The age test: a confrontation in digital transformation

The (mental) age of your company is one of the first things you will be confronted with when you deal with digital transformation. The bigger the company you work for, the higher the chance that it is an “old” company, with a leadership structure that is much older than the average of the market.

This is a first indication of how large the distance might be between how your company thinks and how your market thinks. As the image below shows, we are often confronted with a situation in which the average age of all the people in your company is substantially higher than the average age of your market.  This creates huge challenges in keeping up with the way your market acts, behaves and thinks. You might of course engage in all kinds of market research to know what your clients are doing, yet this is always an approximation of reality. The older you are (compared to your audience) the more likely you only understand them in theory. There are of course always those who are older yet still tech savvy, but in general these people are exceptions (ones your company should cherish!).

Traditional company age

The situation becomes more problematic when your leadership (CEO and management team) is even older than your company average age. This might create additional tension between the speeds of innovation your teams might pursue versus the inertia that is imposed by the overall leadership.

It seems to be the norm that top functions in most companies are reserved for the experienced and thus older people. They bring in maturity and have climbed the long ladder of hierarchy, which is necessary to understand how to become a good senior manager and how to deal with internal and external objectives and politics.

When we look at the new style companies, we see a difference. The image below shows an entirely different picture.

Digital company age

This graph shows the age test for Facebook. Zuckerberg is 30 at the time of writing this, his team is slightly older and his market is maturing as more and more people are joining. Many game-changing companies have leadership that has the age of their market or is even younger. Evernote’s Phil Libin was born in 1972, Uber’s Travis Kalanick was born in 1977 and Tesla’s Elon Musk was born in 1971. They are all (potential) billionaires and much younger than the average CEO from the average company. There are of course also cases like Jeff Bezos from Amazon, who was born in 1964, but the chances that your leadership has the same mental age as him are pretty small.

So please, apply this test to your company and if you feel that your management team has grown too old, recognize it and act. There is no reason why people that are thirty do not make good managers. You need a couple of them in your senior management team as they will bring younger DNA into the company and they might even inspire the older members to become mentally younger.

We’ve written about this and more in our book on Digital Transformation, check it out.

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