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Management gwu CK Pnahalad

passes awry; industry mournsfeBureau ftrjobis to understand

!,}.a,1op amidsoit

becomes the diamond -so most people livenormal, middle class

lives. That,Ithink,shouldbe our goal as

managem andpqryleofprivilege ' .

- CK Prahalad | '

New Delhi, Apr 17: CKPrahal-ad, globally renowned manage-ment guru, eminent thoughtleader and a distinguished pro-fessor at Ross School of Busi-ness, University of Michigan,passed away on Saturday morn-ing at a San Diegohospital afterabrief illness. Hewas 69.

Prahalad, best-known for hisb o ok T he For tune at t he B ott om ofthe Pyramid- Eradicating Pouer-ty throug h Profils, is survived byhis wife, a son and a daughter.

Hailingfrom the textile city ofCoimbatore, Prahalad did hisB. Sc. from Universityof Madrasin 1960, a post-graduate diplomain management from the IIM,Ahmedabad(1966), andDoctorofBusiness Administration fromthe Harvard Business School in

CXw* on. ofthe foremost

visionary t creative thinkers

of our times. His guidance

had aprofoundimpact on

several Indian busiheses.

- KV Kamath, past plesid€rt, cll

1975. He served as a profes;sor atthe IIM-A between 1976 an'il 1977.

After his doctorate fronr Har-vard, he had been associatedwith University of Michigan.

Prahalad was also on theboards of severaitop Indian andglobal companies and .institu-tions like Hindustan Llnilever

and Washington-based WorldResources Institute.

His other popuiar books areThe Future of Competition: Co-

creating Value With Customers,T he Multinational Mi s sion, B al-ancing G lo b al Inte g r atio n Wit hLocalResponsiueness.r GKtheteacher, Page2

He will always hold a special

flace in the hearts of Indianmanagers as the man who

gave us the courage tocompete on a gl

,

- Asradd Mahindra, vednd:lilD, M&M

.tlir' ..rl

He contributed signif icantly

ts our business and aLways

supported us in times; ofneed. We will miss,Cx,,pnd Iwouldmisshim

- Harieh Manwantihai;#bn, sut-

iill

thefew -

GKPMHALAD N[! M[|NEOur Bureau

CKP changed the conversation in the field of strategy & coined terms

like Core-Competence, Strategic Intent and Bottom of the tryramid

MU|llBAI

OIMBATORE Krishnarao Prahalad, oneof the foremost strdtegic advisers tothose at the very top o{ the corporate

fyramid, passed away on Friday in Cali{omia. United States, after a brief illness.

The 68-year-old was battling lung disease for thepast few days, those ciose to him said.

"It's a pro{ound lbss' CKP was not oniy a great map-agement thinker but also a luminous intellect always

reneyving himself," said RI( Ikishna I(umat vice-chairman, lndianHotels, anddirector,Tata Sons, whohas known Mr Prahaladfor the last 40 years.

The Paul and Ruth McCracken Distinguished Uni-versiry Professor at the University of Michigan was

ratedls the most influential management thoughtleader twice in a row by Thinkers 50 listing of theworld's top business management gur-rs. Three of hisboldly original ideas-Strategic Inteatt, Core Compe-_

tence and Bottom o{ the Pytamid-became part ofthe rule book for a whole generation of execudves,

shaping winrring strategies for their companies.His bottom-of-the-pyramid approach, which

chaiienged conventional ttunking about targetingonly the most profirable segme nts of the market' ac-quired a permanent piace ur the lericon of chief e-r-

ecutives- -His rheorr ;li I -{or behind ihe riabili-rl'of the h-igh-r'olune- lon'--iql buslnem loniei-'lr-a: pa-rh-trrealwg't-i.{ Fna: fanffir ? ifldspreiiienl of xrtmue mfusmg prynm6 -[ams*m" _

,{ *ie4 aud w@m} u'*d fob &@ am'tu[]ldo*a m Sc cm dfu'@&:md,om ;uryrmh*nr:wmime s&lliiiE *Wi h$ffin

I @mdftmpcr*llrl: rui ln:!IEL?q* rr. i"!.- - :-- L .- :-- --- ' :

@I!bl-q in.ri r{*il{:a: r! : : i! - : ":::! 5. : i: . : : :- --f,€ -: r1-,-:- li>:i ::---' i;- :.1ailei rOI nlaii:-::'menr deiiciencies, and above ail, his ability to susiainhigh levels of energy even in the fice oI some of the

rmost daunting said r:kshmiNarayanan, ldcedaimanoJ CognizanrTethnolqies-

tVhile 1[r Prahalad consu]ted with at leas: lCli::r !:l::e:rS:::: Le',',:; :: l:e 3i::; ::, :i::-.:::: .:: :-ii: :: \-l :-.: '.:: \f--:.: i:-so-;:..= :::::-:: L-.::: *::-:: ;. -:,:.:: ---.WaS a :-.::--::: -: .:-: :, ':: .: i.:-i-.::-Lrnilerc:;:.: ]_' ! -=:.:.-

Ilis bocL ---:e l::.--=,":::::)'.: ::::n: :.':.::Pyramirl C:tt::=t".; .':-:i;: 'n:,-; j:: :i:;': .-_",J-'r:::-

' tition: Co-Cri;:,:; -'''::;i: ',';-;.: ',','.:i:. J:..;:rt:i'-:: alrdThe New Ay; :'-':1::";:.-'t:'

"l put acacr::.s ---.: . :::cc ia-f.lps: a r ast maiori-t1' just get br': : ir;'; :nate one imponant contribu-tion; once i:: a '.vhie, .vou have an academic whomakes ser erai seminal contributions. CI( belongs inthe third category. CK fundamentally changed theconversanon in the field of.strategy. He coinedterms like Core Competence, Strategic Intent, andBottom of the P1'ramid that will remain with us for-ever. He was a scholar, teacher, and consultant parexcellence," said Vijay Govindrajan, professor atTuck School of Management. In his later books, themanagement guru included some Indian successes,among them ffC's e-choupal initiative, HindustanUnilever's Project Shakti, Aravind Eye Hospital, andthe Jaipur foot, to showcase the innovation that In-dian companies are capable of . Mr Prahalad workedwith some Tata companies and germinated the ideaof low-cost, affordability-basedproducts and servic-es Lbat saw tie group launch the Ginger Horelgror4- "Ee led the hinking in developin g the smart

(CKP was one of the foremost

lateral thinkers of our times. He

had this uncanny knack of looking

into the future. Whether it was the

fortune at the bottom of thepyramid or potential rise of the

multinational lndian business, he

saw it 10 ye"ars before anyone else

ffiV Kmrl'smthChairman, lClCl Bank

basics hotel concept. Ile clearly foresaw howmodern world would unfold over the nextyears,o said Mr Iftishna I(umar.

Mr Prahalad was upbeat about India's future andin the last few years visited the country frequently.Descrlbing India as a "laboratory of innovation," heenvisioned India as a world leader by 2022 in his In-dia@75 talks. He was the first Indian managementguru to attain international stature and broke theglass ceiling of Anglo-Saxon dominance inmanage-ment theory. It was because of him that other lndi-an academics started getting recognised for theirmanagemenl theories.

"We are all followers of CI(P; he paved the wayIor us," observed Nirmalaya I(umar of the of Lon-don Schooi of Business.

,,$i^,- - 1. -.

ffi&$ffiffiffi ffiNWfuffi ffiffiffi ffi pffiffiffi&&ffiffi$

Pffialadwillalwaysbetop ofthepyraniid

ONE FROM THE ALBUM: CK Prahalad receiving the Global tndian Award in 2OO4

ROFESSOR CK Prahalad will beremembered among the grearesrthought{eaders ol rhe 2l st cenrury

His path-breaking work on strategyundoubtedly represents one of the definingpoints in the evolution of managementtheory. He brokefrom the mouldof purelyana\tical and mechanistic ways. hstead,he advocatedthe needto Iift oursightsftom merely incremehtal change torevoiutionary change. Ttuly, he liftedman-agement thought to new levels ofexcilement and activism.

He was an alchemist. He workedwithmissionary zeal ro get lndianbusinesses touncover the immense possibilities at thebottom of the pyramid. This not onlybecause of the latent businessopporfunities, but because of hisconviction

-that's howrhepoorcouldbe

uplifted. And rhat's how businesses couldwin tie legitimacy and trusr that theydeserved. His contention, that business in-terests arld the interests ofsociety could beintertwined, has beena powerfulmessage.Doingtrusiness arrddoinggooddidnothave to be two distinct initiatives.

His cutring-edge ideas and wisdomhave a timeless relevance. kr earlyDecem-ber last yea1, we had hof Prahalad talk toour senior management team, during the

course oI which I spent considerable timewith him. h one of our conversations, hesaid. ilyou want tobefocused on thenextpractice, youhave to worry about weaksignais. You mustlookatthe peripheryYou must see whatthe outliers are doing,connectthe dots and see a newpattem.

Thinkabout ceatingthe future foryoursell as running a 400-metre marathonat a time. This calls for urgenry speed andstamina - ali at one goi And these, he said"are the watchwords for management.

He also pointed oui how the basicdrivers of strucrural change are going to beconnectivity, indusive growth,sustainabiJity and globai markets. Andtherefore, there is emerging a new logic torglobal managemenr. He called it "20 hubsandno spokes". Irememberhim saymg-iI you do not start with a legacy mindset,you can innovate like crazy. Do not worryabout the leamingcurve, worry about thelorgening curve. Forgettingmay be moredifficult thanleaming.

Today, if one were to cawe outtheequivalent of a Mount Rushmore formanagement thinkers, I am sure, prof pra-halad would have to belongthere. He wi.llalways remain on top of the pyramid.

We are deeply saddened by hissudden demise.

Celebratinsagreatfif;

CI(IS MY ROIE MODEL, I{E WAS A CONSUMN4ATEprof essronal-scholarpar excellence, outstandingMBA teache{, and highly sought after CEO coach]He was the world's most-influentialbusinessthinker. He was nor j ust rrying ro help corporationsDecome more compeiltive_he was working tomake our world a bemer place. Above all, h."*r, uwonderfulhuman being who deep\ loved his fam_ily. It is these qualiries rhat inspire my ornnprofessional career and personal li{e.

" lWo incidents caplure lhe essence ol my respect

lor.CI(. For years, I have been rrying io g.i Cf iovisit Tirck and address our MBAirudenls_without much luck. Then I hit upon a brain wave,I persuaded his da ughrer Deepa, to come ro Tirckto do her MBA. Well, Cf< couidn,r tu." aorv" *V

rd;, ; #;il#'#;?:: ':'?:#5:fJ'"CI('s talks-again nor with much luck. So I

persuaded her ro do an MBA (No. she is nor Tuckl.With rhe rhoughr oIsrardng her MBA lasr fal],Tarunya was nowmore willing to listenlc rnanage-ment gurus. She attended CI{3 talk at the Woridln-novation Forum last May. She was not only blon'na way bi his ariicular ion oJ how core competenciescan be leveraged for innova tion, she told me :,,Dad,I spent two hours with CI( after his talk. For all hisaccomplistnnents, he is so simpie and humble. It isincredible". He is incredible, indeed.

There are two tlpes of academics. Vastmajorityof academics try to catch fish in a well understoodpond.(Sometimes we wait and prayevenwhenthere is no more hsh in r he pond,1. There d I e veryfew academ ics who poinr us ir r he direcrion of anew pond whele we can go and stan the process ofcatching fish all over again-this is CI(,s forte. Hehas opened up so many new research paths. He hasfundamentally changed the conversadon in thefield of stategy. One of tlre hallmarks of CIt is thathe neverpubLished two anicles on the sarr-re topic-his style is to create a new line of inquiry, ieave thespace lor "mere nrona ls" a nd rnove on to the nerl.' Let me highlight one of his seminalcontributions-straregic inrenl. There are wo n aysto think about strategy. The tradirional view saysthat companies should match current resourceswith extemal opportunities. CI(k vierv is thatcompanies should set their ambition first and thenexpand the resource base to reach that ambition.For CI(, strategyis innovation. The siarting poim fordeveloping innovarion is to have a huge ainbition.

History is full of examples of greatness sowed inthe vision for a chiid when the family could illafford even the basic necessities. The essence of astrategic intent (or vision) is that it works in an"opportunity-backward" manner, not a"constraint-{orward" manner. In orher wor.ds, theact of strategic intent disregards the scarcity ofresources in the present. The style of rhinkingchanges fuom a "budgering" orientadon to ai"innovat ion" orientation.

In many organisations, vision is eiiher nonexist-ent or sounds so much like "motherhood andapple pie" that it hardly galvanises employees. Suc-cessIu I orga n isarions imagine r he lur u re in boldterms; the details are nor always tlred, but the bigpicture and ihe direction al'e clear, and a1lemployees are aligned. John E I(ennedy's dreamand vlsion for Americain the earlv 1960s is anexample: "We will put a man on tle moon andbring himbackbefore the end of this decade.,,Thevision ofRatanTata, CEO ofthe IndianmulunarionalTara Croup. also cornes ro mind:"Ourintent is to crcare a high-quaLiry,4-pasrengerautomobile priced ar $2,000 rhar meers allemission requirements."

Why does a compelling suategic intent provokean innovatir e resptrnse? Because people are drawntochalJenginggoals. Deep inride, r,re ieel uplifredby the thought of dimbing a mountain in a'lvayr /eare not by the idea of scaling a molehill.

Ci{ practiced his theories in his own life. Even asa doctoral student, he had a verv nice home anrllived in style. He did not want to restrict his lifestylewithin the stipend that a "poor" doctoral studenfreceived. Instead, he defined the lifestyle hewanted and expanded his resource baie to meethis ambition.

CI('s liJe is his message. Let us celebrate hisIasring legary.

&ffi | NovEMBER 20, 2oo9

ETJndia can argue that it's not a bigpolluter compared to developedcountries, so the companies heredon't really need to start thinking ofsustainable development lMratwould you tell such companies?CI(P: In India, you don't have to stan (onsustainable development) because you areabigpolluter. You cdn startbecause there'sa shortage of resources. ff I look at awashing machine that iecognises wheneiectricity was cut off and starts the washcycle trom there and not the beginningthen it saves energy, it saves water and it isacceptable inlndiabecauseitis sustainabledevelopment andit's goodbusiness. Thebeauty of this is, if you innovate here, youcan take those innovations back to the US.

lfs been five years since you wroteLhebookThe Fortune atthe Boftomofthe Pyronid. How successful havecompanies been in tappingthismarket?

Global lndian Of Tfie Year 2004, CK Prahalad in his acceptance speech at ET Awards

Overthe lastfive years. there'sbeen abroadacceptance that the bottom oI the pyramid(BoP) is a viable market. And if you look atBoB it's 5 billionpeople. It's notamonolith,it's awhole numberof segmentations. Atleast in krdia this is not a debate an1'rnoreforme. These are ourmarkets. The gOO mil-lionpeople are ourmarkets. So, the compa-nies are recognising it andlaunchingproducts aimed at these consumers.

Finalf,what's nextftom C KPrahalad?ff you look at myworb it is centeredaround four areas: Globalisatioq role ofconnectiviry inclusive gowth andsustainability. Nobody has looked at all fourof themandsaidwhatare thelinkages. ffyou thinkfor a rninute. globalisation meansnothingif Ican'tindude morepeople. Assoon as you indude more people, it's goingto impact sustainability. And, as soon as youhave connectiviry people are going robemore informed.

what's stoppingus from achieving similarsuctess iq other areas? It's all aboutmindser...how you look at it.

I

You have always batted for thelndian economy.lMrat makesyou soupbeat aboutthe economy?Indiabecameindependentin 1947. Butitachieved economic independence only in1992 and, inmerely lTyears, the countryhas come a longway.lndia is doing prettywellcomparedto others. Everytime acom-parison is dran'n between India and Chinabut don't forgetthat China is 20years aheadof us as faras economicreforms go.It's likethe story df the hare andthe tortbise. Timewiil tell, who will win. I can say withconviction, the long-term ftend is extreme-Iy positive for lndia

AfEW GOOD MEN: Prahalad with Rahul Bajaj &

P Chidambaram atthe EIAwards 2004

ET:As authorof The Fortune ottheBottom of the Pyromid,ateyouhappywith thewaylndia is lookingto achieve inclusive growth? ls therea need to strengthen the ecosystemhere for unlockingvalue at thebottom?CI(P: There's no denyingthat hrdia needsto do more to eradicate the abjectpovenyinthe country. Yet wehav€ to take noticeol the success stories all around us in reach-ing out to t he poor. The seU-help goup sys-tem, fIC's e-choupalmodelorAmul'sdairyplant are successful experiments ofusing the ecosystern for reaching out to thepoormasses. Cellphones, too, havepenetratedrural markets andnow amillion kirana shops are selling telecomproducts. Ilthe telecomboom can happen,

A SHOT lN THEARM; Exchanging noteswith. Biocon's Kiran Majumdar-Shaw

SPEAKING WORDS OF WSDOM: The Parekh andPrahalad lamilies share a ferru ideas

GOIDEN MOMENI: Prahalad speaking atThe Economic Times Awards function

Management guru c. K. Frahalad passes awayfor India to tal<e its place on the world stage was unwavering'

mrnagement guru Prof C. K.

1 Pr:rhalad passed awaY this

I morning in San Diego, US. ai-

I ter a brief illness. He was 68.

I There cin be manY aPPella-

I tions fol Prof Prahalad, whowas rhe Paul and Ruth

J Mccracken Distingtiishedi University Professor at the

Ross School of Business, Uni-versity ol Michjgan: corporatestrategy specialist, whornB usi ne ssWe ek m agazitre oncecalled one of the most influen-tial thinkers onbusiness strate;w, ancl loremost a chamPiol oIIndia's cause at many world Fo-

ra.--lHonoured with the Padma

Bhushan last year, Prof Praha-lad, a prolific author of manY

influential books rhat chal-.lenged the existing paredigms'had consulted with the toP

managenient, of manY of theworlcLs foremost comPanies'

'Flis passion

Our BureauCl'tennai,April l7

Erninent thought leader and

He served on the board of cli-

rectors of TVS CaPital Funds

and Hindustan Unilever Ltd,amongothers. Mr GoPal Srini-vasan, Chairman of TVS CaP-

ital and a forrner student of,Frof Prahalad at the UniversitYof'Mi.higutt, said his formerteacher has 1eft behind a legacY

for generations. "His Passionfor lndiato take its Place on the

world stage was unwavering;hc ,rlr,r'rvimade the rime and

h:rd tl rc cnergy to travel to Indiaover l0 times a year to address

various fora and talk to man-rgemelts. For me he was a

mentol who was alwaYs bY mY

side," said Mr Srinivasan.Mr Srinivasan said Prof Pra-

halad, a powerful orator, hadthe abilitv to connect lhe dtlts to

make it apurposeful, larger Pic-ture. Hii ability to Predicttrends made his books bestsell-

ers and also influenced man-agementthought.

His Competing for the Fu-rure 0994)-, co-authored withGarv Hamel and Printed in 14

languages, was among the best-

selling- business books that

vear. 7he Future of ComPet[tion (co-authored witlr VenkatRamaswamy). was translated

into 12 languages.BusineisWeek described

the book as "provocarive" and"rn importani book full otdis-ruotive ideas". The book was

the first to talk about how com-panies need ro co-create unique

value with customers ratherthan firms creating Productsand deliveringto consumers.

His seminal book, The For-tune dt the B ott om ofthe PYr a-mid: Eradicating Pover4lthrough erofit IZOO+), was se-

lected as oni ofthe best books

of the year by The Economist

and Ied nranya comPanYto lookat providing goods and serwices

to the poor as an oPPortunltY'With case srudies of Aravind

Eve hospitals and HUL's Pro-

iect Shakti, among others. heoutlined new business models

targeted at providinggoods and

seirices to the Poorest oi the

world.As his initial indicates, Coim-

batore Krishnarao Prahalad

was born in that town and was

one of nine children. His fatherwas a well-known Sanskritscholarlnd a jLrdge in Chennai.

After graduating in PhYsicsfrom Lovoia College Prahdadworked

-[our years ior Union

Carbide before his Post-gradu-ation in management in the fi rstbatchof IIM-A.

After a doctorate from Har-vard, ProfPrahalad returned toteach at his alma mater,IlM,before returning to the US' He

wrs with the UniversirY of Mi-chigan since 1977.

>>Tributeson Page 5

Prof C.K. Prahalad: l94f'2OIO

A

To Sir, with loveGopal Srinivasan

I recall my first meetingwith C. K. Prahalad vividlY' Itwas the Fall of 198i. I had justenrolled for the MBA Pro-eramme at the business schoolit the University of Michigan,AnnArbor.

I ran into him in the hallwaY.An intense iooking man, t'ithlarge bright eyes and largeslasses." I knewtherewas aPrahalad'on the faculty but didn't knowthis was him. He accosted me,

salrng, '1 know who You are,

but vou don't know me. But,tell me, what are You going todo this summer to better Yourfamilybusiness and your coun-try?"'That

was Prahalad for You.His commitment to India and

,for the countrY to take its Placeon the world stage was unwa-vering.

His course on corporatesbrategy was in greatest de'mand and'at the end ol the

course he would throw agrandparty at his house with foodfrom the best place in town -he wanted every student toknow how impofiant he or she

was, and had a chance to make

a difference with their livesThere were several things thatmade rny teacher outstanding.

UndoubtedlY, he was a vi-sionarv thinker on strategic*anaget.nr, and Lhe finestmanagement thinker ourcountrryhas produced.

He has created several Path-breaking bodies of thoughrieadership: core competence,

Prof C. K. Prahalad and Mr c

- G. R. N. Somashekar

co-creation, next Practices andthe fortune at the bottom of thepwamid.' -

Many people are abie to out-Hne a 6ig ide4 a new theorJ,'But Prahalad's uniqueness laY

in his abiiiwto connectthe dots

- making the big picture lucidand breaking it down to thenext steps.

To stimulate action in thoseexposed to the ideas. A contin-uinE theme with him over theveais was that India should re-guln itt place in the world bY

Indians building capabilities,driven by meritocracy and In-dia always conducting itself inan exemplary manner.

At every oppornrniiy on theworld stage, he evangelised In-dian success stories.

When the Confederation ofIndian Industry wanted him tosneak on India@60 - the anni-uirsan' of lndependence - he

said he would instead sPeak ofIndia@7|. Such was his focusin envisioningthe future agen-daforthe country.

When his ideaof 5oo millionskilled Indians and 2oo millioncollege graduates was framedinthe Presidenfs 2009 inaugu-ral address to Parliament, one

would have expected the au-

thor, Prahalad, to celebrate andperhaps even relish the mo-ment.

But instead, he said, now weneed to find the leaders to go doit, and thafs going to be thenext challenge.

When he first addressed theWindsor Club' in Bangaiore,he told the captains ofindustrYthat MNCs would take overtheir companies eventuailY.

of couise, no one beiievedhim. In the second Part, he

urged lndian industriaiists tobeiome global in terms of caPa-

biliw and in the third edition he

told'them that both Indian in-dustrialists and consumers willhave incredible weaith in thevears to come. In the mid andiate'90s this seemed imPossi-ble.

But look at his ability to see

things so far ahead His passionfor India was such that hewould visit the countrY six totentimes ayear.

He always made the timeand had the energy to connectand speak to Indian businesses,

sovernmentand NGOs." His professional code ofconducf was such that he

would always keep an engage-ment, even at.the cost of hishealth.

And, an exemplary friendand mentor, on whom onecould count to be at one's sidein times of need and life-inflex-ions.

He used to say that India gotIndependence through'Poor-na swarai' but when would'sampoorna azadi'come ior itsbusinesses?

He iooked at entrepreneursas freedom fighters and used tosav that fteedom from shonag-es and the road to good govern-ance would be delivered onlYbv education, meritocracY andthe entrepreneurial energies ofIndia.

He truly was a tireless fight-er for India's economic andmoralfreedom.

The best tribute to himwould be for us to continue totoil for that noble cause.

(A s t oI d to Vinay Kama th)

Prahalad and Mr Gopal Srinivasan (file photo).

Bala BalachandranWhat one remembers most

about C. K. Prahalad is theextent of warmth andgenuineness he brousht rothe table.

His friends were very spe-cial to him and he would'goout of rhe way to ensure thatthey were comfortable.

Another notable traitabout him was that he triecihis best to attend everv func-tion, event that he #as in-vited for - now let me alsotell you that ifyou lived in theUS and had friends all overthe country, both Indian andAmerican, this is no easytask.

I still remember that hehad flou'n dou'n all the wavfrom \,Iichigan to Houston toattend my youngel. son'su'edding and stayed u ith usfbl the two days it took lor all

and riding rhe manager.::thought wave. He :h.- .-.course, went on tc :,...-_guish himself as onr

-. :.-.=

finest professors an; _-_ -.in rhe field of manage:_.-

.{s a famill man, I ., .

knori n him to ii alk rhe ...._:-mile in ensuring that he ri,:sr,or onil'an outstanding i,-rher. but a menror

' ani

friend to his family as lrell.In their hour of griei. I

pray to the almighw ro o--"ih.m th. ri;;nfth',; E;r:with his incredible loss. \hihis soul rest in peace.

(Prof BaIa Bala::..:-.-dran, Founder and D=:-.Great Lakes Insrir:::.Mand.gement & -rl K. -. . - -Prof of Managern,.,, _-,-counting, Kellogg S-.: .-

Management, Arrerr' -- 1_'

P-rahalad for ot c- . , : .

decad es)

outstanding professor and friendN "rrtr clarity of thought and creative

expression cr eated lasting impressionsand he was the undisputed master ofthe classroom."

the related ceremonies to best professors at IIfI_-{complete. \4/hen he \\.as even in those dar-s. He u.as ayour friend he u'as a friend complete .hur.e, all theindeed. wayi no or.ie could d."am oi

You had no-holds barred sleiping in his class. Hissupport from him and he clarity of thought and cre_was th,e person you wanted uriu.' .*pr.rsion createdalroulg rl .)'ou needed a lasting impressions and hesnouloer to Iean on. was the undisputed master

What made him an out- of the classroorl.standing. _ teacher and Harvarcl was in those dayspfo1rptea. him to pur.sue his the pioneer of several firsisPh.D could be attributed to in management educationtwo things - his inimitable like the .lrr. bur.J and ex_an4 lucid communication periential i;;i"e formatsand more fundamenrally. his ind his ,tini tf,.i? allowedDaslc iove tor teaching. him to realise the advantag_

He r.as ranked one of the es of staying on in the U"S

WNW\WW-&ffiWWThe prescience of Prahalad

Manaoement quru G.K. Prahalad, who passed away on saturday; had an uncanny- foresi[ht to see the next big trends to impact global businesses.Vinay Kamath

I first met C. K. Prahalad in New Delhi in1993. I had never heard ofhim at that time butwas sufficiently overawed as BusinessWeekhad called him "the most influential thinkeron corporate strategy today," and was keen on

meeting the man. Acknowledged then as-one

of mahieemenfs new guruslecause of his

fresh ap[roach to the global market place.

there was a lot written on him in Americanbusiness magazines but very little in Indiaand few in ttre industry had heard of him.

We were to intervieiw him for the nationalbusiness dailv I worked for then and the ven-ue was the Taj Mansingh hotel. Over the nexttwo-and-a-hilf hours, Prahalad with hispowerfirl oration and emphatic gestures mes-

merised us on a variety of issues. CKP, as he ispopularlv known in industry circles, talkedibout how the coming of the multinationalsinto India cannot be stopped, while pointingout that Indian industry was much too in-ward looking and businessmen were raisingtoo manybogies about the MNCs.

The MNCs. he had said then, were essen-

tial for the Indian industry to become a global

oower itself. Call it prescience but much ofi"h"t he said in thai seminal interview has

nlaved out so true for the industrry.' .[ stickler for the precise word, he had

wanted us to fax (it was long before the In-ternet happened!) the text ofhis interview tohim in thd US and he called back with hiscolrcctions. The year 1993 was an early pointon tlrc roacl to libcralisation and Indian com-

trrrrit's wcrc lrrrttlirtg thc MN(l llogcy. Thcrcwt'r't' issucs wirlr l.Ml. lrntl l'ilrggio, Stlztrki

rrrrrl Mrttttti. ll(:1, lll',;rrrtl Slrt'll lrrrtl wlllit'tlottl ol'Not'il,

THE HINDU . BUSINESS LINEMONDAY, APRIL 19, 2O1O

ffilow RemarkablelUomon Leadlo;rrtna Barsh andiirsic Cranston

Prof C.l( Prahalad addressing the CII National Conference and annual session in New

Delhi in March 2009. - sandeep Saxena

imagination." The extensive intenriew, pub-

fish6d in two parts, reflected CKP's anguishthatthere was not much debate onthe comingof the MNCs when the world order rvas shift-in'i rrnidly firrbtrsirlcsscs. I rccrll gcttings.'v-criil clrlls"ll,trrl s('tti()t' ittclrr:lrv l,'ltLlr't's lr'lt'ltt'rtrl lltt' itll('t'vi('u' stilttttLtllrl lrv (litl"s lirlI lrt ipllrl ttr':rr lttttl tr';tltl irrii lr I p,t't irr torrr'li rvil lt

lrirri, Alrr,,ilg {lte ,,rllt'lrt tr'rl$ l'l 11!llnrrr J{*vl

verv fascinated bv how much satisfactiontheie is with whatis happening in software. Ithink it is an extraordinary achievement so

far, butwe haven't scratched the surface ifyoulook at the global software industry. I feel thatlntlir, r,r'hcn it gcts to have 2-3 per cent of the

11lolr:rl s,r['tw:u ti ltlrlt'l(ct tts cotnparctl to the 0.1

l,{,r'r'(,ilt rr,' lr,rvt', it will li'('l Ilrt' tlilli'r't'rlt't'."l,allt ott, tvltctt (Il(l"s Irtrli;r virilr lrt't';ttttt'

basis of the book to a corporate audience atthe Tai Coromandel. In the middle of the talk,the hotel staff suddenly distributed confec-tionerv to all in the hall from large packs. They*.r. M* sweets, priced at 50 paise each and

made and marketedbyHindustan Unilever. Itwas CKP's way of demonstratingthat compa-

nies could come up with quality, low-unitorice oacks of products to cater to the poor'otofrtiblv. As he had said then' "The real

source oi market promise is not the wealthyfew in the devel-oping world, or even the

emerging middle-income consumers. It is the

billiois 6f aspiring poor who are joining the

market economy for the first time."He was of the view that a market at the

bottom ofthe pyramid could be co-created byMNCs and d-omestic industry, NGOs and

most importantiy, the poor them,selve.s, Toq

often poor people are pitronised, he said, and

wanted them-to have real power in themarketplace.

SIMPLE PRESCRIPTIONMv last extensive interview with CKP was in.laiuarv 2009 (The New Manager, 'saryam

sasa miv have wider impact', J an 12, 2009)' in

thE buci.drop of the financial sector break-down in the

-US and Ramalinga Raju's revela-

tion. CKP was in Chennai to speak at thePravasi Bharatiya Divas and later at the CIIYoung Indians iorum. He spoke at length on

whatfndian companies needed to do to- stay

afloat in the recession that confronted theglobal economy. His prescription was.simple.

iust three thinqs: conserve cash, fix internrlinefficiencies and do things morc crertively'

Crrrlting to Chcrrnli wlts lllwlys :t ltttlttt'-contirtg ol'sot ts lirr' (ll(l'. As his lirrrrrt'r strl

rk'rtt, ilrplrl Stittiv;tsltrr, (llr;tiltltrttt ol't'VSr',.,,it,r1 rrrrirrtr rrrrt {llil, rlrr,lir.rl irr llrt"l'rrlrtil

INDIAN MULTINATIONALS'l'o ir question on these spats, it would beworth reproducing CKP's answer: "What Isct' is r reaction to the requirement offoreigrrtlilcct investment rather than asking thetlrrt'stion: how do we grow tndian multina-lion;rls; how do we build MNCs that are lndi-lrr in oligin but have a global spread? To me,-if*" ca'rt do that, all this talk about glob-rrlisrtion and exports is goingto be short tetm'Our long-term destiny is to build globalMNCs. If you want to do that we must have a

long-term strategy that attracting MNCs to,

come to India also facilitates the process ofbccoming MNCs. What I see is inward in-v('stnlcnt, but what I don't is Indian compa-rrit,s tlurt lnVe thc inragination, wherewithal;rrr,l ,lriv,' lo srtv llt:tl stttttt'tl;ly I wotrld like tolrr. ;r 'lirvollt ot lt Ilotttllt, Ilotlt wct'c ollcc tillylilIlt' t'ritrrlttnit:s. I clo ttot bclicve that we aret'onstluirrctl by t'csottrces, I think we are by

IIlIIl. AllrurrH Lrlc lautl D w

Kant, who was Marketing Director of LML atthat point of time who found CKP's viewsrefreihing. Kant, of course, in later years,

went on io become MD of Tata Motors and

spearheaded the Tatas'global ambitions incbmmercial vehicles. A fact, no doubt, ap-plaudedbyCKP.-

CKP stoked the debate amongthe captainsof Indian industry on the need to be globalplayers; his annual sessions with CEos held atlhewindsor Manor hotel in Bangalore wereessentially to fire their imagination. And, itdid get them going: In a little over a decadefromthe ear1yl990s, many Indian companiesstrode out into the world to acquire compa-nies and acquired an MNC tag while ma:ryIndian-origin managers are chiefs of globalcorporations.

CXp, in that intelview, also had stlongviews on software expofts. They were earlydays, no doubt, but as he s-aid, to quote: "I am

more frequen! I used to meet him often inChennai. lt would be events such as the con-vocation address at the Great Lakes Instituteof Management or more recently when he

was one bf the star speakers at the Pan-IITevent at IIT Madras. A few ofthe interactionswere arranged at the IFMR campus inChen-nai by the late Prof S. Ramachander, formerDireitor, and who was a prolific writer and

consultant to -Business LJne. CKP and Ra-

machanderwentback alongway-therewereclassmates in the first batch of IIM-A' Thetwo shared an enduringfriendship - CKP waspresent for the launch ofRamachander's firstbook in Chenn ai,AscendingtheValue Spiraland wrote the foreword for the book.

CKP's interviews were dominated by thecurrent thought and debate lre was engagedin. On curc of his eallicr visits b Cltcnnai, postthe launch ofhis book, Forfun e dt theBottomof the Pyramid, in 2004, he gave a talk on the

Capital, p-oints out, CKP studied in the Tamilmedium at the Corporation School in theNungambakkam area of the city. From thatbackground to stride across the world stage inacademia and business strateg,v, Srinivasansays is what CKP always believed in: merito-cricv. Not manv know too that CKP workedlor a while in ihennai with tndia Fistons ofthe Amalgamations gtoup after his MBA fromIIM-4.

Just before Ramachander passed away, ona visit to his home when he was ailing he lentme CKP's latest book signed by the man him-self,The New Age of Innovation, co-author-ed with M.S. Krishnan. Ramachander haddescribed the book as quintessential CKP,

bristling with anecdotes, new concepts, and

new arguments. Am yet to corrplete the bookbut neecl to lctttrn it to llanuchlnclct''s fitrnilyas a keepsake to remember CKP's ancl Chan-der's enduring friendship.

A master abstractionistLakshmi NaraYanan

C.K. Prahalad

halad, I got an opPortunity to

talk about Cognizant and itsgrowth story. I was elaboral-ing on the companYs nerl-tage, its image, its Progress,its" investment strategY and

competitive Pressures' Itsounded almost like abig cor-norate pitch.' Professor Prahalad simPlY

said: "You have to dif{eren-tiate your flrm along two or

three keY asPects and make

sure that You make disPro-oortionate investments along'those

"reus." This was such a

simple abstrac{ion of what*., ut u firm, should be doing

strategicallY, that even todaY

all of our investments are

evaluated to see if theY make

a big difference to how we are

differentiating ourselves inthe marketPlace.

.+$

There are innumerable ex-

amples of his abilitY to.ab-stract a theme in any glven

situation that can easilY standthe test of time and anY man-

agementtheorY. It is this abil-itv that he Put to use so

eifectively in defining a visionfor India@75, as Part of a

large CII initiative. His Pre-scription for a strong and re-

surgent India, simPlY Put, isone" of flnancial strength,technologY excellence and

moral auihoritY. So simPlY

put that his vision for Indiawill live on.

A management guru, a

strategy consultant of the

highest order and, above all'the Guru ofAbstraction, Pro-

fessor Prahalad will be mis-sed bv all in the corporateworld. But his work will for-ever remain and guide leaders

all over the world for a longtime.

(The writer is Vice-Chair-man. Cognizanl)

,r-ce

It was at a technologY confer-ence in 2004 that CarlYFiori-na. then CEO of ,

Hewlett-Packard, was deliv-ering a keYnote address. She

was talking eloquentlY aboutHP's experiment at KuPPam,

Andhra Pradesh, where thecomDanv was emPoweringvillagers through technologY

- distributing digital cam-

eras and image Printers thatcould be used to generate in-come. She called it "doingwell by doing good" and wenton to argue how the expert-ment had the Potential to be a

Iarge revenue stream'Frofessor C'K. Prahalad

was also a sPeaker at the con-ference and Carly's sPeech

seemed to fit in with a hY-

oothesis he was working on'

ili. subsequent work on

"Fortune at the bottom ofthePy'ramid" was a great abstrac-tibn of the manY examPles'and stories that corPorateIeaders have exPerienced.

Once during a similar in-teraction with Professor Pra-

C.K. Prahalad passes awayNarayan Lakshman

WASHINGT0N DC: CoimbatoreKrishnarao Prahalad, Distin-guished Professor in the Ross

School of Business at the Uni-versity of Michigan, and a

world authority on manage-ment thought, Passed awaY

on Friday in San Diego after a

brief illness. He was knownfor his work specialising incorporate strategy focussingon top management in large,diversifled, multinationalcorporations.

Professor Prahalad's semi-nal work, alongside Gary Ha-mel in the 1990s, on theconcept of "core comPe-tence" of companies won theMcKinsey Prize and sold themaximum number of rePrintsin the entire 80-odd Years ofhistory of its publisher, theprestigious Harvard BusinessReview.

In his paper with Hamel, heurged corporate leaders tothink of diversified companyas a tree: "The trunk and ma-jor limbs as core Products,smaller branches as business

II

units, leaves and fruit as endproducts. Nourishing and sta-bilising everything is the rootsystem: core comPetencies."

He was also known widelYfor his interest in the "For-tune at the Bottom ofthe PYr-amid" and his book on thesubject is considered an au-

thoritative exposition of thepotential for large corpora-tions to improve the condi-tions of the poor in countriessuch as India. TheY could doso. he argued. by "mobilisinginvestmenL caPacitY [aJongwithl the commitment ofNGOs and the communitiesthat need helP." The Poormust become active, in-formed and involv,ed consum-ers, he urged.

Yet Professor Prahalad's il-lustrious career was not re-stricted to academe: heequally established his rePu-talion as a corporate consult-ant par excellence, workingwith a wide cross-section ofcompanies from the CEOs ofthe top 30 Fortune 200 firmsto Hindustan Lever Limitedand Microsoft CorPoration,

India.Growing up in Chennai,

where his father was a San-skrit scholar and judge, Pro-fessor Prahalad workedinitially with Union Carbideafter completing a B.Sc' de-gree from Loyola College in1960. He then went on to ob-tain a Postgraduate DiPlomain Business Administrationfrom the Indian Institute ofManagement, Ahmedabad in1966 and a Doctorate in Busi-ness Administration in theHarvard Business School in1975. He is survived bY hiswife and two children.

Chennai SPeciaJ Corre-spondent rePorts:

Gopal Srinivasan, formerChairman of the Tamil NaduState Councii of the Confed-eration of Indian Industry,said Professor Prahalad haddreamt of India becoming an

economic leader and a moralleader in the comitY ofnations.

Recalling Prahalad's invol-vement in the PreParation ofthe CIIIs vision document, In-dia at 75, Mr. Srinivasan de-

scribed him as one ofthe greatmanagement thinkers. Pro-fessor Prahalad, he said, hadcrusaded for the transforma-tion of lndian business intoglobally competent business.He had emphasised that en-trepreneurship held the keY

to freedom.Mr. Srinivasan, who is the

Chairman and Managing Di-rector of TVS CaPital Funds,recalled that the managementthinker was one of the foun-der-directors of theorganisation.

'oAmazingly i n t t' l I i gen t"Jairam Varadalrt.i, Manag-

ing Director of lllgi l')quiP-ments, who was it sttttlcnt ofProfessor Prahzrlrr<l lirr fburyears in the UnivclsitY of'Mi-chigan, descrilrtrtl him as

"amazinglY intclI igcrr1."

"He had a tl't:ttlt:tttlttus de-

sire to mahe chirrlgtr haPPenthat would havc lrtt itllllrct ona large section ol pt'oplc."

Mr. Varadall"i rt't irllcd howProfessor Prah:rl:rtl, itt 1997,brought his f:rrn i lY I r I (lrimba-tore to show thctrt lt is roots.

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una*arr to difficult-guestrons' we

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r'\ ittins in C K Prahalatl's Business Strat- :11"1$';t'" ffi;1#;i rogit it ' ittut

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lecture at lrn'ra"iiui"tiO *" tt"o* againsl the d'ominant logic rs wl

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d^'*- itt... are not manv who uqli:1"')iji'&, utl *'u'it?itl tu*i pultion us d'id c K and'

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iillluence eternitY

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an invaluable member oI t

Iever board a:-rd once persuaded us to invitelhe i1T';#i;;fi;ts' wives to a str" try'olt-tT:*:1 1':thoardmember'*'""":",'r,,ii*{n:,'"q**:f:

u,,THt|El;'t'fli % ,*ffi'$ W; ii'ii;4;:'11y,His enthusiasm in talkrng

- t I t-

Eulogytomanagementguru CKPTHINIT ofthe red carpet atthe Oscars. Pierce Brosnan is surroundedby journalists and television cameras. Then, another black limousinedrives up. rhere is commotion, and Piertc suddenh tinds himsellalone. Sean Cunncry has i usr arrived. Many years ago, I leli

1 usr like

Pierr,t in this scenario , My MBA section of pricing for the Fall hadbeenfullyerxotledat 70and had a waitlisr.Iwas"two days awayfromstartingt0teachthe course. But, the next day, Inoticed thatmy enrol-men$ wete dow.n to 48. Cle arly a system bug. I calle d adminislrationto silnthe bugorrt and the person at the other endwas equallyperttlexed.Irnentionedthe problemlo a colleague and hb smiled -well, :uurked is more like ir -

-did n 1 you hearl CK suddenly decidedyesterday tb offer a course and all spoti were taken in I0 minutes_Letis see. Yeg his classmeets ai.the same time as yours-toobad!" Hewas lalkurg about CI{ Prahaiacl, the visionarymanagement guru ofthe core compbtency andbottorn-olthe,pyiamid dodels. #hopassed away on Saturday.

One can divide the year into monlhs, or seasons, or work and vaca-tion periods, but here atthe Ross School ofBusiness at the Universityof Michigan, we also divide the year into "these are the times CKteaches" and "these are the times rhat CI( does nor reach". When he isteaciing, the enrolments in ali ihe other classes drop, Ali roolaeprofessors leamthe hard way to teach at a dme when CI(is not teach-ing, or they don't get any students in their classes.

While CK is exrremely well-knovm as a corporare consuhanr, atrue gnru, he is less well-knornm as a faculty member at the RossSchool ol Business where he spenr nearly his enrire workrng life. As a

t'ellow chaired professor and colleague of CK ar Ross, I waniro bringsome perspecfive on hirn as a facuity member. teacher and researcher.His magnetic personaliry and visionary outlook were insightful notjust to corporate managers but also to MBA sfudents, phD studens -ttrirk of Hamelwho is a corporate guru himsell-and other faculn'members. Whereverhespoke. hedrewa crowd. tn Arn fuborwhere he was a residerrt, you cannot throw a stone without hitting alacultymember. Bul, even here, whenhe gave a speech, hundreds ofpeaple viedfcr a spot to listen. And I am nottalkingabout the geneiaipubtc, not just the Micbigan students. He used ro fill Hill Audiicn:.::_--,the largest auditorium in tolrrn, where Iast year's lineup inciudec F.:r:andAnushka Shankar.

_ CK s iarge ideaE the core cornpetenry model - sftategir thinbngshould stan with iooking at the core strengths o{ an orgai:isation -"and the bottom-ofltbe-pltamldmodel*large companies can alsose 11 to the lorrrest rungs of society .:* were path-breaking, But so werehis knowle4ge-building methods. He was an innovatoiin using MBAteams to follow individual compbnies, and then collate the leamingfoom *re combined effon of all these teims into a cohe sive. svsremiticwhole - Ll:Lis is wha L led ro his bestsellin g a nd la r- reachi ng book, TfteBottomaf:the\,ran.id.lnfart,tlisis notjust a book anymore bur ama$agement approach, adopted by many finns. Ar Ross. rve havemultiple corrses wifh this approach as a comerstone. ^{udiiionaltt, hismethodof usingMBAteams to createknorvledge r_. no*.len.t usedbybusiness schools worldwide .

Teachingrechniquesthat CK used also JiJfered r,,:i.:.,\r r: :,:*other professors at business schools. Unlilte oihet lrt'iessi-is, re ,ljnothave elaboratbPowerpoint slides. He rvanied iiudenrs rc jjstenand.take their own notes - the old-fashoneci rr.ar'. ln an age nherestudents expecl detailed class nores, the fact that his classesivere stillilt p,-'ptrl:r4nyrvay speaks r&rin 1o hi: ch.:n:m.: .r:rd rnldot,i-

CK attained management guru stafus worldwide soon after hepublished his core competency model in 1990 in the Hana-rd BusinessRev#ri,. lnponantly, he retained the guru status for a long time. Hewas named amongthe top five in CrainerDearlove'sTitinkers 5}):stotthe Mostlnfluential Business Thjrkers rhree tirnes rrrnnin& beingnumber I in 1005 andtcpping rhe list jl2007 and 2009. This [srispubllshed in F".rl.rj rflagazitle. In India, he n'entbeyond managemenrguru to celebriq: even being called on to hald out the nationalFibnfare awards. Despite anaining celebriry status, he vras lvillhg togive his time to eve4one in the Ross communi4'. He was humble inhis personalitli generous and kind.

Ilwillbe remiss not to point out thar in a tree speech academicsetlin& not everyone agreed with him. There also were critics of thebottom-of-the-p1'ramid approach, some going so faras to say thattheapproach couldbe relramed as, "how to make rnonel ftom thepoorest o1 the poor". Howeve r, ev en r hese dissenters ha vetremendous respecr for C.l('s inrellen and his accornplishmenrs. Cl(.beingrhe geat man he was, satin the audience fortrany of theseialk, and just listened quietly to undersmnd bis critics' poinr of view.He knewthat one testof a great social science theory was dtatsomeone wanted ro challenge it. While CK may have passed away, hisrisionwill continue to inspke us.