BCG Henderson Institute

Generic filters

Intergenerational Leadership for a Sustainable Future

Six ways to realize intergenerational leadership — takeaways from the 2023 St. Gallen Symposium.

Existential challenges like climate change and species depletion are often framed as puzzles, centered on defining the technical measures we need to solve them. Those who believe that we can’t know these answers today often frame the challenges as second order puzzles, centered on how we should iteratively innovate to find technical solutions.

Yet framing the challenges in this way leaves out the important component of human behavior. It is self-evident that we are not acting sufficiently on the knowledge of solutions that we already possess, either individually or collectively. We may know as individuals that we can and should reduce our energy consumption but fail nevertheless to adjust the thermostat. Companies may publicly commit to planetary sustainability and embrace ESG metrics and net zero targets yet fail to substantially inflect their emissions curves. And as societies, we may know that carbon pricing could be a viable solution, support it in principle, even elaborate detailed schemas, but fail to institutionalize it in a way which creates substantial impact.

One cause of the disjunction among knowledge, intention, and sufficient action is that those with the most power to drive collective action may not be the most motivated to do so. A leader who is in the final stages of a successful career has less to gain by overturning the mental models which underpinned this success than a young employee who has many more years of life and work ahead of them and who is not locked into a specific model.

The search for new experience—and new experience curves

In the early days of the sustainability movement, the Brundtland report defined sustainability as the ability to meet the needs of the present without compromising the ability of future generations to meet theirs. The most recent St. Gallen Symposium—a unique conference where students select and define the topics and then invite established and emerging leaders to address them—picked up and progressed this theme under the heading of “defining a new intergenerational contract.” I was privileged to have the opportunity to share ideas as a business strategist on how organizations can build strategies which are effective on multiple timescales.

In my two days of formal and informal conversations, the topic which precipitated the most engagement was the idea of intergenerational leadership and how to achieve it. In other words, how to boost our traction in building a sustainable future by increasing the influence of the next generation in organizational leadership.

Leadership in politics and business is very visibly dominated by the most experienced. This makes perfect sense if the future is expected to be essentially similar to the present and the main role of leaders is to deploy their experience of existing approaches with ever greater efficiently. Indeed, this is enshrined as a foundational idea in business strategy as the experience curve. The experience curve principle states that costs decline logarithmically as a function of cumulative experience. It is not a guarantee but rather the possibility that if cumulative experience is actively leveraged, persistent efficiency gains are possible. One of the simplest measures to facilitate this is to select leaders who have the greatest cumulative experience and demonstrated success with existing paradigms.

But when circumstances are changing, old paradigms are no longer relevant, and new ideas and thinking are urgently required, the same leadership paradigm may obstruct progress. BCG’s founder, Bruce Henderson, a pioneer in business strategy, pointed out that successful companies and leaders are apt to become prisoners of the assumptions underpinning their historical success. The philosopher Thomas Kuhn pointed out a similar phenomenon in science: Paradigm shifts are often slowed by the scientific establishment clinging to older paradigms, even in the face of contradictory evidence.

In The Imagination Machine, we wrote about why companies need to continuously reimagine themselves in an age where the rapid pace of digital competition, disruptive technological innovation, and ever more urgent collective societal and planetary challenges require not only incremental descent down existing experience curves but also the ability to jump to new ones. One way of achieving this is to redress the balance between experience and curiosity by increasing the influence of the next generation in organizational leadership.

Scaling the fast track for young leaders

It’s not that organizations do nothing on this front: Many have talent fast tracks, young innovator awards, or seek input in other ways from the next generation. Rather, the question is how we could increase the scale and effectiveness of such measures to better shape the future. While we cannot know the right answer for sure, we can begin experimenting with greater boldness and urgency to accelerate our learning process on the question.

There are at least six ways of going about this which surfaced in my discussions in St. Gallen.

The least disruptive to existing ways of organizing would be to increase systematic consultation on direction setting. This might take the form of a young leaders’ council which would be invited to opine on all major decisions. This input would then be considered by existing decision-making bodies before proposals are finalized and adopted.

A bolder approach would be to define long-term strategy principles and institute a process to ensure that all major decisions are consistent with these principles. One interesting precedent for this was presented in St. Gallen by a young politician, who explained how such an approach was applied in the government of Wales.

A bolder approach still would be to adopt a bicameral approach to governance, which is long precedented in national government, with an upper chamber whose role is to vet and either approve or send back proposals from a lower body for reconsideration. Going beyond a general mechanism for ensuring debate and surfacing alternatives, one could imagine that membership of the upper chamber could be selected with a tenure limit, so as to increase the influence of the next generation. Or more radically still, the younger chamber could be the proposer of new policies which could be debated and refined for feasibility by the more experienced body.

An extension of the bicameral approach would be to construct temporal business units charged with developing policies, capabilities, and offerings on multiple time horizons. The role of senior leadership would be to weight and synthesize these different perspectives, which in some cases might legitimately contradict one another.

Another approach to rebalancing experience and curiosity would be co-leadership, whereby an experienced leader and a youthful one would share accountability. We explored this idea in a breakout session in St. Gallen, and the CEO of a major engineering company and a young leader jointly presented back to the group their proposal on how this could work and overcome the various obstacles which might arise.

Most radically, one could accelerate the processes of leadership renewal in order to open up leadership opportunities to the next generation. On the demand side, one could achieve this by imposing or tightening term limits or adopting minimum representation guidelines for young leaders in key decision-making bodies. On the supply side, one could accelerate the education of new leaders and allow for non-sequential, accelerated career paths. While there are some risks in diluting the component of experience in leadership too much or too quickly, it was clear from many of the young leaders invited to St. Gallen that youth and visionary leadership are not at all incompatible!

More research and experimentation is required to assess which of these mechanisms would best under which circumstance and how they could be most effectively implemented. But it’s clear that this is a potentially powerful and under-leveraged way to ensure a more sustainable collective future.

Sources & Notes