While corporate boards have focused recently on increasing their diversity in terms of race and gender, they may be overlooking another type of diversity that’s especially crucial to innovation: age.
The reason: Boards with a broader age range are likely to be better at identifying and anticipating sea changes in the industry that companies must adapt to or die, John Chambers, chairman emeritus of Cisco Systems, argued Monday at Fortune’s inaugural Brainstorm Reinvent conference in Chicago.
“You miss it by two to three years, you miss it forever,” Chambers said. He added that he was on the board of Walmart before Amazon surpassed it in market value in 2015. “We saw ‘em coming,” he said, suggesting that a greater diversity of viewpoints might have convinced Walmart’s directors to bet on e-commerce sooner. Chambers, who served on Walmart’s board from 2000 until 2013, now invests in startups as founder and CEO of JC2 Ventures.
He underscored his point with some statistics: It had taken Tesla 14 years to pass GM and Ford in market value—and only seven years for Uber to pass Tesla.
“The next series of changes are three to five years, so the speed and how you combine technology with business model change is everything,” he said. “The boards have to be more diverse—especially as it regards to age.”
But a lack of age diversity doesn’t mean boards today are too old, added Wan Ling Martello, executive vice president at Nestle who also sits on the boards of Alibaba and Uber. “I often hear this in companies, ‘diversity in terms of age,’ but people cannot relegate this innovative thinking to a young age,” she said. “I sit on the Alibaba board, and [executive chairman] Jack Ma is 54, he just turned 54, and he’s one of the most innovative guys.”
Chambers agreed. “What you have to do is create that environment from the board, saying: You must have large diversity in age, and also in terms of capability,” he said. Of the 40 startups Chambers currently advises, the average CEO is 32 years old. But the advice of the older board members—Chambers himself is 69 years old—is key to those young CEOs’ growth and development, he added.
“If you help them scale, within two years, they’ll be as good as a 50-year-old or the 70-year-old,” Chambers said. “So it’s about [having] a board that has seasoned people who have seen the movie before, but others will say you’re about to be disrupted…and I think more diversity in age has a huge amount to do with it.”
Editor’s note: This story has been updated to reflect the years during which John Chambers served on Walmart’s board of directors.
