The strategy world has mourned the sudden passing of C.K. Prahalad, Professor of Business Administration at the Ross School, University of Michigan, this week.
Front page 'Competing for the Future' Hamel & Prahalad, HBR 1994
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As many have commented, Prahalad made great strides in getting business to see the potential in emerging markets and ‘poor’ consumers, in The Fortune at the Bottom of the Pyramid and allied work.
In our rush for the new and latest, early work often gets buried. So I would like, as my take on the passing of Prahalad, to go back to his fundamental testimony to the role of and need for foresight in management, which is to be found in his co-authored piece (with Gary Hamel) ‘Competing for the Future,’ Harvard Business Review, 1994, which became a very famous book of the same name. Sixteen years on and now in the wake of the credit crunch, this piece remains as relevant as it ever was:
“Ask yourself: Do senior managers in my company have a clear and shared understanding of how the industry may be different ten years from now? Is my company’ point of view about the future unique among competitors?
“On average managers devote less than 3% of their time building a corporate perspective on the future.
“The painful upheavals in so many companies in recent years reflect the failure of one-time industry leaders to keep up with the accelerating pace of industry change… Those companies were run by managers, not leaders, by maintenance engineers, not architects.
“If the future is not occupying senior managers, what is? Restructuring and reegineering. While both are legitimate and important tasks, they have more to do with shoring up today’s business than with building tomorrow’s industries. Any company that is a bystander on the road to the future will watch its structure, values, and skills become progressively less attuned to industry realities.
(therefore) “Most layoffs at large US companies have been the fault of managers who fell asleep at the wheel and missed the turnoff for the future.
“If senior executives don’t have reasonably detailed answers to the ‘future’ questions, and if the answers they have are not significantly different of the ‘today’ answers, there is little chance that their companies will remain market leaders.
“The Quest for Foresight: Why do we talk of foresight rather than vision? Vision connotes a dream or an apparition, and there is more to industry foresight than a blinding flash of insight. Industry foresight is based on deep insights into trends in technology, demographics, regulations, and lifestyles, which can be harnessed to rewrite industry rules and create new competitive space.”
Footnote: this from the FT: The last time CK spoke to the FT he was buzzing with intellectual energy. “Really, in all my career I have been interested in ‘next practices’, and not merely ‘best practices’,” he said.
