While railing against ageism, or a bias against hiring older employees, has become common, some leadership pundits argue that executive ranks need to get younger to drive innovation and solve problems that require a longer-term perspective.
“A seasoned leader may favor short-term results over long-term benefits that won’t manifest during their tenure,” Martin Reeves, chairman of Boston Consulting Group’s BCG Henderson Institute, wrote in a co-authored article in the Harvard Business Review. “Moreover, they may be reluctant to challenge the mental models or organizational structures that have underpinned their success. Conversely, younger professionals may be more open to pursuing new paths leading to long-term payoffs, given their longer career horizons. Yet, they are usually not in the position to effect change within their organizations.”
Reeves said a longer-term perspective will likely be required to tackle worsening environmental and sustainability issues, including biodiversity loss. He further noted that in a rapidly changing environment, an exec’s experience “becomes outdated quickly,” and they often lean on “less risky strategies” that align with past success when bold approaches are required.
Reeves writes, “Of course, these tendencies are not a simple function of age or tenure and don’t apply to every individual. Nevertheless, we believe that there is an argument to be made for rebalancing curiosity and experience in leadership, and to reverse the aging demographic of leadership at a time of tumultuous change.”
The average age of a Fortune 500 CEO is 57.7. A CNBC article also noted that the average age of a CEO has been rising with people living longer and healthier lives and the pandemic challenges delaying retirement.
Target last year earned headlines after announcing that CEO Brian Cornell, then 63, would stay another three years beyond the retailer’s mandatory retirement age of 65.
Recent research from Lei Gao, associate professor of finance at the George Mason University School of Business, found that companies with a larger-than-average age difference between the CEO and other C-suite executives are more innovative on the whole, including applying for and registering more patents. According to the findings, “Because younger executives have a longer career ahead of them, they can be patient about when investments will pay off. This makes them better able to counter CEOs’ orientation toward more immediate outcomes, such as financial performance and share price.”
In a column for the World Economic Forum, Arjun Shekhar, co-founder of Pravah and ComMutiny - The Youth Collective, wrote that an infusion of youth at exec levels is required with 10,000 baby boomers retiring every day in the U.S. He adds that a society largely dependent on digital tools and devices demands younger leadership. Shekhar wrote, “Apart from the abundance of energy, youth may also provide fresh perspectives, irreverence for the status quo and a disruptive, creative, innovative mind that is willing to try experiments that may fail with no concerns about reputation.”