Patience is a virtue: Why older bosses are better
Youth is as prized in Silicon Valley as it is in Hollywood. The inexorable rise of disruptive tech companies, adored by investors and consumers alike, has ignited debate around the merits of young and older bosses, and what they can offer shareholders and employees.
Young managers are often said to be more innovative, energetic and less risk-averse than their older colleagues, and are often able to dedicate more of their time to their work. But is experience just as valuable?
OLDER AND WISER
Not only are older bosses more qualified, they are also better prepared. If young people have more innovative ideas for starting up, managers with more experience may be better placed to oversee their implementation, particularly in businesses looking to scale.
“As a technical founder, you probably do not have terrific knowledge of how to build a worldwide sales channel, how to create an invincible brand or how to identify and negotiate ecosystem-altering business development deals,” Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz, has argued. “Acquiring a world-class senior person can dramatically accelerate your company’s ability to succeed in these areas.”
Moreover, important managerial competences, like financial prudence, may be a symptom of being middle-aged. A study in the Brookings Papers on Economic Activity found that adults aged 53 are the least likely to make financial mistakes. Such acumen was found to decrease in both older and younger people, suggesting that CEOs blossom in their early fifties. Interestingly, the UK’s top-performing companies may have reached this conclusion already – in March, research by City PM found that the average age of a FTSE 100 chief executive was 52.8.
RISK-TAKING
Crucially, the nuanced judgement of older bosses does not preclude an appetite for innovation or risk, even in the disruptive tech industry. So you shouldn’t worry about arriving at the helm later in life.
A study by the Kauffman Foundation suggests that twice as many founders of young, successful US tech and engineering firms were over 50 than under 25. Researcher Vivek Wadhwa concluded that, while older people “may lack an understanding of mobile technologies and app development… this can be learned in the same way that the kids learned them.”
Moreover, young chief executives may be more likely to deliberately pursue risky strategies which aren’t in their company’s interests. Research by Emory University’s Soojin Yim found that companies are more likely to make acquisitions if their bosses are younger, and this trend is most common where bosses “likely anticipate or can influence high post-acquisition compensation.” In contrast, young bosses weren’t found to take investment risks if there wasn’t a chance of making permanent compensation gains.
BURNOUT
Reaching the top later in life may be the key to remaining there for longer. Karen Firestone, president of Aureus Asset Management, told the Harvard Business Review about her experience of having a “flatter career trajectory”, which had been interrupted for a decade in her 30s so that she could have a family. Conducting an informal survey, she reported that 90 per cent of the men and women who had taken their foot off the accelerator “said their restraint or patience benefited their careers… and that they learned important lessons from it.”
Indeed, she may be right. When PwC surveyed 6,000 European professionals last year, it concluded that the largest proportion of “strategist leaders” were females over 55.