From John Hagel’s latest post – we need to change focus from efficiency to learning:

“…..why do we even come together in institutions such as firms? Almost 80 years ago, Ronald Coase won the Nobel Prize in Economics for an essay that suggested that we do this for the sake of scalable efficiency — it costs less to coordinate activity within a firm than across independent entities. At the time, this was a remarkably accurate description of the rationale driving the emergence of large corporations around the world.

But times have changed. As the complexity of our environment increases, we need to step back and reassess this rationale. The cost and difficulty of coordinating activities across entities, on a global scale, is far lower now. The pace of change is accelerating and the degree of uncertainty increasing. Perhaps a new rationale will be required to drive institutional success in the future. Perhaps we need to move from a rationale of scalable efficiency to one of scalable learning — designing institutions and architectures of relationships across institutions that help all participants to learn faster as more participants join.

Drucker didn’t quite frame it in these terms, but perhaps we need to expand our focus on innovation beyond the narrow frame of technology and product innovation. If we are to successfully adapt to the escalating complexity of our environment, we need to invest more time and energy in exploring institutional innovation. “