For most people, Prahlad was a difficult to reach, almost always in demand for his ideas and views. From company chairmen to entrepreneurs to students of management, Prahalad’s popularity has transcended that of most other thinkers of his times. While his name is synonymous with the Bottom-of-Pyramid (BoP) theory in more recent years, his impact on management literature and the practice of business globally has been significant for a long time.
Consider his first big concept of core competence. It’s a term used loosely in business circles and academics but has influenced important decisions. If management gurus have been guilty of turning logical business concepts into jargon, Prahlad was equally responsible for his ideas becoming buzzwords. Even as jargons like re-engineering were being used by consultants to get corporations rid excess people, it was Prahalad who helped dispel such myths and convince business leaders to see through the clutter.
The book Core Competence of the Corporation, which he co-authored with Gary Hamel in 1990, jolted Western corporations from their inward focus and start thinking about the external forces that were shaping the future of their industries. This was the day and age of strategic business units and diversification drives by American companies, which were up against the onslaught of Japanese companies and their unique management styles. Prahalad and Hamel pushed companies to discover what’s at the core of their business. They showed that successful companies which had diversified into different streams managed to do well because they viewed them not as SBUs but a portfolio of core competencies that were unique and integral to their success and enabled them to conquer competition. If his first book was about companies rediscovering what they knew best, the next big idea in Competing For the Future, was better. Shaving costs, and employees were not the best way to create competitive advantage. This was the beginning of the Internet era and like some of his contemporary thinkers, Prahalad too understood that technology’s effects were going to be deeper and far-reaching than was imagined. In this book Hamel and Prahalad sought to explain that strategy wasn’t the lazy activity of armchair theorists but an intellectual, demanding exercise that envisions a game-changing approach to the future. Sixteen years later, strategy continues to be a debated and often mis-interpreted subject among management professionals and academicians. It took a step further by de-mystifying the ‘elitist’ view of strategy and taking an ‘activist’ approach-that frontline and middle level people were equally responsible for steering their companies’ and their own destinies.
Over the years, as the business environment began changing faster than before, Prahalad’s ideas were trying to keep pace with the new realities, saturated urban markets, and the growing irrelevance of traditional business techniques. The next line-up of books sought to address such upcoming issues. The Future of Competition: Co-Creating Unique Value with Customers (2004) with Venkat Ramaswamy, was about the new rules of engaging with consumers who were no-longer passive recipients of products and services. Co-creating value with the help of experiences was the way forward in an age of connected and informed consumers.
Then followed The Fortune at the Bottom of the Pyramid (2006). His recent book, The New Age of Innovation: Driving Co-Created Value Through Global Networks with MS Krishnan (2008) outlined the new rules for companies in the 21st century. As Prahalad’s interest in India and its potential became more intensified, he proudly showcased Indian success stories such as Aravind Eye Care and HLL’s Project Shakti as case studies to prove his hypothesis. Companies also bought his philosophy in disruptive growth through rural and urban poor. Critics of the BoP thesis argued that the apparently lucrative market of 5 billion underserved and unserved consumers was not actually as large and attractive as it seemed. However Prahalad maintained that his consumption-led model of poverty alleviation had sufficient merit.
His India@75 vision was about tackling the three issues of ‘economic strength, technological vitality and moral leadership’. And BoP theory was a cornerstone of this vision. Most of what Prahalad spoke about-inclusive growth, sustainability, good governance, entrepreneurship-led innovation, and next practices-wasn’t exactly new. Yet, it was just what a nation grappling with the twin challenges of fast-paced economic growth and sustainable social development, wanted to hear.