The Inimitable Tiff

What will the replacement for the corporation look like? Even Mr. Hamel doesn’t have an answer for that one. “The thing that limits us,” he admits, “is that we are extraordinarily familiar with the old model, but the new model, we haven’t even seen yet.” This much, though, is clear: The new model will have to be more like the marketplace, and less like corporations of the past. It will need to be flexible, agile, able to quickly adjust to market developments, and ruthless in reallocating resources to new opportunities.

Resource allocation will be one of the biggest challenges. The beauty of markets is that, over time, they tend to ensure that both people and money end up employed in the highest-value enterprises. In corporations, decisions about allocating resources are made by people with a vested interest in the status quo. “The single biggest reason companies fail,” says Mr. Hamel, “is that they overinvest in what is, as opposed to what might be.”