Can C.K. Prahalad Pass the Test?

"They have to go through the valley of death"

For a taste of what it's like to have C.K. Prahalad running your company, flash back to September 1999, at the University of Michigan's Executive Education Center. Prahalad prowls the rows of nervous managers attending Michigan's renowned four-week leadership program, seemingly feeding off of the anxiety in the room. He is lecturing on the 16th-century standoff between Cortes and Montezuma -- a metaphor for the struggle between startups and established companies. A master teacher, Prahalad lulls his students into thinking that they know the answers to his constant barrage of questions. Then, slowly, he removes the veil, allowing them to see that they are wrong.

In an hour, the students go from confident blusterers to humbled novices. Only at the end does Prahalad guide them from utter confusion to a new level of understanding. "They have to go through the valley of death," he says. It's another of Prahalad's core beliefs: Only when you are challenged, unsafe, out of your zone, can you find self-knowledge.

This is how Prahalad approaches potential Praja clients, often companies he once advised. "It's amazing, the way he can captivate the upper-level executives -- and tell them that they're crap," says Joe Kosco, director of business development at Praja. "He gets their attention, and then he says, 'This is how we're going to fix it.' " He treats his own employees the same way. Dealing with Prahalad, they say, is like playing chess with Bobby Fischer. " C.K. is an academic with stage prowess," says Robert Martindale, a business-development manager at Praja. "I feel like I'm getting a PhD."

Prahalad is Praja's enforcer-cheerleader, roaming the halls and challenging anyone he meets: "Do you believe yet? You don't believe, do you? Do you?" He is focused in a way that most of his employees can't even fathom.

His idea of time off is taking a long walk with Gayatri -- and then working some more. His enormous new home in Rancho Santa Fe boasts a pool, along with access to a golf course and a tennis court -- none of which he uses very often. He and Jain spend nearly every Saturday together working. Prahalad even tried to convince Jain to move into the mansion next door. "He argued that we could save a lot of time if we didn't drive to work separately," laughs Jain.

All of this leads to a strange dynamic within Praja: What do you do when your boss knows more about every aspect of your job than you do? How do you make a sales presentation if everyone in the room is staring at the other guy? Prahalad is acutely aware of this contradiction. To avoid being perceived as the blowhard executive who knows it all, he is always asking for feedback on what he could have done better. He's sincere about this: It is a way for him to learn -- and learning, after all, is something that Prahalad does well. He even asks me several times during my visit, and again after my return, for a report card: "How can I be a better manager?"

The question betrays Prahalad's own zone of discomfort. He is most at ease when teaching, and he views Praja very much as his classroom. But Praja is, of course, also a business, and the professor has had to wrestle with what it means to actually manage a for-profit organization.

Prahalad admits that the desire of his employees to know exactly what their roles are was one of the things that surprised him most about running a company. And for someone who is used to delivering the message only to top executives, the amount of time that he had to spend explaining his vision took him aback. Some employees fret that with Prahalad's insistence on constant learning, Praja may be moving too slowly.

Prahalad has learned by now that some of his big-company prescriptions don't fit here. "The negative side of a small company is that there are no dampers," he says. "Just because you can make a change quickly, the temptation is to act. Speed is nice to have, but going faster to hell is not how I want to run a company. I want somebody to keep pushing the organization. I also want somebody to say, 'Let's be thoughtful about getting this done right.'

"My role," he continues, "is to balance the tension."

"In great growth times, anyone can lead"

It was a foggy, sleepy day in Seattle, though you wouldn't know it from the electricity surging through the conference hall last October. C.K. Prahalad, professor and entrepreneur, had just described his vision of using technology and innovative strategy to market to the world's poor, and the crowd at the Creating Digital Dividends conference was on its feet. "We have company think, not consumer think," he thundered. "What we make is not what they want."