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Lead, don't manage: How the young rich do it

feature-young-rich-200Andrew Barlow and Adrian Giles were 24 and 23 respectively when they first became leaders. They started their company, Hitwise, in 1997 and sold it in 2007 for $288 million. With their success they joined an elite group – the ranks of our richest people aged 40 and under.

They also rode another wave – a rolling revolution in leadership driven by a flood of young leaders creating big companies. Barlow tells LeadingCompany: “We were on the cusp of when this [leadership approach] was changing. I think there has been a massive change to what it was years ago. It is far less about managing and more about leadership.”

The leaders from the ranks of the Young Rich have been among the most influential because the companies they started have become so large, and they have a lot to say about how business leadership is changing and needs to change more.

Gen Ys have influenced leadership styles

The need to retain the restless Gen Y talent has influenced leaders to shift from being managers – setting tasks, allocating resources, budgeting – to being leaders, says Barlow. “Leadership is really about engaging and inspiring the team, making them feel a part of something bigger than themselves – something they are proud to be a part of, inspiration and vision.”

These days, Barlow and Giles (together worth an estimated $55 million) are active business angels (investors) in several fast-growing private and public companies. Barlow, who is the interim CEO of listed online marketing company, WebFirm , says he has seen a range of leadership styles across the companies he has invested in, and younger leaders are better than baby boomers at managing Gen Y.

“I think the differential for baby boomers – and it happens for companies I have bought – baby boomers in that leadership position don’t understand how to motivate and inspire Gen Ys by telling them what is in it for them. It is not about how to contribute to the company. It is making them feel it is their company and empowering them to do great stuff. It requires a soft touch, and knowing when to push.”

Young leaders managing baby boomers

Ironically, perhaps, the style of young leaders is also popular with baby boomers. Being more comfortable with letting all their reports have authority and resources to do their job and deliver results suits older workers too, as they have enough experience not to want to be told how to suck eggs.

Ruslan Kogan, ($145 million, age 29) is the founder of the online electronics company, Kogan. He says he leaves baby boomer to their own devices. “They manage themselves. Kogan is results-focused. We run a meritocracy. You are rewarded not on how old you are, or your uni degree, or your length at company. People have their key metrics, and they get rewarded on them. They can put forward a business case for pay rise as often as they like if they think they are worth more. We have a 19-year-old who had six pay rises in six months, and is now in the senior team.”

Property developer, Shane Wilkinson ($72 million, age 40), prefacing his comments by acknowledging that there are always exceptions to the rules, says he has a number of reports who are older than him.

“I realise my shortfalls and engage people who are very good in their field. They are often older than me. I try to pick the right person for the right role, give them the power and authority and as much direction as I can, and then let them go. Managing people in their 50s, who are very successful, with kid gloves creates conflict.”

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