Some day – maybe not this century, maybe not this millennium, but some day – Microsoft, IBM, Procter & Gamble, Exxon, General Motors, General Electric, News Corp., even Apple will be gone. It is inevitable. And in a nearer future, within most of our lifetimes, the leaders who now run those companies will be gone. Replaced. Retired. Dead. Forgotten. It is the nature of things. As one of the central tenets of Buddhism pronounces – impermanence is what defines our existence.
This fact seems central to why we prize youth in business so much. After all, young executives, it is assumed, are statistically farther from their exits. Their youth means the lifespan of what they create will be longer and will be farther from dissolution or extinction or, worse still, irrelevance. We also prize youthful leaders because of their spunk, their willingness to take risks, to sleep on threadbare cots and to drink copious amounts of Red Bull, while they are building those world-changing businesses that only young minds can conjure.
Problem is, those assumptions are not supported by the facts. Dane Stangler, a director at the Ewing Marion Kauffman Foundation, observes, “The United States might be on the cusp of an entrepreneurship boom—not in spite of an aging population but because of it.” Another Kaufman study reveals that the average age of founders of technology companies is a surprisingly high 39 – with twice as many over-50 executives as those under 29 years old.
I suspect the truest reason why older executives are on the cusp of an entrepreneurship boom: long term success in business requires season more than youthful spice. Writing in the Harvard Business Review, MIT professor Deborah Ancona identifies four character traits of a successful CEO – Sensemaking, Relating, Visioning, Inventing.
In sum, Sensemaking describes being able to make sense of the world and a company’s place in it; Relating describes being able to connect with team members, other executives, and partners; Visioning is a CEO’s ability to create a compelling vision of the future; and Inventing is a leader’s skill at taking her abstract idea to the concrete world of implementation.
Studying the traits carefully, it is natural to conclude that an inexperienced, youthful entrepreneur is likely to possess two of the required traits in spades – Relating and Visioning – the two traits that describe being able to form and keep relationships, and dream big. However, the case can be made strongly that the last two traits – Sensemaking and Inventing – require a good level of experience in order to be able to draw from past observations and failures, to expertly recognize what’s happening in the world, and then deliver, in real terms, on a dream. It is mostly the seasoned entrepreneur, it can be asserted, who has the stuff required to build. To stick with the metaphor, can a novice carpenter construct a building that will withstand the first, inevitable storm? Unlikely. I’ll trust a seasoned hand over a novice, any day.
The calamity plaguing Facebook might be a current case in point. Does Mark Zuckerberg have the Sensemaking trait? Certainly he did at one point, but he now seems to be struggling with truly knowing Facebook’s place in the world. Does he possess the Relating trait? If we’re to believe what has been written about him, perhaps not. Mark definitely had, at one point, Visioning and Inventing, but while a question mark still looms over whether he can vision his way out of his current challenges, the young founder now appears like he’s running dry on Inventing. Facebook’s anemic stock price raises a glaring question about whether a more seasoned executive would have followed his bankers into the imbroglio of a botched public offering.
Don’t get me wrong; there are plenty of examples of seasoned CEOs who failed miserably. Do we need to drop names like Gilbert Amelio to make that point? I choose not to, since they reflect poorly on the codger crowd. But I will counter with a parry against the oft-stated argument that young entrepreneurs have their older competitors beaten in the Visioning trait.
“Aren’t younger founders more visionary?” the arguers pose. Truth is that many entrepreneurs who have changed the world, and have had lasting influence, did it when they were older than forty. Henry Ford. Ben Franklin. Soichiro Honda. Lee Iacocca. These are biographies that are truly testing the theory of the impermanence of reputations.
I will concede one point, however. Young leaders are more spry, surely. They are less likely to complain about sore backs after hours of being stooped over blueprints or spreadsheets. Older executives, though, bring wisdom, something to which investors are now attaching great value, as they too look at the statistics about the history of success stories. While older executives will certainly time and again lose miserably to their youthful counterparts in a bar fight, I contend they’ll outscore young CEOs in a “Jeopardy” test of wits about operational effectiveness.
I believe the business world will undergo a radical transformation that favors more experienced entrepreneurs, driven by a renewed appreciation by VCs of the been-there-done-that crowd. More and more, veteran executives like me are now in the start-up marketplace, thrust into reinvention mode by the economy, and aided by the realization that the surest way to fight impermanence is by being valuable as long as possible. I project this “new generation” of experienced, and more savvy, leaders will surf us down the next wave of innovation.
[Illustration by Hallie Bateman]