There are pros and cons to hiring a younger CEO, but at one major company, the risks might be worth the reward.
Boeing CEO David Calhoun is stepping down at the end of the year amid major public concerns about the company's quality and safety standards. Shawn Tully, senior editor-at-large at Fortune, spoke with several people who hold top positions in the aerospace industry regarding Boeing's succession plan. These sources included customers and suppliers who worked directly with top management and "witnessed the shortcomings in the C-suite," Mr. Tully wrote April 2.
There was a consensus among Mr. Tully's sources that an external hire, or "newcomer," would be best for the company. He wrote, "Someone who didn't grow up in the failed culture, who doesn't have friends in the company, is probably a better choice to bring radical reform."
He continued that this hire was likely to be younger — in their forties or mid-fifties — so they have the ability to lead for as long as possible and impart lasting change. It will take time to get the company back on track, just as it took time to derail, Mr. Tully reported.
Boeing's plight is more public than most health systems: with a market cap of more than $114 billion, it's among the 150 most valuable companies in the world. But despite the company's unique position, it's not unique in this facet of succession planning. The average CEO age has been declining post-pandemic, and in 2022, nearly 30% of newly appointed chief executives were under 50.
Younger CEOs might be more tech-savvy than their baby boomer predecessors, and the lack of tenure could lend itself to greater agility. These qualities are particularly coveted in the healthcare industry, several executives told Becker's in March. Bharat Magu, MD, senior vice president and chief medical officer of Yuma (Ariz.) Regional Medical Center, believes young leaders bring an innovative flair that benefits both organizations and their surrounding communities.
"New Leaders to the organization with fresh perspectives are essential for both maintaining the organization's success and sparking innovation," Dr. Magu said. "The right leaders possess the ability not only to improve existing service delivery for enhanced efficiency but also to discover new opportunities and collaborate successfully with the business development team."
Maria D'Urso, MSN, RN, senior director of ACN and maternal-child services at NewYork-Presbyterian Queens, echoed the importance of emerging, curious leaders in the AI age.
"This generation of leaders has learned the importance of remaining nimble in order to be able to understand and adapt to the changing healthcare environment, change strategic course and engage the teams in implementing new tactics that will lead to meeting the hospital's mission," Ms. D'Urso said.
As health systems continue to name younger CEOs, they should be wary of potential turnover, according to Jena Abernathy, a senior client partner in Korn Ferry's executive search firm and sector lead for board services in its healthcare practice. The top job often comes with a honeymoon phase, which first-timers are particularly vulnerable to.
"We've seen an uptick in first-time CEOs. Anytime you start to see that, there are potential risks involved, especially with an industry that's going through transformation like what we're seeing in healthcare," Ms. Abernathy told Becker's. "So you're seeing some of these [first-time CEOs exiting] that, unfortunately, were not successful."