Gary Hamel (1954- ) and C. K.(Coimbatore Krishnarao) Prahalad
Hugely influential thinkers in corporate strategy.
Hamel (an Amercan, pictured right) runs the management consultancy business, Strategos.
Prahalad (born in India, pictured right below) was a business school professor in Michigan,USA.
Competing for the Future
(see for more detail Competing for the Future in
the Business Books section)
Business success requires:
1. Exploiting core competencies and creating new ones
Core competencies are:
• distinctive skills in business activities like production, marketing and innovation.
• long-term contributors to better customer service and profits than competitors.
• big contributors to customer perceived value.
• gateways to tomorrow’s markets (so satisfying future customers)
An example is Sony’s ability to miniaturize leading to successful products like the Play Station.
2. “Strategic intent”
This is an inspirational and challenging statement of an organization’s purpose.
In the photocopier market Canon’s strategic intent was ‘Beat Xerox’.
3. “Industry foresight”
This is the ability to create the future by anticipating and satisfying future customers’
These may be clearly stated by them through market
research (articulated needs).
But sometimes customers can’t explain their future requirements (unarticulated needs), because
a product is so revolutionary and out of their experience.
So an innovative company (like Apple) may successfully sell the product without prior customer approval.
But crucial is “expeditionary marketing” which aims to find imaginative and
creative solutions to customers’ future problems faster than competitors.
4. Creative and committed employees
Employees make core competencies and customer satisfaction possible.
They must be empowered to take responsibility for results and change through:
- empathetic and ethical management (leading to mutual respect).
- dedication to the organization’s purpose.
“Community activists” are vital, because they combine change with commitment.
Key quotes on business
In business, as in art, what distinguishes leaders from laggards, and greatness from mediocrity, is the ability
to uniquely imagine what could be.
The genesis of the strategy process must be a purposely created misfit between where the firm is and where it
wants to be.
To create the future, a company must unlearn some of its past.
Key quotes on human resource
What employees hear is that they’re the firm’s most valuable assets, what they know is that they’re the most
Downsizing, the equivalent of corporate anorexia, can make a company thinner, it doesn’t necessarily make it
Hamel’s key books
Leading the Revolution
The best companies are “industry revolutionaries” that radically
innovate and change all the time by:
- continuously questioning how they do things.
- experimenting and learning.
- imagining new possibilities to solve customers’ present and future
Continuous improvement is also necessary but not enough on its own.
So vital to business success are:
- business concept innovation (creating radically new ways of doing business e.g.
- activists (employees who love revolutionary change).
- talented people who are rewarded for innovation.
- challenging, inspirational and customer driven objectives.
- a free exchange of ideas amongst all employees.
- small business units with the power to innovate.
Key quote on business
Today we are limited only by our imagination.
Key quote on competitive
Radical innovation is the competitive advantage for the new millennium
The Future of Management (2007)
, written with Bill Breen (pictured right)
Management must encourage and facilitate constant innovation through a passionate, self-motivated, imaginative
and creative workforce where:
- “the renegades always trump the reactionaries”
- there is a “thoughtocracy” (a free and universal exchange of ideas).
Business success, customer satisfaction and creativity depend on innovations in
management that result from:
attitudes and beliefs
(employees managing themselves and having the freedom to do their own work).
Google gives its people 20% of their time to work on their own personal projects.
5. Chaotic, constructive conflict
Key quote on business
I dream of organizations that are capable of spontaneous renewal, where the drama of change is unaccompanied by
the wrenching trauma of a turnaround.
Prahalad’s key books
The New Age of Innovation
(2002), written with MS Krishnan (pictured
The best way to innovate is “co-creation” creating new products in partnership with
customers (like eBay, Wikipedia and Facebook)
Co-creation was first introduced in Prahalad’s 2002 book, The Future of
Competition, written with Venkat Ramaswamy.
Two important principles of innovation are:
Co-creating value based upon every buying experience of each customer.
Successful companies have a deep understanding of customers’ needs and continuously innovate and change.
Buying globally the best resources and employees to create
This is supported by brilliance in other key business activities like research and
development, marketing and production.
Key quote on change and
“We believe that the changing dynamic of markets...and consumer activism and involvement will create a need for
The Fortune at the Bottom of the Pyramid
The world’s four billion poor (at the bottom of the pyramid living off much less than $2 a day) can escape
poverty by becoming entrepreneurs and customers for global companies
Global companies should consider the impoverished as a huge market opportunity and work in
partnership with them, governments and aid organizations.
There is money at the bottom of the pyramid!
Key quote on poverty and
If we stop thinking of the poor as victims or as a burden and recognizing them as resilient and creative
entrepreneurs and value-conscious consumers, a whole new world of opportunity can open up.