ESTABLISHING SHOT: streets of Washington DC.
Hazy late afternoon.
A flurry of police lights flash by, switching from red to blue faster than Arlen Specter.
PAN UP to high above Connecticut Avenue and move
THROUGH the windows of an office tower into
INT. THE OFFICES OF THE HISTORY FACTORY – DAY
A small and dedicated band of business history strategists are hard at work bringing the treasures of the past to life, working in rooms lined with artifacts from the most successful companies in history, and whistling a tune under their breaths that bears a vague resemblance to “whistle while you work.”
One of this merry band (CHRISTIAN) lifts his gaze from the most important rectangle in his life—his laptop screen—and addresses another man whom even an outsider would quickly identify as the CEO, given the fact that a) he exudes an easy and commanding presence, and b) his computer is pumping out Dead tunes mid-day, something only a CEO could get away with.
Boss, I’m thinking about writing a blog post called “Old is the New New.” You know, like “red is the new black.” Except it’s “old is the new new.”
Like Chuck Taylors. Old canvas shoes turn hip. Old is the new new.
Yeah. Same thing for companies. Right now, everyone wants reliability and proof that a company has staying power. And that goes double for industries like banking. The only way to prove reliability—I mean really empirically prove it—is by being old. In order to point to a track record, you have to have a track record. Preferably a long and distinguished one. Longevity matters. So these banks . . . instead of focusing on new gizmos and offers, or new iterations of zero-fee checking . . . instead they’re tapping into their status as venerable old greybeard institutions. Take Wells Fargo. Which has always understood that old is the new new. Even their logo is old. It’s an antiquated piece of technology. A stagecoach. In fact, from a technological standpoint, the thing isn’t just old, it’s pre-Cambrian. And yet that little old stagecoach rocked a record $3 billion in profits in Q1, while other banks are failing. Wells Fargo turned to their history, and their history paid dividends.
There you go. Old is the new new.
Speaking of greybeards . . . I started to wonder if “old is the new new” also applies to personnel. In an economic downturn, are older and more venerable CEOs more in-demand than young ones? What made me think of it is Jerry Yang. He’s 40. He just got replaced at Yahoo! by Carol Bartz, who’s 60. So I looked into it a bit. A company called Spencer Stuart conducts executive turnover research; they track incoming and outgoing CEOs within the S&P 500, and I ran some of their numbers. For the first quarter of 2009, 17 S&P 500 companies got new CEOs. Cool thing is . . . Spencer Stuart cites their ages. So I did the math, and it turns out the average age of these new CEOs was 53. I also cut the data on the 52 new CEOs installed at S&P 500 companies in 2008; their average age was also 53, interestingly enough.
So how does 53 compare to the average CEO age when we’re not in a downturn . . . which, I’m guessing, is something like 50?
As always, boss, your instincts are right on the money. I read an article in Forbes; it pointed out that in 1995 the average starting age of a CEO was 50.4 years, and that in 2001 it dropped down to 48.8. Across industries, it said in general the average CEO is 50 years old upon taking office.
(takes a sip of his coffee)
So, the verdict? In a downturn—2008 and 2009—companies are going with older CEOs. 53 versus 50. Old is the new new.
That’s interesting. But it isn’t necessarily conclusive.
I know. But it’s cool. So I think I’ll leave it in my blog post.
Outside the window, mother nature sneezes. Small mist-like droplets, almost sleet, join the city’s bi-partisan waltz . . . wafting left in the air, and then right.