In the early 1900s, German physicist Werner Heisenberg laid the foundations for quantum mechanics, a set of rules showing that at the subatomic level Newtonian physics was irrelevant. Just as quantum mechanics upstaged Newton, says strategist Kenichi Ohmae, a radical new model is upending old notions about the global economy. In this sprawling book, Ohmae warns that governments, businesses, and leaders that cling to their Newtonian approaches will become irrelevant themselves. The heart of Ohmae's thesis will be familiar to readers of his previous books, including The Borderless World (1990) and The Invisible Continent (2000): In the new global economy, the nation-state, and the protectionist economic thinking that goes with it, is obsolete. Nation-states have borders, armies, flags, currencies, and a development-stifling instinct to protect their economies from the outside world. As global economic players, they're being displaced by "region states"-borderless centers of vibrant economic activity that welcome global trade and investment, like the Shutoken metropolitan area of Japan and Guangzhou in China. If the rules of the old economy no longer apply, Ohmae ventures, then neither do the old rules of business. Fair enough. The problem is, he says, no one knows, or can know, what the new rules are: "By the time any rule book or user's manual appears...the 'new rules' will already be obsolete." What business leaders can be sure of, Ohmae argues, is that massive change without requires massive change within. That means wall-to-wall rethinking of corporate mission, strategy, and organization. Companies must cut loose from their "ancestry" and, for instance, compete by selling the very products that threaten them. Clinging to the core, as Kodak did in the face of predation by digital-camera makers, is a recipe for failure in this new age. Companies must cast off their sentimental attachment to the nation-states where they're headquartered and jettison their hierarchies and old approaches to markets. Their leaders must become visionary facilitators without preconceived attitudes about their roles-ready to embrace even the idea that the best leader may be a team, not an individual. There can be no half measures in this radical transformation, Ohmae says, no testing the waters before taking the plunge. It's a strong prescription. Unfortunately, this lively book can't, by its own admission, give business readers what they want most: practical advice for competing in the global economy. But it does remind executives to pry their gaze from the present and set it firmly on the future. As Heisenberg well understood, the more doggedly you map where a moving target is, the less you know about where it's headed.
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