Executive Summary
Written by Dr. Anita Anantharam
The current status of women in the workplace is both widely acknowledged and widely lamented. For example, it has been estimated that women lead only 4.6% of Fortune 500 companies and hold only 17% of board seats. Women also earn 75% of what their male counterparts earn. The underlying causes are multi-faceted and not completely understood. The present is a propitious time to take up the challenge from the perspectives of executive education, mentoring, and training.
A 5-year plan centered around a robust investment in professional development provides a firm foundation for achieving these long-term, industry changing results. Moreover, an emphasis on leadership dovetails nicely with one of the major themes of “thought leadership”. The agenda should be centered on data-driven results.
The potential return on investments is briefly outlined below.
Logistical
Important but relatively mundane benefits to the industry around recruitment of high-caliber talent in management, would surely be much wider, both within the company and across the industry more generally. The focus will be synergistic internally with leadership and ethics and will appeal to an external audience due to its political, economic, social, and cultural themes.
Reputational
There appears to be no precedent. As a first-mover on workplace gender issues, brand equity might be enhanced internally and externally. It may also pay dividends with other constituencies. As recently noted by the New York Times (March 6, 2015), “With women still lagging globally in corporate offices, on governing boards and in pay, and many still struggling with family-work policies, pressure has been growing for legislative solutions.” Most industry level analysts are inattentive to these issues, which may be attributed in part to a simple lack of salience. If so, our current efforts could provide a remedy.
Financial
The revenue-generating potential for this initiative seems enormous. Trust in the industry seems lagging.
Intellectual
As suggested above, the topic of women in the workplace is multi-disciplinary by its nature. In addition to the question of diversity within the realm of business, it draws strongly from psychology, economics, political science, and international politics, inasmuch as these areas deal with gender bias, personality differences, and public policy.
Social
Depending on the ultimate scope of the initiative, it is quite plausible that it can enhance professional networking and collaboration at multiple levels, across generations, and across demographics.
Women Rising: Why the Urgency?
Most efforts towards diversifying the workplace by adding women CEOs—the practice of “add women and stir”—inevitably fail because the concomitant infrastructure to support women in leadership roles is not in place (HBR, “Women Rising”). In other words, leadership is an iterative process; validating women in leadership roles will help them see themselves as leaders—and in turn, act like leaders. We can address this global failure with 3 strategic actions—education, networking opportunities, and purpose—and encourage the leadership process. Not everyone wants to (or is able to) be a leader but for those who demonstrate interest, these industry-wide initiatives can be the springboard for professional development, career growth and managerial success.
- Education: We lack women in leadership roles not because of deliberate exclusion, but because a powerful force is at work to keep women from acting like leaders. Educating both men and women about second-generation gender-biases is vital to women’s success as leaders because: 1) women don’t have many mentors on the job; 2) career paths can be gendered (sales jobs for men v. support/operations jobs for women); 3) women lack professional networks and sponsors; 4) double-binds in expected gender roles undermine women’s identity (women as unselfish/nice v. men as independent/assertive).
- Safe opportunities to fail: Fewer women inhabit executive roles and thus, women who find themselves in these positions are not likely to take risks. Presenting women with opportunities for feedback from other women in similar positions of leadership and developing women’s identity as leaders is key to performance evaluation and self-improvement.
- Purpose: Helping women ground their leadership focus on specific tasks such as professional networking can help them cross that impossible divide between likeability and expertise.
The strategic actions described above challenge the assumptions of the “add women and stir” model. At every stage, all stakeholders will be able to assess the quality of the program, and evaluate its impact on professional development and career growth. In this way, companies will be able to sustain competitive advantage in today’s knowledge-based economies.
We need to emphasizes the value and complexity of diversity in top leadership and different challenges men and women face getting there. Research has shown that global competence is important in knowledge-based economies and training women to thrive in diverse environments, indeed to find the strength to lead, makes all the difference between landing a job in the coveted C-suite versus the cubicle.
Understanding the value of career path dependency, power and politics in organizations, the role of stereotyping and role preconception gender bias, issues of family and work-life balance, the importance of networking and mentoring in deciphering codes and structures of social organizations,” are germane to each of the 3 strategic actions described. Without the scaffolding of education and support systems, we will face the same pitfalls of the “add women and stir” models.
Women Rising: Data & Impact
Outcome 1: Growing women’s social capital builds trust, knowledge, cooperation, and shared understanding
Gender affects social capital. Usually women have less of it. Professional networking builds social capital and men are often seen as excellent at building networks. Partly this is due to the fact that social capital building happens at informal events/gathering—a golf tournament, bowling games, sporting events, evening socials, and women are often committed to other obligations (sometimes the family, childcare, etc.) Even if women did not have other obligations, being a minority (in terms of numbers/representation)—in that there are often fewer women at the C-suite level in corporations than there are men—women often feel like gatecrashers at informal social capital building opportunities. Networks tend to be segregated—women to women or men to men. All-women networks are limiting for women. Greater influence would follow from participating in networks with the generally more powerful group of men.
This issues of trust and women’s social capital is not industry specific. Rather it is a global barrier to entry for women’s leadership. For example, between March and May 2013, a team from the University of Florida visited Amman, Jordan as part of the project Extension and Advisory Service Delivery for Women’s Groups in Jordan: Assessing Competencies and Building Social Capital. During these visits the UF USAID-MEAS team worked alongside NCARE’s socio-economic team on a number of workshops as well as a Social Network Analysis of a women’s cooperative. Our research team conducted gender analysis fieldwork in two agroecosystems in Jordan (rangeland and crop-based) during summer 2011 & 2012.While conducting focus groups in several local communities, it became apparent that women’s opportunities for building social networks were sometimes very limited and at other times, less so. Even more puzzling, in one rather small community, the women did not even know each other. This stood in sharp contrast to our collective experiences in other countries where women collaborate and meet frequently for many reasons. In Jordan we found that, in the communities where social capital was weak, the women were not as empowered.
The results of this study showed that by placing female researchers (even if they were non-Jordanians) resulted in greater trust and reciprocity between community partners and researchers. The inherent perceived “sameness” built affinity and trust, particularly when it is part of the organization’s communication efforts.
Outcome 2: Rethinking performance evaluations leads to progressive organizational reform
It is important to point out that despite women’s difficulties in obtaining demanding assignments, there is also evidence that some women are placed, more often than comparable men, in highly risky positions. When companies are facing serious financial downturns and declines in performance, those companies are more likely to place women in high-level executive positions.
Moreover, each organization has its own social structure—regular and predictable patterns of behavior—and its own culture—shared beliefs, values, symbols, and goals. Leadership is an important part of this social structure and culture. Because of both structural and cultural barriers, women generally have less access than men to leadership roles in organizations. To attain these roles, women negotiate labyrinthine arrangements that present various kinds of obstructions, few of which were expressly designed to discriminate women although they have this effect. In other words, the discrimination is not intentional—but built into the fabric of organizational structure and culture. Two important barriers to entry are time and performance evaluation.
- Performance evaluations should be based on objective measurable metrics that limit unconscious and conscious bias. Recruitment should be based on outside agency recruitment rather than through informal social networks. Anyone that has been on the job market and has sent out 100s of resumes to jobs knows that the only way to land a job is to know someone who will personally read your resume. The better your social capital, the more likelihood that you’ve never faced this scenario.
- Legitimizing women’s leadership. Once a woman is picked for a leader, it should be emphasized that she’s been picked because of her management skills and her competence, demonstrated skill and abilities.
- Critical mass on corporate boards, reduced tokenism of being the only woman in the room full of men. This works well when once is young—but likely in a high stakes business world of finance, venture capital, young women are stereotyped as pretty, cute, and fit because of their age. This in the end feeds into a bias that does not allow women to be rise up and be taken seriously as top executives with competence and credentials. In March 2015, Germany, for example, just passed a law mandating equal representation of women on Corporate boards. This is one step to ensure that there is a critical mass of women on the executive boards of major Fortune 500 companies.
Outcome 3: Increase the diversity of your executive top-team to increase your company financially
McKinsey Researcher Report 2012: “A thorough study of 180 publicly traded companies in France, Germany, The United Kingdom and The United States from 2008 – 2010, focusing objectively on two diversity categories (women and foreign nationals) on senior teams. The results of this study were astounding and more importantly, consistent. For companies in the top quartile of executive-board diversity, returns on equity (ROE) were on average 53% higher, and the earnings before interest and taxes (EBIT) were an average of 14% higher. France was the only country who’s ROE was not consistent with the other country’s results, and yet their EBIT was up 50% from non-diverse companies.” (Source: http://inpowercoaching.com/research-says-top-team-diversity-equals-greater-financial-gain/)
Outcome 4: Retaining and Promoting Female Talent Correlates to Higher Profits
“It has been well documented, Corporate America has a “leaky” talent pipeline: At each transition up the management ranks, more women are left behind. According to Sylvia Hewlett, founder of the Center for Work-Life Policy, women represent 53% of new hires. At the very first step in career advancement—when individual contributors are promoted to managers—the number drops to 37%. Climbing higher, only 26% of vice presidents and senior executives are female and only 14% of the 6 executive committee, on average, are women. At this point women are doubly handicapped because, as our research of the largest U.S. corporations shows, 62% are in staff jobs that rarely lead to a CEO role; (in contrast, 65% of men on executive committees hold line jobs.) This helps explain why the number of women CEOs in Fortune 500 companies appears stuck at 2-3%.
Fully tapping the talent of high-skill women; training women for the most productivity enhancing jobs correlates to higher profits. For 2001, the 25 best firms for women outperformed the industry medians, with overall profits 34 percent higher when calculated for revenue, 18 percent higher in terms of assets and 69 percent higher in regard to equity. Furthermore, the 10 firms with the very best records of promoting women showed greater profit results than the firms that were merely very good. These results were reported in the Harvard Business Review, presented in a keynote address for the European Project on Equal Pay and later incorporated into the labor law in the European Union.
In 2010, 58% of all undergraduate degrees in the U.S. were awarded to women. As a result, women accounted for 53% of the total college educated population in the U.S. However, only 50% of the college educated workers were women. Simply said, we don’t have the full amount of female college educated talent in our workforce. Changing this could improve corporate performance and help raise national productivity. But doing so will depend on finding ways to keep ambitious, well-qualified women moving up the management ranks. Women can also contribute to the productivity challenge by training in disciplines with impact on increasing productivity, such as finance, professional services, and science & technology.”
Source: Unlocking The Full Potential Of Women (Barsh, Yee, McKinsey 2011)
Outcome 5: Bringing more women into the workforce is an opportunity to grow GDP and the US economy by 3-4%
“According the the Wall Street Journal Executive Task Force for Women in the Economy Report (2011), unlocking the full potential of women would add approximately 5-million jobs in the US and would grow both the domestic GDP and the economy by 3-4%.
There is a strong correlation between the representation of women on boards of directors and corporate performance (Catalyst, 2011). Expanding opportunities for women in business is vital to organizational health and financial success.
There is a 26% difference in return on invested capital (ROIC) between the top-quartile companies (with 19-44% women board representation) and bottom quartile companies (with zero woman directors).
When the McKinsey Women Matter team asked business executives globally what they believe the most important leadership attributes are for success today, each of the top four—intellectual stimulation, inspiration, participatory decision-making and setting expectations/rewards—were more commonly found among women leaders.
Reviewing about 100 companies, companies with three or more women in top positions (executive committee or boards) scored higher than their peers. The measures included nine factors, ranging from external orientation to coordination and control, that are linked to well-functioning organizations. Companies with a high score across the nine metrics of organizational health (in the top quartile) have also shown superior financial performance.
More than 90% of the women and men who mastered each of the five leadership dimensions felt equipped to lead through today’s challenges compared to only 21% of those who mastered none.”
Source: Unlocking The Full Potential Of Women (Barsh, Yee, McKinsey 2011)
Outcome 6: Work-Life Balance is important to men and women for marital health and for stronger families
“Men don’t lose out when there is gender equality. They do better at work, and better at home, where marriages are happier when work is shared. IT’S easy to see how women benefit from equality — more leadership positions, better pay at work and more support at home. Men may fear that as women do better, they will do worse. But the surprising truth is that equality is good for men, too.
If men want to make their work teams successful, one of the best steps they can take is to bring on more women.
Last year, the Internet sensation Alibaba went public after achieving years of extraordinary growth as China’s largest e-commerce company. The founder, Jack Ma, explained that “one of the secret sauces for Alibaba’s success is that we have a lot of women.” Women hold 47 percent of all jobs at Alibaba and 33 percent of senior positions.
Research backs him up. Studies reveal that women bring new knowledge, skills and networks to the table, take fewer unnecessary risks, and are more inclined to contribute in ways that make their teams and organizations better. Successful venture-backed start-ups have more than double the median proportion of female executives of failed ones. And an analysis of the 1,500 Standard & Poor’s companies over 15 years demonstrated that, when firms pursued innovation, the more women they had in top management, the more market value they generated.”
Source: How Men Can Succeed in the Boardroom and the Bedroom (Sheryl Sandberg and Adam Grant, NY Times, March 2015)
Women Rising: Women CEOs, their impact, & the profits that follow them
List from HBR: http://www.elle.com/culture/career-politics/news/a31649/harvard-business-review-calculates-top-100-ceos-in-the-world/
1. Ursula Burns, CEO of Xerox
As chairwoman and CEO of Xerox, Ursula Burns is the first African-American woman to lead a Fortune 500 company. When she's not overseeing the global enterprise, she serves as a board director of the American Express Corporation and to the Exxon Mobil Corporation. NBD: Barack Obama appointed her to be vice chair of the President's Export Council.
2. Joelle Emerson, founder and CEO, Paradigm
A onetime employment lawyer who specialized in battles for women's rights, Emerson founded Paradigm to help tech startups prioritize and invest in diverse workplaces. It's working. Slack and Pinterest have already tapped her for guidance.
3. Jennifer Hyman and Jenny Fleiss, co-founders, Rent the Runway
While classmates went on to work in finance or toil at big banks, Hyman and Fleiss graduated from Harvard Business School and decided to solve a problem: How do you get dressed when you have nothing to wear? The women founded Rent the Runway, which raised over $60 million in new funding in 2014. It's worth an estimated $600 million, dispelling the myth that the markets that women care about are too niche to be mainstream.
4. Payal Kadakia, co-founder and CEO, ClassPass
ClassPass co-founder Payal Kadakia has shown vision and determination. Through the startup, consumers can book classes at cultish boutique fitness studios for a flat fee in 33 cities nationwide.
5. Kathryn Minshew, co-founder and CEO, The Muse
The talent acquisition industry is worth about $124 billion a year, and Kathryn Minshew wants to tap into it. The Muse co-founder created the job-search-slash-career-advice website to reach millennial job-seekers. Her a-ha moment is an even better punch line: Monster.com had recommend that the Duke-educated McKinsey consultant use her skills to manage a 7-11 in New Jersey. She raised $10 million this year, which she plans to invest in—what else—employment. She told BizJournals that she intends to add 25 employees by the end of this year, enforcing a strict "no jerk" policy to choose them.
6. Indra Nooyi, CEO, PepsiCo
It's Nooyi's job to run the second-largest food and beverage business in the world. Forbes awarded her the 13th spot on its list of 100 most powerful women in the world. A veteran of PepsiCo since 1994, Nooyi has risen in its ranks. She was named president and CFO in 2001 and was appointed CEO in 2006. Like to cozy up to oatmeal on wintery mornings? You can thank Nooyi for that. She lead the team that oversaw its merger with the Quaker Oats Company in 2001.
7. Jessica Richman, founder and CEO, uBiome
Jessica Richman goes with her gut. The founder and CEO of uBiome convinced venture capitalists to invest $6.5 million to better understand our bacteria. And while uBiome isn't yet public, odds are good Richman will get it there.
8. Clara Shih, founder and CEO, Hearsay Social
A pioneer in the social media space, Shih founded Hearsay Social in 2007, leveraging predictive analytics to help companies reach clients when they are most receptive to messaging. Today, she sits on the Starbucks board of directors and speaks frequently about her experiences in tech and business. And while she graduated first in computer science at Stanford University, she likes to remind young women to invest as much in each other as in themselves. At the Grace Hopper Celebration Conference, Shih insisted that the 12,000 women in attendance form real support systems: "If each of us chose to mentor just one woman or girl, it would have a huge impact."
9. Adi Tatarko, co-founder and CEO, Houzz
Tatarko and her husband, Alon Cohen, decided to dedicate themselves full-time to this online destination for interiors and housewares in 2009. Since then, they've turned Houzz into one of the top 200 web properties in the United States. Investors like what they see, valuing the startup at $2 billion in 2014.
10. Alexa Von Tobel, CEO, LearnVest
Von Tobel is a proud dropout. Over six years ago, she quit Harvard Business School to launch LearnVest, an online resource aimed to empower men and women, in particular, to manage their own personal finances. Earlier this year, she sold it to Northwestern Mutual for a reported $250 million. Now, Von Tobel continues to serve as its CEO and chairman, which sounds a lot like, you know, having it all.
11. Anne Wojcicki, co-founder and CEO, 23andMe
Having spent a decade investing in healthcare, Anne Wojcicki knew that biotech companies needed to better empower consumers. She founded 23andMe to give men and women access to personalized medical records, utilizing genetic information to better diagnose disease and understand human behavior. Her bet paid off. 23andMe is now worth $1.1 billion.
12. Susan Wojcicki, CEO, YouTube
A claim to fame: Wojcicki was the 16th employee at Google and the first to be pregnant. She's since had four more children, nabbing the top spot at YouTube in 2014. Ambition runs in her blood, obviously. Her sister is 23andMe CEO Anne Wojcicki. “My situation isn't that hard,” Wojcicki told USA Today. “I won't say it was easy, but I decided I'd make it work because I really believed in Google's potential. When you're a junior-level woman and get pregnant, people always ask if you'll quit. But no one asks me that now.”
Women Rising: Next Steps
Start with a compelling story for change – the “business case” – and communicate it broadly, emphasizing the successes that reinforce the desired mindset shifts.
Refine the organizational processes and other formal mechanisms that can encourage compliance to change—in particular the metrics and reporting used to track performance and reinforce accountability.
Build the capabilities that enable the desired behaviors. For example, both men and women can learn how to be more effective sponsors.
Leaders—all the way down to the front line—must model the change. Changing only the mindsets of the Executive Committee and other senior leaders misses the most important influencers of sustained change—employees’ direct supervisors.
Many companies have made real strides in removing structural barriers for women, by adopting more flexible work routines, implementing career off-ramps and on-ramps, and policies that enable women to survive the dual responsibilities of family and work. The next leg of this long journey requires something much harder to achieve – genuine transformation.
Dr. Anita Anantharam has worked in Higher Education for the past fifteen years. She is a tenured professor at the University of Florida, Gainesville, and her research interests are in the fields of gender research, international politics (particularly emerging markets), and social justice movements. Her MBA training highlights her commitment to women and business, leadership training, and executive education. She has won awards for her teaching and research from USAID-MEAS, J. William Fulbright, and the U.S. Department of Education. She holds a BA from Columbia University, a PhD from the University of California, Berkeley and an MBA from the Hough Graduate School of Business, University of Florida. She is the founder of LeaderLync, an Ed tech platform launched through the Hatchery Program at Innovation Hub. LeaderLync is an online application that incentivizes and tracks student leadership at the high school and university level.
Sources:
Unlocking The Full Potential Of Women (Barsh, Yee, McKinsey 2011)
A modest Manifesto for Shattering the Glass Ceiling (Mayerson, Debra E; Fletcher, Joyce K, HBR, Jan/Feb2000)
Best Practices in Women’s Leadership Diversity and Inclusion Initiatives Research Prospectus (WWLI, July 2014)
From Purpose to Impact (Craig, Nick; Snook, Scott, HBR May 2014)
How Men Can Succeed in the Boardroom and the Bedroom (Sheryl Sandberg and Adam Grant, NY Times, March 2015)
Is There A Payoff From Top Team Diversity? (Thomas Barta, Makus Kleiner, Tilo Neumann, McKinsey 2012)
L’oreal Masters Multiculturalism (Hae-Jung Hong; Doz, Yves, HBR, Jun 2013)
Navigating the Cultural Minefield (Meyer, Erin, HBR, May 2014)
Stopping the Exodus of Women in Science (Hewlett, Sylvia Ann; Luce, Carolyn Buck; Servon, Lisa J, HBR, Jun 2008)
The Battle for Female Talent in Emerging Markets (Hewlett, Sylvia Ann; Rashid, Ripa, HBR, May 2010)
The Female Economy (Silverstein, Michael J.; Sayre, Kate, HBR, Sep 2009)
The Sponsor Effect: Breaking Through the Last Glass Ceiling (Sylvia Ann Hewlett, with Kerrie Peraino, Laura Sherbin, and Karen Sumberg, The Center for Work Life Policy, 2010)
Unlocking The Full Potential Of Women (Barsh, Yee, McKinsey 2011)
Will working mothers take your company to court? (Williams, Joan C.; Cuddy, Amy J. C, HBR, Sep 2012)
Women in the Executive Suite Correlate to High Profits (European Project on Equal Pay, Adler, Pepperdine)
Women Rising: The Unseen Barriers (Ibarra, Herminia; Ely, Robin; Kolb, Deborah, HBR, Sep 2013)
Women, Find your voice (Heath, Kathryn; Flynn, Jill; Holt, Mary Davis, HBR, Jun 2014)
World Development Report 2012: Gender Equality and Development (Lin, World bank)