Snapchat CEO Evan Spiegel (left), and Microsoft CEO Steve Ballmer
Photos: Getty
By Geoff Colvin
December 5, 2013

At a creaky 57 years of age, is Microsoft CEO Steve Ballmer — who has created no wealth for shareholders in nearly 14 years at the top — too old to run a tech company in the Snapchat era? Is Snapchat CEO Evan Spiegel, who couldn’t legally buy beer until 2011 — and who reportedly turned down a $3 billion cash offer for his revenue-free company not long ago — too young to make wise business decisions?

The youth vs. experience debate is eternal, but it’s urgently relevant in today’s business environment because we’re at a rare turning point that seems to pit youngsters against oldsters. As the global economy becomes entirely digital, every company must form a view about who can manage and lead best in a new, fast-changing world. Remembering three facts will help.

We’re in a transition period that will soon begin to fade. Let’s agree that the mainstreaming of the World Wide Web in the mid-1990s was not just a change of degree but a historic shift that separates two eras. People who grew up with the web (like Spiegel) really do experience the world in a different way from those who did not (like Ballmer) and arguably hold an edge in understanding how people will use digital technology. But today’s two-class world is obviously temporary. In addition, as the global population gets older on average, understanding consumers in their forties, fifties, and beyond — when they have more money — will be at least as valuable as insight into teens and twentysomethings.

Business models die younger than they used to. That’s among the most important effects of the digital revolution, and it’s by no means clear that youth or age confers an advantage in responding to it. Groupon’s business model was widely regarded as brilliant when the company went public two years ago. When results soon showed that the model wasn’t working — small businesses found that Groupon’s web-delivered coupons were hurting them more than helping — CEO Andrew Mason, who started the company at age 28, couldn’t fix it, and the board fired him. By contrast, Thomson Corp. sold most of its North American newspapers in 2000, at the market’s top, to focus on digital delivery of information. CEO Dick Harrington was 53; many people thought him nuts, but his business-model change looks like genius in retrospect. Business-model innovation is a mandatory new competency in the digital era, and few people of any age are good at it.

The constraints of the human body count for more than ever. The science-fiction visions of future humans as mere brains emitting signals were wrong: A digitally networked global economy forces businesspeople to travel the world and perform at any hour on any day, straining the mind and body without mercy. Sam Allen, CEO of Deere, who travels the globe almost nonstop, recently took his top team to the Human Performance Institute in Orlando to meet with exercise physiologists, nutritionists, and the like, and he can’t say enough about the results: “It really gave us a new perspective on managing our day-to-day energy so we can consistently perform at our best.” In a fast-moving environment, an energetic, agile body and mind may be more important than age.

So bottom line, who’s better? A Spencer Stuart study of 300 CEO transitions between 2004 and 2008 found that age made no significant difference to performance. We shouldn’t be surprised. The team that developed the iPhone included no so-called digital natives; Steve Jobs was a year older than Ballmer. No business succeeds without a team that combines widely varied skills and experiences, and it doesn’t matter who brings them. Young entrepreneurs who never took finance courses need to acquire that knowledge. Gray-templed CEOs who think Candy Crush is a soft drink have a new world to learn about.

The most valuable trait in today’s economy may be absolute fearlessness in acknowledging what you and your team lack. It’s present — and rare — at every age.

This story is from the December 23, 2013 issue of Fortune.

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