Anand Mahindra Reflects On CK Prahalad And His WorkBloombergQuintOpinion
Management guru CK Prahalad advocated seminal ideas that have stood the test of time like ‘Core Competence’ (1990) , ‘Competing for the Future’ (1994), and ‘The Fortune at the Bottom of the Pyramid’ (2004). This month marks his birth anniversary and serves as occasion to examine his ideas and his influence in this special series of articles.
CK Prahalad’s influence on the Mahindra Group’s strategic thinking has often been mentioned by Group Chairman Anand Mahindra. Prahalad termed the group’s strategic direction as building ‘Fortress Mahindra’ – a moat of competitive advantages that others would find tough to breach. Rama Bijapurkar talks to Anand Mahindra on the influence of CK Prahalad’s ideas and their contemporary relevance.
Rama Bijapurkar: You knew CK Prahalad well personally and professionally; you have talked of him in some of your interviews and he also did some sessions for the Mahindra & Mahindra leadership team. What phrases would you use to describe these sessions and the effect that they had on the people who attended? What changed mindsets did people walk away with?
Anand Mahindra: Strategy sessions with CK always took us into another orbit. As much as one could try to anticipate the trajectory of the conversation, he would never fail to surprise us with a completely new perspective on things that forced us to come at the problem from another, completely unanticipated direction. All participants left musing: ‘Hmmm, I never thought of that.’ To this day, I try to emulate him and leave a similar impact on my co-participants in strategy discussions.
Bijapurkar: You have talked of applying his concept of combining horizontals and verticals – capabilities and served markets – to create new businesses. What are your favourite examples of this? Is this a framework you still use as a company to conceptualise new businesses?
Mahindra: The grid that CK used to summarise the opportunities that lay ahead of the Mahindra Group is utilised to this day, for explaining the value addition of a federal organisation.
We always look for opportunities created in the interstices between our businesses, particularly those created by laterally deploying a competency from one business into the customer segment of another.
For reasons of competitive confidentiality, I don’t want to mention too many examples, but on a very generic basis, I can give you the example of how we looked at the customer experience competency developed in our hospitality company and attempted to deploy it in our dealership experience in the automotive sector.
Bijapurkar: Who does this kind of thinking in your group? Is there a special place or group, or can it come from anywhere?
Mahindra: Strategy is the responsibility of each business sector and they all have strong strategy departments. However, the Group Strategy Office at the Corporate Centre oversees ‘war-rooms’ every year in which each sector’s strategy is discussed, challenged and enhanced (if possible).
Bijapurkar: It’s been 15 years since CK introduced the world to the idea of Fortune at the Bottom of the Pyramid … the “bottom of the pyramid” phrase is now firmly entrenched in management lexicon around the world, but few have seen the fortune yet. How do you think about “fortune at the bottom of the pyramid” as a business approach?
Mahindra: The Bottom of the Pyramid concept is an enduring one and has spawned many variants and avatars. Even Clayton Christensen’s concept of disruption is a variant of the Bottom of the Pyramid doctrine since it posits that disrupters use a dramatic lowering of cost structures to attack established competitors. At Mahindra, our variant is our concept of ‘Rise’ businesses. We define such businesses as those which drive positive change and create substantial value in the communities in which we operate. That allows us to do well and do good at the same time. By definition, you can’t establish such businesses without focusing on the Bottom of the Pyramid where the largest multiplier effect is created.
Bijapurkar: Do you believe Indian companies have—or can get to the stage when they have—the cost position to mine this fortune at the Bottom of the Pyramid or should we leave it to China who is entrenching itself in our mass markets?
Mahindra: China’s cost position has come largely from the scale effect. In India, we can also get there and we have a unique opportunity now with many large manufacturing companies hedging against trade tensions by moving part of their production to other Asian countries.
But a low-cost position doesn’t only come from scale; it can come most dramatically through innovation and radically re-engineering a product or service.
I’m hopeful that Indian startups coming out of our technical institutes could achieve this.
Bijapurkar: If CK were alive today, what would you want to talk to him about, say over lunch in your office?
Mahindra: Very frankly, if CK were in front of me now, the last thing I would consult him on would be business or competitive strategy matters. I would want his view on how he laid his strategic roadmap for the evolution of his life as he grew older. Was he happy with the balance of work and family time; did he set aside time for pondering the after-life; what brought him the most happiness over the years... I know his answers to these questions would also take us into another orbit...
Also in this special series: