Henry (Hank) Boerner, Chairman and Chief Executive Officer of Governance & Accountability Institute (G&A Institute), a research and corporate strategies consultancy, He has served as board member and chair of the Issues Management Council, a global professional membership organization whose work is focused on managing issues and for advancing the issue management process, used to align organizational activities and stakeholder expectations. He publishes in professional and trades, including “Corporate Finance Review” (Thomson-Reuters), and was editor of the monthly “NIRI IR Update.”
Christopher P. Skroupa: Here we are in the middle of the second decade of the 21st Century. What is different for “21st Century companies” from those of the previous century?
Hank Boerner: In general, there is a fascination with the concepts of centuries and decades. Kids growing up in the 1960s were different from those of the Seventies and so on. Decades as we recall them may be somewhat similar, but there are very dramatic differences between centuries in business, politics, culture, economics, and other human endeavors.
So now that we are into the 21st Century, changes have been coming into clear view–and that includes the nature of business enterprises in the 21st Century.
Skroupa: How would you describe the new century company? What are the characteristics that you see that make it different from 20th Century counterparts?
Boerner: To put change in context, think about the dramatic changes from centuries gone by. As we entered the 1800s, the power supplied by the steam engine was being perfected by the Scotsman, James Watt was pulling people into factories and cities and out of their rural cottages where they made goods by hand, artisan-fashion. Throughout the 1800s abundant steam power spurred opportunities to create great wealth in the form of factories, such as for apparel and footwear manufacturing. Railroads came on the scene, with steam engines replacing horse-drawn carriages and river barges. By the end of the 1800s we had electric power in many cities, changing the very nature of human activities. Night could become day with a flick of a light switch.
And so we should look at what the 20th Century brought us, in terms of breakthrough technologies and personal innovation, as an indicator to what that might mean for us in the 21st Century.
Skroupa: What does that mean? How do foundations laid in the last century impact opportunity in this new century for individuals and companies?
Boerner: A quarter-century ago, two kids in a garage were creating desktop computing power for the rest of us (Steve Jobs and Wozniak of Apple). A bunch of kids developing software tools were doing the same (led by Bill Gates and Paul Allen of Microsoft). These innovators displaced giant “big iron” computing firms like IBM, Sperry Rand and Digital Equipment. Somewhere out there today, there are their counterparts creating or harnessing more processing horsepower; and brainpower, to put that power to work in ways that others have not yet seen to be possible.
Giant advances in computing power makes possible a wide, even unimaginable, field of dreams for 21st Century entrepreneurs and tinkerers. In the 1760s, James Watt was hooking up a tin can and borrowed stethoscope tubing to create the steam engine; 21st Century “kids” have massive information technology and processing power at their fingertips to create change. And massive disruption. They can easily tap into waiting pools of capital. Look at the 21st Century companies of Uber and AirBnB, and the changes that are now sweeping through hospitality and personal transport industries. That’s disruption on a wide scale, and occurring almost instantly. I think we’ll see that characterizing the 21st Century in business and finance.
Skroupa: What are the ingredients for business success in the 21st Century? Are they different from past centuries?
Boerner: Thinking, in century-to-century comparisons, in the 19th Century a poor 12-year old immigrant from Scotland came to Pittsburgh and created the American steel industry. That was Andrew Carnegie, who became the wealthiest American in this time. He created the first $1 billion U.S. corporate, U.S. Steel Company. Carnegie’s steel was everywhere in the expanding American nation. Carnegie saw opportunity where others did not and he moved to create business on a vast scale.
Fast forward, and his counterpart today may be Elon Musk, a South African come to America to do business. Think of the disruption caused by this brilliant 21st Century tinkerer. Tesla Motors is leading the revolution in powering automobiles. He created PayPal and SpaceX, and his dreaming goes on. In both cases, brilliance and ambition seemed to put the two men at the right time and place in the nation’s history.
However, the ingredients change and evolve over the decades. I think of convergence and timing. Henry Ford profoundly changed the 20th Century way-of-life with his mass-produced “horseless wagon.” Did you know that one out of two cars on the road early in the 20th Century were Ford-branded? That was possible because of breakthroughs in prior years. In glass-making, metals, technology, rubber manufacturing, the perfection of the internal combustion engine, widespread distribution of gasoline to fuel the car, instrumentation, and so on. Same was true for the Wright Brothers as they put America in the air with the “flying machines.”
So the advances being made in this century in materials science (such as carbon fibers for aircraft), measurement and control systems, miniaturization such as nanotech, fuels development such as algae-grass combustibles, and other evolving technologies will spell out opportunity for individuals and the organizations they will build in this century.
Skroupa: Are there specific industries that will be different in the 21st Century? Are there industries that will disappear, like carriage building when autos came along?
Boerner: In some cases we seem to reach the limits, and that remains so, and then we have dramatic breakthroughs past “the wall.” Take undersea cables for global communication. That was a 19th Century breakthrough. Although, capacity was reached from time-to-time. And then in the 20th Century we had satellites in space, rotating around the globe and beaming up and down volumes of instant communications. Railroads were the kings of industry through the 19th Century and into the first half of the 20th. We still move a lot of freight on the rails, but passengers? They are up in airliners, moving city-to-city, or in very sophisticated personal transports—we call them “cars” —and not in passenger rail cars.
The future is of course impossible to accurately predict. But we can say for sure that today’s tinkerers, breakthrough thinkers, outside-the-box mavericks, will see something and say, “why not,” instead of “why do it.” We will see that type of thinking on steroids in 21st Century companies, I think. And as a result, we’ll see new companies and industries doing things we never dreamed of before.Tweet