Sir John Browne of British Petroleum puts it simply: "Our strategy is our organization." Nokia executives are even more laconic: "Strategy = Structure = Implementation."

These sayings indicate a change in the way complex global firms discern their future. They no longer believe it can be precisely determined in advance, no matter how carefully a strategy is constructed. Instead, the future emerges from the complex and hard-to-predict interactions of leaders, followers, and the corporate setting. This change of view takes us from the simple dictum that "organization follows strategy" to a leadership model in which organizational design, the quality of team interactions, and the distribution of energy in the firm may be far more important determinants of success than the soundness of this or that strategy.

The new belief in the importance of organization is closely linked to changing attitudes toward markets. The 1980s were a period of unusual faith in markets as the ideal means for matching ideas, talent, and capital. Large corporations were described as sinks of torpor and waste; managers, unchecked, would dissipate resources on corporate jets and other unnecessary perquisites. The heroes of this story were the LBO artists, who punished the lazy and selfish managers by breaking up their firms, and the venture capitalists, who funded the obvious ideas that the big companies somehow couldn’t see. The value of the resulting innovation invariably exceeded the substantial cost of moving capital out of a giant company, cycling it through the capital markets, and connecting it to an entrepreneur.

But the new decade opens with a more balanced outlook. Yes, entrepreneurs and venture capitalists create a lot of value. And as one of the articles in this issue, "The alchemy of LBOs," reminds us, substantial value can be unlocked when businesses are taken out of large firms and given marketlike performance incentives. But enormous value also derives from the ability of large companies to build up resources, create brands, and provide a home for innovations that markets may be unable to finance. The ideal for an economy seems to be a mix of both large and small firms. Cisco Systems, for example, is surrounded by small start-ups producing a steady flow of innovations that often directly attack Cisco’s core business. Far from worrying about these entrepreneurs, Cisco seems to thrive in this environment; it readily adopts the start-ups’ ideas, even when they overlap its core technology. The entrepreneurs, in turn, get to see their best ideas rapidly attain global scale. Markets are useful economic mechanisms, but so are hierarchies and mixed forms such as networks and joint ventures.

What is good for an economy may also be good for a firm. This issue’s cover story, "The innovative organization," argues that winning companies incorporate features of both large and small firms. They give entrepreneurial activities not only plenty of space but also access to the parent’s resources and knowledge and, ultimately, promote alignment with the parent’s goals.

All this suggests we may be moving to an environment where the scope (or focus or core competence) of many firms will again broaden. For well over a decade, focus was the manager’s first imperative. But today’s managers are looking for growth; they are striving to develop new businesses, and in some cases they are leading their firms through a wholesale transformation. Assets such as brands and know-how can be reused and stretched beyond their original purpose.

Several of the articles in this issue focus on the challenges of creating organizations that can sustain such change and innovation without losing performance discipline. "Teamwork at the top" offers practical advice on how senior managers can work most effectively together—a considerable challenge as the scope of a business changes. "Unlocking the value in Big Pharma" shows how the organizational forms of pharmaceuticals firms can turn scale to their advantage. And the Current Research section offers an update on the state of the battle for managerial talent, a perennial issue for firms trying to sustain innovation.

Managers will always need great strategies, but strategic thinking and the rhetoric that supports it increasingly share pride of place with organizational design and the quality of leadership at every level. We will know that management thinking has caught up with leading-edge practice when we stop drawing a neat line between "strategy" and "organization."