The age battle for CEOs: young vs old

While some organisations may prefer younger and more agile CEOs, having older and more experienced people at the top also has its advantages. Let us look at the pros and cons pointed out by HR leaders

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Parag Agarwal, the CEO of Twitter is only 37 years old. Sundar Pichai became the CEO of Google in 2015, when he was only 42. Even Satya Nadella was named the CEO of Microsoft at the age of 46. These are the three poster boys among Indian professional CEOs of global companies, and incidentally, they became CEOs in their late thirties and early forties.

Some of the entrepreneur CEOs in India, are even younger – many in their 20s!

It’s common for people to assume that the average age of CEOs is going down by the day; that they are getting younger, but that’s not the real picture.

“In brick and mortar companies, there has generally been a reluctance to hire anyone below the age of 50″

Jaikrishna B, president-HR, Amara Raja Group

The average age of a CEO among the 500 largest companies was about 58 years in 2021, according to an executive search firm, Spencer Stuart. According to another report by Deloitte, the average age of men CEOs in India was 61.1 years in 2021 and that of the women CEOs was 57.4 years. The broader trend in CEO age still doesn’t favour youth.

Most Indian companies, especially the traditional Indian corporates, still rely on experience and prefer silver-haired CEOs.

“Larger companies prefer only CEOs who have toiled hard in situations for long periods of time. They will not hire people with just five to seven years of experience but take on people with at least 15 to 20 years of experience as CXOs,” says Gajendra Chandel, senior HR leader and practitioner.

Scale of operation

Amit Chincholikar, Global CHRO, Tata Consumer Products, explains the difference between a large company and a smaller company, through a maritime example. He likened a large, traditional company to a freight container.

When a freight container needs to take a turn 10 nautical miles from a point, it’ll have to start planning in advance, about 10 miles away. A new startup or a smaller business venture, on the other hand, is like a speedboat, and therefore, more agile in its journey.

“The average age of CXOs in large companies has come down by seven to eight years”

Amit Chincholikar, Global CHRO, Tata Consumer Products

As Chincholikar rightly states, “Large, well-established companies are defined by their big scale and complexity in operation. To manage such a scale requires a set of experiences, which enable a person to think from the point of view of understanding what it takes to succeed”.

He goes on to explain, “Typically, those with a variety of experiences are preferred as CEOs of large companies, because they are expected to have the ability to manage scale and complexities and large cross-functional chains,” says Amit Chincholikar, global CHRO, Tata Consumer Products.

However, he believes that there has been a shift in the norm of the average age and experience in the C-suite. Earlier, the norm was that people needed to spend about three years in a role, before being promoted to the next role. In a large corporation, about seven to eight of such experience sets are considered essential before one attains the coveted CXO position.

“Even in large organisations, the average tenure per role has come down to two years. Hence, the average age of CXOs in large companies has come down by seven to eight years in the past 10-12 years,” he asserts.

Jaikrishna B, president-HR, Amara Raja Group, points out that each organisation is at a different stage. Small-scale companies need people with experience for the top positions, assuming that they are in a turnaround complexity. However, they will not generally choose by age.

“A younger company may not look at someone with so much experience as CEO because with experience, unlearning may be difficult”

Pankaj Lochan, CHRO, Jindal Steel and Power

“Sometimes, they will look at people with at least two decades of experience, which can be attained by a person at around forty, which is still a younger age. However, for brick and mortar companies, there has generally been a reluctance to hire anyone below the age of 50,” states Jaikrishna.

The primary reason behind hiring older CEOs is that they are expected to have much more wisdom attained through years of experience, and are expected to possess better intuition in running a large-scale company.

Experience

He adds that even though young entrepreneurs may be able to successfully set up businesses out of an idea, or establish operations which may successfully scale up, they still need people with experience of handling large setups efficiently.

Hence, it is not uncommon to see a more established startup hiring a CEO who comes with an experience-rich background. “Larger startups also bank on experienced CEOs, even though the founders of the startups may be young and willing to take risks and make investments. After all, in large companies too, the founders were young when they started and over time when next-gen promoters took charge they happened to be much younger. Founder CEOs will be predominantly and relatively young at the time of starting the enterprise. As the size of operation increases, they tend to bring in people with more experience to helm the organisation.”

“The primary criterion assessed at the time of appointing someone at CXO level is their mindset rather than experience in a startup”

Gajendra Chandel, senior HR leader and practitioner

Pankaj Lochan, CHRO, Jindal Steel and Power, says, “Large companies look for people with at least one and a half to two decades of experience. A younger company may not look at someone with so much experience because with experience, unlearning may be difficult. When building a business, one would need someone with a propensity to learn, and greater unlearning may be required for someone with much experience.

“For JSP, the CEO would need to have knowledge of dealing with a large set of people, be aware of the possible outcomes of decisions, logistics — inbound, outbound — liasoning, and so on. The position requires a mature mind, knowledge of all parts of the business and the value chain,” Lochan says. He further explains that hiring young people also disrupts the hierarchy of the organisation. Between a 30-year old and a 45-year old with the same IQ and capabilities, Lochan would prefer the latter for the CXO position, simply because of the decade of experience advantage on the side of the 45-year old.

However, he stresses that the hiring will still be done strictly on the basis of merit, not age.

Lochan also shares Chincholikar’s observation of the declining age of CEOs even in the traditional companies. “In terms of learning and development, India’s manufacturing space has evolved from pure physical input to management input L&D. Training people on management skills has become a part of the KRAs. With this, competencies have increased and the average age of CXOs has thus decreased. Whether it is a good trend or not, I cannot really say,” he says.

“Companies keep on challenging talent. If they perform well, they are fast-tracked to the position of a CXO”

Praveer Priyadarshi, Senior HR leader

Startups

Chandel says that the new-age companies do not look at experience when they hire someone for a CXO position. The primary criterion assessed at the time of appointing someone at the highest levels is their mindset. People who break into the top management positions for such companies need to be agile decision makers with a mindset aligned with the vision of the founders of the startups.

The general vision with which the founders operate is to secure growth in a relatively short time, and that means, quick turnaround time.

Chandel observes that people looking to nurture a career gradually, aren’t ideal for sustainable employment at such companies. Even when they end engagements with these startups, they don’t bag lucrative positions elsewhere.

Senior HR leader, Praveer Priyadarshi, observes that in recent times, people are getting better-quality exposure and experience as compared to the past. That’s why, their skills and capabilities are growing much faster. “One doesn’t need to work for 30 years to hold the office now. Age and experience are not as important today as they were before. I also foresee this translating to larger companies,” he says.

“We don’t look at talent as a function of age any more. It is a combination of capability and competencies. The CXOs of many big multinationals today are relatively young. Companies keep on challenging talent. If they perform well, they are fast-tracked to the position of a CXO,” Priyadarshi explains to HRKatha.

Train young CXOs

Priyadarshi believes that there needs to be more rigorous inculcation of softer skills. Leaders need to be better prepared to handle situations that they may encounter in their career. Cases such as the better.com firings (link previous article here) point towards the dearth of softer skills in leaders.

“The trend of people reaching CXO positions at a relatively young age will not last very long”

Debjani Roy, advisory CHRO, Mind Your Fleet

He observes that even though the trend of younger CXOs is picking up, these leaders definitely require coaching and nurturing to be effective. Older people, who are battle tested and come with tonnes of experience make for good coaches and can use their years of experience to nurture the younger talent.

Debjani Roy, who works as an advisory CHRO for Mind Your Fleet, has experience of engaging with such startups in consulting roles. Explaining the challenges associated with training younger CXOs in a company, she tells HRKatha that during her seven-month engagement as the CEO’s strategic counsellor, she observed a clashes in ideologies. Further, she does not believe the trend of people reaching CXO positions at a relatively young age will last very long.

Roy explains that leaders such as Ratan Tata and Anand Mahindra, even though they came from promoters family, have risen through the ranks through years of institution building and managed to build their careers gradually, fare much better professionally and command greater respect.

“There needs to be a minimum years of experience for a professional to graduate to a leadership position. That is the fundamental of the traditional way to do business. One can’t make this stand on its head, which is what attaining such high positions with limited years is doing,” she asserts.

Roy further says that young companies prefer younger CXOs to avoid clashes in board meetings. After all, people who bring in more experience will have a different perspective on how businesses should be conducted than the young founders, who aim for quick growth.

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