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Were chief executives of the past also expected to act in an unpredictable world?

Yes, says CBS researcher, mentioning the Great Nordic Telegraph Company as an example. Yet, he stresses that today’s leaders are facing even more challenges.

By CBS Executive Education

It is not only our leaders of today who have to act in an unpredictable world. In the past, Chief Executives also faced unforeseen crises, says Martin Jes Iversen, who conducts research on strategy and innovation in a business historic perspective at CBS.

“For example, we have seen two World Wars and a serious stockmarket crash in 1929. And if we move forward in time, we had the oil crises in the 1970s. 1993 saw the emergence of the European Single Market, which was not a crisis, of course, but it created a new situation where goods could move freely across borders, which meant access to bigger markets and greater competition,” explains Martin Jes Iversen.

"Challenges are fast-paced and increasingly complex."

Martin Jes Iversen, Associate Professor

After that, it was all about expansion, and with the competition state, politicians tried to create preferable conditions for the business world. However, in 2008, a global financial crisis knocked the wind out of many corner offices, forcing the leadership to reevaluate their strategies.

In other words, plenty of unpredictability. Yet, the researcher from CBS stresses the differences between the challenges current leaders face and those chief executives of the past have had to navigate. We will get back to them. Firstly, there is another point to be made, based on the business history of Denmark.

The ability to redefine oneself

“Denmark is known for its large, long-established companies like Novo, Danfoss, Carlsberg and Maersk. What sets them apart is a consistent ability to renew themselves, which has enabled them to weather various crises. And since the establishment of The European Single Market, they have grown really big,” Martin Jes Iversen explains. He also mentions GN Big North A/S, which is now one of the world largest producers of hearing aids and headsets.

GN Big North A/S was founded in 1869 by C.F. Tietgen. It is a company that Martin Jes Iversen has researched, and according to him, it is a great example of a company that has been able to resist sudden crises and, in some instances, have even used them to redefine itself.

“GN Big North – or the Great Nordic Telegraph Company, which was the company’s name up until 1985 – was one of Denmark’s first globally oriented companies. It had to interact in a changeable international setting, where international politics and domestic politics would often create unpredictable challenges. This put GN Big North down for the count on several occasions,” Martin Jes Iversen recounts and then adds:

“Historically, the company has been able to adapt and see new markets in new technologies.”

From versatility to focus

Originally, a deal between C.F. Tietgen and the Russian Tsar gave the Danish company a monopoly on establishing and running telegraph lines to the Far East through Russia. Subsequently, the network was expanded across Europe and Asia, and even after the Russian Revolution, the Danish State was able to renew the deal with the Soviet Union. However, in time, prosperous years turned into meagre years, and in the chief executive suites, they eventually had to acknowledge that they were facing a new, rough reality.

That was how the wireless telegraph and other new technologies found favour. And in the 1930s with The Great Depression and protectionism, the leadership decided to change its strategy. Immediately after the war, the company established a number of subsidiaries, and the group was now balancing on two legs. One was the traditional production industries such as a battery factory and electronics, while the other was communications and telephony.

“They shifted their focus towards new markets — some closely related to the traditional ones, and others in completely new directions,” Martin Jes Iversen explains, adding that in the 1980s, the company went through yet another restructuring, when they began focusing on fewer products. Before then, the leadership had decided to buy Danavox, a Danish producer of hearing aids, and in the following decades, the company continued to grow its hearing aid business through innovation and acquisitions

“ Decisions and transactions must be able to withstand the light of day, and a well-calibrated compass is required."

“Just like other successful Danish companies, they have gone from versatility to focus,” says Martin Jes Iversen, adding that the world of business in Denmark has changed, in as much as today, the largest companies are big both nationally and internationally. In fact, the twenty biggest companies are relatively bigger than the corresponding German and Swedish companies, if you hold their turnover up against the GDP of each respective country.

Current leaders are more challenged

Even though there have always been crises and changes, the researcher from CBS stresses that current leaders are more challenged than before in a number of areas, including pace.

“Changes take place over shorter timespans. The technologies change faster, and in just five years, we have had a pandemic, a war in Europe and a number of other geopolitical crises. Add to that the climate crisis and growing inequality, which are also influential factors. And we have a new American president, who is radically changing trade policies as we know them. These are all conditions that a leader must be able to face, while simultaneously also being able to focus on the core business,” Martin Jes Iversen points out and adds:

“Furthermore, digitalisation has led to greater transparency now. Basically, all leadership decisions can be scrutinised in various contexts on different platforms. Decisions and transactions must therefore be able to withstand the light of day, and a well-calibrated compass is required. And it is not always enough to refer to the fact that current legislation is being observed. We have seen this in relation to trade with Russia after the invasion of Ukraine in February 2022.”

“Previously, it was common for businesses to have the same chief executive for ten to fifteen years, and often, strategies would cover a five-year-span. That kind of continuity is rare these days, and that is an expression of the fast pace of challenges and their increased complexity,” Martin Jes Iversen underlines.

Martin Jes Iversen is an Associate Professor at CBS as well as MPA Professor in Maritime Business at SMU in Singapore.
His primary research area is strategy and innovation as well as international shipping.
His research focuses on the role of private companies in the development of the modern capitalist society.
He has written several books about Danish companies.

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Were chief executives of the past also expected to act in an unpredictable world?

"Challenges are fast-paced and increasingly complex."

“ Decisions and transactions must be able to withstand the light of day, and a well-calibrated compass is required."

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