Following the Spanish Flu of 1918-1920, the Roaring Twenties swept through the United States, propelling innovation and consumerism in a way the country had never seen before. And at the center of that boom were ambitious entrepreneurs who were ready to disrupt, take risks and compete ruthlessly.
Now, let’s fast forward to the 2020s: We are just beginning to recover from the Covid-19 pandemic and the economic downturn left in its wake. Innovations in science and technology are changing every aspect of life and work today, just as they did in the 1920s. But with digital transformation, entrepreneurs and business leaders today operate in a radically different environment than that of Henry Ford or JP Morgan. Let’s look at some of these differences and why they matter.
The need for agility
Digital transformation has become a buzzword, but it basically comes down to using technology to replace manual processes and quickly respond to emerging consumer and business demands.
Business moguls of the 1920s moved as fast as they could with innovations — whether it was bringing electricity to every home in America or using radio for mass advertising to boost consumption. In order to move fast today, CEOs need to be digital-savvy and invest in the right business technology, whether it’s artificial intelligence (AI), automation tools or customer-relationship management (CRM) platforms. They also need digital-savvy executives in their c-suite.
Diversity in leadership
When we think of the 1920s, we often imagine a powerful executive — maybe sitting behind a mahogany desk in an opulent office — making all the important decisions by himself and giving out orders to the rest of the company. He got together with a couple of equally powerful pals, and they decided fates and fortunes while puffing cigars. Maybe these CEOs still exist today, but the majority of modern companies are led by teams of executives with laptops and smartphones.
Over the decades, the c-suite has gone through many reinventions. A typical team today includes team leads representing specific business areas, such as sales and marketing. Increasingly, more non-tech companies are adding chief technology officers (CTO) and chief data officers to compete in the digital economy.
Many c-suites today, whether voluntarily or to comply with the law, include women and minorities — something that was unheard of in the 1920s when society was just beginning to accept women’s voting rights. Again, still a lot to improve on, but we are moving in the right direction.
While diverse experiences and viewpoints help to avoid blindspots and make better decisions, they also require an extra effort to align teams. So, entrepreneurs today need to spend as much time on developing team culture and alignment as they do on other mission-critical initiatives.
The new consumer expectations
In the 1920s, a handful of entrepreneurs pretty much dictated consumer behavior, whether it was with mass production of cheaper cars, expansion of chain stores and telecommunication, or other product and business innovations that were aimed at improving the bottom line. Out of these efforts, an American consumer was born and, as a side effect, a new way of life.
With every decade, the new way of life became faster and more consumption-focused. And the average consumer has become more demanding, sophisticated and powerful.
What do new consumer expectations mean for business leaders? Well, every business decision today should revolve around creating great customer experiences and anticipating and fulfilling customer needs in ways that fit their preferences, not those of the business. Of course, it must grow the bottom line at the same time.
Access to real-time data
Today, business decision-makers have access to key business data at their fingertips. Real-time digital dashboards provide insight into every part of business, making it easier to solve problems and course-correct in a timely manner. There’s no need to wait for the quarter-end numbers or for field offices to submit reports.
With access to real-time data comes the pressure for executives to connect different data points in meaningful ways, think faster and make data-driven decisions.
Fast and open communication
Email, instant messaging and social-media platforms have sped up communications and made company executives much more accessible and approachable than they’ve ever been before. We have tech executives who read and occasionally even respond directly to customer emails. Anyone can reach Jack Dorsey by tweeting at him.
We can argue both the merits and pitfalls of instant communication, but the point is that business leaders today are much more accessible to their employees and customers unless they make an effort not to be. How CEOs communicate with different stakeholders has a huge impact on the company image, which brings us to the next point.
Social responsibility and business ethics
The age of opportunity for inventors and business moguls, the 1920s were harsh toward farmers, labor unions and minorities. With a pro-business government, unchecked power and full control over the narrative, business executives got away with practices that would be illegal and considered unethical today.
Thankfully, the times have changed. Many CEOs today speak up against injustices and create or support initiatives to build a more equitable society and combat discrimination. There’s also more social pressure now than there was in the 1920s, and ignoring it can irrevocably damage reputation, customer relationships and business.
We still have a lot of work ahead in creating a more just and equitable society. And entrepreneurs, once again, have a chance to lead the way.
We often idealize the 1920s and the business moguls who defined them. But success means something different for entrepreneurs today. The business goals may have stayed the same (getting more customers, growing business, beating the competition), but the way of business and leadership are different. And that’s a good thing.