8/8/2019 Book Review-The New Age of Innovation-Parag Ghatpande

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Book Review- New Age of Innovation- Parag Ghatpande

Book Review-The New Age ofInnovation

 Introduction:

The New Age of Innovation: Driving Co-created value through Global Networks authored

by C.K. Prahalad and M.S.Krishnan, Tata Mc-Graw-Hill Edition 2008, 278 Pages, ISBN 13:

978-0-07-024861-8, ISBN 10: 0-07-0244861-3. The Central theme of the book revolves around

the new managerial demands in business that requires new sources of value creation. The

Authors basically have a viewpoint that the demands have created an N=1 and R=G

environment, where various companies needs to consider each customer individually and

customize their products accordingly by utilizing resources/ suppliers from across the

Globe. The Authors argue that in this age of technology and need for constant innovation;

firms should have the ability to reconfigure its resources by focusing on detailed, crystal

clear business processes. Another important concept being discussed in this book is focus

on co-creation by expanding the supply network to R=G emphasizing more on detailed

analysis on consumer behavior and industry trends and identifying the right opportunities

which can create a great competitive advantage. C.K Prahalad and M.S.Krishnan have

beautifully explained the New House of Innovation whose dome is the Social Architecture

of the firm whereas the two pillars N=1 and R=G rests on the strong base of technical

architecture of the firms which are intended to develop the flexible and resilient business

processes and focused analytics. The latter half of the book describes that how to implement

the new strategies in the organizations. Any change is not liked by firms/ individuals who

are accustomed with the normal processes in firm and the book clearly describes the

impediments occurring while transforming into N=1 and R=G system. 

 Analysis:

Mr. Prahalad and Mr. Krishnan explains that the industrial system has been changing for a

long time and now it has reached a modulation point where firms need to evolve its

business processes that were traditionally followed and they should formulate differentstrategies to survive in the fierce competition and become successful. The conventional

Porter’s strategies of low cost and differentiation are not followed by firms as their core

strategies and firms must perceive the N=1 and R=G strategy.

N=1: Focus on importance of individual customer experiences & then customizing the

product. Best Example is Dell.

8/8/2019 Book Review-The New Age of Innovation-Parag Ghatpande

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Book Review- New Age of Innovation- Parag Ghatpande

R=G: Focus on obtaining access to resources globally and domestically where firms

leverage these resources to co-create a personalized experience to individual customers. 

Best example to elaborate on these concepts is today’s Social Networking world. The focus

of youth on websites like MySpace, YouTube, Orkut and Facebook suggests that a whole

new generation of new customers will be growing up and expecting to be treated as uniqueindividuals and they will have skills & propensity to engage in market place which is

essentially defined as N=1.

The Innovation opportunities come from deep understanding of the needs of the

individuals and not the average of all individual’s needs. The book highlights the link

between strategy, business models, and operations of any firm focusing on analytics and

need for managerial intervention to identify trends & reveal unique opportunities. The fact

that each organization is unique in its culture and technical capability and consists of

"legacy skills, managerial mindsets and technical systems” should be well appreciated. The

Authors discusses the Business Processes as the way a company can gain competitive

advantage by reconfiguring resources in real time. The Analytics information calls for

sophisticated systems that can mine every scrap of data, identify trends, and reveal

opportunities. The emphasis is on mining internal information but the part about R = G

seems to have gotten lost. IT Matters is about the technical architecture for innovation.

Organizational Legacies, is about how companies have cultures and values and those

cultures and values need to change if the business is going to change successfully. The main

illustration in this chapter is the first Indian firms to offer outsourcing. The authors don't

seem to know about the second wave of outsourcing firms, mostly founded after 2000 who

are modeling their business plans on what to do differently than their predecessors.Efficiency and Flexibility highlights a challenge that every company that has ever tried to be

both nimble and efficient has faced. Dynamic Reconfiguration of Talent makes the point

that you need to treat employees and vendors as unique individuals. The examples are

good, but firmly rooted in IT. An Agenda for Managers, promises that the author's model is

the one that will be the basis for innovation and value creation. There's good advice like

"learn by doing, take small steps."

Conclusion:

The book discusses the complex issues in a simple manner and a number of examples are

used to make the reading lively and interesting. A great use of figures further helps the

reader in understanding intricately woven issues easily. The book is a must read for policy

makers, business managers and students of business to gain a sustained competitive

advantage in the age of innovation.