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Corporate boards wanting to increase their diversity usually focus solely on gender and race. But what about age diversity?
The average age of business leaders is on the rise, in spite of the fact that younger generations make up the majority population. Homogenous boards miss out on the diversity of thought that comes with a wider range of ages, as well as a myriad of other skills which stem from different social environments and cultural upbringings.
Technologically adept, culturally savvy, inquisitive and ambitious, young professionals are changing the corporate world; it’s time that corporate boards got up to speed.
The advocacy of corporate diversity has been growing for years and, with mounting pressure coming from institutional investors, most S&P 500 boards have responded; 2017 marked the first time in history that more than half of their new directors were women and/or racial minorities. Yet, whilst the importance of female talent and diverse cultural perspectives is widely known, the benefits of younger talent – and more specifically younger leadership – is less so.
Boards seek professionals with the experience that sees them fit well into the traditional board room culture and can benefit the business. Pair that hiring logic with the assumption that age equals experience and it’s unsurprising that younger candidates are dismissed readily based on the duration of their career. But organisations need to open themselves up to the possibility that this may not be in their best interest after all. Hiring from the same cut will create a homogenous board – and of an older age average – which in most cases is a substantial leap from customer demographics.
The technology literacy gap is the perfect example of how this mindset can be short-sighted. Statistics show young professionals are more technologically competent than older leaders. Digital plays a role in advertising, brand awareness, social media presence, digital strategy and management, international sales, PR, automated processes, customer engagement campaigns; the list is endless, making a tech native a valuable member of any board. Younger talent provides more than just a ‘fresh’ perspective, they bring new, unique skills that can impact the growth and success of an organisation to an outstanding degree.
Knowing how many benefits young leaders can bring, we were keen to speak to our clients and candidates on the topic. We’ve spoken to our network – to clients who readily embrace younger leaders and to candidates who have quickly climbed the ranks – to hear about their personal experiences, across an array of industries. Their comments have been collected below:
Our candidate is a multi-lingual, thrice graduated industry professional who, spending the majority of their career with one employer, has worked through the ranks from a graduate development programme through to a global managerial role. As a noticeably younger member of the company board, they have experienced the prejudices and progression obstacles that many young – capable – leaders face, especially within large, well-established, international corporations.
“I sat in a room last year with our leadership team. They were discussing HR, and the entire team was openly talking about millennials, and not with a positive tone. Most of the comments were "entitled, need to work harder, etc.". The usual things. After about 20 minutes, I spoke up and said something similar to the following:
"I just want to say that I'm a millennial, and I take some exceptions to the tone of this conversation. I'm 28 years old, I have already moved for the company 4 times. I have already completed my MBA by going to school and working at the same time. Millennials are the most educated generation to-date, and if we want to work for multinational corporations, we are required to enter into these rotational programs out of university and uproot our lives for the company multiple times just to gain visibility and experience. I'm one of the first people at the office in the morning, and one of the last to leave. Given this perspective, I think it's important that we look at Millennials differently and understand that we're a highly-educated generation of talent that can benefit an organisation if the organisation takes time to understand their development goals and needs and utilises them appropriately."
The room went silent. And of course, nothing changed.
What I see is a ‘groupthink’ at the top and a good old boys' club that has "their way" of talent development. Large multinationals have their development process, and it is not transparent. To get direct people management earlier in your career, leaving the organization is usually the best option. Also, the pay increases are much better. I recently read an article that said that a person's lifetime earnings are 50% less if they stay with the same organization throughout their career. If inflation is 1-3% per year, and you get a raise like that every 2 years and then a promotion with a 5-10% bump in pay every 3-4 years, it's hard to increase earning significantly more than inflation. Millennials know this, and large multinational companies are too arrogant to realize that a significant pay increase 5-10 years into someone's career will substantially help with employee loyalty and retention.”
At 31, Gav founded the organisation The Test People, now known as Ten10 and the UK’s largest independent testing company. By 38 he had won 23 business awards, including IoD Yorkshire Director of the Year, and now at 42 he is the CEO of Website Performance Insights Platform RapidSpike. Gav is a living example of a successful young entrepreneur and an accomplished leader.
“I don’t think there is as much stigma around young leaders as you would expect. Employers are becoming much more receptive to the idea of younger business leaders as young entrepreneurs like Mark Zuckerberg and Elon Musk have shaken up the aesthetic of traditional business structure over the last 10 years.
Our younger generations are changing; they’re more engaged, more driven. People are a product of their environment and, in this case, that environment is more accessible and open about business. Social media has revolutionised the speed at which people receive and learn new information therefore progression is also expected to be faster.
Being around other young talented individuals helps you stay fresh and innovative. As a leader myself, I make sure I embrace change which include listening and acting on information regardless of its source; great ideas can come from anywhere. I work in partnership with my colleagues and consider all options before making important decisions.
It’s like the old saying goes ‘If you’re good enough, you’re old enough.’ To other young professionals aspiring to become future leaders, my advice would be:
Keep learning. If you want to be a future leader you need to have knowledge, you should never stop learning. Read books, listen and talk to others, attend events, and do it all daily.
Have purpose. You should always have a goal that you are working towards, and not something so vague that you can’t measure or achieve it. For example, more money or happiness shouldn’t be your end goal as they are only biproducts of other goals.
Take care of your health. You only have one body, so don’t neglect it or you will regret it. If there was one place I feel I've failed, it’s here. I perhaps would have achieved more had I looked after my health.
Always give more than you take. Make sure you give back; it might be an event at a school, something for charity or just free business advice. Giving is key to feeling great and as long as you can inspire one person in the room, you are doing your bit.”
Max joined his family business Veissmann – a world-leading, 100-year-old climate solutions company – at the age of 27, taking on the role of co-CEO at just 29. Given his own success and business experience, he appreciates the new perspectives and different skills that younger professionals can offer and is a strong advocate for developing and hiring young leaders.
“Acknowledging the new perspectives and expertise brought in by young hires is key for competing in today’s world.
Many young leaders have less “path dependency” which usually results in a higher courage and willingness to take risks than settled managers. They bring a fresh perspective from the outside without being routine-blinded already.
Being raised in the digital age, younger leaders also bring a natural understanding and affinity for new business models and digital solutions, allowing them to take a more holistic approach towards digitalisation.
Often then it is the combination of generations’ experiences that provides the right growth environment for a business. My father trusted me with a lot of responsibility within our family business at a young age. Having lived almost three years in Asia, a lot of which was in China, I have a great awareness of environmental problems such as climate change and air pollution. I am driven by making a true impact and I think that my awareness of these problems - paired with my commitment to contribute to the solution - put me in the best place to take on the responsibility of our family business.”
Alongside himself, Paul’s colleagues and fellow leaders occupy a young demographic, from early 30s to mid 40s. He and his employer deliberately target younger employees in their hiring strategy, finding that whilst older professionals rely on technical expertise, younger people are more interested in challenging the ‘norm’.
“As a young leader, you are constantly leading people who know more than you and have greater levels of experience. It’s only natural then that you need to build the trust and respect of your team before you are able to get the most from them. When younger leaders perceive their challenges to be based in prejudice that lands a little naïve to me; it’s more about needing to prove yourself to your team, to build your team’s confidence in your leadership ability just as every leader needs to do anyway. Power doesn’t come from a place in the organisational chart or, at least, you get limited effectiveness out of that kind of power.
In general, young leaders aren’t of value; diversity and alternative thinking is. Diversity of thought on a team solving problems brings better results, regardless of the dimension of diversity you’re flexing. If staffing is disproportional, either too young or old, nothing will change. This links to the push on female leadership too – female leaders will pay huge dividends in male heavy environments, but not necessarily in already female-heavy ones. Diversity reaps better results and that’s what companies want.
My age is totally irrelevant to my performance. Provided you’re talented and motivated, when you’re on the upswing of your career you are always capable of more than your resume demonstrates you can do. Young people have always got ahead when someone more senior takes a chance on them. I’ve got ahead because people have taken chances on me, and I’ve always done my best to demonstrate that those were worthy bets.
People who have done things the same way for a number of years - and had success doing so - go back to the same proven approaches because they’re rational beings! Young leaders, in comparison, tend to be more open to trying different things and taking risks. That’s both a benefit and a curse though, as they’re less aware of the potential pitfalls of which the more experienced leader might have knowledge. I think one of the absolutely key strategies to being an effective young leader is to embrace humility and recognise how little you know, then go about systematically making sure you access the experience of people who do to inform the team’s decisions.”
Sam is a specialist recruiter at CSG who focusses on the recruitment of young leadership. As a huge advocate of young professionals, Sam helps to educate his clients on the benefits of younger management and on long-term strategies that they can form part of, which can be critical to both short and long-term organic growth.
“There is a huge gap between business leaders and the youth of today coming through university, so the perfect chance – and a need really – for clients to start embracing younger leadership.
I talk to businesses on a daily basis about the advantages of placing future leaders – those of a notably younger demographic – either getting them into the business early in their career and starting the “succession planning process” or hiring them directly into positions of leadership.
Businesses get someone who thinks differently to those approaching the end of their career, someone who embraces new philosophies and someone who embraces the use of new technology and social media etc. They can also start to implement long-term strategies; C-Level succession planning for example, can be taken care of in the one hire. It’s all about considering the long term. The hire might be costly now but taking this individual on at a higher level in 2 years’ time will cost even more and at that point you’re already 2 years behind the curve. As a by-product, businesses often improve their staff retention too. Colleagues see the new hire and, looking at the type of person brought in, see that the business is moving in the right direction.
People forget how incredible individuals of this age bracket can be. We’re not talking about just anyone who is young and ambitious, but specifically those with the credibility: the knowledge and qualifications (MBAs, PhDs), the high levels of responsibility – especially compared to their peer group, and the signs of success and appreciation such as a fast progression within the business and high salary. Younger leaders are generally less afraid of challenging business norms and can effectively inspire teams and other individuals to seek more from their career and push the boundaries of success. Their input and leadership can be hugely beneficial to businesses and I make a huge effort on a daily basis to communicate that within my sector.”
The evidence making a case for age diversity is clear; young leaders will more than pay dividends in the long run. Whilst a more seasoned candidate has the advantage of experience, boards only utilising the talent of their older employees are missing out on the perspectives that can provide crucial insight to boost their bottom lines.
To keep up with their competitors, companies need to diversify their decision makers – adding, and listening to, younger people. Experienced senior staff – directors, executives, board members – are hugely valuable, but alongside the experienced you need those willing to take educated risks, accustomed to different norms and business processes.
That starts with the thoughtful recruitment of qualified, responsible candidates – not just diversity for diversity’s sake. CSG specialise in finding the senior level talent to add value to client boards and ensure the future of organisations. We do not limit our searches based on age, but focus instead on skillset, experience and capability, engaging the talent which will make up the next generation of leaders.
Whether you are a qualified candidate looking for the next step in your career or a client wanting to add fresh ideas to your existing senior team, please don’t hesitate to get in touch. We work across 7 distinct sectors, from 5 global offices and on an international scale. We can be reached at +44 (0) 333 323 2000.
The Financial Times, Average age of UK board members is rising, 18.12.17
PwC, Board Composition: Consider the value of younger directors on your board, 04.18