Are Most CEOs Too Old to Innovate?
Bron: Harvard Business Review
The youngest executive on HBR’s list of the 100 Best-Performing CEOs is Simon Wolfson of Next, at age 46. According to research on age and innovation, even he may be beyond his creative peak.
As Ezekiel Emanuel summarized in The Atlantic earlier this year:
Dean Keith Simonton, at the University of California at Davis, a luminary among researchers on age and creativity, synthesized numerous studies to demonstrate a typical age-creativity curve: creativity rises rapidly as a career commences, peaks about 20 years into the career, at about age 40 or 45, and then enters a slow, age-related decline.
By comparison, the average CEO on our list is 58. The number of CEOs in their 40s is dwarfed by the number who qualify for Medicare. Could the best CEOs be too old to innovate?
First, the research. In a 2010 paper, Benjamin Jones of Kellogg examined the age of Nobel prize winners and great inventors throughout the 20th century and found a relationship consistent with the one Emanuel describes.
The innovators in both groups did the bulk of their breakthrough work in their 30s and 40s. Virtually none of them completed it before age 20, but only 14% did so after age 50.
Researchers have identified this type of curve in a wide range of creative professions, though the peak age varies by activity. On its face, this data suggests that by the time most CEOs make it to the corner office, their most creative, innovative years are behind them.
But there’s a catch. The average age of Nobel Prize-winning work and technical innovation has increased by nearly a decade since the beginning of the 20th century. In 1900, it came around age 30; by 2000 it was nearly 40. That effect is even more pronounced in the natural sciences. The average age of Nobel Prize winning work in physics is now 48.
This increase is partly a result of longer life spans and an aging population, but it also reflects the additional years of education required to make scientific breakthroughs. Management also takes time to learn, perhaps more than ever in an increasingly complex world. The best CEOs keep learning as they go, and this may more than make up for any decline in creativity that comes with age.
Of course, the CEO job also requires more than creativity, and additional years of experience may help with this broader set of duties. For instance, researchers estimated the peak age for good financial decision making to be 53. So while creativity is probably in decline for most people by the time they hit 50, other critical management skills are still improving.
So far, none of this research has looked at CEO age directly. But in a recent paper, researchers at MIT and UPenn did find that firms with younger CEOs pursue innovation more aggressively, as measured by the number of patents they file. The researchers did not find that these younger executives were inherently more innovative; but they did find them seeking out more innovative companies. (This helps explain why the CEOs of successful tech start-ups are far younger than the heads of more established companies.)
The paper also found that younger CEOs tend to hire younger inventors, and the presence of younger inventors correlates strongly with innovative activity. That fact should both startle and encourage older CEOs. Building and maintaining an innovative organization means hiring the right people and funding the right projects, and in both cases experience is invaluable. But youth does have some benefits when it comes to creativity, and managers of all ages should remember that.
This post was updated to clarify that Nobel prize winning physics work is done at 48 years old; the actual prize is typically awarded much later.