Leadership

Remembering C.K. Prahalad: A Champion of Innovation

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Business processes and IT infrastructure and systems must combine for an extremely flexible, response-driven, real-time enterprise. Software vendors must adopt an innovative, flexible mindset in order to deliver products that will drive their customers’ success in the years to come.” C.K. Prahalad, 2006

Few business leaders influenced the transformation of the software industry like C.K. Prahalad. Through his open-minded vision and influence with global CEOs, C.K. urged enterprises to adopt a new perspective about the potential of technology and innovation to transform business – a management philosophy that thrives in today’s competitive economy.

A unique thinker

As a thought leader, visionary, mentor and friend, C.K. continually challenged me to think differently. His sudden passing cut short a life which undoubtedly would have continued to expand the creative strategic process which he set in motion in boardrooms around the world.

C.K. succeeded at reinventing management strategy because he spoke to business leaders in their own language. He was regularly included in lists of the world’s top management strategists.

Software CEOs who worked with C.K. regularly marveled at his quick ability to grasp business problems specific to their industry – and bring a clarity of thought and direction to potential opportunities.

C.K. believed strongly in the power of IT to transform a business. He delivered keynotes at major technology gatherings such as the  software conferences and Interop, urging attendees to harness the next-generation technology and transform it into a competitive advantage – not just another enterprise system.

C.K.’s thought leadership in the area of “innovation through co-creation” was one area in which he challenged software executives to broaden the traditional boundaries of R&D to create increased business value.

In a 2006 oped on SandHill.com, C.K. called on traditional software vendors to abandon traditional business models and help their customers deliver innovation-driven value to the bottom line:

Everyone in the IT industry has the opportunity to capitalize on new opportunities if they can adopt a mindset of innovation similar to that of their customers.

There is a tendency for the large software vendors to deliver products that are “hard wired.” They connect to legacy systems and deliver innovation slowly, rolled out across large installed bases – so slowly, in fact, that most software vendors would not be considered “innovative” by their customers today.

This need to protect their installed base is slowing innovation. As consolidation between vendors continues, the need to demonstrate operational efficiencies is often not translating to dynamic, innovative offerings from the ever-larger vendors. There is too much fear of “rocking the boat.”

Software vendors can reverse this perception by co-creating value for their customers. By working closely with their customers and responding to their individual needs they can become innovative: Demonstrating clear returns-on-investment (ROI) – not just in monetary terms but in tangible business results as well, speeding implementation, working with business units on R&D for new initiatives, building products which can leverage legacy assets. These are just a few of the ways in which a software vendor can become an innovation partner.

The New Age of Innovation

Luckily, C.K. shared his insights with the world through nearly two decades’ worth of best-selling business publications. Beginning with “Competing for the Future” (co-authored with Gary Hamel) in 1994, C.K.’s publications include “The Future of Competition: Co-Creating Unique Value with Customers” (co-authored with Venkatram Ramaswamy in 2004) “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profit“and in 2008, “The New Age of Innovation.”

At Interop/Software 2008, C.K. delivered a keynote covering the implications of his new book for the software industry. Consider his perspective on the impact of IT on innovation summarized on SandHill.com:

“I believe there is a new house of innovation on two pillars of co-created experiences and equal demand/access to global resources. The basement of the house is the technical architecture of the firm — the information and communication technology backbone. The social architecture of the firm is the values, skills, attitudes of all managers and people in the company form the roof. But the thing that holds everything together, the glue, is the IT architecture, which is the flexible and resilient business processes and focused analytics. Value creation becomes understanding and managing tensions and frictions across all these parts.

The competitive landscape is changing. I think the next generation of systems is one consumer co-created experience using the resources from multiple vendors. The nature of advantage, I believe fundamentally, is access to capital, raw materials, technology, and resilient processes and analytics. And new value creation and innovation depends on rethinking technical architecture of your firm. I believe information architecture and capabilities will become new strategic assets; therefore, IT matters.”

Beyond business success

Most impressively, C.K. believed in the power of global business and information technology to improve the lives of all people – especially those in the developing world. In “The Fortune at the Bottom of the Pyramid,” he presented a strong case for the importance of these countries as target markets and regions of opportunity rather than simply areas at which to direct financial aid.

And when C.K. spoke, CEOs listened. Thus, an entirely new conversation on marketing to developing countries began in executive suites worldwide.

Another area in which C.K. had recently focused was the field of corporate sustainability. When we co-authored last year’s Harvard Business Review article on “Why Sustainability is Now the Key Driver of Innovation” with Ram Nidumolu, C.K.’s influence moved green business initiatives up the agenda for many international enterprises.

C.K. will truly be missed by the SandHill.com community. To honor his tremendous contributions to the software industry, we should strive to prioritize innovation as a business driver every day.

M.R. Rangaswami is publisher of SandHill.com.

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