Reimagining Capitalism in a World on Fire

by Rebecca Henderson

The first is that recognizing and responding to architectural innovation is hard but not impossible. Phil Knight had trouble—perhaps precisely because he was so successful—but Lipton, Walmart, and CLP were all able to use the creation of shared value as a route to significant competitive advantage. The second is that those firms that manage to take advantage of these kinds of transitions—that have the courage to invest before their competition and to invest in the skills and people required to build entirely different ways of approaching a market—have the potential to reap enormous returns. The third is that organizational purpose is the key to change. Those firms that have a clearly defined purpose beyond profit maximization, where it is clearly understood that the purpose of the firm is not to make shareholders rich, but to build great products in the service of the social good—