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Dan’s Biz Bookshelf: ‘The New Age of Innovation’

The New Age of Innovation by C.K. Prahalad and M.S. Krishnan captures the evolving landscape of global business with a precision and insight that is hard to match. It’s a book that delivers not only in theory but also in practical application, making it a must-read for anyone serious about leveraging innovation to fuel long-term growth. Prahalad and Krishnan highlight the concept of co-created value, emphasizing the power of networks in this digital era to transform how we view customer relationships, business value, and competitive strategy.

At its core, the book is based on two key principles: the "N=1" and "R=G" models. “N=1” highlights the essential shift to treating each customer as a unique segment—no more one-size-fits-all. Instead, the approach demands a tailored experience that considers the customer's specific needs, wants, and values. The “R=G” principle further supports this shift, suggesting that resources for creating value no longer need to be internal but can be accessed globally. This flexibility allows businesses to scale more efficiently, adapt rapidly, and compete on an entirely different level. The “N=1” and “R=G” combination underscores how individualized customer engagement and extensive resource networks are the future of growth.

One of the best parts of the book is the diverse set of real-world examples that make complex concepts relatable and actionable. For instance, Prahalad and Krishnan use UPS as a prime example of the “N=1” strategy in action. UPS has managed to build a sophisticated, customer-centric approach by tailoring its logistics solutions to meet the specific needs of each client, proving that even in a seemingly standardized industry, customization and personalization can drive substantial value. This focus on tailoring services to individual clients illustrates the power of personalized customer value and how it ultimately strengthens brand loyalty and trust.

The authors also bring forward innovative case studies from companies like Cisco, which exemplifies the “R=G” approach by using an extensive network of global partners to source resources and deliver complex solutions quickly. Cisco’s success shows how leveraging external resources can create a nimble, responsive business model—one that adapts seamlessly to new demands without overextending its internal capabilities. This kind of strategic collaboration makes a compelling case for the agility of networked solutions over isolated, insular growth.

Another memorable example is from the financial sector, where Citibank has applied these principles to create customized financial products tailored to diverse markets around the world. By deploying resources globally, Citibank achieves the customization required to meet unique local demands while maintaining the strength of a global brand. These examples ground Prahalad and Krishnan’s theories, making it clear that this co-created value approach is not only feasible but already transforming industries worldwide.

For any business leader, The New Age of Innovation offers a clear roadmap to remaining competitive in a global economy. Prahalad and Krishnan encourage us to see our businesses through a new lens—one where flexibility, personalized value, and networked resources define success. With its actionable insights and real-life examples, this book does more than inspire; it equips you with the mindset and tools to make innovation the core of your strategic vision.

Dan Beaulieu is president of D.B. Management Group.

Title: The New Age of Innovation: Driving Cocreated Value Through Global Networks

Authors: C.K. Prahalad and M.S. Krishnan

Copyright 2008 McGraw Hill Education

Pages: 303

Price: $9.33 (Amazon)