C.K. Prahalad: The Practical Visionary

Posted on March 3, 2008. Filed under: HCI Summit, Speakers |

prahalad We’re looking forward to March 10th when the conference kicks off. Dr. Prahalad, recognized by BusinessWeek as one of the world’s best leaders, is our keynote speaker in Scottsdale. HCI’s Executive Director and Executive Vice President of Research Allan Schweyer had the opportunity to interview Dr. Prahalad in advance. Here’s the resulting article!

The Practical Visionary by Alan Scweyer

Early last year when Mike Foster, Founder and CEO of the Human Capital Institute (HCI) asked me who I thought would be the ideal opening keynote speaker at HCI’s national conference in 2008, without hesitation, I said “CK Prahalad!”. There was no doubt in my mind then and there is none today as we eagerly await the big day on March 10 in Scottsdale, Arizona.

With his groundbreaking work on core competencies, modern strategy and tapping markets among the world’s poorest consumers, Prahalad has proven time and again that if there is a successor to Peter Drucker, he is it. I had a chance to speak with Professor Prahalad in early February and was inspired to write this account of the interview.

As many readers will know, Dr. Prahalad practices what he preaches. In 2000 he left a lucrative consulting practice and a tenured professorship at the University of Michigan to captain a technology start up. Praja.com (since sold to TIBCO) was a platform that aimed to demolish the typical hierarchies in organizations through access to information that would empower the individual, no matter their position in the company.

Citing numerous examples, Prahalad has demonstrated the power of this approach. None is more telling than the story of India’s farmers, told in his 2004 book, The Fortune at the Bottom of the Pyramid. Uneducated and beholden to ruthless middlemen; for decades, India’s farmers had realized only tiny fractions of the revenue generated from their crops and produce. By providing Internet access, community computers and minimal training through an initiative called “e-Choupal”, the farmers (many illiterate) were soon accessing the Chicago Board of Trade to check local and global futures prices before going to market. The farmers also use the Internet to access best practices in modern farm techniques to increase yields and even to access information about practices such as soil-testing techniques. Happily, middlemen are becoming a thing of the past and living standards are on the rise wherever e-Choupal has been introduced.

You might be wondering what talent management lessons this holds for sophisticated organizations? I asked Dr. Prahalad that question.

“The new generation will not work any other way, they’ll demand access to information. This will change the meaning of hierarchy, hierarchies have always been sustained through the flow of information. What is the point of hierarchies if everyone can get that information? Information is power and if everyone has it, the hierarchy collapses. The more transparency, the less hierarchy and the stonger the company. We need look no further than our political systems. Democracies have their faults but they have proven to be far more resilient, far more sustainable than the alternatives. The rigid command and control structures, still common in many organizations, stifle innovation and creativity and can never unleash the full potential of the workforce.”

Prahalad’s remarks triggered thoughts of Toyota, Semco and others who are at the vanguard of information democratization. I wondered aloud: If we give people a chance and the right tools, can even those we wouldn’t classify as “talent” do incredible things?

“Democratizing information democratizes the process of managing the large organization and raises intriguing questions about leadership. This has huge implications for talent management practices – talent has nothing to do with hierarchy. In the past we formed teams of people at roughly the same levels, the junior teams having very little influence. Today, to compete effectively, we must form hierarchy agnostic teams that attract views and ideas at all levels – Toyota has proven this. Senior people have to learn how to listen to junior people.

A quiet revolution is underway. And the first companies that will have to master this are in India and other developing countries. Tata, Wipro and others have to come to grips with this soon given the demographics in India. But they will benefit from being the pioneers. A democracy is capable of being challenged constantly – like our political system. Such a system in place in an organiation will give it tremendous long-term advantage.”

At this point in the conversation, I was gripped by the possibilities. True democracies at work could be revolutionary. Dr. Prahalad’s long-time partner in management strategy thought leadership came to mind. Gary Hamel’s provocative 2007 book, “The Future of Management” challenges leaders to cast aside current organizational structures and management beliefs to achieve breakthrough results. I asked Dr. Prahalad about the consistencies with his work.

“How does Apple do what it does? Manufacturing is done in South East Asia, design is centered in California, it’s not only about Steve Jobs or a small band of innovators, the organization is effective because all parts are operating seamlessly. Apple and other successful global companies have learned how to manage global talent virtually and remotely. They have different management models. Beyond Apple, are ultimately transparent and democratic companies like Semco better positioned? Absolutely. But it is culturally very difficult to stop the hoarding of information as it is a source of private power. Asking people to move away from that, to make information sharing a competitive advantage, can take years. It is both cultural and generational. Luckily, the younger generations have grown up with free flows of information and, as I said before, they will demand nothing less.”


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[…] Prahalad keynoted.  Dr. Prahalad is a prominent world-class figure, an influencer of leaders like Bill Gates,  and professor at the Ross School of Business, […]

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