C K Prahalad on Innovation Next Practices: N=1, R=G

I got invited to the CII Member Fellowship Evening organized by CII Southern Region.
Three speakers representing varied background and interest were lined up.
cii member fellow evening
C K Prahlad was first to go. He started with ‘I’m going to disappoint many of you – I’m not going to talk about BoP’ instead CKP talked about his upcoming book to be released in April.
C K Prahalad wasted no time drawing the audience towards Next practices rather than Best practices. Underlying theme being: Innovate the innovation process itself. Fundamental shift in paradigm from Firm Centric view to customer centric – dealing with customers one at a time. He made a powerful illustration citing the case of Build a Bear – a specialty store where children can custom build their teddy bear. Where the ingredients of making a teddy bear are assembled Just in Time with the ultimate end user fully involved. Very Agile indeed. The teddy is Given a Life by the child with a heart, a sound effect and an external style with whole nine yards of birth certificate and a promise to be the best friend to the teddy. For the parent and the child pair, it is not the product, it is the experience -an opportunity to co-create is central to the experience. For the store, there is a significant reduction in total SKUs and the SKUs in the inventory are in synergy. Further there is opportunity to up sell merchandise like sports tees and accessories enhancing the experience for the child and revenue for the store with very high profit margins.

With this, C K Prahalad asked the industry captains: Why are you not pitching your biz this( customer experience centric) way? Why pitch by cost, quality and response time efficiency?

C K Prahalad went on to illustrate the point with more serious/life critical example – pace maker expert monitoring. With pace-makers, there is not much point in arguing about quality. Here the opportunity for value creation is outside the product as such – ability to monitor state of your heart by remote expert, totally personalized. [Alluding to how Medtronic – long time market leader in pace-maker woke up to effect CareLink]. Under special circumstances, different service partners are to be activated( articulated as CKP likes to put it) to deal with the situation. Sometimes the local hospital is involved, some times an ambulance is involved and of course some times the priest gets involved! Reinforcing the concept of customer centric, fulfillment one customer at a time personalized to fit his/her context well.

C K Prahalad formulates serving one customer at a time as N=1. In order to service this one customer like this, a whole lot of reliably working partnerships are to be forged. It invariably will have to scale globally like it or not. This if formulated as R=G( Resource = Global. Or simply as I see it – Radius of operation = Global ). This is what OnStar by GM did to high end cars monitor special conditions and articulate service partners to respond to customer’s specific situational need. To a lesser extent by Dell to assemble a computing hardware of your choice by N=1 and R=G.

The key characteristic of a The Firm serving N=1 with R=G are:
Node within a global web.
Personalized Experiences
Co-creation
Celebration of Individual
Thematic experience.
Delivery Network.
Li & Fung is an example of 100 year old US$10b trading company illustrative of ‘Platform Play’ success. Netflix, Google, Amazon are other examples cited.
Obviously this is going to be capital intensive and highly IT intensive says CKP. Thanks to the India growth story, capital is within reach. And IT is abundant in India. Why are we just using it to make others rich and competitive? With that challenge, he went on to question if Science is the way to do Innovation?
There was a quick run-through of palletized biomass fuel powered smokeless stove. The stove will free the rural women folks from smoke and soot exposure. IISc folks pitched in with ceramic coating. Like that a whole lot of resources were used to assemble the stove and the supply chain around it. Millions of pieces are deployed in India and it is getting deployed in other developing markets. BP the sponsor of the project got entry into consumer space that too at the base of the pyramid. The R=G is kind of obvious here but the N=1 eludes me. Perhaps I need to check the case study in detail.

For me, with Social Media familiarity made me easily relate to what C K Prahalad was talking about to the point of wondering if the YouTube like democratization( N=1 + Affordable = Democratization, unlike say OnStar) play out in physical space more intensely and much faster than anticipated.

PS: I attended an Agile event on the same day. I found it bit ironic that Old School industries are emulating user centric Agile like tech success stories. And in Agile the good old manufacturing best practices are gaining new currency.

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About labsji

I blog, Therefore I exist ! Funny things are funny to me. Cool things are cool to me. Innovations tick me. I attempt spirituality religiously :)
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5 Responses to C K Prahalad on Innovation Next Practices: N=1, R=G

  1. Pingback: Nano Tech Conclave: Nomura Research Institute, Indo-Japanese partnership « Joy Of Innovation

  2. Rajesh Kumar says:

    After all the controversy around the book on BOP and the Aneel Karnani paper that so credibly challenges the foundation of BOP, I am not surprised Dr Prahalad is keen to move on, and not so keen to talk about BOP.

  3. labsji says:

    Thanks for the pointers on BOP. Well, Dr Prahlad knows his biz well. And practices it well.

  4. Ryan Nagy says:

    Excellent summation of the N=1, R=G concept.

    You have a clear, easy-to-understand writing style. I am currently listening to an audio version of “The New Age of Innovation” and used your blog for a quick clarification of some facts.

    Thanks – Ryan

  5. Aalok says:

    hi ryan, could you pl share the audio version of ‘new age’ . would heartily appreciate your response to apdaalok[at]gmail[dot]com
    thank you

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