C K Prahalad: "Don't Try to Eat the Whole Elephant"

Laying out how Apple outstrips Facebook, Havas Media Lab's Umair Haque argues we should start thinking of platforms as markets, like Apple.

"Apple took something terminally closed -- the mobile value chain -- and pried it radically open," he writes.

In doing so, Apple and Google and a handful of others have opened up a new way of doing business, a new supply chain that involves myriad players of all sizes.

Traditional companies can -- and must -- get on board, argues best-selling author strategy guru C K Prahalad, doing so by means of "co-creation" and "global resourcing".

"How do you create a consistent, personalized experience, one touchpoint at a time? How to get highly distributed action and at the same time extreme consistency: that's the challenge," says Prahalad.
While Haque calls for revolution, Prahalad's more interested in evolution, and his latest book, "The New Age of Innovation", takes traditional businesses through the process from start to finish. Here, he explains how to prepare for change.

• Get the foundations right ICT is very important. But before embarking on a big IT spend to create a new business model, make sure you understand the underlying forces that will take you to N=1, R=G.
  You have to have faith: otherwise, every time there's a minor problem in the implementation, you'll change direction. Just because you are going north, doesn't mean it's going to go in a straight line.
  It's a question of taking a lot of small steps: don't try to eat the elephant in one big bite.
• Run small experiments Start with clear specifications and a clear idea of gaps by auditing your own internal structure.
  Then create small internal experiments to move one step at a time rather than turning everything upside down.
• Separate processes from analytics and ICT First consider business processes. How do you get clearly articulated, well documented business processes that are resilient and capable of change?
  Then, ask how you can get good analytics that understand the implications of N=1, R=G. It's not historical understanding of what happened with sales forecasts last week or last month -- to help customers requires real-time analytics, and the real-time engines for connectivity, for clearing messages between the company and the consumer. That's the starting point.
• Re-train your managers The social architecture -- the mindset of managers -- must change. You cannot procrastinate. People must be empowered to act. Real time action requires a managerial mind-set. It also requires distributed leadership -- a shared agenda commonly understood, but access to information at very distributed levels.
  Nobody in senior management can act on these issues in real time. It has to be totally distributed -- a call centre operator, a customer service representative, all must be able to take action.
  This empowers people at all levels of the organisation. Break the hierarchies and move to an orientation where people with the best information and closest to the problem can act in real time.
• Ensure brand consistency Everyone should act in a way that's consistent with the broad philosophy of the company, so you enhance your brand, you enhance the experience of consumers.
  We have a lot of training to do, allowing people to let go, enabling people to act at all levels, but sharing the common information -- there should be visibility across the organisation, not just at one level.
  Consistency of management direction and small, calculated steps are the keys to ensuring it's not disruptive at all.