When most businesses are obsessed with “what’s next,” Proctor and Gamble has reached back into its past in order to look to its future – setting the business world abuzz. The iconic American company has ousted its current CEO and brought back 65-year-old A.G. Lafley for another go as chief executive.
Lafley said last week that he hadn’t been seeking the job after stepping down four years ago. “The board went through their usual thorough and comprehensive review of alternatives, and one way or another, they concluded I was the best option for right now, and they asked me,” Lafley told Bloomberg on May 23, after P&G announced he was replacing his own carefully selected successor, Bob McDonald. “I wasn’t sitting at home waiting for the board to call.”
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What’s interesting (and overlooked) about the move – Lafley will be charged with shoring up P&G’s finances and adapting to new markets, among other top challenges – is that the P&G board has decided the best person to reinvigorate the $83 billion company is a “senior citizen.” Despite his “advanced” age, Lafley is viewed as the go-to genius who can save the company.
Perhaps Lafley’s age has gone unnoticed because it’s become common sense that people in their 60s are still at the top of their game – as are many folks in their 70s and 80s. With more people over age 60 than under 15, markets and workplaces in the 21st century are in the midst of a transformation. In business, science, entertainment, government, and fashion – even fashion! – adults who are past traditional retirement age continue to contribute at the highest levels. Our longstanding notions of what it means to age and grow have been shattered by the accomplishments of the A.G. Lafleys and Mick Jaggers of the world.
But public and private policies haven’t caught on: Retirement ages remain inflexible. A recent Gallup poll found that the average U.S. retirement age is 61 (up from age 59 a decade ago and 57 in the early 1990s). Among current workers, 37 percent plan to retire after age 65 (up from 14 percent in 1995). But numerous nations have state-mandated retirement ages. Globally, one in every five companies with revenue over $20 billion forces its CEO to retire at a predetermined age.
It’s amazing, but in 20 percent of global companies, Lafley would have been barred from holding the top job solely because of his age. Global institutions across the UN system also mandate retirement as if we were still living in the 1950s, when the post-WWII institutions were just getting started.
This mismatch between common sense and traditional age-related policies reveals two lessons that all global businesses would be wise to recognize:
#1: “Old age” isn’t what it used to be. Roughly 30 years have been added to the American lifespan over the past century, and old benchmarks of aging, including “retirement age,” “senior citizen,” and “pensioner,” are obsolete. If a 65-year-old Lafley can be tapped to run one of the world’s most complex and competitive organizations, clearly other aging boomers shouldn’t be expected to (or expect to) call it quits with decades of life remaining.
#2: As Lafley and his peers age, the market obsession with youth is off the mark. By as early as 2020, there will be over a billion people in the world over age 60, and the businesses that offer goods and services for this huge demographic cohort are the ones that will succeed in the coming decades. In a sense, focusing on the young is the old way to do things. The world’s “seniors” are giving up bingo parlors and pickleball courts for corner offices. And their power to drive economic consumption follows suit.
So while congratulations are due to A.G. Lafley, the real win is for much of society. As long as older adults can drive business, the 21st century’s “gift of longevity” can become the engine of economic growth and wealth creation.
Mr. Lafley has been tapped to lead P&G; P&G can lead business; and business can lead society by showing that traditional, off-the-shelf notions of retirement have no place in 21st century life.