The 21st Century Company — What Can We Expect?
Posted on August 15, 2016 by Hank Boerner – Chair & Chief Strategist#Business & Society
When my partner Lou Coppola and I were discussing concepts for a conference with Chris Skroupa and the Skytop Strategies team last year, we talked about the fascination that we all seem to “have with decades and centuries.” And even “Millennia” — we are now in the Third as the calendar changed from “1900s” to “2000s.” And of course we talked our fascination with “looking ahead” to divine the future.
The musings led to the wonderful event that we had in May 2016 at Baruch College / CUNY, our gracious hosts for the “21st Century Company” conference. I’d like to share my opening comments for that conference with you.
In “decades” we talk about the Roaring 20’s, the 1960′s social and cultural revolution, In centuries we think about traditions of the Victorian Age — taking up most of the 1800s.
Time magazine publisher Henry Luce dubbed the 20th, “The American Century.” And it was, in so many dimensions: economic, cultural, militarily, industrially, financially, and so on.
Remember the discussion about when exactly the 21st Century would begin – in year 2000 or 2001? And how the world’s IT network was about to melt down because we had only two digits for dates in old software? An estimated $100 Billion dollars were invested in “Y2K” programs by business 1995-2001.
Y2K was a good example of progress made in the new century based on technology and scientific advances in the prior century. We saw that throughout the 20th Century — tinkerers building on 19th and 18th and even 17th Century advances.
“Tinkerers” create by leveraging the old for the new — and that’s how we advance in our society — how we create value – create new industries — create new wealth for the many. (And, of course, for the fortunate few, the 1%, as well.)
In the 1760s – the 18th Century – Scotsman James Watt tinkered with steam power.
He experimented with stethoscope tubing and tin cans — building on advances earlier in the century.
Watt’s tinkering led to harnessing the power of steam In the 19th Century, tinkerers put the steam engine on a wagon, and pulled carriages behind. The vehicles were “in train,” so they called it “a train” pulled by the steam-powered locomotive. Many of us got here this morning “by train.”
Soon railroads were everywhere, carrying people and freight. The great American prairies of the Midwest and Southwest stretches of flat land (like Oklahoma and Texas) were settled and a mighty agriculture empire arose mid-continent.
The farmland output — the harvested crops — would concentrate in factories and the nation would have packaged foods – think of cereals – as well as abundant pork, beef, buffalo and other meat products.
A tinkerer in the 19th Century – Samuel Morse – put electric stimulation through wires to convey messages. He gave us the telegraph. Recently some observers called the telegraph the “Victorian Internet.” At this point in my presentation at Baruch I held up glass standoff — it’s silicon in nature. The standoff should be familiar to you — you will see it atop the crossbar along railroad tracks; it insulated the telegraphy and later telephone wires.
Silicon was fundamental to 20th Century electronic technology. In the last century there would be a valley named for Silicon because of the importance of the simple “sand” element. Silicon is found in radios, cameras, phones, computers.
The telegraph concept’s success led us on to telephony, radio broadcasts, television, and the global Internet with its wondrous World Wide Web (www.”whatever” you like). Tinkerer Tim Berners-Lee created the Web – and made it available to all of us with no strings attached.
At the end of the 19th and into the 20th Century, tinkerer Thomas Edison brought forth amazing devices – spawning giant industries! Think of the electric utilities – built on the genius of Edison.
He experimented with 6,000 plant materials to find a light bulb filament that worked and would last for the consumer. Carbonized bamboo was one solution. If you drive around the City of Fort Myers, Florida, you’ll see bamboo plants here and there. And the Edison and (Henry] Ford Winter Estates features family gardens and a research lab. When Thomas Edison bought his property he found bamboo growing there and experimented with that plant for his light bulb filaments. Henry Ford played around with plants to grow a domestic source of rubber (latex) for his auto’s tires. Such in the fascination with the wonders of nature for tinkerers!
Edison’s great insight was that a central generating system — the dynamo – with wires running to homes and business would create a new category of business services.
At the time of his death in 1931 the still expanding electric utility business was a $75 billion business in current dollars!
His tinkering gave us moving pictures (“movies”), the phonograph and other machines that would change our business and personal lives.
Remember James Watt of Scotland and the primitive steam engine? Steam power was soon everywhere — powering railroads, providing power for factories and globe-roaming steam ships, telegraph, electric power to change night-to-day – all marvelous inventions in the 19th Century.
So: How to build on that in the 20th?
Enter tinkerer Henry Ford. He worked in an Edison electric plant in Detroit. He tinkered and developed practical “automobiles” and put Americans on the road and changed our way of life.
Ford built on the legacy and foundation of the prior centuries. On earlier advances in metals, rubber, instrumentation, wiring, steel making.
Henry Ford’s Model T was everywhere. He also revolutionized the workplace, bringing the work to the worker on the assembly line.
His workers had the opportunity to earn $5 per day – two times what other industrial workers earned. This was an important 20th Century economic insight – that way they could buy the cars they made!
Sometimes progress comes slowly.
Here’s a fascinating story: Car and Driver magazine staged “The Race of the Century, Ford Model T vs. Tesla Model S” last year. This was a contest pitting a 1915 “T” Ford against a 2013 Tesla. Guess who won? The route was Detroit to Shoreham, Long Island, just under 700 miles.
The restored Model T had to take all non-expressway roads while the Tesla zoomed along at 68 mph on the interstates. But down time for re charging meant the actual speed over the route was in the 30s for the Tesla.
That was less than the 100-year old Model T — it hit 40′s regularly and even 68 MPH doing down hills. The Ford had numerous pit stops and its battery actually blew up from overuse. The drivers had the windshield down – imagine driving all that distance with wind in your face and no cover (roof) or surrounding windows as you zipped along.
Battery charging stations had to be set up with volunteers along the route for the Tesla Access to 100-AMP service was needed for the Tesla – thank you, Thomas Edison for electric power everywhere!
The Tesla won by a very slim margin.
The final destination was the Tesla memorial, honoring Nikola Tesla, the competitor to Thomas Edison, who built a giant electrical testing tower in Shoreham, New York. (Organizers are trying to create a museum there to honor Tesla and his experiments.)
We can look to 21xt Century “tinkerer” advances in battery power and rapid recharging stations — that will address these immediate challenges.
Tinkerer Henry Ford, meet tinkerer-extraordinaire Elon Musk!
Tinkerers innovate – new products, new services, new technologies, new approaches – on the foundations of prior advances.
The move from tinkerer’s garage to giant publicly-traded enterprise can be rapid – look at Apple, in relatively quick time attaining the largest market cap in history.
There are challenges: As the innovative product or service grows, how is the venture to be managed? Financed? What will the relationship of company and society be? Relationship of investor and board and management?
For a time, owners – tinkerer owners-cum-capitalists John Rockefeller, Andrew Carnegie, Henry Ford — were virtual rulers. The growth of the capital markets shifted power to the provider of capital.
“Management,” a 20th Century term, over time became more important than “owner.”
Here we are in second decade of the 21st Century – typically, the large corporation is globalized, automated, complex, a dominant force in our society.
The tinker-owners are replaced by professional managers and the enterprise owned by “atomized” owners — their holdings are 1% or less of the total (and hence, “like atoms” in the words of authors Adolf Berle and Gardiner Means in the 1930s in their work, “The Modern Corporation and Private Property“).
What will be the defining characteristics of the 21st Century company in terms of Company and society relations? Organizations will be flatter — less layers of management, more dispersed responsibility, less command-and-control in the 20th Century sense. There’ll be more automation, more technology replacing people. (More robots / less human hands on control knobs, levers or control sticks of machinery.) More machine-talking-to-machine. that’s happening in industrial settings now, with numerous devices sending data to central databases for analysis and sharing to lead to better best practices at dispersed industrial locations.
In this 21st Century we are in an era of great expectations – stockholders (the atomized owner interests) and stakeholders (the new keys to success for the large enterprise) expect the 21st Century company management to be more sustainable, socially responsible, “good citizens.” Open and transparent. Accountable to stakeholders.
Companies today are in so many ways are viewed to be “citizens” of the nation and world – what does that mean? What are “good corporate citizens?” How will we be defining “corporate citizenship?” Stay Tuned!
We explored all of that and more in our Skytop-Governance & Accountability Institute co-presented conference at Baruch College.
There’s more information at: https://skytopstrategies.com/21st-century-company/