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C K Prahalad

The Guru of Management Gurus

GRK Murty
Coimbatore Krishnarao Prahalad (1941-2010), who was rated
twice in a row as the most influential management thought
leader by Thinkers 50 listing of the world‟s top business
management gurus, passed away on April 16, 2010 in San Diego,
California. All through his life, he tried to make corporates more
competitive and through them make the world a better place to
live in.

In his sudden demise, the world of strategy has lost one of the
most “perceptive, innovative, and influential strategic thinkers”
of all-time. As against the usual practice, of the academicians,
of spinning extension and analog theories around their already
proposed fundamental premise, CKP never published two
articles on the same topic. He simply opened up so many new
lines of enquiry—of seminal nature—throwing open new avenues
of research activity for the rest to pursue.

Prahalad, a known maverick, had first come out with his big
management idea, „core competence‟—a competency resulting
from an organization‟s ability to combine different technologies,
learning and relationships that enables it to transcend products
and markets, which not only drives a firm‟s strategy and
business but also, and most importantly, remains difficult to
replicate by the competitors— in a 1990 article published in the
HBR, jointly with Gary Hamel, his student. It simply asked firms
to pause and question themselves as to what their core business
proposition is.

In the subsequent book, Competing for the Future that he wrote


with Gary Hamel, he came out with a seminal idea, „strategic
intent‟—“stretching limited resources to fit ambitious
aspirations.” It proposed that firms must first set their ambition
and then create the resource base to actualize that ambition.
He advocated that a company‟s vision must aim at working in an
„opportunity-backward‟ manner rather than in the traditional
„constraint-forward‟ manner. His construct of strategic intent
essentially comprises: direction, discovery, and destiny. To
achieve the desired differentiated outcomes, he advocated a
shift from „budgeting-orientation‟ to „innovation-orientation‟,
for he strongly believed that mere „shaving costs and
employees‟ no longer works in global markets, but what alone
works is a serious and intellectual „resource-leveraging‟ that is
steered by front line and middle level people along with the
corporate leaders with a sense of equal responsibility, for
strategy is as important as execution.
In 2004, he came out with another book—The Future of
Competition: Co-Creating Unique Value with Customers, with
Venkat Ramaswamy—arguing that the consumers are no longer
passive recipients of products and services. In today‟s world of
connected and well-informed consumers, firms must aim at
intimately involving consumers in co-creating value that is
unique to the consumers and sustainable to firms. It even
suggests that emerging markets be used as a source of
innovation for creating customized co-created experiences using
global resources and talent, which can even be taken back to
western markets later for reaping cost-advantages.

Then came his real out-of-the-box thinking in 2006: The Fortune


at the Bottom of the Pyramid. It identified the hitherto
forgotten poor—a massive 5 billion people, not a monolith but a
whole number of segmentations spread across emerging
economies—as the consumers of the global businesses. Although
critics observed that the „bottom of the pyramid‟ is too small to
add anything significant to the bottom line of multinationals,
he, citing the examples of the India-based Aravind Eye Hospital,
Bank of Madura, etc., countered it arguing that by developing
low-cost products, firms can earn profits, that too, while serving
a social purpose. Indeed, he argued that its actualization offers
“dignity and choice through markets” to the hitherto unserved
masses.

As though to prove the business implications of his argument, he


co-founded the company, Praja Inc.—a high-technology company
that allows “people to personalize their experiences on the
Internet—and also became its CEO later. He asserted that Praja,
by ensuring knowledge sharing and data analysis, would
empower the individual, paving the way for a “fundamental
transition from a firm-centric society to a consumer-centric
society.” However, this venture did not succeed: perhaps, a
vindication of the old saying that professing an idea and its
practice are two different things.

In Prahalad‟s concept of strategy, people are the primary


constituency. Till he came up with the idea of „bottom of the
pyramid‟, no management guru ever thought of including the
poverty-stricken masses in the strategy formulation of a
business. His India@75 vision document that aims at tackling the
three vital issues of “economic strength, technological vitality,
and moral leadership” is a reflection of his faith in India‟s
human capital. In his death, India has lost a great exponent of
its economic agenda—sustainable and inclusive economic
growth.