Business Insight : Book Review: The New Age of Innovation

Innovation is the watchword in the present dispensation. For companies, it is innovate or perish. For individuals who are affiliated with organisations or are entrepreneurs in their own rights, there is the ever present need to add value, to be creative, to prove one’s worth on a daily, if not minute by minute basis. C.K. Prahalad International bestselling co-author of “The Future of Competition, Competing for the Future and The Fortune at the Bottom of the Pyramid”, teams up with Professor of Business Information and Technology, M.S. Krishnan, to provide strategies that will spur innovation and creativity within institutions, organisations and in societies. The New Age of Innovation focuses on building innovative organisations through customer service. An enviable customer service culture is something that Rwanda is currently trying to build into its national psyche, in the nation’s aspirations to develop a world class service and knowledge based economy. That the customer is king is an age-old truism. Prahalad and Krishnan take this ancient cliché several steps further. The authors state that, in fact, the customer’s place in an organisation service is not only primary, but that the customer should in fact be a co-creator of all products designed with him in mind. No longer should a firm, organisation, or individual on their own, create a product with the customer in mind. Systems should be designed in such a way that products are created together with the customer or client, and all parts of the system, be it the Human Resource Department, Accounting, Communication etc should all be connected to this process. The key, according to the authors of The New Age of Innovation is that even if an organisation has 100 million consumers, it must learn to focus on one consumer at a time. “The focus is on the centrality of the individual.” In this light, organisations will have to concede to the reality that they are always unable to completely satisfy the yearnings of one consumer at a time and should be open to “access resources from a wide variety of other big and small firms in the global ecosystem.” This means that the “focus is on access to resources, not ownership of resources.” A good example is the Apple iPod. Because the emphasis is on consumer satisfaction, it is a devise manufactured with partners from every corner of the world. “The disk drives are made by Toshiba, display modules by Matsushita and Toshiba in Japan, SDRAM memory by Samsung in Korea, and video processors by Broadcom, A U.S. firm.” Other illustrations given include Amazon and eBay, Google and Facebook. In a striking statement, Prashnan and Krishnan submit that “competition favours those who spot new trends and act on them expeditiously.” CEOs, entrepreneurs, managers and investors must have a “nose for smelling new opportunities and be able to respond adequately by creating processes and mapping out strategies within the organisation to address such opportunities. The book is helpful for sharing the burden of creativity and innovation between the organization and the customer. This implied that it is the mandate of the organisational heads to actively invest in and seek out customer participation in the creation of products and services. However, the book is heavily focused on examples from the United States and India. Very little example of emerging economies and the unique challenges they face are provided. In the case of East Africa for instance, there is little advice directed at how companies who have to face the threat of political instability from their governments, or fluctuations in economic policies due to dependence on commodity export can weather such external environmental challenges in order to maintain a culture of creativity and innovation. In Prahalad and Krishnan’s book, the political and social external environments are working perfectly and are highly supportive of the economic policies of the organizations being discussed. The heavy reliance on United States’ based companies portrays the book as unable to connect with the existing realities of other parts of the world such as found in Africa, Asia, Latin America and the Caribbean. Author: Professors C.K. Prahalad and M.S. KrishnanPublishers: McGraw Hill BooksYear: 2008 The Business Insight is brought to you courtesy of the Department of Research, School of Finance and Banking