He's the world's most influential living management guru and the first Indian-born to be so honoured.
Which is why, in these troubled economic times, when countries are slipping into recession, companies are going bankrupt, CEOs are taking pay cuts and pink slips are the norm, it makes sense to take Coimbatore Krishnan Prahalad's sage words of advice.
Strategy is about stretching limited resources to fit ambitious aspirations. Management is a lot of blocking and tackling. Many companies don't understand yet that outsourcing isn't about exporting jobs. It's about importing innovation. You have to have faith. You cannot lead if you don't believe. The technology eliminated the tyranny of the few over the many.
Invest time in languages and intercultural awareness. Focus on becoming part of the global citizenry. In exchange for the opportunity to participate everywhere/ anywhere in the world, you have the obligation to do something productive which will improve the world. Develop a personal mission, a desire to leave personal legacy. You cannot solve the world's problems in a small company. The goal is not to say that we are going to do it anyway, with or without money. It's a nice, brave thing to say, but very soon you'll be running out of cash. The negative side of a small company is that there are no dampers. Just because you can make a change quickly, the temptation is to act. Speed is nice to have, but going faster to hell is not how I want to run a company. I want somebody to keep pushing the organisation. I also want somebody to say, 'Let's be thoughtful about getting this done right.' It is the bamboo that bends in heavy winds that has another day to live. The trees that don't bend get uprooted. If you do precisely what you're supposed to do, and you're boxed in, then you're going to do that very well. But if pressed to do things that aren't in your normal job description, the challenge can push you to a new level of achievement.
If you want new ideas, you have to push yourself into the periphery. How many senior executives discuss the crucial distinction between competitive strategy at the level of a business and competitive strategy at the level of an entire company? Especially in troubled times, leaders must behave like emotional and intellectual anchors. You must steady the organisation and have a passionate belief that what you are doing is important. Leadership is about what you do when the going gets tough� The critical issue is about faith, passion, and, most importantly, authenticity -- so that people know you are not pretending. People can see a sham." I spend a lot of time talking about what we're doing in terms of strategy. You have to give the same message over and over again.
Consumption can and does increase income. Consider health care. If you are legally blind with cataract, you can't work and neither can the family member who cares for you. But if you get access to inexpensive cataract surgery, now you can see and both of you can work. Have you consumed eye surgery or increased the family's earning power? You've done both. It's two sides to the same coin. In an organisation, one unique person makes a difference, but you need teamwork to make it happen. In a company like ours, if we want to do something, we can just call a meeting. But in a small company, you have to exercise caution and build your own personal dampers so that you don't act on everything. Sometimes not acting may be smart. But if I get the feeling that everybody's becoming so thoughtful that nobody's doing anything, I want to go and light some fires somewhere. If you are a good manager, you always worry about your competitors. To take the competitors for granted is a mindset of a closed economy. Nobody in the open market takes anybody lightly. Leaders do not allow themselves to be weighed down by the difficulties of the present but are focused on the possibilities of the future. Instinct, passion, courage and confidence are the precious ingredients of managing differently. A vision of the future is critical to motivate people to become innovative.
Being anchored in reality and taking small steps towards that vision is equally critical. We have to learn to look at the stars and count the grains of sand at the same time. Any company that cannot imagine the future won't be around to enjoy it. Managing differently calls for a major revolution in the way we perceive our own roles as managers. The biggest transition that needs to be made is to move away from managing to leading, from administration to entrepreneurship. Whether it is quality levels, logistics, costs, scale, working capital management, or capital efficiency, there is no room for the second best. Good is not good enough anymore. If you want to understand how the future is being created, you have to understand how decisions get made, how people allocate resources, how choices get made.
Why don't people have economic opportunities? Because there's no information. You don't know what the price of fish is in the next village. The large-company Internet business models, the Internet poor, the new business models -- they're one big circle. They all interact with one another. But we have to make this a business issue. A commitment to lead in the creation of new opportunities -- an opportunity-led management system -- is critical. Most often, managers change in reaction to a crisis or a problem, not in search of opportunities People are intelligent enough to know what they are getting and not getting. The greater the angst of sales and marketing managers over the decision to sell core products to outsiders, the more likely it is that the firm's in-house channels are less efficient than alternate distribution channels How to distinguish non-core capabilities from core competence? In the broadest terms, a company many have 40 or more primary skills, but only 5-15 core competencies. Senior management has to focus on which competencies are at the centre of their business.
Excitement is manifested strategically by employees seeing how their jobs link up with attainment of a goal. The new strategic intent presents a challenge, and engages employees' intellectual energy. Like Ford did in the early 1980s with its quality campaign, managers must make every employee aware that without their help, the company will not regain or increase its competitiveness. Companies that create the future do more than satisfy customers, they constantly amaze them. Beyond reengineering a firm, top managers must know how to reengineer their entire industries, a la CNN, Wal-Mart, and Service Corporation International. Pathbreakers all, they recognized their core competencies and developed strategies to reshape industry structures around their competitive competencies. Rebuild leadership before you need to. Business must start with the assumption that consumers don't want to apply the same amount of effort to construct all their experiences. Today, I will take whatever coffee I'm given -- but on another occasion, I might be more particular.
Management must be performance oriented. Meritocracy, stretch targets, clear measurements and rewards based on contribution are the keys to a high performance culture. We have company think, not consumer think. What we make is not what they want. People shift their priorities, where they want to customise, where they want to invest their energy and expertise. If you build systems for total participation and co-creation, buying off-the-shelf is a sub-set and is also possible. If you only build a system for what's available and what you make, then people cannot co-create. Over time successful business recipes become dull -- your success leads to business structures that may become dysfunctional. What we need to ask ourselves is -- is there a different way?
To be extraordinarily sensitive and concerned about key competitors, especially those who have more experience and technology capabilities, is not a wise thing to do. I think we have to distinguish between being respectful and being concerned about competitors. At headquarters, managers are focused on the markets already being served, not the potential markets of the future. When this happens, the company is hostage to existing markets, even though it may possess highly-evolved core competencies which can be leveraged for the future. By creating a mismatch between aspirations (more) and resources (less) you create entrepreneurship. Entrepreneurs leverage resources and change the business model to get more, for fewer resources. So the task for us is, how to create aspirations that rest outside the current resource base You have to have faith: otherwise, every time there's a minor problem in the implementation, you'll change direction. Just because you are going north, doesn't mean it's going to go in a straight line. Start with clear specifications and a clear idea of gaps by auditing your own internal structure. Then create small internal experiments to move one step at a time rather than turning everything upside down.
Consumers did not have much share of voice. Now they do. There is a fundamental transition that is taking place -- from a firm-centric society to a consumer-centric society. Creating a new market is key... not to create new needs for these consumers, but to find new ways to sell the same products and services in an innovative way It's a question of taking a lot of small steps: don't try to eat the elephant in one big bite. The social architecture -- the mindset of managers -- must change. You cannot procrastinate. People must be empowered to act. Real time action requires a managerial mind-set. It also requires distributed leadership -- a shared agenda commonly understood, but access to information at very distributed levels. Everyone should act in a way that's consistent with the broad philosophy of the company, so you enhance your brand, you enhance the experience of consumers.
(from http://specials.rediff.com/money/2009/jan/15slide1-success-strategies-from-worlds-top-management-guru.htm)
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