Younger execs have better impact on bottom line.

Wisdom and experience are attributes valued by most companies. But according to a study by researchers from the School of Management, top-management teams composed of relatively young executives have a better impact on a company's bottom line.

The finding is based on analysis of the characteristics of top-management teams-generally consisting of executives above the vice president level, ages 40 to 65-within the U.S. airline industry, and how the management teams affected firm performance in terms of return on investment and return on sales.

The study, published in Team Performance Management: An International Journal, can be applied to most industries, the authors say, because of similarities in management structures and because top managers often are employed across different industries during their careers.

Researchers C. Carl Pegels, professor of management science and systems in the School of Management, and Baik Yang, a graduate of the management school's doctoral program, measured the performance of the airline industry's management teams, factoring in team members' average age, time in current position, time at firm, time on the team and education.

Of those characteristics, the researchers found that only age and time in current position impacted firm performance, with teams of younger managers achieving the best results.

"The lower the average age of the top-management team, the better the firm performance," says Pegels.

"The rule of thumb for most industries is that the older the management team, the more wisdom a company can marshal to achieve better firm performance. But this study shows that younger top-management teams can achieve better results for a company," he adds.

The study also showed that better firm performance was achieved by top-management teams whose members had been employed in their respective positions for about the same length of time.

"There is a better distribution of power among management teams composed of team members of younger age and of similar tenure," Pegels says, "which probably fosters better team performance and less conflict, leading to better firm performance."