The Outnation, by Jonathan Rauch (Harvard Business School Press, 1992). I could go on and on about the virtues of this simple, unpretentious, elegantly written, and beautifully observed book about Japan. Among other things, it explains why mindless criticism of Japan's trade deficit with the United States could produce a result opposite to the one intended by critics -- that is, greater centralization of the Japanese economy and a strengthening of the bureaucracy that is the primary obstacle to increased political and economic competition.

But I was most impressed -- and disturbed -- by what the book revealed about our own culture: "[T]he United States is blessed with what are probably the most adaptable and responsive social institutions in the world. In particular, America is blessed with a political system that was capable of removing a malfeasant president from office peacefully and a scientific system that still beats the competition hollow. Yet I worry, because America's problems today are moral rather than institutional, and moral problems are the hardest kind to fix. Japan's problems are the other way around. I believe I can tell you ways to make the Japanese political system work better; but if you ask me how to make American teenagers care more about studying and less about showing off their Corvettes, I can only shake my head dumbly."

Twenty-First-Century Management, by Hesh Kestin (Atlantic Monthly Press, 1992). This is a terrific book about an inspiring company, one of the few that offer genuine insights into what business in the 21st century might look like. The book is everything a business book should be: smart, witty, informative, entertaining, thought provoking, and short. The publisher achieved this commendable result by matching up a seasoned reporter with a worthy subject, Computer Associates (CA), a giant software company whose success has defied explanation -- until now, at any rate.

At the heart of founder Charles Wang's philosophy is what he refers to as "reorg," a process of endless reinvention. In the early days Wang would totally reorganize the company as often as four times a year, and he still does so no less than once a year. "The very idea flies in the face of both received business wisdom and what is thought to be common sense," writes Kestin. "A system that works should be allowed to keep working, no? Yes, and the system that works at CA is reorganization. Its stability is in change." Wang's willful chaos is based on the simple idea that the company's most valuable assets are its people, who should be deployed so as to help CA achieve its goals. Since the world is in a state of constant flux, CA's goals must constantly change as well, and so too must the role of its people. Hence, reorganization.

I suspect the reorg principle will hold particular appeal for Inc. readers, for two reasons. First, it can be employed almost anywhere, regardless of scale. At the same time, reorg is based on the same imperative that a new business is: wealth creation, not asset protection. And it is only in creating new wealth, rather than protecting what we have, that we will be able to prosper in the next century. *