Following on three earlier posts (Part 1, Part 2, Part 3), here’s the final set of three strategic insights contained within Chapter 1 of “The New Age of Innovation” by C.K. Prahalad and M.S. Krishnan:

10. Forgetting And Learning: Just as we have to learn the rationale and the implications of managing in an N=1 and R=G world, we have to forget the approaches to managing using traditional ways of categorizing businesses such as manufacturing or services. … So the first distinction that we so often use -- hardware and software -- may be dated. The same thing may be said of a cell phone. Is this hardware or software? Yes to both. … The second popular distinction traditionally made is that of a product business as compared to a service business. From that perspective, is serving hamburgers at McDonald's a service or a product (manufacturing) business? (Chapter 1, p. 35)

Ironic, isn’t it, that during a time when there's so much critical new information to absorb and learn, it's equally important to "forget" some things that we used to hold true but now will only hold us back -- but that's all part of the challenge in this time of The New Age of Innovation.

11. Hardware and software, manufacturing and service, product and service, and process and product innovations are categories of the past. … the tire is hardware and software (with sensors connected to a network to measure wear and tear). Yet, it is a physical product (a truck tire), but it is also a service to individual fleet owners, providing them with new information on fleet usage, cost of tires, and ways to improve efficiency. … Thus the discrete categories in which we pigeonhole business innovations become less relevant. (Chapter 1, p. 37)

Again: sound familiar?

12. We believe that the movement toward N=1 and R=G is not a choice. The focus of the young on Web sites like MySpace, YouTube, orkut, Facebook, and other suggests that a whole generation of consumers will grow up expecting to be treated as unique individuals, and they will have the skills and propensity to engage in a marketplace defined by N=1. … This is not about a single firm and its success. This is about the acceleration of a social movement toward a personalized cocreated experience. Value for this new generation of consumers is not embedded in traditional notions of quality. That is a given. These consumers want to be involved in shaping their own experiences. (Chapter 1, p. 40)

So there's the challenge: It's not a fad, but rather a deeply ingrained set of expectations and customer demands that are going to be with us for a long, long time -- this is not a passing fancy. So what are you and your company prepared to do about it?

My guess is that many of these anecdotes will sound strange because they’re outside of our general experience, but they’ll also be appealing because we can see within them the opportunity to unlock huge potential within our companies that, otherwise, is slowly getting locked into a set of processes and models that are flat, unexciting, and uninspiring. And they're that way because they've hit the last stop on the end-of-life train -- it's time for them to be tossed out and for fresh new thinking -- and thinkers -- to step to the fore.

Next time, some highlights from Chapter 2, which deals with business processes -- the link between strategy, business models, and operations -- in the New Age of Innovation.