Global Economics

C.K. Prahalad, 1941-2010


C.K. Prahalad, who died Apr. 16 at 68, was hell-bent on shaking managers free of what he called their "dominant logic"—deeply held assumptions about the world. He was a provocative thinker who regularly came up with startling insights that would send executives scrambling. During his 33-year career as a business philosopher, a professor of strategy at the University of Michigan's Stephen M. Ross School of Business, and a well-paid consultant, Prahalad developed theories that have become so commonplace it's easy to underestimate the impact they had at the time. In 1990 he argued that businesses should focus on their "core competence"; corporate strategy has never been the same. Prahalad's insistence that companies engage the billions of potential consumers at the "bottom of the pyramid" was controversial in 2004. Today it's global economic conventional wisdom. His dictum that customers want a greater voice in what they consume has gone from cutting-edge to cliché in six years.

Prahalad was born in the southern Indian state of Tamil Nadu in 1941, one of nine children. He learned his bookish ways from his father, who was a judge and Sanskrit scholar. Prahalad studied at the Indian Institute of Management and then at Harvard, where he received a PhD from the business school. He intended to settle in his homeland but found nationalist India of the 1970s inhospitable to his global outlook. He returned to the U.S., where he could roam intellectually.

Prahalad had eclectic interests: bird migratory habits, historical maps, the spread of languages. He wasn't especially gregarious, but when he traveled, which was often, he tried to pry useful information out of everyone he met. He was always looking for connections and patterns, hoping to predict change.

As a teacher, Prahalad nudged his students to stretch their minds. As a consultant, he demanded his clients do the same. When he arrived for a weekend with senior executives at Royal Philips Electronics (PHG) in the early 1990s, he told them he had just read a news report that Philips was heading into bankruptcy. "Forget what we are supposed to talk about. There is a major crisis," Prahalad recounted in a 2006 BusinessWeek profile. "You had better figure out what you are going to do about it." Within a few hours the executives had drawn up ideas for a radical restructuring. Then Prahalad admitted he had made up the whole thing to spur the team to think creatively. "His style could be mean, but effective," Jan Oosterveld, a retired Philips executive, said at the time.

Among Prahalad's last works was a column in the April Harvard Business Review. It concluded with this thought: "Executives are constrained not by resources but by their imagination."

Education

Indian Institute of Management, Havard Business School

Work

Management Guru/Business professor, University of Michigan

Key Insight

Billions of consumers await at the "bottom fo the pyramid"

Susan-berfield-photo-200x200
Berfield writes about retailers, restaurants, and other consumer companies for Bloomberg Businessweek. Follow her on Twitter @susanberfield.

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