A Bigger Picture - C.K.Prahalad

C.K.?Prahalad's value model is?based on the idea that value is determined by the customer co-creation experience, and that companies must access resources from multiple sources to compete.

He?created the base of the pyramid idea and changed the way the world viewed India's economic potential. At the time of his death he held the title Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at Michigan Ross.

A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel. It can be defined as "a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace" and therefore are the foundation of companies' competitiveness.

The Future of Competition, where the cocreation idea was born;?The Bottom of the Pyramid, looking at five billion under served consumers; and?The New Age of Innovation?– the N=1 and R=G idea – were all parts of a larger argument. “I had to separate them into bite-sized concepts,” CK explained, “so the message didn’t get confused. But now you can see how they fit together.”

“If you look at the opportunity for companies, I’m making three simple points in all three books. One: look at six billion people as your market, not just the billion at the top of the pyramid. Look at six billion people as potentially micro producers, micro innovators and micro consumers.

“The second thing I’m saying is if you want a very good way of serving the consumers and, therefore, retaining consumers, then you have to understand the uniqueness of each one and create a unique personalized experience. That means you cannot just give them a product and think of the relationship as a transaction. You have to build a relationship that is more enduring. That’s the cocreation idea.

“And third, in?The New Age of Innovation, I’m taking these two ideas and then saying, how do you do it operationally? What is the glue? The glue is information architecture, or IT architecture, and the social values that you create are the social architecture, in terms of skills, training, approach to talent and so on.

“So they all come together and I believe that we are on the verge of the largest growth opportunity that any firm has ever seen. Just imagine: even if you don’t take six billion people as your market, if you can just go from one to three billion — that’s still the biggest growth opportunity people have ever seen. I think we are on the verge of something extraordinary.”

The new ways of thinking, he said, also challenged or notion of leadership. “First, leaders must lead.

“Go back and look at the Fortune 500 or the Fortune 100 over the last 50 years, and ask yourself how many companies have disappeared from the list, and what the survivors do to stay in that league. You will find that they are continually looking forward, not backward. They are continually changing the rules of competition, rather than following the accepted rules. They are regularly defining new ways of doing business, pioneering new product concepts, building new core competencies, creating new markets, setting new standards and challenging their own assumptions. They are taking control of their future. You can’t do that if you are not willing to change and to move from where you are today. The opportunities are out there for everyone, but capturing new business opportunities is like shooting flying ducks – you can’t do it with fixed gun positions.” — CK Prahalad, 1995

Such was CK’s vision. His words remain true even today – some 30?years later!