Review: The Fortune at the Bottom of the Pyramid [Updated 5tyh Anniversary Edition]

5 Star, Capitalism (Good & Bad), Change & Innovation, Economics, Intelligence (Wealth of Networks), Nature, Diet, Memetics, Design, Peace, Poverty, & Middle Class
Amazon Page
Amazon Page

C. K. Prahalad

5.0 out of 5 stars Nobel Prize Material-Could Transform the Planet [But Most Seem to Have Missed the Point], October 24, 2013

There are some excellent and lengthy reviews of this book so I will not repeat anything that has already been said. This book review should be read together with my review of Stuart Hart’s Capitalism at the Crossroads: Next Generation Business Strategies for a Post-Crisis World (3rd Edition) which points to several other related books, and Kenichi Ohmae’s book, The Next Global Stage: Challenges and Opportunities in Our Borderless World (paperback) All three are published by Wharton School Publishing, which has impressed me enormously with its gifted offerings.

Here’s the math that I was surprised to not see in the book: the top billion people that business focuses on are worth less than a trillion in potential sales. The bottom four billion, with less than $1000 a year in disposable income, are worth four trillion in potential sales.

In combination, Prahalad and Hart make it clear that business suffers from the same pathologies as the Central Intelligence Agency and other bureaucracies: they are in a rut.

I will end by emphasizing that I believe this author merits the Nobel Peace Prize. As the U.S. Department of Defense is now discovering, its $500 billion a year budget is being spent on a heavy metal military useful only 10% of the time. Stabilizization and reconstruction are a much more constructive form of national defense, because if we do not address poverty and instability globally, it will inevitably impact on the home front. This author has presented the most common sense case for turning business upside down. He can be credited with a paradigm shift, those shifts that Kuhn tells us come all too infrequently, but when they come, they change the world. It may take years to see this genius implemented in the real world, but he has, without question, changed the world for the better with this book, and make global prosperity a possibility.

Continue reading “Review: The Fortune at the Bottom of the Pyramid [Updated 5tyh Anniversary Edition]”

Journal: Interview with C. K. Prahalad

Commercial Intelligence, Communities of Practice, Ethics, Gift Intelligence, Key Players, Mobile, Peace Intelligence
Full Interview Online
Full Interview Online

Five years ago, C.K. Prahalad published a book titled, The Fortune at the Bottom of the Pyramid, in which he argues that multinational companies not only can make money selling to the world’s poorest, but also that undertaking such efforts is necessary as a way to close the growing gap between rich and poor countries. Key to his argument for targeting the world’s poorest is the sheer size of that marke.

Knowledge@Wharton: In the five years since The Fortune at the Bottom of the Pyramid was published, what impact have your ideas had on companies and on poor consumers?

C.K. Prahalad: The impact has been interesting and profound in many ways — much more than one could have expected. For example, several of the multi-lateral institutions — The World Bank, UNDF [United Nations Development Fund], IFC [International Finance Corporation] and USAid — have fundamentally accepted the idea that involvement of the private sector is critical for development…. I asked 10 CEOs of companies as diverse as Microsoft, ING, DSM, GSK and Thomson Reuters to essentially reflect on whether the book has had some impact on the way they think about the opportunities. Uniformly, everybody — whether it is Microsoft or GSK — essentially says not only that it has had some impact, but that it has changed the way they approach innovation and … new markets.

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Review: The New Age of Innovation–Driving Cocreated Value Through Global Networks

4 Star, Best Practices in Management, Change & Innovation

new ageBrilliant in Isolation, Annoying for Self-Referential Insularity, August 24, 2008

C.K. Prahalad

This book is certainly worth reading, and especially by those executives that do not read much (the ones with the big egos and short attention spans). I admire the authors, but I am also increasingly annoyed by the annoying self-referential insularity that charactizes “star” authors who seem to not have read much by anyone else. Publishers need to begin demanding a proper literature search and more due diligence in “connecting” the reader to dots created by others.

Let’s be crystal clear: Stewart Brand, the original editor of the Co-Evolution Quarterly and the Whole Earth Review, and the founder of the Silicon Valley Hackers Conference, did more inthe 1970’s and 1980’s for the concept of co-creating value that this pair will ever achieve.

More recently, in the 1990’s and the past ten years, Collective Intelligence, the Power of Us (a Business Week cover story 20 June 2005 that the author’s do not deign to notice), Wisdom of the Crowds, Smart Mobs, and so on, have all focused on the core concept of co-creation of value.

This book loses one star for its pretentions as an immaculate conception of a core concept that has been understood by the rest of us for the past forty years.

Now, having vented in defense of other scholars and practitioners that the authors should have respected, here are my flyleaf notes that easily warrant a solid four.

+ Roadmap for business leaders that does a superb job of showing how strategy and business processes both need to receive more respect as well as deliberate management.

+ Every individual must be treated as a singular client, and no firm has the resources to do it all–being able to connect the single client with a need and the single third party able to meet the need may be the ultimate business process.

+ Most interesting to me, as a deep admirer of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, the book that showed me my final calling as intelligence officer to the public, for which I and 23 others created a non-profit, the authors drop the one billion extreme poor from their client list, and focus only on the 4 billion above that line.

+ Properly embraced, these four billion are billed by the authors–accurately and wisely in my view–as a major source of innovation and need that can power the global economy by 2015.

+ Role of Information Technology (IT), which Paul Strassmann has demonstrated is often a negative return on investment, is to bridge the gap between strategic intent and “capacity to act.”

+ Analytics in this book are primarily mathematic and data mining of existing digital information, with a token reference to external information. “Intelligence,” “decision support,” “competitive intelligence,” and “commercial intelligence” are not terms to be found in this book. The authors appear to be oblivious to the existence of the Society of Competitive Intelligence Professionals (SCIP) founded in 1986 and just now beginning to reach its potential.

+ The authors place great emphasis on the importance of the individual employee and customer, and again arouse my ire as they fail to refer back to such giants as Wilensky, Carkhuff, or Cleveland (see list of 10 books they either have not read or have chosen to forget).

+ Global standards plus local effectiveness is the key to mobilizing four billion new consumers.

+ They emphasize the importance of understanding the “hidden costs of the inflexible and archaic internal systems that exist in most firms.” They might also have thought to cite Ben Gilad on how most information reaching CEOs is late, biased, subjective, incomplete, and often wrong.

+ The three core concepts for the manager in a hurry to retain are: first, treat all others (consumers, employees, suppliers, regulators) as co-equals; second, do continuous analytics; and third, be ready to be turn on a dime. Efficiency is TIRED, flexibility (which means some redundancy) is WIRED.

For myself the real eye-opener in this book was the several case studies of what FedEx and others are doing with the detail that they amass from making their entire system transparent–not only are they tracking every package, but also every link and every inquiry–and then making sense of that to offer new services to specific INDIVIDUALs. I also appreciated the references to IBM’s “ecosystem” of individuals and talents, and the emphasis on how many complex tasks can be “de-skilled” and migrated to very low-cost largely uneducated individuals, spreading the wealth while reserving the higher loads for increasingly scarce “full operational capability” programmers and managers.

I liked the authors’ reference to A. V. Dhamakrishnan of Ramco India, and his focus on “evidence-based management” (page 165. I am considering publication of a work by many others on Health Intelligence, and the term I have found that rocks the health industry every time is “evidence-based medicine.”

The authors conclude that social networks are now moving into business-oriented collaboration platforms, and provide a listing of offerings that is long and interesting but not at all complete. Visit ArnoldIT.com for the real edge of the IT envelope.

This is a very fine book. It may be that publishers need to commission the literature survey, and then identify others to write forewords and afterwords that connect the dots. In no way do I demean the brilliant building block provided by this book–I am simply irritated that it hangs in space as an immaculate conception with no respect demonstrated for the considerable work by others–and to publish a book in 2008 and not even note the Business Week cover story of 20 June 2005 on “The Power of Us,” sorry, but that merits a spanking all by itself. Due diligence, anyone?

Other books, both old and new:
The exemplar: The exemplary performer in the age of productivity
The Knowledge Executive
Organizational Intelligence (Knowledge and Policy in Government and Industry)
Out of Control: The New Biology of Machines, Social Systems, & the Economic World
Smart Mobs: The Next Social Revolution
Wikinomics: How Mass Collaboration Changes Everything
The Wealth of Networks: How Social Production Transforms Markets and Freedom
Group Genius: The Creative Power of Collaboration
Collective Intelligence: Mankind’s Emerging World in Cyberspace (Helix Books)
Collective Intelligence: Creating a Prosperous World at Peace

The authors might wish to demonstrate in their writing that which they preach so assidiously in this book.

Who’s Who in Collective Intelligence: Yochai Benkler

Alpha A-D, Collective Intelligence
Yochai Benkler
Yochai Benkler

Yochai Benkler is the Berkman Professor of Entrepreneurial Legal Studies at Harvard, and faculty co-director of the Berkman Center for Internet and Society. Before joining the faculty at Harvard Law School, he was Joseph M. Field ‘55 Professor of Law at Yale. He writes about the Internet and the emergence of networked economy and society, as well as the organization of infrastructure, such as wireless communications. www.benkler.org.  Below is his Foreword to the book as re-mixed by Hassan Masum.

The Wealth of Networks:
Highlights Remixed

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Review: The Fortune at the Bottom of the Pyramid–Eradicating Poverty Through Profits (Hardcover)

6 Star Special, Capitalism (Good & Bad), Economics, Future, Values, Ethics, Sustainable Evolution, Voices Lost (Indigenous, Gender, Poor, Marginalized)

Amazon Page
Amazon Page

5.0 out of 5 stars Nobel Prize Material–Could Transform the Planet,

December 9, 2005
C.K. Prahalad
There are some excellent and lengthy reviews of this book so I will not repeat anything that has already been said. This book review should be read together with my review of Stuart Hart’s “Capitalism at the Crossroads,” which points to several other related books, and Kenichi Ohmae’s book, “The Next Global Stage.” All three are published by Wharton School Publishing, which has impressed me enormously with its gifted offerings.

Here’s the math that I was surprised to not see in the book: the top billion people that business focuses on are worth less than a trillion in potential sales. The bottom four billion, with less than $1000 a year in disposable income, are worth four trillion in potential sales.

In combination, Prahalad and Hart make it clear that business suffers from the same pathologies as the Central Intelligence Agency and other bureaucracies: they are in a rut.

I will end by emphasizing that I believe this author merits the Nobel Peace Prize. As the U.S. Department of Defense is now discovering, its $500 billion a year budget is being spent on a heavy metal military useful only 10% of the time. Stabilizization and reconstruction are a much more constructive form of national defense, because if we do not address poverty and instability globally, it will inevitably impact on the home front. This author has presented the most common sense case for turning business upside down. He can be credited with a paradigm shift, those shifts that Kuhn tells us come all too infrequently, but when they come, they change the world. It may take years to see this genius implemented in the real world, but he has, without question, changed the world for the better with this book, and make global prosperity a possibility.

NOTE: This book comes with a DVD that is an extraordinary value all by itself. Wharton Publishing has really delivered a one-two intellectual punch, first with the book, and then with the DVD which as a short introductory presentation by the author, and then a series of 2-4 minute multi-media snap-shots of the various case studies and the “faces of poverty” transformed. I am really impressed–I’ve had Wharton MBAs work for me before (but please note, it was Michigan MBAs that excelled in the work I am reviewing(, examining OSS.Net and how to take it to the next level, but the work reflected in these case studies and by the author as a manager of budding intellects has taken my respect for Michagan (and Wharton) to a whole new level.

Note: while this book is totally unique, and inspired my idea to create the Earth Intelligence Network and be intelligence officer to the poor, organizing 100 million people to teach the five billion poor “one cell call at a time,” there are several other books that have given me enormous hope, and I list them below.
One from Many: VISA and the Rise of Chaordic Organization
Democracy’s Edge: Choosing to Save Our Country by Bringing Democracy to Life
Escaping the Matrix: How We the People can change the world
All Rise: Somebodies, Nobodies, and the Politics of Dignity (BK Currents)
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
Society’s Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
The Tao of Democracy: Using Co-Intelligence to Create a World That Works for All
The Wealth of Networks: How Social Production Transforms Markets and Freedom
The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization
Revolutionary Wealth: How it will be created and how it will change our lives

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