"IT does matter," C.K. Prahalad told the audience at the Interop/Software 2008 conference today. Despite predictions of its imminent loss of influence, not only does IT matter, it's a way to create enduring competitive advantage in the New Age Of Innovation. "That's the punch line," Prahalad said.

On my flights back to the United States and on my flights back to India, I do a James Bond. I start by twisting my watch's ear. After that, I take out my cash clip and place the India credit cards and currency at the back and the U.S. ones at the front (or the other way round). No, I don't do passports, sorry. Next, I flip open my mobile device, change SIM cards ( AT&T for U.S., Vodafone for India) because I don't like international roaming rates (do you?). I endlessly amuse curious onlookers and myself (hey, it's more fun than re-re-heated airplane fish). But this Bond act -- sans the gadgets or the companionship -- will be only half as right as Casino Royale. Forget the India-U.S. hike; if James Bond wasn't blessed by his government, he'd need a lot more N=1 mojo to do all the intercontinental acts he does. Like what, you ask? Let me focus on just two industries, and please let me grouse.

Analytics, a business function that is growing rapidly in prominence, truly embodies the N=1, R= G philosophy. Analytics helps drive innovation, as it looks within an organization's data for actionable insights that provide revenue-enhancing solutions.

Unions, agriculture, heavy manufacturing, steel, coal, and all the disenfranchised workers who lay rotting in the vast intellectual desert paved the way to this Rant.

"Old business models are being turned upside down" is an interesting headline, but I don't think that is the reality.

Authors Prahalad and Krishnan refer to it as N=1 -- customer intimacy at the individual consumer level -- and it's a founding principle of the New Age Of Innovation. But a new Harris Interactive poll suggests a majority of U.S. consumers might have a ways to go before they're comfortable with that level of intimacy.

Yesterday, I texted Cab Eddie on my cell: SITTG IN NY-NJ FRRY. AM DA ONLY 1, STILL COSTS $10.75. LST NITE DA SHUTTL FRM LGA 2 BROOKLN COST $16 BUCKS. ANN ARBR 2 DTW CANT BE $40. RETHNK BIZ MODL.

N=1, R=G describes a new age of innovation driven by an aggressive use of IT, especially analytics, and an extensive, sophisticated, real-time supply chain. A new survey by Accenture indicates many companies think the barriers to innovation are mostly internal, as in corporate politics and motivation. Is there a disconnect here?

I have an annoying habit of reading more than one book at the same time -- in a none-too-complete way. One of my current half-way-there digs is called "Number: The Language of Science" by Tobiaz Dantzig, and some early pages in the book triggered these thoughts.

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:

I was at the American College of Cardiology conference in Chicago and I saw several solutions that were very N=1, R=G. There were devices that can manage rapidly beating hearts (tachycardia) or slowly beating hearts (bradycardia), and those that do so remotely. Cardiologists can now fix your heart wirelessly as you sleep. But I don't want to talk about this heart-heavy stuff.

One of our MBA students raised a central question during my MBA class last week regarding the concepts of N=1 and R=G. His question was: Professor, does N=1 and R=G (Global) mean outsourcing to the Far East? My immediate response was an appreciation for raising this important question. My answer, though, was no, not necessarily. Still, I understand that the word "global" can be misleading in the current environment.

If the world is indeed moving to the requirements of N = 1, where each customer must be treated as a distinct individual, and R = G, where companies must tap the right resources across the globe to be able to compete, how do we get started in overhauling what we do and how we do it? Following on the two earlier posts ( Part 1 and Part 2) that contained ideas 1-6, here is the third set of three insights from authors C.K Prahalad and M.S. Krishnan:

Anticipating customers' needs by sussing out patterns of behavior requires sophisticated analytical technology, and that technology requires mountains of customer data to analyze. Where does that data come from? More importantly: To whom does it belong?

"We have a fundamentally better business model." It was 2000, at the height of Enron's rise from energy utility to Fortune 10 commodities trading juggernaut, and company president Jeffrey Skilling was on top of the world, talking like "the smartest guy in the room." What Skilling didn't fully appreciate was that revolutionary business models don't amount to much if you can't execute on the vision.

Following from yesterday's start, here are three more of the 12 strategically important ideas from the first chapter of The New Age of Innovation. Tomorrow, we'll look at another trio of ideas: more breakouts of what must be transformed and why, and how to achieve scale in a world where speed is becoming preeminent.

Google's loss is EMI's gain, but can anyone (besides Apple) figure out the future business model for music?

Over the past 10 years, it has been my great privilege to know and occasionally work with "The New Age of Innovation" author C.K. Prahalad as well as his co-author, M.S. Krishnan, both highly distinguished professors at the University of Michigan's business school and internationally renowned experts on business strategy and the role of information technology in that strategy. C.K. has been a member of InformationWeek's Editorial Advisory Board for most of that time, and he and Krishnan have written numerous ground-breaking articles for InformationWeek, participated in our events, and in general helped us identify key changes before they became apparent. So about a year ago, just after C.K. and Krishnan had asked me to take a look at a rough draft of a book they were working on, I realized that this new project would be much more than a book: It would be a movement.

About 400 years ago, the English metaphysical poet and noted IT strategist John Donne warned against losing touch with the times: "Ask not for whom the bell tolls. It tolls for thee." The bell is ringing frequently these days as companies in various industries stumble or fail because they can’t keep up with change: changes in customer demands, in the pace of business, in the truly strategic use of technology, and in the rise of the power of the individual. But help is on the way in the form of "The New Age of Innovation," a seminal new book from C.K. Prahalad and M.S. Krishnan, and here are 12 powerful ideas from just the Introduction and first chapter of that book. In future posts, we'll look at many more excellent ideas from each of the book's 8 chapters.

Where does business innovation come from? Is it a push or a pull? I contend that innovation isn't imposed, it's fulfilled.

Here's the formula: The new age of innovation is about both personalized co-created experience for individual customers (N=1) and global resource leverage (R= G).

Let me start with the thesis of the book. The industrial system as we know it has been morphing for some time. Now it may have reached an inflection point.