The New Age of Innovation by C K Prahalad, M S Krishnan

I had to read this book The New Age of Innovation as a part of my professional requirement. To be able to talk about what the gurus of Innovation have to say in their latest book. The book has been launched in various cities with the author’s tours. Huge publicity on all kinds of media, and through the paid seminars.

The New Age of Innovation by C K Prahalad, M S Krishnan

The book talks about one major new concept. Rather I would say documents it in the form of a model as this concept has always existed in certain segments. The concept is N=1, R=G. This primarily means that to serve one customer, you have to access/use/leverage global resources. A corollary to this is that you have to customize the offerings for each customer and cater to their unique requirements.

To do this there are certain capacities/capabilities and flexibilities that you need to build in your business systems. In your human capital and your geographical reach. There are two diagrams in the book that summarize the whole book.

Transformation

The first one is a diagram showing a transformation from ‘one organization serving multiple customers’ to ‘many organizations or global resources coming together to serve a single customer’. The second diagram is the house kind of structure which says to enable N=1, R=G. You need to enable your technical architecture and your social architecture. This is all explained in the first two chapters.

Technical Architecture

In the next three chapters, the authors explain the technical architecture. They emphasize the need for IT, the commodity and non-commodity part of IT. The need for analytics and the way analytics can contribute to the insights for the next innovations in the organizations. How legacy systems need to be replaced to make the organization more flexible to accommodate the N=1, R=G model. It presents a case of a lot of Indian companies that have adopted this model and have built flexibility in their systems. He makes a case for the strategic importance of IT. How organizations can not afford to write it off as a commodity.

Mindset Changes – The New Age of Innovation

In the next three chapters, he explains the mindset changes that the managers need to go through to accept and be the change that would enable the organization for this new model. It talks about the new requirements in talent management. Which again needs to be both flexible and mobile. The authors also talk about the role of leadership in bringing in these changes in the organization.

Concept

While I like the way the concept has been packaged and presented, I am not sure if I agree with the universality of this concept. It is definitely applicable to the service industry. But it had been there in that industry in some basic form. Say in medical services, each case is a unique case. And a doctor or a surgeon has to bring different resources, maybe from different sources every time to serve the patient.

The authors themselves talk about layers in the structure that are commoditized. These commodity providers obviously do not adhere to this model. They would still go with standard/universal offerings. Everything else will be designed according to their standards.

At times the book gives a feeling of being written for IT companies. Especially those having a major base in India. You get to see a lot of their point of view. I wish there were as many cases or examples from old traditional companies who have transformed or remodeled themselves to adapt to the model proposed in the book.

It is an easy read for anyone who has been a part of the business at any point in time. Has a lot of case studies and examples.

Thanks, Shankar for gifting me this book.

Buy this book – The New Age of Innovation: Driving Cocreated Value Through Global Networks by C K Prahalad, M S Krishnan at Amazon India.

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