Young CEOs are becoming much more commonplace in today’s business world. It used to be that young CEOs were the exception and not the rule. However, it is not at all uncommon to see 20 something and 30 something CEOs running very large and successful companies in today’s technology-driven, global business environment. Regardless of how bright and talented these young CEOs may be, there are nevertheless certain challenges and obstacles they will face for the first time that more seasoned executives have encountered numerous times over the course of their careers. In today’s post, I’ll share some thoughts on how to leverage the strengths of younger CEOs, while mitigating the inherent risks associated with inexperience…
In working with a number of Private Equity and Venture Capital firms who have young CEOs at the helm of their portfolio companies, or boards that have recently hired young CEOs, it is clear to me that most organizations realize the upside of younger talent. That being said, these engagements also serve as evidence that they are looking to hedge their bets by using me to help mitigate the risk associated with young CEOs.
While boards and investors like the intelligence, commitment, enthusiasm, and boundless energy that young CEOs bring to the table, it is perhaps their relentless drive to make their mark on the world that can be most attractive.
On the positive side of the equation, young CEOs sometimes accomplish great things because they don’t have the experience to know what they are not supposed to be able to accomplish, and as a result, sometimes appear to achieve the impossible. However more often than not, young CEOs operating outside of experiential boundaries are met with frustration, if not failure, by having what appear to be great ideas eventually unwound by unforeseen factors that were only unforeseen to them due to their inexperience or lack of discernment. It doesn’t matter whether a young CEO is a college dropout, whether they possess an Ivy League MBA, or whether they spent a few years as a consultant at a top strategy firm…they are still likely sailing in uncharted territory more often than not.
The simple truth is that everyone, regardless of their age or title, needs sound advice and counsel. However, this is particularly true of younger executives. If you were to speak with a 50-year-old CEO and ask them how much he or she has learned over the last 20 years of their career, they would most certainly say the experience gained during that time was invaluable. Let’s use the current state of the economy as an example…20 something and 30 something CEOs have never experienced a sustained period of slow economic growth, much less a global recession. They have no experience in growing a business in a declining market. Contrast this with a more seasoned executive who has lived through a few different business cycles and the experience gap becomes very clear…
The purpose of this text is not to discourage investors and board members from placing a young CEO at the helm, but rather to encourage setting them up for success as opposed to failure. A bright and talented CEO is only going to be that much better with someone in their corner charged with helping them navigate the complexities of situations they have yet to encounter. My strongest recommendation is to provide your chief executive with a dedicated resource to develop their professional skills through mentoring and coaching. Not only will you be happy with your decision, but the young CEO will shave years off their learning curve.
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