Subscribe to Inc. magazine
WIRE

Here's Why Innovative Companies Have Such Young CEOs

The younger the CEO, the more groundbreaking innovations.
Advertisement

If you're trying to boost innovation in your company, you may want to find a young CEO.  

That's according to new research from MIT and University of Pennsylvania economists, who came to this conclusion by comparing patent citations and the CEO's age. 

As NPR reports, a patent that breaks new ground--a new pharmaceutical technique, for instance--becomes foundational to other research.

The number of citations show how much other research is based on a particular patent. This means that some patents are hugely influential while others languish in irrelevance. By counting the citations, you can see which patents are actually influential.

After looking at the age of CEOs at hundreds of American companies, the economists found a strong link between the age of the leader and the probability of breakthrough innovation. 

In short: The younger the CEO, the more groundbreaking innovations. 

It was the same case for leadership changes: When a younger CEO was brought in (a Marissa Mayer, perhaps?), the likelihood of game-changing patents went up. 

Why the difference?

"If you're an old manager, that (company is) your baby," lead author Daron Acemoglu says. "You're going to be very cautious in sacrificing that baby. But if you are a young manager, you come without that vested interest, without that baggage, so you're going to be much more radical in thinking about saying: Let's ax this brand. Let's forget about this technology. Let's make a switch to this new way of doing things." 

However, not every organization should start headhunting 20-somethings. The authors are quick to caution that if you're working in a highly established industry, then it's probably a mistake to bring in a kid who wants to blow everything up. 




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: