The 21st Century Company – And You — Iteration / Innovation / Progress! And the Now Very Familiar… Disruption!

Theme-setting Comments at the Skytop Strategies’ “21st Century Company” conference, early-November 2017 in New York City. This was my third time opening the conference to set the theme of the day…

By Hank Boerner – Chair & Chief Strategist, G&A Institute

There are three words that I think define the concept of these 21st Century Company gatherings. The approach was conceived more than three years ago over lunch with Chris Skroupa, my partner Lou Coppola and I. And the words keep ringing true ever since.

The first word is Iteration — from the ancient Latin: again…and again…and again. Science and Discovery is about iteration — it is the basis of our scientific theory and practical application of scientific advances. We hear these days about “science-based” and “evidence-based” progress being made. At least from most of us.

The second word is Innovation — also from the Old Latin — the new. Something, everything — new. Most of us are interested in the new; some are anxious, others enthusiastic.

The third word is Progress — also from the Latin roots and with us with the same meaning for many centuries — it is the story of humanity — forward! Moving forward.

Interation / Innovation / Progress. Think of the great inventions of the later years of the late 18th and 19th Centuries that made the 20th Century so very different in so many ways in our personal and business lives. In finance — in public and private governance — and other aspects of our lives.

Our lives in Century 20 were very different from the experiences of generations before us. And will be in Century 21 thanks to the great progress of prior decades.

We can see all of this at work in these Inventions.

First, Electricity – the “Dynamo” (as it was called) that harnessed the power and changed nighttime dark to daylight at any time!

Telegraphy, the Wireless and Telephony….over time leading to the broad-bands of our internet and our cell phone. Everything is powered by electricity.

And the internal combustion engine – providing reliable, portable, movable power — today, cars & trucks and airplanes on the move dominate our lives, don’t they? Speaking of the last….

In the early 20th Century, The Great Tinkerer, Henry Ford brought together many scientific advances in glass, metallurgy and development of materials such as plastics, instrumentation, rubber for tires, the internal combustion engine…and more… to mass produce cars & trucks.

Henry Ford invented the efficient modern factory with his idea of bringing the work to the worker. His advances in the innovations related to motor cars brought about great progress. He was also a…farmboy at heart.

And thanks to the farmboy in him — Ford Motor Company has been making certain parts out of soybeans. This is both a 20th Century and 21st Century story.

Founder Henry Ford planted 6,000 acres of soy on the company farms. In the 1930’s he worked with soybeans to develop early versions of plastics, paints, and other products familiar to us today.

He actually made very sturdy car fenders out of soybeans and was photographed banging on such a fender with a sledgehammer — more than 70 years ago. Those old, collectible brown Ford stick gearshift knobs? Oh, yes — they are a soybean extraction!

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Henry-the-Tinkerer pounding away at a fender made of soy — he wanted to make a whole vehicle out of the wondrous plant!

One thing he invented in his laboratory for us to use every summer — the charcoal briquette. This came out of his “Industrialized Barn Concept,” his idea that future farmers might use their barn for production in the cold winter months!

And now to 2017 — in mid-October, Ford Motor Company celebrated the 10-year anniversary of using soybean-based-foam in its car seats. That practice saved 228 million pounds of CO2 from entering the atmosphere — equivalent to CO2 consumed by 4 million trees in sequestering carbon emissions.

You can see the soybean seats in Ford Mustangs of the last 10 model years. More than 18 million vehicles produced in North America have soy-derived foam seats, proudly notes Great-Grandson / Ford Chair William Ford – an MIT grad. And he is Great-Grandson as well of Harvey Firestone, the rubber tire innovator. And he drives a Mustang with soy seats. And Firestone tires!

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Photo:  William Ford, Chair of the Ford Motor Company with a Mustang — with soybean seats!  20th Century meet the 21st in technology!
Tinkerin’ away: The Ford Company’s lab tinkers today with such materials as wheat straw; rice hulls; trees; coconut; kenaf; tomato peels; chopped up US dollars; dandelions; algae; agave…you know, the stuff of tequila! The derived materials may be going into tires and gaskets.

That is truly 21st Century Corporate Sustainability in action!

The Spirit of Old Henry-the-Tinkerer & Innovator lives on. As does the Spirit of Thomas Edison. And Alexander Graham Bell. And many other tinkerers.

This is for us clear demonstration of the spirit at the heart of science, of scientific discovery…and of Innovation. And the outcome: the Progress we make!

Another great 19th Century invention I mentioned was the harnessing of Electricity: This new power source drove wired transmissions; think of the telegraph as electrons whizzing through wires to carry dots & dashes. Then telephony evolved with voice-over-wire; then came electrons driving radio waves, then television waves, then wireless telephones. What comes next?

Think about the little and very powerful cell phone, our wire-less telephone that we take for granted — we carry the device around and depend on it for many things every day. The amount of processing power far exceed the capacities available to “tinkerers” like the early space astronauts in their space-borne vehicles.

Speaking of Innovation and Interation…remember Radio Shack? Kids-in-the-garage of Silicon Valley invention fame shopped at Radio Shack for parts — the Steves, Jobs and Wozniak of Apple fame. Radio Shack is gone. Apple thrives. There is great irony here for us…

The fourth word for us to keep in mind for the 21st Century is very important: Disruption.

Iteration, Innovation, Progress…leads to Disruption.

Economist Joseph Schumpeter described the concept of creative destruction almost 80 years ago.

This is the process in our Capitalistic society of industrial mutation that incessantly revolutionizes the economic structure from within, destroying the old / creating a new structure.

Applying this to Radio Shack: Technology writer Steve Cichon in Huffington Post in March 2014 mused about the February 1991 Radio Shack ad that highlighted electronic items from the ubiquitous storefront – well-known for several generations as “America’s Technology Store.”

This was before the debut of the World Wide Web (in 1994, by tinkerer Tim Berners-Lee), tiny cellular phones and other goodies in our lives that we take for granted today.

To explore the pace of innovation / and the resulting disruption – and the impact on our everyday lives, please do think about right now:

• The pioneering Tandy 1000 personal computer in the 1980s;
• the little “microthin” calculator;
• home telephones (copper wires!);
• stereo player;
• tape recorder;
• CD player;
• phone answering machine;
• earphones;
• microphone;
• speakers;
• photo camera,
• camcorder/video camera;
• weather station;
• AM-FM clock radio.

All that was listed in an ad at about $3,000 in 1991 dollars. That is $5,400 in 2017 dollars.

And all of those electronic miracles of 26 years ago are right here in the 4-oz Apple iPhone! At in one hand, at a fraction of the price, all portable, all in your pocket.

Think about the progress that is made, step-by-step, an iteration or discovery (one at a time), that lead us to miracles in our lifetime. There is such an exciting future ahead for the Millennial Generation, isn’t there.

I’ll leave it here for now. We will be exploring all through our day together the marvels and miracles — and hard work — that leads us to ….

Iteration / Innovation / Progress! And the now very familiar… Disruption!

This is what the 21st Century will be all about.

The 21st Century Company — What Can We Expect?

by Hank Boerner

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/

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