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Business Intelligence

An old question revisited

Which is more important for effective leadership: youth and exuberance, or age and experience?

By Rob Weisman
September 7, 2008
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As voters ponder the choice between John McCain and Barack Obama, candidates of different generations, the matter of age - and the trade-off between experience and new thinking - looms large.

Businesses have long wrestled with that trade-off in hiring chief executives, swinging from gray-haired pros to young up-and-comers, depending on the era and the challenges. But many have now settled on a middle ground in grooming and recruiting executives for the corner office.

While companies are more open to candidates of different ages and backgrounds than in the past, today's ideal corporate leader may be the "inside-outsider," suggests Joseph L. Bower, professor of business administration at Harvard Business School, who studied management succession trends for his most recent book "The CEO Within." Such a person is both seasoned enough to understand how a company really works but shrewd and hungry enough to be able to shift gears and steer a company onto a sounder path.

George L. Davis Jr., a global managing partner at Egon Zehnder International, the world's largest privately held executive search firm, puts it somewhat differently. He looks for the intersection between a proven track record in an industry and the amount of time, or "runway," in which a leader might be expected to pilot the organization. "Employers want someone who has the greatest amount of experience with longest potential runway," says Davis, who's based in Egon's Boston office.

In the 72-year-old McCain and the 47-year-old Obama, American voters see more than the typical Republican-Democratic divide on issues ranging from taxes to foreign intervention. In age and manner - Obama energetic and collaborative, McCain brash and resolute - each personifies his generation's management style.

The pull between the two styles mirrors a similar tug of war playing out in corporate America. Age has long been an elephant in the room - usually not talked about but never far from mind - influencing how executives are courted, motivated, and judged. Hiring based on age is illegal.

But when head-hunters are told to corral candidates that are "innovators" and "risk takers" to run a start-up, or to round up "mature" and "tested" managers for a turnaround, the desired profile is clear.

"Boards tend to recruit CEOs that reflect their own values and aspirations," says Lauren Mackler, an executive coach and corporate consultant based in Newton. "And naturally, many of the things they're looking for are going to fall into certain age categories."

Businesses in the decades after World War II put a premium on grizzled veterans (often veterans of the US military's officer corps) who had paid their dues, climbed the corporate ladder, and mastered the command-and-control style that was then in fashion.

That changed in the 1990s, when technology invaded the workplace and boosted the fortunes of younger managers comfortable with personal computers and the less hierarchical business environment they were fostering.

During the Internet boom, as companies rushed to embrace e-commerce, young entrepreneurs like Jeff Bezos of Amazon.com and Marc Andreessen of Netscape Communications Corp. were lionized. Laptop-toting college dropouts juggled multiple job offers while older middle managers were sidelined. Age discrimination complaints spiked. And while some youth-infused companies prospered, others were burned by tech-savvy hires short on business results.

Then the pendulum swung again, and start-ups that had blossomed into sprawling successes, like Apple Computer Inc. and Dell Inc., began tapping older and more experienced executives to manage the next phase of their growth.

But the professional managers and consultants had no magic bullets. And eventually, founders like Steve Jobs and Michael Dell found themselves back in the saddle.

Today's business landscape features leaders of all generations. While most corporate CEOs are in their 40s or 50s, consultants say, there is a new crop of entrepreneurs, like 24-year-old Mark Zuckerberg at Facebook and Larry Page and Sergey Brin, the 35-year-old cofounders of Google Inc. Legendary graybeards hold onto the reins, meanwhile, at companies where they own a majority of stock, like 78-year-old Warren Buffett at Berkshire Hathaway or 85-year-old Sumner Redstone at National Amusements Inc.

"We're seeing less age discrimination today," says John A. Challenger, chief executive of Challenger, Gray & Christmas, a Chicago outplacement consulting firm, who notes that faster turnover in executive suites has created more opportunity.

"Many companies are looking for experienced leaders who've been there before. At the top level especially, knowledge is often valued more than energy."

One factor may be demographics. As managers from the baby boom generation retire, there are fewer young prospects in the pipeline prepared to take their place.

"There are 78 million boomers, and there are 46 million Gen-Xers, folks who are in their early 40s," says Deborah Russell, director of workforce issues for the AARP, a Washington group lobbying for older Americans. "That tells you that there's going to be a need to look at older workers as a pool to recruit from."

Companies weighing the choice between a young star and an old veteran - the identical choice facing American voters - have to consider what task the executive is being hired for and how the candidates' strengths and weaknesses match the challenge.

"Younger executives tend to be more up to date on new business practices and have a drive to prove themselves, but they sometimes lack the experience and the emotional maturity needed to lead people," Mackler said. "Older executives have the wisdom of experience, but the downside can be rigidity and complacency."

Robert Weisman can be reached at weisman@globe.com.

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