C.K. Prahalad writes on the powers of Dominant Logic,
All of us are prisoners of our own socialization. The lenses through which we perceive the world are colored by our own ideology, experiences, and established management practices. Each one of the groups that is focused on poverty alleviation–the World Bank, rich countries providing aid, charitable organizations, national governments, and the private sector–is conditioned by its own dominant logic.
Makes sense to me. We’ve all had different paths, and each of our paths has shaped our thinking in different ways. This reminds me of something Paul Buchheit said some time ago about the limitation of our own thinking.
In his presentation at Startup School 2007, Paul reminded us that when someone tells you, “That’s impossible†it should be translated as “According to my very limed experience and narrow understanding of reality, that’s very unlikely.†Everyone continuously builds a different set of experiences in their respective lives, and therefore everyone’s understanding of reality is fundamentally different.
I covered that here. Back to the story on why for-profits are generally viewed and treated negatively in their genuine endeavors to do good (and inhibiting them from achieving real success). Prahalad continues,
The policies of the [Indian] government for the first 45 years since independence from Great Britain in 1947 were based on a set of basic assumptions. Independent India started with a deep suspicion of the private sector. The country’s interaction with the East India Company and colonialism played a major part in creating this mindset.
The dominant logic, built over 45 years, is difficult to give up for individuals, political parties, and sections of the bureaucracy. This is the reason why politicians and bureaucrats appear to be vacillating in their positions. Most thinking people know where they have to go, but letting go of their beliefs and abandoning their “zones of comfort” and familiarity are not easy
The emphasis on not leaving comfort zones is mine–a reminder to myself that I should never just coast in life. Momentum may take one a long way, but for me, it gets boring after a while. I strive to push harder, never settling for mediocrity.
On some of the problems with India’s public policy:
Because of disparities in wealth and the preponderance of the poor, the government thought its first priority must be policies that “equalized” wealth distribution. Taxation, limits on salaries of top managers, and other such measures were instituted to ensure distributive justice.
Instead of focusing on how to create wealth (expanding the pie) by working together to co-create unique solutions with private enterprises for a win-win, the policy was focused on further slicing and dicing of the pie that they have perceived to be a fixed-size.
Wealth is as much as cold hard cash in the hand as it is, a mindset.
On a separate note, Prahalad also writes about the misconception among local authorities that the rural (in India) was poor and that the urban are rich, placing an artificial geo-spacial boundary between the poor and rich. Data however, indicates that many in urban areas actually live in slums. And that’s true for places like China as well.
Shameless plug: I’m with Wokai, a non-profit microfinance for China. Read more about them here, or contact me directly if you have any questions.