Remembering CK Prahalad: Folding The Future InBloombergQuintOpinion
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.
I’m in India this month participating in several CK Prahalad Memorial events around the country. Interestingly, it’s also a year of anniversaries for two of his most important books – 25 years since Competing for the Future and 15 years since the Fortune at the Bottom of the Pyramid. Both of these have had a significant and enduring global impact on theory and practice. As family members, we cannot speak to the influence of my father’s work – that is for others to determine. But I can describe some of the inspiration that guided him.
My father believed that work was the place we went to put our values into practice, not into hiding. His commitment to inclusion began at home – he always gave the family drafts of his writing for our reactions before submitting them for publication. His work displays an uncanny ability to look deep into the past and far into the future. There is also a keen and deliberate balance between the focus required to build strong companies and the respect for diversity that builds strong societies. Both works called for managers to commit to learning and inclusion and cultivate imagination in their quest to shape the future.
Competing for the Future (with Gary Hamel) and The Fortune at the Bottom of the Pyramid (a paper with Stuart Hart was followed with a book of the same title by CK Prahalad) proved to be impeccably timed. I believe that the reason they became instant bestsellers and have remained relevant is a result of how and why these concepts were created. The ideas presented are not academic musings – in fact, they sought to explain the reality not described in theory. They were the result of years of studying management practice to understand how some firms were able to successfully challenge established rivals and industry orthodoxies. They were gleaned from helping real companies grapple with an increasingly diverse and global set of competitors. Deep empathy and respect for managers are apparent in both volumes. Neither book peddles ‘solutions’, rather proposing a learning agenda in order to increase innovation and impact.
The context for Competing for the Future seems eerily familiar today. Companies were narrowly focused on quarterly results and the management trends of the day were ‘restructuring’ and re-engineering - polite terms for headcount reduction. There was also a growing fear of global competitors, mainly from East Asia and the early days of the digital revolution. Business leaders were often coping with these issues at the expense of building for the future. Hamel and Prahalad argued that “catching up is necessary, but it will not turn an also-ran into a leader. The goal of this book can be simply stated: to help managers imagine the future and, having imagined it, create it”.
Their view of strategy has become ‘obvious’ in the years since:
- The insistence that strategy is a competition for industry foresight,
- Imagination is the most important asset to be cultivated,
- Explicit rejection of short-term metrics – focus on the future, and
- A rebuke of ‘winner takes all’.
They rejected the idea that there was a singular ‘winner’, emphasising that there are several noted and respected artists who succeeded with a distinctive point of view. To build the future, they emphasised, efficiency will never be enough:
However lean and fit an organization is, it still needs a brain…the brain we have in mind is not the brain of the CEO or strategic planner. It is …the collective intelligence and imagination of managers and employees throughout the company…CK Prahalad and Gary Hamel in ‘Competing for the Future’
The Bottom Of The Pyramid
The ‘bottom of the pyramid’ was the idea that required the most effort to get into the public domain, yet, ironically, it may be the idea that my father is best remembered for. When he began, much of academia and industry were focused on the impact of new technologies, measuring shareholder value and envisioning a new paperless, post-capitalist society. The world’s poor were largely invisible in these scenarios. Many of those who were concerned about their plight were still troubled by the idea of selling anything to them. When the argument was put forth that the poor represented an untapped source of innovations, even polite skepticism usually disappeared. Poor countries were often seen as basket cases, not ‘innovation labs’. Sadly, this pessimism was as common among elites in emerging markets as it was in the West.
Today, the narrative of business as a force for good has taken hold, extreme poverty has reduced and cell phones are in the hands of the world’s poor. At the time, however, the poor were not even in the rear-view mirror of most multinational corporations and the changes required to innovate for these markets were significant. However, my father approached this challenge with his characteristic optimism about the ability of the poor and people inside companies to collaborate and make the world a better place.
The tests he used to measure new concepts were straightforward:
- Will it change the conversation?
- Does it show the opportunity?
- Will it lead to some action?
I think it’s fair to say that arguing that the four billion poor people around the world represented a vibrant consumer market, that this market could best be tapped with for-profit models and that the poor themselves had to be partners in the process easily satisfies all these three conditions. This wave of bringing the benefits of capitalism to the under-served is a global debate today and will continue to shape policy and strategy in years to come.
Looking back, I think there are a few threads running through his work that have become even more urgent today. My father believed that even if life isn’t fair, companies and individuals should strive to make it more so. He showed us with his example that breakthroughs are not just a matter of intellectual effort, but a deep personal commitment to helping others. He helped me understand that looking at large problems can be overwhelming, but looking at people leaves you inspired. His commitment to inclusion can even be seen in his writing style – it became much simpler over time. He told me that this was because what happened inside companies would have an ever greater impact on all of our lives, and he wanted to make sure that more people came into the debate. The message to managers put forth in Competing for the Future was very much on display in his life: “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…”
In Competing for the Future, Hamel and Prahalad laid out a blueprint for companies to understand their rivals in terms of capabilities and leverage their own unique strengths as a basis for innovation. In the Fortune at the Bottom of the Pyramid, I believe my father pushed the boundaries again by setting forth a concept of innovation that it was not just a set of ideas, but rather a set of ideals about the role of business in society.
He showcased excellence far outside of the corporate realm and demystified how empathy could be turned into rigorous, sustainable processes.
The examples show leaders that his famous phrase “aspirations > resources” was a powerful way to understand not only the goal setting inside organisations, but the mindset of billions of under-served consumers. He shared with us his belief that entrepreneurs were the freedom fighters of the modern age, because they would ultimately have to deliver on the dreams of billions of people around the world. Once again, he is asking us to imagine.
Also in this special series:
Deepa Prahalad is a speaker, author and design strategist. She co-authored Predictable Magic: Unleash the Power of Design Strategy to Transform Your Business (Pearson) and consults for corporates and startups. Deepa mentors leading social entrepreneurs and serves on several international nonprofit boards.
The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.