Lead in turbulent times. The value of experience. Third part – Dismantling some stereotypes (Chapter 2)

Stereotype: illogical belief that limits creativity and that can only be changed through personal reasoning on that topic.

During the following lines, I am going to try to dismantle certain stereotypes or cliches that exist in the popular imagination about the different behavior or the different attitude that experienced leaders have with regard young people regarding the situation in companies. I will specifically refer to three types of topics:

  1. The experienced leader represents the past, while the young one represents the future. In other words, when there is a future project with a long term idea, it is better to choose someone with years ahead than someone whose future perspective in years is lower than the past. This is false. And it is a mistake.

  2. The accelerated changes that happen in our environment demand young leaders who adapt to changing circumstances, because experienced leaders, we do not, or we do it too slowly for our times. This is false. And it is a mistake.

  3. Experienced leaders are expensive compared to how cheap young people are. These types of statements are made without understanding that the wage cost is only a part of the overall cost of a person, and also only one side of the equation. Someone is expensive or cheap based on what they give in return or offer, not on the absolute value of its payroll. Therefore, in general, this statement is false. And, again, a mistake.

In this chapter, and after having dealt with the first in the previous one, we will deal with the second and third points. I start with my argumentation.

Why inferring that young executives have a greater and better adaptation to change than those of us who are experienced leaders is false and also a mistake?

We are going to look at the evolution of business in the last 50 years to show how wrong the reasoning is.

The business paradigm has changed. Since 1973, when the first and most important oil crisis occurred, and with the passing of the years and the successive crises that the world has suffered, we have gone from an economy (in general, and excluding cases and situations extremes) with an accent on supply to another one that puts it on demand. From an economy where things were lacking, to one in which there is everything or almost everything. The targeting has passed without a solution of continuity:

  • To be in the productive means, because everything that was produced was sold. The difficult thing was to produce and have the appropriate technology to do it, since not everything was invented.

  • To be in the client, since:

    • There is excess supply in most markets for goods and services.

    • What one cannot or knows how to produce, is done by another company to which the service is subcontracted, and it becomes part of the product’s value chain.

    • The important thing is to convince the client that the value proposition of each one is different, and above all better than that of the company that will surely visit them next.

  • The financing:

    • Money has become a rare commodity, because the holders of mentioned financing drop it with a dropper, since they also do not live, as in the past, on the fat of the land, as the price of money has become significantly cheaper.

    • The cash collection of the services provided is now part of the concern of companies, to the point that there are credit insurance agencies that ensure the collection of all or part of the amount of the good or service provided and there are various banking and non-banking formulas (factoring, confirming, etc.) tending to that assurance, beyond the traditional discount letter or line, which in almost all cases has disappeared.

  • Globalization has led to the socialization of markets for goods and services. What was previously exclusive to a few economies has become something that makes the customer not care where it is produced, but rather that it is done according to criteria of quality, cost and services that are appropriate for him / her. The “made in” of yesteryear, which provided a plus in quality and competitiveness by itself, no longer exists, or at least is worth less.

  • New technologies provide tools unthinkable a few years ago, and have become buoyant businesses by their own. At the end of the last century and the beginning of the next, with the dot-com boom, business and personal life resembles little to the previous one, so that it is difficult to understand without mobile phones, computers, tablets and the internet, for put a few examples.

  • This paradigm shift has led to the changes in companies’ needs from fundamentally productive, and engineering, technological profiles, to those most demanded today of sales and financial ones, and of course, technological profiles.

  • The need to sell makes R + D + i a fundamental tool in advanced countries. The influence of the Low Cost countries, and especially China, has made certain markets for goods and services have simply disappeared, in favor of them being carried out in these countries, with the aggravating factor that given the initial lack of imagination of those countries, they copy very well, and that has certainly sparked their imagination. Given this, the former producing countries are permanently obliged to make R + D + i elements that establish competitive barriers that are difficult to overcome by to low-cost, at least in the short term.

  • The culture of failure is being socialized, creating second chance markets. Imported the concept from the USA, where failure is not at all a disappointment, this is no longer considered as something negative, coupled with defeat, but as in the Churchillian mentality, it is taken as a part of the road to success. And also, a necessary part. A leader who has not experienced the taste of failure, who has not risen from a fall, who has not reinvented himself after a failed process, who has not applied the fashionable concept of resilience, is a lame leader. Obviously it is not good to accumulate a history of consecutive failures, but it is also not good that there have never been any. To the point that in the Anglo-Saxon countries, always with the US at the top, candidates are being asked for their CVs of failures.

After all this digression about the change of scenery that has occurred in these years, it is important and a sign of realism and justice, to say that experienced leaders have been not only participants, but also drivers of these changes, the greatest in many years. To think that all this has happened only because youth “pushes” is, in addition to a mistake, a deep injustice. This shows our ability to adapt of those leaders, and what is more important, our strong wish to improve at all times. The world moves not only, but in large part, thanks to the fact that we, experienced leaders, make it possible.

For this reason, thinking that our adaptation to changes is inadequate, slow and that we are reactive to them, is false. And besides being false, believing that is a mistake.

Why saying that experienced leaders are expensive, compared to how cheap young people are is false and also a mistake?

To make this statement alone is to say nothing. Rather than it, it is not knowing what supply and demand mean. My two arguments for dismantling this stereotype have to do with it.

All this series of articles is being done on the basis that we are in a free market, not intervened, of supply and demand. This implies that the rules of the game are clear and that they are the same for everyone. But above all, it indicates that the actors who move in this game, know the rules, accept them and also do everything possible not to deceive themselves or others, but to keep them alive and active.

All of us who have managerial positions, and much more those of us who have been and are in front of the customers and pulsing the reality of the market, know that the price of a good or a service is not set by us, and not even, except in monopolistic markets, or in some oligopolies, neither does the client.

The good salesperson is the one who, based on studying his sector, his clients, market movements, etc., is, among other things, able to guess what is called the target price. This means that the back-office technicians no longer indicate the prices at which a product or good should be delivered, using the “cost plus margin = price” technique, but the company as a whole tries to obtain the best of the possible margins, taking into account that the price variable is fixed or not very mobile, and is also known.

It happens that sometimes, those who defend and even accept these terms, do not apply them to the case at hand, that is, to how to remunerate a position when we have the decision to propose a candidate.

The simple idea of ​​lowering the cost of the position by hiring someone with a lower salary burden is, in addition to not understanding the law of supply and demand, perfectly applicable in this case, a way like any other to discredit the position itself, starting the house with the roof.

Therefore, if we are facing a position of a true businessman, he will find himself faced with the dilemma of deciding whether the project requires a younger candidate, with all that this entails, or another more experienced one, with all that this also entails. But the cost variable will not influence since it is fixed by the position, and is known by both candidates. The agreement will be given when the offering part and the demanding one conclude that the project is worth the same for both parties. As in any normal business transaction.

Therefore, it is one thing if for this project we require one profile or another, but in the same way as if both were young and inexperienced or both were the opposite. Given this, it can always be argued, as we have already done in the first chapter of this series, whether what should prevail is the merit of what has been done or the possibilities of future management, or both. Nothing to say in this regard, except what I already explained in that chapter. And another is the one that refers to cost. And in this, said variable is irrelevant once the “price” that the project has is defined.

And in front of the above, my second argument appears. As in the commercial market, the price has a counterpart in the form of the delivery of goods and services, in the selection it is exactly the same. By this I mean that looking exclusively at one side of the equation makes no sense, if we do not see the counterpart. So much is worth, because so much is received. That is why it is an equation and or an inequality. And the challenge for the headhunter, as for the applicant, is that the latter is as similar as possible to the former.

If, as a result of the above, experience is a determinant element, for example, the equation will be much better balanced (that is, it will leave long before being inequality) when a candidate who has it appears. And if it is also in a specific area that the project requires, even earlier. And that is independent of age. It is, in this specific case, of experience.

The same happens in the case that the value of the project is in finding someone who does not know the sector, or does not have excessive experience, because they are looking for “virgin” ideas, methods and systems. In this case, the match will occur when that candidate appears. And age will be irrelevant again.

Therefore, to think that experienced leaders are expensive and those who are not, are cheap, without taking into account anything else, even less all the points that I have just described, is false. And besides being false, believing that is a mistake.

Next chapter: Fourth (and last) part – Why is an experienced leader more suitable?