CK Prahalad at Nyenrode


“Man did not come out of the stone-age because we ran out of stones. Man innovated,” he says. “Man will not run out of fossil fuel to find the next big thing. We will innovate.”

It has been a long 34 days and now I am in the last leg of my trip before heading home. I am in Bruekelen, Netharlands. Outside this tiny habitat, itself discernable only by its suburban status to Amsterdam – is a medieval palace by a canal that now is home to the largest private business university in the Netherlands. It is the Nyenrode University.

Nyenrode has a strong Indian connection; it has many Indian students, some great Indian faculty, and association with the Indian Institute of Management and last year, ex-President Abdul Kalam was here to receive an honorary doctorate. I come here often, sometimes to deliver a lecture, sometimes to listen to someone else. Today I am here to participate in a roundtable conversation on sustainability. Among others, a great reason to be here is to listen to Dr. C.K. Prahalad who would be the keynote speaker.

Yesterday was a wet day in Netherlands; it rained like an incessantly weepy child. You could not make out through the haze that the daffodils are breaking free and the tulips are like ballerinas held at the wings before a grand performance. But today, the Sun has come up nicely. And, as in a prelude to a grand musical, just as smaller artistes come on stage to perform with aspiration and abandon, I find beds of colorful spring flowers asking to get noticed like tiny ballerinas before the tulips come on stage.

Roundtable Participants with CKP - I am in the red tie

The Little Ballerinas

We are now at the courthouse building of the palace where the roundtable is in session. To many westerners, Dr. C.K. Prahalad defines the idea of India. I have known him for two decades now and each time I listen to him, it is an uplifting experience. In times like this, you need to hear what thinkers like him see as tea leaves in the cup. “You can not be an academic unless you are an optimist,” he says. It sounds simple and profound just like he makes his point on a dozen other issues on sustainability.

Convert sustainability from being a concern to an opportunity for innovation. That is the core of his message. He goes on to say that we need to be looking at “next practices” and not the best practices. If every one is emulating everyone else’s best practices, we will all stagnate in a mediocre world.

Extortion and guilt giving may work to raise the temperature on the issue, but they do not sustain. We must focus on wealth creation – doing well and doing good – at the same time!

Every system in the world is under great strain.

It is not about the trees we cut; it is about the microbes we destroy that science has not even started to know.

All the oceans are under peak harvest level.

Ozone layer depletion can actually blind people.

How did it all happen?

In the last 70-years, while taking care of the consumptive needs of just 1.5 billion people, we created the ecological damage. Now 1.5 billion people will be added to that number in India and China alone – and combined with people moving up the ladder elsewhere, 2 billion new members will be added to the world’s middle-class. And that leads us to unimaginable stress on the system – the Planet will survive though people may not, unless we pay urgent attention to the underlying issues.

The impact of pollution, destruction of fisheries, and destruction of forest land – crosses national boundaries.

Today, the eco-footprint of an American is 9.6 hectare; that of a Russian – 4.4, for a Chinese it is 1.6 and for an Indian, it is .8. In the next few years, that .8 will double but the bigger issue is that it will double for a huge mass of people.

In dealing with sustainability, regulation and compliance take high priority no doubt, but they are not enough. Large forums are critical to solve the problem, even if that sounds counter-intuitive.

Wal-Mart buys probably $25 billion Chinese goods. It can discipline its suppliers. It has the power, as do Marks and Spencer. But could these companies also educate their customers? Of course. Wal-Mart alone could educate 100 million people who come to throng its isles.

We need to think of big business as an ally. Not adversary.

The current world of economic uncertainty and volatility will do big business good. These would force issues. They push the idea of sustainability from Corporate Social Responsibility (Guilt Money, he calls it) to core business and draws this interesting 5-box model on two axis: Integrating sustainability with the core business and Innovation.

At the bottom is compliance; it is the least innovative. But, an opportunity none the less. Think of the US. Different states have different pollution norms. Within California, there are different norms for San-Francisco and San Diego. The US and Europe and Asia have different norms. What savings could be made if we pushed standardization as the starting point and compliance as a driver for sustainability?

Then look at just operations – operations of companies and governments. Telecommuting will become the norm in the years ahead. AT&T saves $500 million a year in space alone because people are working out of home. When UPS mandated a simple idea of no left turns for their delivery trucks and a last-in-first-out idea for package delivery, they saved 3 million gallons of gas. Mathematical algorithms can make you green!

Then look at products and services. CISCO re-conditions routers and gives them back! Random House has mandated that it would use 30% uncoated paper. Unilever says 100% of its palm oil would be sourced from sustainable agriculture.

If Coke reduces water usage by 20%, it would save 50 billion liters of the precious resource! Operations have enormous potential of saving if we choose to innovate.

Think of detergents that need to be transported to take up store space. What if the same washing capacity is packed in lesser volume? Compact the detergent.

What if in cold countries, washing machines could work with cold-water detergents?

What if Fedex and DHL and UPS did not carry fat printed reports across the world but digitized them at the source – teleported them over satellite links and printed them closer to where the delivery is needed – like at a Kinkos for Fedex and not lugged the reports across oceans.

What about learning bio-mimicry?

The best cements are made by corals. But they do not pollute.

Cement plants across the world produce 1 ton of carbon emission for that one ton of cement – every time.

What about waterless detergents? After all, dirt is a deposition on substrate surface.

What about converting coal to methane without sending miners down the shaft?
We could ask bio-organisms do the work.

How about eatable packaging? Imagine the billions of shampoo and pan masala sachets that choke the drains, kill the microbes and just sit there without becoming soil.

The Civil Society and Big Business must work together to make the breakthroughs happen.

CKP thinks we will come out of the current crisis, but how?

CKP Speaking

CKP Speaking

“Man did not come out of the stone-age because we ran out of stones. Man innovated,” he says. “Man will not run out of fossil fuel to find the next big thing. We will innovate.”

For that, all of us must think big. And start small.

Do not eat the elephant all at once.

Listen to everyone; listen to the people who say “No”. In free societies, people must learn to build coalitions. Coalitions are the future.

Strategy is not about unhindered march forward. You must learn to go two steps forward, one step sideways, and sometimes, another backward and repeat the process.

The current crisis is actually very good. The eco-system we will build will be very different from the economy we leave behind.

Organization size for coping with complexity has gotten out of hand. A 7-feet-tall person cannot stand to attention for an hour; his legs would simply break up. Man is not inherently designed for a 7-feet structure. Our big fat organizations falling is all due to inherent un-sustainability.

We need to learn how to build scale without size.

Roundtable Participants with CKP - I am in the red tie

Roundtable Participants with CKP – I am in the red tie

It is well past eight in the evening now. Outside the castle’s courthouse where we are gathered in a big circle discussing the future of the world – more importantly – the future of man, the spring flowers have gone to bed. Tomorrow, I must leave before they are up. By the time I return to Nyenrode again, they would all probably be gone. I feel a sense of emptiness, a certain longing whenever it is time to leave this beautiful country of canals and castles, tulips and windmills.

But Bangalore is waiting and so are all of you to whom I lovingly bring a piece of my world every now and then. So, I shake hands with the wise man and turn to my room. He says in parting, it is about quality of leadership. Someone must say it got to be done without knowing the details. It is about building wellness measures. We must address the issue with the entrepreneurial spirit. Profits are a better driver than fear, guilt, coercion and policy. And finally, it is about respect for nature.

Man must live in harmony with nature. It is time to give up the desire for mastery!

Comments
Abhijit Jadhav Says
Friday March 13th 2009

Thoughts of Dr. C.K. Prahalad has always been thought provoking.

Idea of sustainable development is quite attainable and will definitely shape future direction of our business, especially in developing countries where there has always been lesser concern for the nature.

Thanks for bringing his thoughts through your blog.

Keep Posting

Abhijit Jadhav Says
Friday March 13th 2009

Thoughts of Dr. C.K. Prahalad has always been thought provoking.

Idea of sustainable development is quite attainable and will definitely shape the future direction our business, especially in developing countries where there is always been lesser concern for the nature.

Thanks for bringing this Great Thinkers thoughts through your blog.

So Keep Posting

Anand Says
Friday March 13th 2009

“In times like this, you need to hear what thinkers like him see as tea leaves in the cup. “You can not be an academic unless you are an optimist,” he says. It sounds simple and profound just like he makes his point on a dozen other issues on sustainability.” – Good to listen that you are meeting him, it would be great if you can share points and give your opinion also on sustainability.

Regards,
Anand

Ramesh Says
Friday March 13th 2009

Amen. Well said. I think sustainability will gather even more impetus if Joe Public can be convinced that this is not at the expense of development. Today its too often an either/or argument. But it can also be “and” and I believe that will be the point when sustainable behaviour will become a natural way of life.

Lubna Says
Friday March 13th 2009

Dear Subroto,
This post is poetic. You brought nature in Bruekelen alive for us. I initially didn’t want to post any comment here and detract from the beauty of the above piece. But just couldn’t resist replying to this post – guess this blog has become an addiction.
As regards global warming there are just no easy answers for a solution. There are way too many complex issues involved.
Costs: Green products are expensive and till they remain expensive as compared to traditional products, the consumer demand is unlikely to be there. To illustrate: only if electricity costs zoom up so high, will apartments install solar panels for providing warm water – the saving on electricity costs will narrrow the gap between buying a solar panel v/s just installing an electric geyser in the bathroom.
Use of policy measures together with creating awareness: While policy measures may not always be the answer at times penal/policy measures may work along with awareness creation. Each on its own may not have the desired effect. For example, plastic bags are no longer allowed to be used in Bombay (there was a complete clamp down a few years ago) and this project has been successful till date. The effort was a combination of education cum penal measures.
Taxes were put to good use in Ireland in 2002, with the introduction of the plastic bag tax – usage of plastic bags declined by 94% within a matter of weeks.Green tax, as it is termed has been put to good use in many countries – in the US for hyrid cars. But, if one views it in the Bangalore context, would people stop driving large cars that are fuel guzzlers merely because they get tax sops for smaller cars (or pay more taxes for larger cars)- unlikely, as it would require a complete change in mindset, as perhaps large cars are a misguided status symbol? Policies cannot be a one size fits all and will have to be carefully drawn up taking into consideration the local scene.
Use of eco friendly technology in new terrain: Perhaps, this is where eco friendly technology can help the most. Imagine the extent to which rural india could benefit through use of solar energy. Today farmers are dependent not only on the monsoons but an erratic power supply for irrigating their fields.
The Himalayan Light Foundation (An NGO) works in providing solar systems in remote Himalayan regions (predominately in Nepal) in areas dependent on expensive diseal and fast disappearing firewood. In this area it would be essential for the government, corporate entities and NGOs to get together and work together. As you said, coaliitions are the future.
I think the economic slow down has resulted in a decline in carbon footprint, at least to an extent. People are more aware of saving electricity – ights at workplaces are promptly switched off, use is made of videoconferences instead of the frequent travelling which was once the norm, to name a few instances. So there has been a silver lining somewhere!

Anil Says
Saturday March 14th 2009

There is a very bad system failure. It’s degrading, but it took so long for the best in the world to realize and bring environment into main stream. The problem is different. Humans think it takes time for the sea level to rise, so we can wait. Climate change is not just about sea level rise. There is a lot more,failing monsoons, extreme monsoons, hurricanes, cold wave in southern cities of India, water at gangotri disappearing.
Well lets see, replacing kerosene lamps is just solving the lighting and economic problem, not the climate issues. Why don’t Americans Invest in public transport instead? Donating a solar light is good, it’s not as good as replacing 1000 cars with a train.
And when it comes to corporates, why is it that a HR in the lowest management handles CSR? Why don’t they have a Chief Climate Officer or a VP-CSR? Why don’t they have a Chief Energy Officer ?
It’s high time we add “Climate Care” along with Science in Primary education.

Sunday March 15th 2009

Dear Subroto,

thanks for sharing the substance of the talk by CKP and your own thoughts in tha bargain: what a treat!
On the subject of the number one issue for this world: climatechange, lets have a look at solutions. Particularly the big solutions, which may turn out to be very small indeed.
I’m hinting at the solution curently being developed by Craig Venter and his team. On TED.org he talks about how is busy creating newly designed bacteria that can feed on CO2 and turn it into usable energy. YES, you are indeed reading this correctly. Creating newly designed bacteria. When, not if, this will be a reality all we need to do, says mr Venter, is to make sure the CO2 is fed to the bacteria at the right concentrations (a controlled not a run-away process) and we have our (literally) ‘thermostat’.
The way forward still is science, so though agreeing with there no longer beng a need for mastery in an eco-political sense, their is still a tremendous need for mastering knowledge, engineering challenges and science.
So let’s really master our challenges and kisses from the world will be our rewards!

regards
jan willem den oudsten

Gurulakshmi Hait Says
Monday March 16th 2009

Sir,

Very very informative piece.Thanks for sharing it.

Gurulakshmi Hait

lvs Says
Monday March 16th 2009

Very powerful commentary.

You are right man must live in harmony with nature. The question that arises is it possible? We are a greedy species. We like to store for the future, we want to buffer ourselves against surprises, we like to have more than we need……..

To accumulate more we have created proxy beings. These proxy beings are the front for feeding our greed. Did you know that corporations have most of the rights of human beings without being held responsible and accountable as humans are. We have learnt to plunder nature while keeping our conscience clear.

You are right we need to think innovatively. And while doing that we must factor in the needs of the environment and that of mankind.

You have put forward some great ideas. Many of these would save companies a lot of money and so would be welcomed.

savita Says
Saturday March 21st 2009

Hi Subroto:

Having been a student of Prof Stuart Hart, a colleague and co-author of CKP, in sustainable enterprises, I have made my own observations from reading as well as personal work experiences.

The issue with creating sustainable business – having seen many succeed (make an impact, yet be profitable) and those unsuccessful experiments – is the patience one needs to let it grow. Too often big companies, which really have the wherewithal, the scale, the technology, innovation capabilities – are caught in the -quarter-by-quarter – meeting shareholder expectations.

The only solution I see is in startups/small business who have the passion to pursue without the endof quarter sword hanging over their head. But they need capital to expand, experiment as well as mentoring. Unfortunately – the capital which is the key is still not there.

The other problem is the general public policy/government tax benefits. IT companies get tax benefits in India, why can’t a company like REVA get tax benefits across India to encourage electric cars. Why are we making such a big hue-cry about the NANO when it is only going to pollute the environment more.

On a different note about sustainable cities. Urbanisation is an inevitable trend, as the globalisation process and development attracts more rural migrants into the cities for job/education etc.

instead of these massive road widening projects, we need more sustainable and more importantly efficent public transportation and encouragement for electric or non-polluting vehicles. Pedestrians have no place to walk in bangalore, and for someone who loves walking/biking, I am scared of being runover.

Let’s start with making just one city in India a sustainable, pedestrian friendly, clean and green city.

The citizens are doing their bit, but we need the companies and industry leaders in bangalore to come out and talk openly on these issues. I don’t see much of that happeneing.

We are not learning lessons from Europe but want to copy the US and its ‘mismanaged/broken public transport system’.

Savita.

Krishna Says
Saturday March 21st 2009

Of late, Corporate Social Responsibility (CSR), more than an honest intention, has become a corporate fashion statement for many wealthy companies (CK is right in saying it as ‘Guilt money’). We should be thinking it as part of our hygiene just as our behaviour etiquette towards others and such ‘not-me-but-my-reaction-to-others’. In fact, it was before the advent of industrialization and mass migration to cities. People were distributed all over the land in local communities and self-sustaining the environment in their own ‘personal-ecological-interest’ without using any of today’s words laced with ‘philanthropy’ or ‘social’ tags. Today’s connected world provides such opportunities to citizens to be living where they were born and yet be as economically productive as their city-born counterparts. And take care of their ‘personal ecology’–their community land and neighbourhoods and live more healthy and green. I am sure if we divide the total available green land of the earth by its population, each one/family would get sizeable and manageable area for sustanence through private ownership. Therefore, in my view, the de-urbanization by distributing the machinery of economic productivty would be one such solution, if not utopian.
On another front, I feel the free-market ideas of capitalism has pervaded environmental concerns too, and created this ‘strage’ avatar of ‘carbon credits’. In a sense, it’s like allowing a shrimp-farmer in Nellore to pollute his entire community and redeem his sins by planing trees in alaska or amazon. Our financial wizardry (supposed to have been responsible for the current economic meltdown) have applied their ‘unproven’ models to save mother earth. Hope they don’t melt our global enviornment like they did for the global economy.

Krishna

Madhuri Says
Sunday March 29th 2009

Sir,

I had brought up a question during ur lecture @ IIM B on 28-Mar-09. You said u would prefer responding in ur blog.

The question was, though difficult it is possible to connect the dots in the past, but near to impossible to identify and connect the dots in the future. how can one develop the skill ?

Your thoughts on it please ….

Manoj Says
Sunday April 5th 2009

@Above,

Connecting the dots in professional life – for it – think out of the box. It definitely helps, past or future. Here is one good desc at Wiki – http://en.wikipedia.org/wiki/Thinking_outside_the_box

Connecting the dots – personal life – I think Mr. Bagchi has been very honest in his book “Go Kiss the World” when he says – We do not know by giving an example of the river. In fact, we do not know…nobody knows!

Parul Says
Friday April 10th 2009

Hi Subroto,

Thanks for sharing CKP’s thoughts, as he always gives you some food for thought. He talks about things which are so basic and we all know but we fail to realize the importance of that.
Keep Posting :)

Regards,
Parul

Lubna Says
Thursday April 16th 2009

Hi Rakesh,
If you look on the left hand top corner, they are all there under the heading “Columns”.
However, the individual urls are as follows:
Business World (Arbor Mentis): http://www.mindtree.com/subrotobagchi/arbor-mentis/
Times of India (Times of Mind):
http://www.mindtree.com/subrotobagchi/times-of-mind/
I re-read this columns quite often. Happy re-reading!
Cheers
Lubna

Lubna Says
Friday April 17th 2009

Hi Rakesh,
Yes, someone else also pointed out to me that you were not searching for the urls. Sorry. In fact, once I was searching for my favourite article – Job satisfaction v/s Satisfying the job and found it right here (I thought you were on a similar hunt).
Coming back to what you are saying, hmmmm….perhaps this very post, is an exhaustive coverage of CKP’s views, which many readers appreciated and we would not have known of CKP’s insights -otherwise. However, perhaps Subroto’s own views did get buried in providing us the overall coverage of the discussions at Nyenrode. I liked this post because nature was captured so beautifully in words.
Among the recent posts, I loved the article on Group Think and A Professional for the Future. This was pure “Gardener speak” as I call it.
Rakesh, I think blog posts and articles always tend to be different in style and approach. Both Arobr Mentis and Times of Mind were articles as oppossed to blog posts.
However, I am sure that another post will come along which as you say will contain the fire of the vedantic Indian mind.
But, Job Satisfaction is my eternal all time favourite and I even have it pinned on my softboard at the workplace. I doubt any article, written by anyone or even another article by Subroto, will replace this one from its top ranking!
Best,
Lubna

Niranjan Manjunath Says
Monday April 27th 2009

Dear Mr. Bagchi,

Your post brought back all my memories at Nyenrode including your visits. It has been a great pleasure and the inspiration continues to influence my life as I am jumping into the arena of entrepreneurship.

Regards,
Niranjan

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