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Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
Too little, too late
Anders DrejerProfessor of Strategy and Business Development at Aarhus Business School, Denmark, and author of ten books, among them Strategic Management and Core Competencies – Theory and Application (Quorum Books, 2002), and numerous articles in international journals.
The Future of Competition: Co-Creating Unique Value with CustomersC.K. Prahalad and Venkat RamaswamyPublished by Harvard Business School Press
Disappointed. I have thought about it for a long time, and hesitated, but have decided to use this harsh word to describe my overall sentiment towards The Future of Competition: Co-creating Unique Value with Customers by C.K. Prahalad and V. Ramaswamy. There are several reasons for my disappointment – first, there are always high expectations for a new book by C.K. Prahalad (even without Gary Hamel), so it may be hard to deliver consistently on those hopes. Second, and more importantly, the book fails to investigate what I consider its most important theme. Third, what is investigated in the book hardly qualifies as either new or very visionary. This points towards my fourth criticism – the timing of the book is questionable and perhaps my reaction would be different had it been published three or four years ago.
However, you may think differently, so let me start by describing the book to you. The starting point of the book is twofold. First, the authors rightly acknowledge the paradigm shift in society and business that is unfolding – and, mind you, unfolding fast and at accelerating speed. These years are taking us from the industrial society to a new form of society based on network technologies, new demands from customers and, hence, new markets and new forms of organization with new ways to create value for customers. Second, Prahalad and Ramaswamy observe that the new forms of organizations probably should not be found among the dot.com types of firms that were so hyped in the 1990s and that traditional industrial organizations may be around for some time to come. The authors conclude that the organizations of the future will be a third kind where the characteristics of traditional organizations and dot.com organizations have merged. This I found very inspiring and enlightened. The writers also try to avoid the trap of either-or – which is so common within the management literature these days – and instead try to look at ways to nullify the so-called dualisms of managerial life.
However, the book is not a discussion of the emerging markets and corresponding third form of organization. Instead, Prahalad and Ramaswamy prefer to discuss a number of aspects related to the emerging markets and organizations of the future. The new markets are represented by a new class of customers, who – driven by information access, networking, a global perspective and experimentation – demand new kinds of value. The new value is customer centered, personalized and unique and can only be created by co-production between customer, company and (other) collaboration partners in a network structure. This is the gist of the main part of the book. From this foundation, a set of issues is also discussed, too many to cite here. Of particular interest are the new innovation processes in the emerging markets and strategic management in the new firms and markets. In the future, innovation will be based on dialogue and close interaction, according to the book, which is a far cry from the rational company-oriented technology push/market pull model of the industrial age.
As for strategy, Prahalad and Ramaswamy discuss a number of issues related to strategic thinking as a collaborative, dialogue-based process of discovery. This, I might mention, is not far from what has been state-of-the-art strategy theory for the last few years and is no news.
Instead, I would have liked to see a discussion of the third form of organization that Prahalad and Ramaswamy start their book by proposing, seen in its proper historical context and complete with a full set of characteristics ranging from strategy to structure and culture to competencies and employees. Such a book is needed right here and now. The authors' discussion of emerging markets and value creation in these markets was more pertinent three or four years ago. Furthermore, it is my belief that we actually got this discussion from others at the time. I recall the excellent The Experience Economy – Goods and Services are no Longer Enough by Joe Pine II and J.H. Gilmore (Harvard Business School Press), which discusses many of the same issues as Prahalad and Ramaswamy but was published in 1999! Also, the important work of Von Hippel on collaborating with suppliers and users in design and innovation ought to be mentioned. The authors may be forgiven the oversight of one or two books, of course, but the issue of timing of this book is an important one – this is not the right book at the right time.
Having said that, the book is well written and full of many interesting examples that firmly show me that C.K. Prahalad as an academic and writer still has a lot to offer without the help of Gary Hamel – perhaps even more than with Mr. Hamel? So for those who have not yet caught a glimpse of the emerging markets to come or have not read the earlier contributions to this field, this is a good book and a nice read. None the less, I was not inspired or provoked and I had expected this much and more from the book. So, disappointed.