The man of vision
In memory of late Prof. CK Prahlad
PROFILE BY ASHOK OGRA
In the sudden death of C.K.Prahlad, the world has lost one of the great management writer and thinker and India an outstanding friend and advisor. He was 68 and was Professor at the Ross School of Business, University of Michigan and specialized in corporate strategy. Described as one the top 50 business thinkers of the world by, he was known for his deep knowledge and understanding of management practices across the world. Credited with adding three original ideas – Strategic Intent, Core Competency and Bottom of the Pyramid, he became a part of the rule book for a whole generation of top business leaders, managers and teachers. He not only had the this uncanny knack of looking into the future, but also a genuine concern to see the world’s poor becoming part of the management discourse.
Impressed with the work that the Nobel laureate Muhammad Yunus of Grameen Bank, pioneered in Bangladesh in the area of micro-finance, Prof. Prahlad caught the imagination of the world leaders and decision makers when in 2004 he proposed integrating the millions of the poor people into the business strategies by seeing them not a drag on the nation’s resources but as potential consumers of goods and services.
His book ‘The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profit’ first published in 2004 changed our approach towards the 4 billion people who live at the Bottom of the Pyramid (BOP) on less than $2 per day poor, seeing them not as a problem but an attractive business opportunity. “The typical pictures of poverty mask the fact that the very poor represent resilient entrepreneurs and value-conscious consumers. What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win–win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable”.
The strength of these innovative approaches is that they tend to create opportunities for the poor by offering them choices and encouraging self-esteem. Entrepreneurial solutions such as these place a minimal financial burden on the developing countries in which they occur.
To understand how all of this is possible, we need to start with some basic assumptions: First, the poor cannot participate in the benefits of globalization without an active engagement and without access to products and services that represent global quality standards.
Second, the BOP, as a market, provides a new growth opportunity for the private sector and a forum for innovations. Old and tired solutions cannot create markets at the BOP. These markets have remained “invisible” for too long. Third, BOP markets must become part of the firms’ core businesses; they cannot merely be relegated to the realm of corporate social responsibility initiatives. Successfully creating BOP markets involves change in the functioning of companies.
He challenged the assumption that that “the rural population was primarily poor and the urban population was relatively rich. The data increasingly does not support this distinction. There are as many rural rich as there are urban poor. Poverty knows no such boundaries. In the developing world, more than one third of the urban population lives in shanty towns and slums. These traditional views reflect the philosophy behind actions taken by bureaucrats and politicians. During the last decade, a slow but discernable transition has been taking place from the traditional to a more market-based outlook.”
Not everyone agreed with his BOP theory including his own colleagues at the university who argued that the BOP constitutes a very small percentage of potential consumers. The strategy instead should be on making the rural poor producers of goods, not focus on it as a market for consumers.
Predicting the rise of India to be global power by 2022 ( 75 years after independence), he cautioned that this position is possible only when India works on all three fronts- economic growth, technology development & moral leadership, and acknowledging that income inequality pose greater challenges to India than poverty is a . “As a country, India must have high and shared aspirations like it had in 1929 when the leaders of the then Congress party declared their ambition as Poorna Swaraj. Since then, India has never had a national aspiration which every Indian could share.”
Elaborating these key areas, he said that India has reduced abject poverty dramatically during last decade. However, a more difficult problem will emerge in its place. An important consequence of rapid economic development and globalization of the economy are the lags and asymmetries in the benefit results. Some sections of society will benefit and some will lag behind. These asymmetries will create multiple new divides in society - divides between educated and the uneducated, the urban and rural populations, between regions of the country as well as between ethnic groups. As a consequence, income inequality will emerge as a source of social tensions.
Prof. Prahlad wrote many books- all best sellers - including ‘Competing for the Future ’ printed in fourteen languages, and named the Best Selling Business Book of the Year in 1994, ‘The Future of Competition: Co-Creating Unique Value with Customers’. The Business Week described the book as “provocative” and “an important book full of disruptive ideas”.
Earning his management degree from the Indian Institute of Management, Ahmedabad in 1966, he went to Harvard Business School for his doctorate that he completed in a record two and half years. He was honoured with many awards across the world including the Padma Bhushan in 2009 by the Government of India.
Prof.Prahlad is no more with us but he leaves behind an incredible and rich footprint -through his writing and lectures- that will remain with us for a long long time.
(The author, a native of Kashmir, is a noted Management and Media educator and is currently Founding Director of the Apeejay Institute of Mass Communication. Feedback at email@example.com)
Lastupdate on : Wed, 21 Apr 2010 21:30:00 Makkah time
Lastupdate on : Wed, 21 Apr 2010 18:30:00 GMT
Lastupdate on : Thu, 22 Apr 2010 00:00:00 IST
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