Has Gen X lost out when it comes to the C-suite?

The Wall Street Journal columnist Callum Borchers wrote an interesting article a few days ago entitled, "The Gen Xers Who Waited Their Turn to Be CEO Are Getting Passed Over".  It's well worth a read on your own, but the very first sentence in the article summarizes Borchers' point perfectly.  He writes, "When it comes to the C-suite, Gen X might be doomed to live up to its "forgotten generation" moniker."

Apparently, there are two trends happening simultaneously in the corporate world.  First, baby boomers are working past the traditional retirement age and staying on in their current leadership roles in the C-suite.  For example, 41.5% of chief executives of companies in the Russell 3000 are at least 60 years of age or older, which represents an increase from 35.1% in 2017.  As Borchers explains, many organizations have played it safe in recent years, particularly during and immediately after the COVID-19 pandemic, by either keeping their current CEOs in place or hiring experienced and/or well-established (read "older") CEOs.

Second, given the rapidity of technological change, especially with advances in computing and, in particular, artificial intelligence, companies are beginning to hire younger CEOs in their 30's and 40's.  Again, by way of example, the share of CEOs in the Russell 3000 in their 30's and 40's increased from 13.8% in 2017 to 15.1% more recently (please see the figure below from the WSJ article). 

As Matteo Tonello from the Conference Board said, "We're starting to see a barbell phenomenon in the CEO role where Gen X is being squeezed in the middle."  Gen X is typically defined as those individuals born between 1965 and 1980.  They are starting to reach their late 50's, an age which, at least historically, many first-time CEOs have been hired.  What's happening instead is that companies are skipping a generation and hiring younger first-time CEOs.  Borchers further notes that Gen Xers are looked upon as skilled tacticians rather than visionary leaders.  They are just not being viewed by Boards as transformational leaders or rising stars with big ideas about what the future could look like.

I've previously commented on the so-called "youth movement" when it comes to head coaches in the National Football League (see my post "Youth Movement").  At that time, I also commented on the growing trend for companies outside of football to hire younger CEOs.  Similarly, Becker's Hospital Review reported last year that the average age of hospital CEOs has decreased slightly over the last decade, but it still remains higher than it was in 2014.  Health care organizations are subjected to the same challenges and trends that companies in the Russell 3000 encounter, so it wouldn't surprise me at all to see a growing "youth movement" with respect to hospital CEOs.  Whether this is the right or wrong approach is a decision that most hospital boards will have to make in the best interests of their organization.  

Give trust to build trust...

A few weeks ago, I wrote a post entitled "Deference to expertise builds trust..."  What's interesting is that, in at least the way that it is used in the High Reliability Organization (HRO) literature, the word deference has almost the same meaning as the word trust.  Please allow me to explain.

The Merriam-Webster Online Dictionary defines deference as a readiness or willingness to yield to the wishes of others.  By comparison, the word trust is defined in three ways as a verb - first, to give a task, duty, or responsibility to (as to "entrust"); second, to put (something) into the possession or safekeeping of another (as in "to hand"); and third, to regard as right or true (as in "to believe").  However, the word trust may also be used as a noun, as in a firm belief in the integrity, ability, effectiveness, or genuineness of someone or something (as in "confidence") or alternatively, responsibility for the safety and well-being of someone or something (as in "custody").

So, by deference then, we mean are placing our belief, our confidence, and our trust in someone to make the right decisions for their team(s) and organization.  We are entrusting and empowering them with taking responsibility for not only their actions but for the actions of their teams.  We are giving them responsibility, and with responsibility comes accountability.  It follows then, that by entrusting (empowering) others, we are establishing an interdependence that is based on mutual respect and trust.  When we show others that they have our confidence, we in turn increase the likelihood that they will share that confidence by trusting us in return.

If you want an example that perfectly illustrates the concept of "giving trust to build trust", look no further than the "Open Prison" concept in India.  An "open prison" is one in which prisoners serve their sentences with minimal supervision and security.  Think of a prison without walls, towers, and barbed wire.  Prisoners are not even locked up in cells.  They are essentially free to come and go as they please, often leaving the prison to go to a job outside the prison during the day, only to return at night.  In some cases, their families are allowed to stay with them.  

The "open prison" concept started in the late 1950's and early 1960's in the Indian state of Rajasthan, where it remains a popular model today.  As Kavitha Yarlagadda writes (see "India's 'Open Prisons' Are a Marvel of Trust-based Incarceration"), "Designed to foster reform as opposed to punishment, the system is based on the premise that trust is contagious. It assumes — and encourages — self-discipline on the part of the prisoners. On a practical level, letting incarcerated folks go to work also allows them to earn money for themselves and their families, build skills, and maintain contacts in the outside world that can help them once they’re released."  In other words, "trust begets trust".  

Now, what does an open prison in India have to do with HROs?  I think they illustrate a key principle that is foundational to the concept of deference to expertise.  Deference to expertise is built upon mutual trust.  By giving trust, we build further trust.  Just like what happens with the open prisons in India.  "Trust begets trust, which then begets even more trust."  It's a virtuous cycle that leads to high performance teams and high reliability organizations.