Like most workers, I have strong suspicions that many of the decisions made by corporate leaders are based entirely on the last book or article that they have read. While working at a major company with which I was associated, I started to notice that the some of the most experienced people in the organization were being “exited”. Grey hair and high expertise in many areas seemed to make one more likely to be let go. At roughly the same time, I started to hear about the “death of expertise.” Leaders spoke of this as a good thing, implying that they simply no longer had need of the people that held the skills deemed to be part of the past. The leadership spoke of how the company needed people that were “young and innovative.” It was clear that they believed that he older and high expertise workers were simply no longer part of the companies innovative future.
As I watched my friends and co-workers, at first from inside of that company and later from outside, I noticed a curious phenomena – those older, high expertise workers did not fade into sad, small jobs or become Walmart clerks. Instead, they founded companies, invented new products, and generally became more, not less successful. Clearly, there was something I did not understand here.
The funny thing is that, as with most generalizations, the generalization of Young and Innovative is not fully accurate. Yes, there are young and innovative people, and many good companies have been started by young people. But the most successful companies are started by people over 40. In fact the average age of a founder in the US is about 40, and companies started by people over 55 grow much more quickly than companies started by people under 35. Companies started by people over 40 tend to survive better, grow to higher valuations and in general do better. So what I observed in my peers and friends in fact reflects not just something unique to the exiting class of my old company, but rather it reflects something verified by academic studies.
We can speculate on what makes those folks with grey hair better founders and CEOs of new ventures. It could certainly be the routine experiences that those older workers bring to the table. I could offer that it is, more than anything, the ambition to make a path for themselves and the knowledge of what that takes. Whatever the cause, it means that investors and executives should think carefully about the value of grey hair and what that experience brings.
Oh, and that company I left? It has gone into a period of deep troubles that were in some part driven by a failure to maintain innovation. Innovation that used to be provided by those high-expertise people that were let walk out.