CK Prahalad - Visionary of Global Management Passes at 68

On occassion we are fortunate and benefit from the insights and work of special people. When they pass it is noteworthy and sad. Such is the case with the distringuished professor CK Prahalad, who was internationally recognized for his research in corporate strategy and the best ways top management can navigate the often-complex waters of running large, multinational corporations.

As a Paul and Ruth McCracken Distinguished University Professor of Strategy in the Ross School of Business, Prahalad was a well-respected and deeply admired member of the community, both as an expert in his field and as a teacher. In 2009, he received the Pravasi Bharatiya Samman — an award given by the president of India to men and women who make exceptional and praiseworthy contributions in their respective fields. In the same year, the Indian government honored Prahalad with the Padma Bushan — the third highest civilian award in India — for his distinguished service to the nation. The Times of the United Kindom also named Prahalad the most influential business thinker on its The Thinkers 50 List in October 2009.

For many reasons this Harvard professor and author attained notarity. Among many publications, he had several international bestselling books, including “Competing for the Future,” “The Future of Competition” and “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits.” A visionary who saw the unique contributions the emerging global middle class is and will have on the world, he once was quoted as saying:

If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.

Five Fundamental Change Drivers Over the Next 15 Years

Fifteen years can result in major global change. At the start of the 1990s, China was largely a planned economy, and the Soviet Union still existed. Few people had heard of the Internet and e-mail seemed closer to science fiction than reality. The next 15 years will bring further massive changes to the shape of the world economy, to the landscape of major industries and to the workings of the company. Key trends over the next 15 years can be summed up as follows:

Globalization . It’s too early to talk of Asia ’s century, but there will be a redistribution of economic power. Emerging markets, and China and India in particular, will take a greater slice of the world economy. Non-OECD markets will account for a higher share of revenue growth between now and 2020 than OECD economies. Labor-intensive production processes will continue to shift to lower-cost economies, which will still enjoy a massive wage advantage over developed markets. The pace of globalization will be arguably the critical determinant of the rate of world economic growth.

Demographics . Population shifts will have a significant impact on economies, companies and customers. The favorable demographic profile of the US will help to spur growth; aging populations in Europe will inhibit it. Industries will target more products and services at aging populations, from investment advice to low-cost, functional cars. Workforces in more mature markets will become older and more female.

Atomization . Globalization and networking technologies will enable firms to use the world as their supply base for talent and materials. Processes, firms, customers and supply chains will fragment as companies expand overseas, as work flows to where it is best done and as information digitizes. As a result, effective collaboration will become more important. The boundaries between different functions, organizations and even industries will blur. Data formats and technologies will standardize.

Personalization . Price and quality will matter as much as ever, but customers in developed and developing markets will place more emphasis on personalization. Products and services will be customizable, leading firms to design products in a modular fashion and, in the case of manufacturers, assemble them in response to specific customer orders. Customers and suppliers will be treated in different ways, depending on their personal preferences and their importance to the business.

Knowledge management . Running an efficient organization is no easy task but it is unlikely on its own to offer lasting competitive advantage. Products are too easily commoditized; automation of simple processes is increasingly widespread. Instead, the focus of management attention will be on the areas of the business, from innovation to customer service, where personal chemistry or creative insight matter more than rules and processes. Improving the productivity of knowledge workers through technology, training and organizational change will be the major boardroom challenge of the next 15 years.