How Much Does Experience Matter in Business?

When considering the true value of experience as it relates to the attractiveness of an employee, or more specifically a manager, we need to establish a competing attribute against which to weigh the relative importance of experience. The best attribute I can describe in terms of a competing quality is simply general intelligence, an attribute whose spectrum ranges from dull, to extremely mentally acute. To clarify, intelligence in the context of a manager should be loosely defined as the ability to effectively interpret constant streams of changing data, properly diagnose problems within an organization, and implement the "as-needed" adjustments necessary to solve the problem.

To begin with, the attributes of experience and intelligence are not mutually exclusive; experience can certainly lead to the advanced recognition of common problems and the formulation of effective solutions. Taken to it's extreme, it is not reasonable to assert that a brand new college graduate will possess superior management skills on his first day of work than the manager who has 30 years experience. However, I would like to focus on the more practical question of whether business experience ceases to add considerable management effectiveness after a given period of time. That is to say that, with each passing year, a manager gains sequentially less prowess than was accrued the year before. In other words, is the business experience v effectiveness function one which rises positively in the first 10 years on the job, only to flatten out in coming decades.

My primary argument is that, as the world's general pace of change increases, simple measurements of managerial worth such as "years of experience" become less and less relevant. Much more important, I believe, is a manager's ability to recognize the changing winds of business, and act accordingly. To that affect, I would argue that excessive years of industry experience (30+) has currently - and will increasingly going forward - serve to act as a detriment to that individual. I've found these "super-experienced" individuals to be overly fixated upon the way things "have been done for years". In today's market, I would much rather entrust the management of my company to an adaptable, mentally acute individual with 15 years of experience, rather than a similarly intelligent individual with 35 years of experience.

Lastly, managers with substantial amounts of experience are excessively prone to the Gambler's Fallacy - the idea that past events are a reliable indicator of what the future holds. Each year of experience seems to add a layer of mental callousness to an individual, whereby they become increasingly averse to the idea of processing new information, in favor of applying previous outcomes to a new situation. Fundamental facts may have changed that these individuals have become structurally unable to recognize.

I'm in no way disparaging the possession of business experience, however, my personal observation is that year's of service to a particular industry will more often hinder, rather than aid, an individual's ability to develop new solutions to new problems. Obviously, the old guard of business will resist this concept - selfishly in many cases - to the detriment of their organization's effectiveness and efficiency. Pass it on. Sphere: Related Content