. The first challenge …
arises as both public and private institutions struggle
to plot a course through an increasingly inconstant
environment… The second … is how to oppose the
forces of institutional entropy… The third is … how
to stem the tide of individual estrangement.
Inspiring Individuals
Rather than calculating the number of people to
fire in order to become competitive, companies
should be asking “How can we create the sense of
purpose, possibility and mutual commitment that
22 Purely Prahalad
will inspire ordinary individuals to feats of collective
heroism!” … reengineering individuals can do more
for competitiveness than reengineering processes.
The Goal
The goal is to fundamentally reinvent existing
competitive space or invent entirely new
competitive space in ways that amaze customers
and dismay competitors.
Organizational Transformation
The organizational transformation challenge faced
by so many companies today is, in many cases, the
direct result of their failure to reinvent their
industries and regenerate their own strategies of a
decade or more.
Invent and Reinvent
To create future, a company must change in some
fundamental way the rules of engagement in a long-
standing industry, redraw the boundaries between
industries and/or create entirely new industries. A
capacity to invent new industries and reinvent old
ones is a prerequisite for getting to the future first
and a precondition for standing out.
Know What You Don’t Know
Managers must realize that precedents often outlive
the context that created them. Worse, they may
not know what they don’t know and still worse,
they don’t know that they don’t know. For any
Next Practices and Not Best Practices 22
organization, this is a great challenge. Tradition-
bound companies like Xerox and Sears suffered
because they did not know about the perspectives,
outlooks and goals of their competitors.
Bottleneck At the Top
The bottleneck is usually at the neck, at the top of
the bottle. Very conscious of their status in the
organization, they believe that they know more
about the industry, competitors, customers than
those whom they manage. But more often than not,
they know more about the past. As they climbed
the corporate ladder, they failed to realize that
rules of yesterdays’ success become obsolete
quickly in the dynamic business environment.
Questions Are Not Dumb
There are no dumb questions if they challenge the
present. Dr. Edward Land’s little daughter wanted
to see… the photograph her father had snapped,
‘right now’. This question set Dr. Land on a quest
to invent instant photography – Polaroid.
Remembering his daughter’s query, Land reflected,
“We don’t invent new products… The best ones are
already there, only invisible, just waiting to be
discovered.”
Shouldering Blame
Who takes the blame when a company suffers from
competitive failure? When a leading Japanese
company runs into financial difficulties, the top
24 Purely Prahalad
management takes the biggest pay cut, while the
first line people take the smallest. This approach
puts the blame on the people at the top who failed
to anticipate and respond to the winds of change.
Shared Pain – Shared Gain
If you want your people to rise to a particular
challenge, they must benefit when the company
succeeds. An atmosphere of “shared pain, shared
gain” must prevail in the firm. Such an atmosphere
is not possible when compensation levels between
the top management and first-line employees is,
say, 75 to 100 times higher at the top.
Focusing On New Challenges
The future is built on the ability of the entire
organization to focus on key challenges which bridge
the firm’s present with its strategic intent. Strategic
intent must be supported by building new
capabilities faster than the competitors. This is
possibly the ultimate competitive advantage.
Reskill, Reshape, Redesign
No company can escape the need to reskill its
people, reshape its product portfolio, redesign the
processes and redirect its resources. The real issue
is whether transformation happens belatedly in a
crisis atmosphere or with foresight in a calm and
considered atmosphere, whether the transforma-
tion agenda is set by more prescient competitors
or derived from one’s own point of view about the
Next Practices and Not Best Practices 24
future, whether transformation is spasmodic and
brutal or continuous and peaceful.
Zero Tolerance
Managers are critically concerned with the cost and
speed of change, knowing that quality must never
be compromised… A system supporting millions of
users and collaborators requires zero tolerance for
errors in matters of regulatory and financial
compliance – these expectations won’t change
methodologies used for developing new
applications. Changes to existing applications must
have six sigma quality built in.
Competing for the Future
To compete successfully for the future, senior
managers must first understand just how
competition for the future is different from
competition for the present. The differences are
profound. They challenge the traditional
perspectives on strategy and competition…
Competing for the future requires not only a
redefinition of strategy, but also a redefinition of
top management role in creating strategy.
Creating the Future
Creating the future is more challenging than playing
catch up, in that you have to create your own road
map. The role is not simply to benchmark a
competitor’s products and processes and imitate
its methods, but to develop an independent point
26 Purely Prahalad
of view about tomorrow’s opportunities and how
to exploit them.
Corporate Challenges
These are: (a) Set the challenge in the context of
the strategic intent. (b) Describe with honesty, the
nature and magnitude of the challenge. (c) Specify
precisely the improvements to be made within a
time frame. (d) Establish procedures to measure
and link every employee’s contribution to the
overall challenge. (e) Encourage the employees to
innovate and go beyond their usual roles in the
organization.
Need for Speed and Perseverance
Today speed is of utmost essence. Product life-
cycles are getting shorter, development times are
getting tighter, and customers expect almost
instantaneous service. Yet the relevant timeframe
for exploring and conquering a new opportunity
arena may be ten years, twenty years or even
longer. Leadership in fundamentally new industries
is seldom built in anything less than 10 or 15 years,
suggesting that perseverance may be just as
important as speed in the battle for the future.
Commitment and Perseverence
Organizational commitment and perseverence are
driven by the desire to make a difference in people’s
lives – the bigger the differences, the deeper the
commitment. This suggests a difference between
Next Practices and Not Best Practices 26
competition for the future and competition for the
present, namely the prospect of making an impact,
rather than the certitude of immediate financial
returns.
Portfolio of Competencies
It is important that top managers view the firm as
a portfolio of competencies, for they must ask
“given our particular portfolio of competencies,
what opportunities are we uniquely positioned to
exploit?” The answer points to opportunity arenas
that other firms, with different competence
endowments, may find difficult to access.
Occupying High Ground
Traditional planning seeks to position the firm
optimally within the existing structure by
identifying which segments, channels, price points,
product differentiators, selling propositions, and
value chain configuration will yield the highest
profits. Although (this) is certainly legitimate, it is
insufficient if the goal is to occupy the high ground
in tomorrow’s industries. If strategy is seen only as
a positioning game, it will be difficult for a company
to avoid being trapped in an endless game of catch-
up with fragmented competitors.
Managers Create Laggards
A laggard is a company where senior management
has failed to write off its depreciating intellectual
capital fast enough, and has underinvested in
28 Purely Prahalad
creating new intellectual capital; where senior
managers believe they know more about how the
industry works than they actually do, and where
what they do know is out of date.
Important Issues
Competition within today’s industry structure raises
issues such as: “What new features should be added
to a product? How can we get better channel
coverage? Should we price for maximum market
share or maximum profits?” Competition for
tomorrow’s industry structure raises deeper
questions such as: “Whose product will ultimately
win? Which standards will be adopted? How will
coalitions form and what will determine each
member’s share of the power?” And most critically,
“How do we increase our ability to influence the
emerging shape of a nascent industry?”
Reducing Genetic Variety
Success reduces genetic variety. To the extent that
success confirms the firm’s strategy, managers may
come to believe that doing more of the same is the
surest way to prolong success, and that any
competitor that is not doing it “our way” can’t be
very smart.
Agile Systems
We need to focus on “global standards” of quality,
transparency, interoperability, compliance, speed
and cost. But we must also provide space for the
Next Practices and Not Best Practices 28
local operation to be flexible… What must be global,
and therefore non-negotiable, and what can be local
is a critical consideration in building flexible
business processes and agile systems.
Creating Unlearning Organization
Creating a ‘learning organization’ is only half the
solution. Just as important is creating an
‘unlearning’ organization. To create the future, a
company must unlearn at least some of its past.
We’re all familiar with the “learning curve”, but
what about the “forgetting curve” – the rate at
which a company can unlearn those habits that
hinder future success?
Using Past As Pivot
Creating the future does not require a company to
abandon all of its past. A critical question for every
firm is: “What part of our past can we use as a
‘pivot’ to get to the future, and what part of our
past represents excess baggage?”
Amplifying Weak Signals
Competitiveness favours those who spot new trends
and act on them expeditiously. Therefore, managers
must develop insights about new opportunities by
amplifying weak signals. These weak signals emerge
from insights derived through a deep understanding
and interpretation of a wide variety of information.
30 Purely Prahalad
Foresight Vs Hindsight
Traditionally, managers depend on experience –
“gut feel”, if you will. Most often a gut feel and
intuition are important, but in a fast-changing
competitive environment, experience of the past
is less valuable. Foresight, not hindsight is of value.
Challenging Orthodoxies
Flush with success, challengers often forget the
most basic rules of corporate vitality. To be a
challenger once, it is enough to challenge the
orthodoxies of the incumbents; to be a challenger
twice, a firm must be capable of challenging its
own orthodoxies… To reinvent its industry a second
time, a challenger must regenerate its core
strategies. It must reconceive its definition of the
marketplace, redraw the boundaries of the firm,
redefine its value propositions, and rethink its most
fundamental assumptions about how to compete.
Opportunity Horizon
However unappealing a company’s present
situation, it is unlikely to abandon the past for the
future unless it has created for itself an alluring
vista of future opportunities — an opportunity
horizon that presents a compelling alternative to
simply reliving yesterday’s success. To give up the
bird in the hand, a company must see a dozen birds
in the bush. The future must become just as vivid
and real as the past.
Next Practices and Not Best Practices 30
Business Processes
In a rapidly changing competitive environment,
business processes cannot be stale. The dynamics
of an industry dictate the rate of change in business
models and strategy. Business processes must keep
pace with this rate of change in the strategy of the
firm. More important, business process capability
may suggest new ways of competing.
Producing Urgency
Any company that drives forward while looking at
the rear view mirror will, sooner of later run into a
brick wall. The goal of making the brick wall
apparent to employees is not to create a sense of
anxiety. Anxiety is immobilizing. The goal is to
produce a sense of urgency. Urgency comes when
everyone knows there is a brick wall out there, but
that the wall is far enough away. So there is still
time to turn the wheel and avoid the crash.
The New Landscape
Spotting new trends require comprehension of
consumer expectations and behaviours and
technological changes, as well as the nature of the
supply chain and opportunities for its
improvement… The new competitive landscape
requires continuous analysis of data for insight.
Analysis that is only episodic and ad-hoc, or periodic
will not suffice. Traditional analytical approaches
are often asynchronous with business changes.
32 Purely Prahalad
Transparent Assessment
In a global firm, it is hard to know where talent
is. Talent is, by definition, non-hierarchical…
Further, the ability to effectively work in a cross-
cultural team may not be very transparent. So
the first step in developing and understanding of
how to mobilize task-specific teams is building a
process for transparent and objective assessment
of the skills, attitudes, and experiences of all
people.
Core and Non-core Capabilities
Firms compete not only for market position and
market power, but also compete for capability. The
firm must concentrate more on core competencies,
customer value, competitor differentiation and
extendibility. A core competence must make a
sizeable contribution to customer-perceived value.
Remember, customers are the judge of your core
competence. The core competence must also be
competitively unique and substantially superior to
others. A true core competence must also form the
basis for entry into new product markets.
Measuring Capability
You can get an accurate reading of a firm’s
capabilities by subtracting the percentage of profits
that derive from its historical endowments, from
its total profits. The remaining profitability
indicates the firm’s ability to manage and exploit
Next Practices and Not Best Practices 32
its unique capabilities.
Rewards of Leadership
Being the first often carries a risk of failure,
particularly when the leader fails to understand
the precise nature of the emerging opportunity and
allows the company’s financial commitment to take
the driver’s seat. The leader must learn quickly and
inexpensively the precise nature of the customer
demand, the suitability of the new product or
service concept, and the need for adjustments in
the strategy.
Involving Key Customers
A leader can involve key customers early in the
development of the product or service. The
company must regularly test emerging product
concepts and prototypes with employees, and
customers on a small scale. It will be good to share
investment risk with alliance partners or use new
and unfamiliar class of customers or set of
techniques. The goal is not to be the first in an
absolute sense, but to be the first with the product
that finally unlocks the emerging mega market, with
a blend of price and performance.
Strategic Intent
There are three tests of any strategic intent –
direction, discovery and destiny. The strategic
intent turns into reality when everyone in the
organization understands how his/her contribution
is crucial to the achievement of the intent. Everyone
34 Purely Prahalad
in the company must find the goal emotionally
compelling and how his or her job is linked with
the attainment of the goal. Strategic intent must
be personalized for everyone.
Strategic Architecture
The top management must set very clear corporate
challenges that make everyone focus on the next
key advantage or capability to be constructed.
Strategic architecture determines the exact nature
of these challenges, one at a time. For example,
the next cycle time, the next cost reductions, the
next penetration in a new market, the next learning
new technology and so on. The top management
keeps on providing people with a clear view of the
next advantage to be constructed.
Specific Challenges Empower People
People want to win and be a part of the winning
team. It is the responsibility of the top management
to establish a sense of purpose, to identify
challenges and make every employee understand
his/her role in the final victory.
Real Challenge of Our Century
Democratizing commerce is the real challenge of
the 21st Century. While discussing the role of private
sector in the Fortune at the Bottom of the Pyramid,
a question came up “Is globalization good or bad
for the poor?” The question makes people take
sides. Instead, we should accept globalization as
Next Practices and Not Best Practices 34
gravity and defy it by building a plane with a
question “How do we make the benefits of
globalization reach to all micro consumers, micro
producers, innovators and micro entrepreneurs.”
We agree with Dr. Prahalad that choice is where dignity starts,
and that the world will change only when we view truly low-
income individuals as full participants in their local economies
and communities, rather than as passive recipients of charity.
— Jaaqueline Novogreats
CEO, The Acumen Fund
Emotional Energy
Corporate challenges aim at the acquisition of new
competitive advantages by identifying the local
point for capability building. This happens when
emotional energy is generated from enthusiasm for
the organization’s strategic intent. Every employee
must feel a deep sense of responsibility for the
success of the firm and must understand how his
contribution will help the firm succeed.
Empowering Employees
It is only when specific challenges are identified
that employees feel empowered… Setting corporate
challenges require great honesty and humility on
the part of top management. The top management
must honestly portray the magnitude of the
challenge and freely admit their part of the
responsibility for poor performance. Each employee
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must be made to feel free to challenge corporate
orthodoxies in say, standard operating procedures
or workflow design or bureaucratic procedures.
Respect for All
We must respect individuals irrespective of their
present condition. If we decide what is good for
them, the very spirit of co-creation is violated. We
can educate them on the benefits and risks of their
choices, but they must exercise their choices. Many
of us have had the taste of the extraordinary
intelligence of the uneducated and the way they
make the best of what they have.
Right to Exercise Roles
Everyone must have the right to exercise their roles
as micro consumers, micro producers, micro
entrepreneurs, micro investors and micro
innovators. They must have access to information,
access to credit and micro finance, access to
regional and national markets.
Democratizing Commerce
Democratizing commerce is steadily gaining ground.
Private sector is entering into a collaborative
partnership with civil society, governments and
philanthropists. Six conditions apply:
1. Respect individuals and their rights.
2. Focus on market-based solutions.
Next Practices and Not Best Practices 36
3. Ensure scalability of solutions.
4. Through information technology and organization,
reduce the rich-poor, urban-rural divide.
5. Focus on innovation and entrepreneurship.
6. Devise ecologically sustainable solutions.
Derisking Ambition
Being ambitious is not equivalent to taking big risks.
Many companies believe that risk-taking is necessary
to grow and to innovate. Calculated risk must be
taken, but by definition, “ambition” means
stretching an aspiration and then “derisking”
ambition. Rather than making heroic investment,
the company should use its tools of resource
leverage for derisking heroic ambitions.
One Loose Brick at a Time
You can be small but collectively you can disrupt
global business if you understand the structure and
know where the loose bricks are. If you want to
take down a big wall, don’t break your head against
it. Instead, take one loose brick at a time. After
you have taken out enough bricks, the wall will fall
by itself. Keep searching for loose bricks.
Breakthrough Innovation
Traditionally we tend to glorify one person for some
breakthrough innovation, generally in a product.
But as companies get bigger, this one person may
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provide the environment, but the actual work
would have to be done by hundreds of people.
Putting Processes in Place
Unfortunately, business processes are an
organizational orphan. They are looked upon as a
necessary evil. But unless you have a very sound
process in place, you cannot be flexible, which is
crucial to being innovative.
Developing a Point of View
The first thing organizations need to do is to develop
a point of view. It has to be the organizational
equivalent of putting a man on the moon. You may
not know how to do it, but once you know what
you want to do, you work towards that step-by-
step. That done, the company needs to put in place
its strategic intent – not necessarily a clear strategy,
but a broad direction in which it is headed.
Essential Analytics
(For putting in place a strategic intent), along with
changing the employee mindset, factors like IT
systems and analytics also come into play. Analytics
are essential as they enable the company to offer
relevant options to each customer and make future
recommendations on the basis of the data gathered.
Evolution Vs Revolution
Setting up an innovative capability will not happen
overnight. I do not believe in revolution but a fast
evolution. Revolutions involve great risks and costs,
Next Practices and Not Best Practices 38
while evolutions give you time to adjust and make
course corrections.
Changing Relationships
The biggest breakthrough that needs to happen is
for companies to realize that the relationship
between the company and consumers is fast
changing.
Re-examining Today
While telling employees that what they have done
so far was correct, they also need to be told that
processes and skills are not separate from the
external environment. Once the external factors
change, companies need to re-examine whether
what they are doing will be right for the next round
as well.
Co-creating with Customers
In a business culture dominated by quarterly results,
companies are still pondering the efficiency and
profitability versus innovation questions. This is
rather silly. If you co-create with your customers,
it will reduce the risk of product failure, as the end
users are telling you, at no additional cost, what
they want and you no longer have to define it.
Accessing Global Networks
Companies need to co-create unique experiences
with customers to compete in a globalized world.
The key to creating value and the future growth of
every business depends on accessing a global
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network of resources to co-create unique
experiences with customers, one at a time.
Customization
Companies will need to interact with their
customers so closely that they actually co-create
value with them on an individual basis (N=1). Think
of Google. They have 100 million customers all of
whom can, for instance, create their own music
portfolio. These are products that allow customers
to use and customize them for their own individual
purposes. At the same time, companies will
resource the goods and services needed to develop
new offerings from anywhere in the world (R=G).
N=1, R=G
The equation, N=1, calls for a level of customer
intimacy that can only be achieved with extensive
use of deep analytical technology. The second, R=G,
requires supply chain and logistics expertise that
allows companies to source goods and services
efficiently and effectively from anywhere.
Running a Marathon
I am not interested in a “charismatic leader”
approach to innovation. Companies need continuous
changes – not just epidemic breakthroughs. It is
like a marathon runner, with the difference that
you divide the distance into metres.
Talent Cannot Be Trapped
The search for talent must go beyond cost arbitrage.
Next Practices and Not Best Practices 40
Lowering costs is a concern, but it is coupled with
the need for better quality, speed and innovation.
Talent can no longer be trapped in boxes in the
organizational charts.
Cocreation Reduces Risks
Co-creation reduces risk because consumers are
already involved in thinking through what they
want. But that does not mean that you do not have
ideas of your own. You get to check prototypes. It
also reduces time and investment. More people and
suppliers participate in the development.
N=1, R=G
You need shorthand and N=1 and R=G are not
equations. N=1 is a short hand way of saying one
customer experience at one time and R=G is about
resources accessed from multiple, global vendors.
Delivering Value
A company delivers value by giving each customer
a unique personalized experience (N=1), but to
make that possible, the company ought to have
access to multiple resources, both global and local
(R=G) from several vendors.
Four Driving Factors
Four driving faces are coming together for the first
time in human history.
• Take connectivity and access to information.
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Over 3.5 billion people are getting connected
through cell phones and PCs.
• The second is digitalization and the ability to
move information seamlessly across multiple
devices and the dramatic reduction in the cost
of computing and communication.
• The third piece is the convergence of industry
and technology boundaries. Today your cell
phone is a telephone, a computer, a camera, a
watch, a radio and may be a TV.
• The fourth is the emergence of social networks.
These four drivers together enable the emergence
of new competitive dynamics. However, 90% of the
thinking on innovation is still very much firm-
centric, product-centric.
Bringing About Transformation
There are no right or wrong ways in bringing about
transformation. Each company has a different
starting point. But all the paths have two things in
common – they have a point of view on where they
want to go and they can uniquely develop
personalized consumer experience based on co-
created solutions. Second, no company today has
the capacity to service just one consumer at a time
because of the complexity involved in building and
sustaining the ecosystem.
Shifting Values
Next Practices and Not Best Practices 42
Value is shifting from products to solutions to
experiences. In this new world B2B and B2C will
converge. No company has all the resources it needs
to create unique personalized experiences. All
companies will, therefore, have to access talent,
components, products and services from the best
source. Then comes flexible systems which are a pre-
requisite and must be developed. And finally,
specific models must be developed to enable organi-
zations to focus on one consumer from the millions.
The Big Picture
You need to enable people to see the big picture
and their place in it. You train them to do this. You
do it by getting people with different functional
backgrounds to work together in common tasks
under time pressure. You do it by getting them to
achieve goals, where they must understand what
the other person can contribute and why the other
person’s contribution is important. This learning has
to be experimental and intellectual.
Excitement Creates Energy
Entrepreneurial talent is attracted where your
resources are low and enthusiasm is high. When
resources are high and enthusiasm is low, innovation
becomes hard to find. Satisfied employers do not
mean anything. Excitement is what creates energy
and innovation.
Managing Talent
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Talent management connects social and technical
business processes. You need IT and analytics to
achieve data management. Without understanding
who is doing what, and without having the business
practices in place to understand the social aspects
and focus on the individual, talent management
cannot occur.
Importing Talent
Talent is about competitiveness, so we should focus
on importing great talent rather than losing jobs.
The global search for talent changes the way we
manage companies.
Building Seamless Teams
Cultural differences between countries change
corporate approaches to building seamless global
teams. Intellectual diversity requires ways to train
for collaboration.
Don’t Put Lemons Together
It is important to test for attitudes as well as skills.
It is important to have diverse people and not put
lemons together. Balance in countries, work type
and the like are important to balance inter cultural
needs with inter personal demands. It is also
important to have methodologies in place to get
rid of friction and posturing between cultures.
Creating a Mismatch
Creating a mismatch by design where aspirations
Next Practices and Not Best Practices 44
are ahead of resources is fundamental to innovation
and entrepreneurship. Resource constraints is not
the problem, innovation constraint is.
Changing the Game
Once you establish an aspiration level wanting to
be a global leader, wanting to be No.1, wanting to
pursue excellence, then you can only do it one of
two ways – leverage the resource that you have, or
change the game to your advantage. Innovation in
terms of better utilization of limited resources or
change in the game to your advantage both come
out of the aspirations that are mismatched with
the existing resources.
Thinking Differently
Going ahead is about thinking differently, not being
just efficient. But you have to be different. You
have to develop a distinct point of view about
opportunities and disruptive business models. We
cannot play the game with other people’s rules,
we have to invent our own rules.
Disruptive Models
To understand disruptive business models, five
criteria are critical.
1. Does it radically alter the economics of the
industry?
2. Does it maintain and improve functionality? It is
not just about lower cost, it is about improving
functionality. In fact, both of them go together
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if your know what to do.
3. Does it make it difficult for incumbents to
react? You do not want other people to be able
to copy what you have done rapidly. They will
find it difficult because they have to forget
what they have learnt, and they have to
readjust their asset base in order to compete
with you.
4. Is it sustainable? Is it based on logical internally
consistent business principles?
5. Does it enlarge the size of the market?
Value Creation
Almost all traditional views of strategy have been
very elitist when it comes to value creation. The
assumption is that the top managers develop
strategy and everyone else implements it. I don’t
think this is the correct answer.
Reinventing Business
We are in an era of discontinuous change. As a
result, we are no longer talking about fine tuning
or improving the organization’s efficiency. We are
talking about nothing less than re-invention —
reinventing the business in fundamental ways.
Reinvention requires a new skill mix and new ways
of approaching business. It may require different
business models. It may also require different
Next Practices and Not Best Practices 46
people. Companies have been looking outside their
basic industries for people who can thrive in the
new environment.
Three Billion Micro-innovators
Today, instead of a small group of people sitting
and thinking about innovation, you can have three
billion people not only being micro-producers and
micro-consumers but micro-innovators. It will not
happen overnight, but everybody has an opportunity
to contribute to innovation.
Granularity and Modularity
The more detailed (granular) our understanding of
the activities that constitute business process and
more explicit the logical linkage among those
activities, the better the building blocks of the
business processes. Granularity allows for fine-
grained changes to the business process and
enhances clarity to each activity and action.
Modularity of business processes enables easier
change and connectivity to other processes.
New Ways of Thinking
One must think differently about strategy and about
organizations. You need new ways of thinking about
organization when, for example, you:
• Mobilize your employees around a strategic
intent
• Leverage resources across organizational
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boundaries
• Find and explore opportunities
• Redeploy core competencies
• Consistently delight customers
• Explore new competitive space
• Build banner brands
Exploiting the Inter-linkages
One should not perceive a corporation as a single
entity or a collection of unrelated businesses. Senior
managers must first identify and then exploit the
inter-linkages across units that could potentially
add value to the whole.
Strengthening Emotional Ties
Recognition (brand recall) and reputation (brand
esteem) are not the only parameters of brand
power. One must also consider affinity — the
strength of emotional tie that connects the
consumer with the brand. When the level of affinity
is high, the consumer is more predisposed to
consider a new product bearing the banner brand.
Too Much of a Good Thing
Assigning responsibility for strategic decision
making to people closest to customer and
competitors — is good medicine, but an overdose
Next Practices and Not Best Practices 48
may prove toxic. Dismantling bureaucracy without
a clear sense of direction could prove chaotic.
Empowerment without direction is anarchy.
Unique and Defensible
Mission statements do inspire people but most are
undifferentiated form those of the competitors and
so fail to inspire employees. A mission statement
must stake out a unique and defensible position in
an already overcrowded market.
Balancing Act
For balancing demands of innovation and efficiency,
managers must start with a point of view of how
they want to compete and drive change day by day,
meeting by meeting, report by report. They should
not forget that making business processes strategic
to results require managerial, cultural and
technological change.
Leveraging Resources
Some firms are capable of extracting greater
learning from each additional experience. Some
firms are more efficient at learning. The capacity
to mine ideas for improvement and innovation from
each and every incremental experience is a critical
component of resource leverage.
Borrowing Resources
Borrowing the resources from other sources is yet
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another way of achieving resource leverage.
Through alliances, joint ventures, inward licencing
and use of subcontractors, a company can avail
itself of skills and resources residing outside the
firm. Borrowing also involves internalizing of skills
by learning from the partners.
Internalization
Acquiring an entire firm is not always a good idea.
Internalization is often a more efficient way of
acquiring new skills. When you acquire a firm, you
also pay for the skills you already have or for skills
that are less strategically valuable. In an
acquisition, the problems of cultural integration
and policy harmonization are more complex.
Learning from Experience
The capacity to learn from experience depends on
many factors. You should have people who are good
at problem solving, a forum where employees can
identify common problems and search solutions.
You must be willing to fix things before they are
broken and continuously benchmark against the
world’s best practices.
Basis of Entrepreneurship
Entrepreneurship is open to everybody. Knowledge,
courage and determination, and not inherited
wealth are the basis of entrepreneurship. Everyone
can identify with the new entrepreneurs – their
Next Practices and Not Best Practices 50
starting points, their family backgrounds, their
early struggles, their pursuit of education, their
belief in themselves, their capacity to ignore
constraints and the creation of new business
models.
Co-creating Solutions
For building a co-creation platform for
collaboration with others, the managers need to
learn to co-opt both consumers and civil society
as also other institutions. They must learn to co-
create solutions because gaining local knowledge,
accessing specialized overhead, gaining trust and
becoming locally relevant is not easy. The managers
will have to develop collaborative and integrative
capacity — the capacity to integrate the
contributions of multiple players into a collective
whole.
Breaking Out of the Pack
Performance orientation must become a central
organizing idea. The key to global leadership is
continuous attention to performance. Whether it
is speed, costs, technological edge, or service, the
key is to break out of the pack with breakthrough
improvements and NOT marginal improvements.
Markets Focus on the Future
Market-value represents a belief in the point of view
of top management on how to compete. The market
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does not value the past. It focuses on the future
and the sustainability of the business models that
firms use. A clear and unambiguous articulation of
the strategic direction of the company is crucial to
gain the confidence of consumers, employees and
the investors.
Good Governance
Openness and transparency are critical. Good
governance matters. Openness to customers,
suppliers, employees and investors and willingness
to share information and engage in an open dialogue
is critical to building trust and respect.
Innovation is the Key
Innovation is the key to success. To take global
leadership, firms must innovate. Innovation forces
managers to focus their attention on ideas and
talents, NOT on capital and physical assets.
Creating Intellectual Excitement
Create intellectual excitement. High performance
firms have a lot of intellectual energy. They are
characterized by high growth, new products and
services, new markets and new business models.
The capacity for continuous change is the
precondition for excitement.
Recipe for Leadership
We need leaders who combine substantial
knowledge of their industries and who are
Next Practices and Not Best Practices 52
connected to the global network of collaborators
and competitors. Leadership is increasingly a
combination of intellect, administrative savvy and
morality.
Developing Cross-cultural Sensitivity
M/s. Rajiv Vastupal, Rajiv Mehta, Janak Parikh and Dr. Prahalad
53
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2Global leaders will be expected to develop cross-
cultural sensitivity. They must live with and thrive
on ambiguity. Markets, technologies, competitive
arrangements are changing so fast that detailed
predictions are not easy or feasible. Thinking, acting
and enabling others to act will become critical.
Leveraging India
The industrial infrastructure around the
world is in a state of turbulence.
Opportunities as are available today
come once in a lifetime. India must seize
the moment. Let us not waver and let it
54
M/s. Janak Parikh, Dr. Prahalad, Sunil Shah, Rajiv Mehta and D.J. Radia
55
56 Purely Prahalad
pass. The time for decisive
leadership is now. Trust
the young – the 25-30 year
olds – to lead the way.
Let us give them their
space and get out of their
way.LEVERAGING INDIA
Aspirational Products
The Indian consumer is quite aspirational. It doesn’t
matter what income level he is at, he wants
aspirational products. So brands are quite important
contrary to the common perception that brands are
only important for the top of the pyramid. But there
has to be constant value.
Opportunities Galore
We have failed to recognize that every minute 30
Indians are leaving the villages to come to some
city. Every city in the country will have 50 per cent
of its citizens living in slums. We need to build at
least 300 new cities. Imagine what building 300 new
cities in the next 15 years means for our country. It
is the most massive construction opportunity that
we have. Connecting all these with infrastructure
will provide an enormous opportunity for growth,
for innovation.
Leveraging India 56
Imagination Vs Resources
The real challenge is to recognize that
entrepreneurial transformation is not about
resources, it is about imagination and its
aspirations. All entrepreneurs start with low
resources, and high aspirations. India has low
resources but we should get high and global
aspirations. We can then leverage resources and
change the game.
Imagining a Different India
If you want to build a different India, you must
imagine a different India. You cannot extrapolate.
All that the planning commission does is
extrapolation. So we end up with budgeting rather
than imagining a different India and building it.
This does not mean that we go from here to there
in one jump. We have to build systematically, one
step at a time. We focus on next practices and not
best practices. We have to create an innovation
sign box. We accept India’s constraints but innovate
within these constraints.
Create a Sandbox
We need to focus on six constraints: market based
solutions, social equality and development,
procreation and collaboration, scale, new price
performance levels, and ecologically sustainable
development. If we accept these and create a
sandbox, we can get the conversation going in
communities, in businesses, civil society, politicians
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and bureaucracies.
Magnificent India
India can be a major player in shaping the emerging
world order through economic strength,
technological vitality and moral leadership. In 2022:
• India will have world’s largest pool of trained
manpower – 200 million graduates (16%) and 500
million trained, skilled workforce (40%).
• World’s leader in industry and commerce – 30 of
the Fortune 100 companies from India.
• It would account for 10 per cent of world trade.
• It will be a source of global innovation — new
businesses, new forms of organization, new
technologies.
Shared Aspirations
Since Poorna Swaraj in 1929, India has never had a
national aspiration which every Indian can share. A
shared aspiration is fundamental for changing India.
As a country, India must have high and shared
aspirations.
New Moral Voice
The world needs a new moral voice which India
can provide as a country, since universality and
inclusiveness is practiced with its wide variety of
cultures, leverages and religions.
Leveraging India 58
Pushing Domestic Economy
Although India is affected by the economic
slowdown, it should deal with it expeditiously and
how fast it handles is important. It is time to prove
that this country has the courage to set it right.
India has to focus on how to create a massive global
market. It has the potential, cash, infrastructure,
but the real problem is pushing domestic economy
to grow faster.
Aspirations Vs Resources
The question we should not ask is, do we have
the resources. If aspirations are higher than
resources, you will innovate and thereby change
the game. The issue is not resources but the
balance between aspirations and resources. It is
the conscious misfit between aspirations and
resources that create innovation and
entrepreneurial energy.
Folding in the Future
Incrementalism will not work. India should focus
on the opportunities rather than looking at the
constraints. One cannot get to the potential of India
@ 75 by extrapolating what it did in the last 60
years, or even the last 10 years. You have to imagine
India @ 75 and then fold the future in.
Recognizing Researchers
We should start looking at basic research as an
integral part of innovation. We must celebrate the
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achievements of researchers as we do for Bollywood
stars. After all, people need recognition. A country
will get only that kind of people who you recognize.
More Data Driven
“Market based” does not mean private sector alone.
It could be public sector, NGOs, private sector or
cooperatives. Market based means transparency in
prices, transparency in decision making,
enforceability of contracts, etc. India needs to be
more data driven than technology driven. We need
to focus on individual rights rather than group
rights.
Becoming the Education Laboratory
We need to create a capacity for becoming the
education laboratory of the world. We need to focus
on arts, science, literature and heritage, and strive
toward creating an environment from which can
emerge 10 Nobel laureates.
Sharing Aspirations
We need to let aspirations live outside the
benchmark of our resource base and share it with
the rest of our brotherhood. A shared aspiration is
the key for changing India. And to do this, we have
to leverage resources by getting more for every
person and every rupee spent.
Education and Skill Building
Dissolving abject poverty can be achieved by
Leveraging India 60
strongly focusing on education and skill building.
We need to create 10 million jobs annually. Taxing
the rich and subsiding the poor won’t help. We have
to create inclusive growth by creating sustainable
opportunities.
The Cost of Corruption
We can safely say that in India, the poor quality of
human development is not about lack of resources
but the level of corruption in the deployment of
resources. Our cost of corruption is $20 trillion per
annum. We need to ask, “Is the cost worth paying?”
Good governance and less corruption lead to high
levels of GDP per capita. A nation does not get rich
first and then become less corrupt. It’s the other
way round.
Being Socially Responsible
To look at corporate social responsibility (CSR) as
different from business, gives it the flavour of
philanthropy. CSR is a good way to get started in
being socially responsible. Being socially responsible
and being profit-oriented are not in conflict,
because if you don’t make a surplus, how will you
have money to do anything for others?
New Managerial Lens
The world is moving at a breakneck speed. Why
can’t we take one step forward and find new and
different ways to innovate to be part of the new
world of competition? There are different ways to
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leverage the resources of others rather than
assume that all resources have to be inside the
company. Once you start with the new
perspectives or a managerial lens, you see change
in innovation patterns all across.
Building a Supply Chain
We cannot start with the assumption that we can
be vertically integrated and still do N=1. We need
to build a unique supply chain that allows a manager
to selectively access resources depending on the
demands of the consumer.
Customer Preferences
Companies that do not make the transition to
N=1 and R=G can go on momentum for quite some
time especially in a country like India which is
growing so rapidly that supply is not yet keeping
pace with the demand. You can get away with it
for some time. The sooner we learn how to do
N=1 and R=G, the better. Old approaches will work
if you are only competing inside the country in a
supply constrained environment. Globally, variations
based on customer preferences, biases, behaviour
will be the order of the day.
The Dhaba Culture
India can move faster by combining the dhaba
culture – very personalized (I want less salt, more
ghee, more onions) – with the efficiency of the
industrial system.
Leveraging India 62
One Step at a Time
Indian companies have to fold the future in, one
step at a time, one building block at a time. You
cannot go from here to there in one shot. You can
have clarity of direction for the first two steps but
not all the way. We need to have an overarching
theme but we have to invent the means as we go
along. It is never a straight line from here to there.
We can take small steps, establish milestones. Each
of these milestones can be clear and precise. As
we learn, as we consolidate, we can do many
creative things.
Shaping the Future
All good Indian companies have the tendency to
look for best practices and then try and replicate
the model. My advice to them would be to shape
their own future and innovate customized solutions.
Look at next practices and not best practices.
Confidence Vs Arrogance
Some Indian companies have become arrogant due
to their initial success. It is necessary to be
confident but retain humility. Indian companies still
have miles to go.
Structure at the Top
The real issue in India is not technology. We have
the best IT companies here, we have analytical skills
here – we have to just embrace them and use them.
But in order to build the bottom of the house and
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the basement, we have to worry about the
structure at the top — skills, attitudes, opinions,
preferences of managers and their values.
Need for Sophistication
In India, one will increasingly find a wide rural
distribution, which is going to require extremely
sophisticated logistics, information technology and
IT capabilities. Strategy and implementation are
two sides of the same coin in taking this further.
Trends of the Future
Here is a rundown of the top 5 consumer trends
of the future that I see unfolding in India:
1. Hi-tech solutions are not going to be the privilege
of the rich, as tech solutions will become
inexpensive.
2. There will be a rapid diffusion of products and
services.
3. A continuous process on value, which implies
innovation to continuously change the price –
performance equation. So, poor countries like
India, will set the stage for value, not the rich
ones. For instance, a $30 cataract surgery, a $20
hotel room, a $2000 car, etc.
4. Will see a lot more public-private civil society
partnership in order to provide unique solutions.
5. Sustainability will become an integral part of
Leveraging India 64
what we will think of a development opportunity,
as 700 million additional people come into the
workforce as micro-producers and micro-
consumers.
Shaping the Emerging World
I believe that India can and should actively shape
the emerging world order. This demands that the
country must acquire enough economic strength,
technological vitality and moral leadership.
Six Crucial Factors
In our journey to make India shape the emerging
world order, we need to accomplish six most crucial
goals during the journey.
1. India needs to turn its population into a distinct
advantage as it has the potential to build a base
of 200 million college graduates. India then can
have the largest pool of technically trained
manpower in the world.
2. India must become home to at least 30 of the
Fortune 100 companies.
3. India should account for 10 per cent of the global
trade by 2022. India must get connected with
the rest of the world.
4. India must become a source of global innovations,
new businesses, new technologies and new
business models. In this, the bottom of the
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pyramid, 800 million Indians can become a
major source of breakthrough innovations.
5. India must focus on the flowering of arts,
science and literature.
6. India must become the world’s benchmark on
how to cope with diversity.
Creating World-class Enterprises
A developing country is a state of mind and not a
physical reality. Inefficiencies and dysfunctional
behaviours, sheer lack of discipline and disregard
for productivity are not caused by resource
constraints. They create resource constraints. All
the icons of India today are proof that resource
shortage is not an excuse for not creating world-
class enterprises.
Meritocracy Is the Key
The world is a stage for a young Indian. Talent and
opportunities are not geographically constrained.
Meritocracy and not privileged access to resources
and markets, is the basis for enduring success.
Global standards are critical even if you just want
to be a player in India. Indian consumers want
choice and new price-performance levels.
Leaders, not Managers
India needs leaders and not cautious administrators
or managers of the status quo. We need leaders
who have vision, who are demanding, impose high
standards on themselves and others, and who are
Leveraging India 66
willing to force change in the status quo. India
has always responded to leaders who combined
vision with personal integrity.
India Must Seize the Moment
The industrial infrastructure around the world is in
a state of turbulence. Opportunities as are available
today come once in a lifetime. India must seize
the moment. Let us not waver and let it pass. The
time for decisive leadership is now. Trust the young
— the 25-30 year olds – to lead the way. Let us give
them their space and get out of their way.
Building a Different India
You must imagine a different India, if you want
to build a different India. If you extrapolate, you
will end up with budgeting rather than imagining
a different India and building it.
Global Aspiration
India has low resources, but we better get high
aspiration, a global aspiration. We will then
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3leverage our resources and change the game. The
real challenge is to recognize that entrepreneurial
transformation is not about resources. It is about
imagination and its aspirations.
Conducting Reality Checks
Some Indian companies have become arrogant due
to their initial success. It is necessary to be
confident but don’t lose touch with reality. The
per capita income in India has dramatically
improved to $500 per annum. But the same in USA
is $40,000. So, it is not a bad idea to do a reality
check.
Fortune at theBottom of the Pyramid
68
M/s. Yatindra Sharma (Past-President, AMA), Dr. C.K. Prahalad, andProf. Balakrishnan
69
70 Purely Prahalad
The four billion people who constitute
the bottom of the pyramid are not a
monolith. For those who want to engage
in this opportunity, there is no single
universal definition of the bottom of the
pyramid. The definition must fit the
focus for productive engagement. We can
choose to serve any segment of the four
billion.FORTUNE AT THE BOTTOM OF THE PYRAMID
The Concept of BOP
The concept (bottom of the pyramid) was
introduced to draw attention to the 4-5 billion poor
people who are unserved or underserved by the
large organized private sector, including
multinational firms.
Engine of Innovation
… four billion micro consumers and micro producers
constitute a significant market and represent an
engine of innovation, vitality and growth. This is a
new category for all – be it managers, governments,
or civil society organizations.
Fortune at the Bottom of the Pyramid 70
Defining BOP
The four billion people are not a monolith. For those
who want to engage in this opportunity, there is no
single universal definition of the Bottom of the
Pyramid. The definition must fit the focus for
productive engagement. We can choose to serve
any segment of the four billions.
Consumer’s Right
The next big challenge for humanity is to get
everybody not just the elite, to participate in
globalization and avail of its benefits. So, do you
want to get world class products, not luxury
products, at affordable prices and with multiple
choices? That is the consumer’s right.
Innovation Principles for Bottom of the
Pyramid Markets
1. Focus on price-performance of products and
services.
2. Provide hybrid solutions.
3. Develop scalable and transportable
solutions across languages, cultures and
countries.
4. Focus on conserving resources: eliminate,
reduce, recycle.
5. Start product development from a deep
understanding of functionality and not just
form.
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6. Focus on building a logistics infrastructure
that includes manufacturing that is sensitive
to prevailing conditions.
7. While designing products and services,
consider the skill levels, poor infrastructure
and difficulties in servicing remote areas.
8. Find innovative ways to educate the
customers on product usage.
9. Develop products that can perform in hostile
environment.
10. Given the heterogeneity of the consumers,
research the interfaces.
11. Ensure that innovations reach the consumer.
12. While developing products, focus on the
platform so that new features can be easily
incorporated.
Radical Innovation
Right pricing and right business model will get you
a huge market… poor people adopt technology
rapidly. They have no problem with advanced
technology and there is money to be made… you
need radical innovation and model products and
services.
Entrepreneurship and Innovation
Even the little boys on the street who sell small
things to earn a living are entrepreneurs.
Entrepreneurship doesn’t necessarily mean volume
of investment. In fact, it largely depends on
innovation and the way you think. Entrepreneurship
and innovation are the antidote to poverty.
Fortune at the Bottom of the Pyramid 72
Low Switching Costs
While people are aspirational, they also can switch.
What is interesting is that the switching cost for
consumers in India is low. Therefore, companies,
have to continually innovate in order to keep the
consumer. The consumer is increasingly at the
driver’s seat. And it is quite important for companies
to recognize that it is the Indian consumer,
particularly poor consumers, who’re going to drive
continuous innovation.
Sophisticated Poor
Consumers are very discerning when it comes to
big-ticket items – they’ll be a lot more conservative
and look at the best value… They are willing to pay
more for things that have better value… The Indian
consumer is a much more sophisticated consumer
even if he is poor.
Customer Behaviour
Companies can go on a momentum for quite some
time in a country like India which is growing so
rapidly that supply is not yet keeping pace with
demand… you ca get away with it for some time…
If you are only competing inside the country in a
supply constrained environment, old approaches
will work. On the other hand, as supplies catch up
with demand, it will hurt you as people start saying,
“I want to have an influence on what happens”.
Globally, variations based on customer preferences,
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biases, behavior will be the order of the day.
Personalized Service
Your friendly neighbourhood kirana store owner
knows exactly what your needs are! Your database
is in his head. He knows whether you are
creditworthy, whether you have upgraded your soap
brand and the eating habits of your family members.
So, he gives you an incredible personalized service.
This personalized service (can) be combined with
the efficiencies of mass production.
Working Together
Large private sector firms and civil society
organizations are learning to work together in a
collaborative fashion. There is a growing recognition
that marrying the local knowledge of a non-
government organization with the global reach of
a multinational firm can create unique and
substantial solutions.
Poverty Alleviation
The private sector cannot solve all the problems
(of poverty alleviation), but can bring technical and
financial resources, the disciplines of organization,
accountability and entrepreneurial drive to bear
on the problems.
Escaping Poverty
Even (for grossly destitute, deprived people) our
goal should be to build capacity for people to escape
Fortune at the Bottom of the Pyramid 74
poverty and deprivation through self-sustaining
market-based systems.
Critical Constraints
Awareness, access, affordability and availability are
the key ingredients to market development at the
bottom of the pyramid. It is useful to start with an
innovation sandbox, a set of critical constraints that
must become non-negotiable in the development
process. The innovation sandbox must be specific
to the firm, its target segment, and the business.
The Innovation Sandbox
The innovation sandbox for business at the Bottom
of the Pyramid should include sealability. Unless
solutions can be sealed, it has little use in changing
people’s lives. Such businesses tend to be low
margin, high volume, high return on capital
businesses. Then comes a new price-performance
envelope. Affordability dictates that we must start
with a price+profit-cost and not cost + profit = price
perspective. Attention should also be given to
modern technology… in the development of
products, services and information technology.
Finally such businesses should provide international
standards of quality, safety, ecological sustainability
and aesthetics.
Lifestyle Measures
One should not measure the customer segments by
income alone, because it hides the interesting
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transitions that are taking place in the market. It
is better to use lifestyle measures (LSMs) of the
bottom of the pyramid consumers – their aspirations
and preferred lifestyles. Individuals make choices
that do not necessarily follow our perceptions of
what an individual should do at his or her income
level. A slum dweller aspires for a TV, a farmer
invests in cattle without improving his residence.
Advanced Technology
Advanced technology is critical for ensuring the
quality of products or service delivered. More
importantly, advanced technologies, wisely
deployed, reduce the overall costs, if the
investments can be leveraged.
Challenges into Opportunities
Many CEOs, are looking at business with the Bottom
of the Pyramid lens. They recognize that the
government alone cannot solve the complex and
multi-dimensional social and environmental
challenges of the twenty-first century. Industry will
have to be a part of the solution. There is an
increasing awareness that such challenges can
become opportunities for innovation and business
development.
Social Transformation
I am impressed by the social transformation that is
taking place in markets where private and public
sectors are involved. BOP consumers adapt to new
Fortune at the Bottom of the Pyramid 76
technologies, experiment and find innovative
applications. Barriers to communication are
breaking down. They are getting access to legal
identify and so can benefit from the opportunities
and social interactions. And finally, the very social
fabric of society is being changed by organized,
empowered, networked and active women.
Right to Dignity and Choice
You and I cannot decide what a poor person should
have… They have as much right to dignity and choice
as we have. I remember a time, right here, ten
years ago, I asked why a poor child cannot have an
ice cream. Ice cream was taxed as a luxury item! I
want to know who decided ice cream is a luxury. I
also want to know who decided telephone is a
luxury… Let us not pretend to make choices for
poor people. Let them make their own choices.
We have the obligation to give them information,
but they have their right to make their choice
just as you and I have.
Breakthrough Innovation
I think the bottom of the pyramid is not something
you do when you don’t have anything else to do.
The bottom of the pyramid is breakthrough
innovation. It is not something you do because of
guilt. You do it because it is the right thing to do
for being innovative and creating breakthroughs in
your business.
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Entrepreneurship Drive
Preconditions for entrepreneurial drive in BOP are:
(i) new channels of access to consumers, (ii) access
to world class technology, (iii) growth in per capita
income, (iv) availability of consumer credit (v)
price-performance changes. These will increase
focus on entrepreneurship and alleviate poverty.
Importing Competitiveness
I continuously keep arguing in the US that you are
not exporting jobs to India. You are importing
competitiveness from India. There is a huge
difference between the two ways of thinking. If
you think you are exporting jobs, then you have to
worry about Buffalo versus Bengaluru. On the other
hand if you are importing competitiveness, it is a
good job to keep it in Bengaluru, so that you can
compete on a global basis.
Entrepreneurial Drive
Development of skills, quality, processes, project
management skills and so on are very important.
They represent tremendous entrepreneurial drive.
There are 3000 companies only in Bengaluru which
are less than 20 million dollars in sales. That is the
key. This is the entrepreneurial drive.
Asking Right Questions
Why can we not anticipate new opportunities by
asking simple questions?
Fortune at the Bottom of the Pyramid 78
• Is it a big widely recognized problem in India?
• Will it affect a wide range of businesses?
• Is there an opportunity to leapfrog?
• Are there any real winners in this game, any
established leaders? If not, why can’t I be the one?
• Will it change the economics of the industry?
Empowering with Education
India needs to become a source of global innovations
by generating new businesses, technologies and
business models. To create these new models of
innovation, we need to stress on education by
making education affordable to one and all, without
any lowering of quality. The bottom of the pyramid,
800 million poor Indians can become a major source
of innovations, if empowered with the tool of
education. Moreover, our diverse culture, heritage,
languages, dialects are all a benchmark for the
practice of universality and inclusiveness.
New Business Models
India is becoming home to new business models —
very low capital intensity, extremely low fixed costs
and conversion of fixed costs into variable costs.
The bottom of the pyramid, 800 million Indians,
can become a major source of breakthrough
innovation.
Customers Can Dump You
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Don’t treat your customers as stupid. Don’t forget
that the bottom of the pyramid market has triggered
the growth of telecom, retail, FMCG and banking
industries in India. Consumers in this market can
dump you because of lower switching costs.
Aspirations at BOP
The Indian consumers are quite aspirational. It
doesn’t matter what economic level they are at
but they want aspirational products. So brands are
quite important contrary to the common perception
that brands are only important for the top of the
pyramid. But there has to be consistent value.
Keeping the Customer
In many products in India, the unit packs are small
and even the expenditures are small. Therefore, if
people are not satisfied, they can switch brands.
They will switch if they are not satisfied or better
values are available. A good example is how fast
people switched when telephony costs dropped to
one paisa per second. Companies, therefore, have
to continuously innovate in order to keep the
consumer. It is quite important for companies to
recognize that it is the Indian consumer, particularly
poor consumers at the bottom of the pyramid who
are going to drive continuous innovation.
Quality is Critical
A lot of consumers, even those at the bottom of
the pyramid, are willing to pay for quality.
Fortune at the Bottom of the Pyramid 80
Therefore, companies have to learn that quality is
a critical component of the brand premise.
Poor but Sophisticated
Consumers are very discerning when it comes to
big-ticket items. They are more conservative and
look at the best value. So, nowadays one tends to
find a lot of research that goes into maintenance,
repair, kilometres per hour, etc. Consumers are
willing to pay more for things that have a better
value. So, the Indian consumer is a very
sophisticated customer even if he is poor.
Role of Women
A well-understood but poorly articulated reality of
development is the role of women. Women are
central to the entire development process. Access
to economic independence can change the long
tradition of suppression of women and denial of
opportunities.
Price-Performance Structure
While attempting to innovate BOP markets, one
must focus on products and services. Serving BOP
market is not just about lower prices. It is about
creating a new price-performance structure.
Technology and Infrastructure
BOP consumer problems cannot be solved with old
technologies. They need hybrid solutions. Scalable
and price-performance enhancing solutions need
82 Purely Prahalad
advanced technologies blended with the existing
and rapidly evolving infrastructure.
Scalable Solutions
As BOP markets are large, solutions must be scalable
and transportable across countries, cultures and
languages. Solutions must be designed for ease of
adaptation in similar BOP markets.
Eliminate, Reduce, Recycle
In relation to a BOP market, all innovations must
focus on conserving resources: eliminate, reduce
and recycle.
Acquiring Trust
The sophistication and demand of the BOP markets
have surprised managers who are used to developed
markets. It is not just about making cheaper
versions of products sold in developed markets. The
managers must acquire local knowledge and local
trust before they develop markets – be it micro
consumers or micro producers. They must learn,
learn rapidly.
Co-opting Consumers
The managers need to learn to co-opt both
consumers and civil society and other institutions
to create a co-creation platform. They must learn
to co-create solutions because gaining local
knowledge, accessing specialized overheads,
Fortune at the Bottom of the Pyramid 82
gaining trust and becoming locally relevant is not
easy. The managers will have to develop
collaborative and integrative capacity — the
capacity to integrate the contributions of multiple
players into a collective whole.
Changing Mindsets
The biggest challenge to managers who are trained
84 Purely Prahalad
4to serve existing markets effectively is to change
their mindsets when they approach BOP markets.
The managers have to forget traditional ways of
approaching the business and develop a new and
innovative approach. The goal is to build new
markets, organize the unorganized markets, build
new ecosystems and create new business modes.
Focusing on BOP
India can become a source of innovations if we
recognize the needs of the poor — the bottom of
the pyramid. There is a potential market of 500
84
85
86 Purely Prahalad
million Indian who are not currently serviced by
the organizated sector. Focusing on the bottom of
the pyramid will force us to think of substantial
development, new price-performance levels.
Quotable Quotes
There is no challenge which is
impossible. The more ingrained the
thought process, the more creative
solution it demands. So, the real trick
lies in finding out such a thought process
and then dealing with it.QUOTABLE QUOTES
“ The thought process that you are resource
constrained, that you cannot lead, that we have to
look at the best practices and so on are very deep
rooted. So once you understand them you have to
construct methods by which you can keep a check
on it.”“People should realize that you care about them, you
want them to succeed. They will then accept
innovative approaches.”Quotable Quotes 86
“Business need to recognize that they are a social
institution that operates with a social license from
the community.”“ If you are honest about helping others rather than
showing how smart you are, things are very easy.”“You need to differentiate between problems of the
moment with long term trajectory.”“The catch lies in how we can provide the most
innovative products to customers at a very
affordable price.”“Business leaders need to do good, not by
philanthropy, but by enlarging the scope of business,
making it more inclusive.”“The traditional approach to poverty alleviation
assumed that we, the elites, have to tell the poor
what to do. While we must enforce global standards,
global technology and the global ability to organize,
we also need to have local responsiveness. Co-
creation is an integral part of serving.”“The last century was all about marketization of
politics and getting individuals share their voice
about how they are governed. The next big challenge
for the humanity is to get everybody, not just elite,
to participate in globalization and avail of its
benefits.”
88 Purely Prahalad
“Democratize commerce. People who have access
to information will not tolerate inequality.”“No business can sustain itself if there is no value
created for the customer. If both parties do not get
value, there is no transaction.”“Some 30 years ago, there was a lot of debate about
whether quality will increase cost. What did we find?
That if you deeply understand quality and you put
methodology in place, costs automatically come
down.”“ It is the consumer’s right to get world-class products,
not luxury products, at affordable prices and with
multiple choices. And the producer must get fair
wages for his efforts and fair returns for his
creativity.”“The opportunities are immense in the era of
globalization. The surge in connectivity,
digitalization, convergence and social networking
have opened new doors for entrepreneurial
boom.”“Traditionally, companies fragment their brands to
compete for share of segment. Like the Japanese,
you must promise the best price-performance trade
off – the best value – at whatever price point you
buy.”Quotable Quotes 88
“The watch-word for the would-be engineers of the
modern corporation are devotion, empowerment,
focus, entrepreneurship, personal accountability
and customer-focus.”“Quality and alignment of business processes to
strategy and business models can become a source
of competitive advantage.”“We always assume that we are researching the
customer. But it is the customer who is researching
the brands and companies.”“The core competence that support product
leadership is the foundation of corporation. The
banner brands is the roof. Between the foundation
and the roof are the various businesses each resting
on a shared foundation and each supporting a
common roof.”“ The emancipation of women is an important part
of building markets at the bottom of the pyramid.
Empowered, organized, networked and active
women are changing the social fabric of the
society.”“Flexible business processes can create the capacity
to develop new business models and strategy.”“Early in the pursuit of new competitive space, the
most critical resource is not cash, but management
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talent.”“The goal is not just to focus on a few things at a
time, but to focus on the right things, to target those
activities that will make the biggest impact in terms
of customer perceived value.”“Some firms approach alliances and joint ventures
with the attitude of a teacher, others do it with the
attitude of a student.”“Dividing meagre resources across a wide range of
medium-term operational goals is a recipe for
mediocrity across a broad front.”“Technology is increasingly stateless. It moves quickly
across borders in the form of scientific papers,
foreign sponsorship of research, cross-border equity
stakes, international conferences and so on.”“Unlearning most often takes place before learning
can begin.”“ Industry foresight comes when senior executives in
a company are able to empathize with basic human
needs.”“Having imagined a future, a company must find a
path that leads from today to tomorrow.”“Wealth creation can be a legitimate activity. Wealth
fairly and openly acquired must be respected.”“ If you don’t know where you are going, going faster
doesn’t help.”“Leadership is about the future and about change.
Leadership is about hope too.”
Quotable Quotes 90
Leaders of India Inc. Speak
Edited excerpts from newspaper reports ofDr. Prahalad's first memorial service held at Chennai
S. Ramadorai Vice Chairman, Tata Consultancy Services
It is time the nation introduces next practices in
governance by looking inward and not outside, for
inspiration… We should create a Centre for Clean
Governance.
Dr. Prahalad espoused a six-pronged strategy to
be on par with the developed nations in 2022. We
must innovate to create a 500 million skilled
workforce and leverage technology for uplifting
the poor primarily by providing education and
imparting skills.
Jamshyd N. Godrej CMD, Godrej and Boyce Manufacturing
Dr. Prahalad's belief that manufacturing was the
core strength of the country is the turning point
in making it a manufacturing hub in the last
decade.
As the nation stood on the cusp of sustainability
requiring enormous changes, Prof. Prahalad's
theories would provide the interface and influence
legislation on sustainability.
Gopal Srinivasan Chairman, TVS Capital Funds
The greatest strength of Prof. Prahalad was that
he was truly humane.
D. Sudaram Former Vice-Chairman, Hindustan Unilever
Prof. Prahalad was the driving force behind Pureit,
a solution to provide safe drinking water at low
price and Shakti, a project of empowering rural
women by distributing FMCG through them. Prof.
Prahalad travelled to remote interiors to interact
with the women for further research.
Shridhar Mitta Cofounder, B4e Inc.
Prof. Prahalad inspired me to set a world-class
testing facility in India and become a role model
to the world.
Prof. S. Sadagopan Director, Indian Institute of Information Technology
Prof. Prahalad dared to be different and was
extraordinarily committed.
P.R. Venkatarama Raja Vice Chairman, Ramco Systems
Prof. Prahalad's repeated message was, "You are
responsible as leaders to lead the country into a
future full of unknowns."
Arvind Srinivasan Administrator, Arvind Eye Hospital
Prof. Prahalad was an alchemist who picked up all
base metals and turned them into precious ones
by working on the collective wisdom of individuals.
Leaders of India Inc. Speak 92
Lectures delivered at AMAby Late Dr. C.K. Prahalad
1. Opportunities for Indian Organisations for theGlobal Markets (August 20, 1993)
2. The Power of Imagination: India’s Legacy and thePath to the Future (January 8, 1999)
3. What We Cannot Imagine: We Cannot Create(January 7, 2000)
4. Face to Face with Dr. C.K. Prahalad (TopManagement Forum) (January 5, 2001)
5. India as a Source of Innovation (January 6, 2001)
6. Rapid Growth: The Imperative for India (June 29, 2002)
7. India of My Dreams (December 26, 2003)
8. Learning to Lead (January 31, 2005)
9. Changing the Rules of the Game in the GlobalIndustries (February 7, 2006)
10. Advance in Science and its Impact on Strategy(December 28, 2006)
11. The Next Practices: Innovations from India(February 24, 2007)
12. Globalizations of Indian Firms: Innovation orImitation? (February 25, 2008)
13. Global Crisis: Is There an India Advantage?(February 17, 2009)
14. Leveraging India (January 11, 2010)
Lecture CDs available at AMA
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The Late Dr. C.K. Prahalad
For fourteen long years, the late Dr. C.K. Prahalad, during his visits to
Ahmedabad, enriched us with his perspective on business in general
and also on the opportunities that India has, showing us how to
leverage the country’s extraordinary potential in the global market.
A Paul and Ruth McCracken distinguished university professor of
corporate strategy at the Ross School of Business, the University of
Michigan, he topped the “Thinkers 50” list for two consecutive years.
In the word of Des Dearlove, co-creator of the Thinkers 50 ranking,
Coimbatore Krishna Rao Prahalad’s “influence on the business world
is immense”.
In 2009, he was awarded the prestigious Pravasi Bharatiya Sanman
Award for his enormous contribution in the field of management.
In the same year, he was conferred the Padma Bhushan. For over
ten years, Dr. Prahalad was among the top 10 management thinkers
in every major survey.
Author and co-author of several international best-sellers, he was
hailed by the Business Week as “a brilliant teacher” and “the most
influential thinker on business practices today”.
He was a member of the Blue Ribbon Commission of the United
Nations on private sector and development.
He was the first recipient of the Lal Bahadur Shastri Award for
worthwhile contributions to management and public administration.
He was also the recipient of the third Distinguished Global Thinker
Award.