The Rise of Young CEOs: How Will They Handle Themselves?

A CEO is responsible for choosing his company's identity, for declining certain opportunities and pursuing others. In today's society, companies place more emphasis on competitive advantage and planning that they do on purpose and corporate identity. We have learned that CEOs must demonstrate leadership by using strategy as a way to guide development over time. The purpose of a company must clear and explicit, but the CEO must be open to change; some of the most successful companies today have evolved and adapted their strategies to the changing environment. Strategy defines a firm, a concept that has been lost throughout past decades.

So much responsibility rests on the shoulders of CEOs, yet the business world, especially the technology industry, is witnessing a rise in CEOs of extremely young ages. Facebook's Mark Zuckerberg (27),  Groupon's Andrew Mason (30), and Google's Larry Page (38) are some of the big names highlighting this recent trend. These are all prominent companies that have been extremely successful. However, people are beginning to question the value and reliability of youth in corporate decision-making. These young leaders bring creativity and innovation to their respective companies, but often lack the knowledge and familiarity that experienced CEOs possess as a result of years in the business.

One of the biggest recent news stories has been Zuckerberg's decision to take Facebook public. This is a perfect example of a CEO making a significant change in his company's identity. Facebook has long been successful as a private company, but it has grown so big that entering the public market has become a viable option. The strategic decision to file for an initial public offering (IPO) has been met with both support and criticism. Regardless of whether it was a necessary move or not, it will change the culture of Facebook in the future.

Going public is one of many important decisions that CEOs are faced with. Zuckerberg is not the only young executive to make the change. Eight of the 42 technology and Internet companies that held IPOs in 2011 were led by CEOs under the age of 40. These leaders aren't afraid to make significant changes to positively impact their company, but questions about their maturity and vision for the future are still unanswered.

It is easy to criticize younger executives as being inexperienced and unable to respond to challenges. "Age provides a distinct advantage," management theorist Vivek Wadhwa argues. On the other side, Ben Horowitz of Andreessen & Horowitz argues that young founders and CEOs are better at finding innovative products, and while they might lack the ability to squeeze money out of such products, that skill is much easier to teach. Many times these young CEOs hire more experienced CFOs and employees for guidance and background.

Even outside the technology industry, young CEOs have demonstrated superior leadership and decision-making. Michael Reger (35) of Northern Oil & Gas Inc. had planned on drilling for oil in a field on the fringes of the world oil industry. It was a risky decision, one his father disapproved of and discouraged his son from pursuing. His father had been in the business much longer and had seen serious oil busts and failures. Nonetheless, Michael decided to continue with his decision, which has now become one of the company's greatest advantages.

Young CEOs are changing the world of business, and they are out to prove that their leadership can be effective, regardless of their age. Returning to strategies that emphasize future sustainability and corporate identity will help these young leaders experience success and prosperity in their companies.