Men, Women and Prosperity

2011-12-16

Female talent remain a huge untapped potential, also at the top.

Recruiting and retaining women in science
 and technical fields is one of the key success factors for the European 2020 Strategy. But, putting women’s’ talent to use is not only a concern for science but for all sectors of the economy in all countries. The logic is straightforward. Talent generates ideas that can generate products, services and competitiveness, which in turn leads to prosperity. Since women makes up ½ of the potential talent pool the more women involved the higher the probability of prosperity.

Female talent and prosperity

The WEF Gender Gap Corporate Reports illustrates how nations’ competitiveness depends on whether and how it utilizes its female talent.  The parts of the world where women are treated as second-class citizens are not surprisingly also the least competitive and prosperous ones. As one of the primary emerging markets China is rapidly closing the gender gap. Tens of millions of young women are moving into factories in fast growing city areas or attending the highly competitive universities. Although few women make to the upper echelons of Chinese private and public organizations things are changing fast and partly inspired by the more women-friendly cultures of foreign multinationals.

The OECD countries are at the top of the list with one exception. Japan is an outlier because it is prosperous and is not using much of its female talent. According to a recent study by Gant Thornton only 8% of CEO of listed companies in Japan are female, compared to 34% in China, 45% in Thailand, 97% (!) in the Philippines and 20% as a worldwide average. Judging from the service jobs women tend to have in Japan half of their workforce seems overqualified, under worked, under paid and is probably quite bored.

The average Japanese women working full-time earns 44% of their male peers. But then again, the Japanese economy has stalled since the crisis in 1990s and those (men) who work tend to work around the clock. One can only imagine the effect on the economy and society of welcoming and engaging the collective talent of Japanese women.

The labyrinth to the top

Women now occupy more than 40% of all managerial positions of the most highly paid executives of US Fortune 500 companies, but of those with titles such as chairman, president, chief executive officer, and chief operating officer only 6% are women. The pattern holds for other developed countries too. In the 50 largest publicly traded corporations in each nation of the European Union, women make up some 10% of the top executives and less than 5% of the CEOs and chairpersons of boards.

The more female talent in use the more prosperity? If so, what a wonderful potential for improvement!

Even in family friendly work cultures women tend to have more additional roles at home which reduce their potential to engage and contribute at work. Sweden, for example, has a well-known system of childcare, generous incentives for men to stay home with toddlers and recently also elaborate tax deductions for professional house keeping. Yet, gender imbalance still reigns at the top of Swedish organizations.

Researchers Alice Eagly and Linda Carli use the metaphor of a labyrinth to describe the challenge facing women in organizations and their research shed light on how to help women close the gap with men.  The challenge is clear:  “If we can understand the various barriers that make up this labyrinth, and how some women find their way around them, we can work more effectively to improve the situation” (Women and the Labyrinth of Leadership, Harvard Business Review, September 2007, p 64).

Women, diversity and performance

In their resent special report on women at work The Economist – in its usual bluntness – point out that the companies that are taking most action to close the gender gap are not doing it “out of the goodness of their hearts.” I agree.  Their story about how Deloitte in only a few years transformed itself from a horrible work place for women to a women-friendly employer is illustrative of both the motivation and the effort needed as well as the great benefits that can be reached from increasing gender diversity.

The business case for gender diversity is strong. A study from 2004 by Catalyst found that companies with the highest representation of women on their top management teams experienced better financial performance than companies with the lowest women’s representation. Similarly, boards with at least three women directors did better than those with fewer. A much larger 2007 McKinsey study show similar results. Gender diversity means you  recruit from a wider pool of skilled workers, improve the organization’s image and enhance its marketing opportunities.

Gender and innovation

At the heart of the innovation are people willing and able to work collaboratively in teams and to exchange what they know so the team process is an appropriate unit of analysis to understand innovation. Research supports that gender balanced team are more innovative, which my own experience confirms, but only a few researchers have studied the impact of gender differences on innovation.

Findings from the  Lehman Brother Center for Women in Business at London Business School show that there are a number of critical aspects of the innovation process that are influenced by the proportion of men and women in a team. Laura Tyson and her colleges have studied factors  known to influence the innovation process in practice. For example, differences in self-confidence between men and women; personal initiative; sensitivity to others’ views; the extent to which they are able to include others; their satisfaction with their life and their career satisfaction; their perceptions of the significance of the tasks they are undertaking; and their commitment to the organization.

Not surprisingly, the perceived psychological safety is a must for innovative thinking. This is common sense to most people: If you feel threatened, run the risk of being ridiculed, or have to listen to chauvinistic jokes of simply feel uncomfortable you probably remain silent rather than put up your hand, engage in “out-of-the-box” thinking or suggest a weird idea.

Eliminating the minority experience

The problem is that gender imbalanced teams are not naturally safe and secure in the eyes of the minority. Too often, senior teams and teams tasked with innovative thinking have just one or two women as members and such “tokenism” has a negative effect on the women included and, consequently, on the performance.

From experience of male-dominated organizations I know how difficult it can be to welcome women as equal partners rather than as the token minority presence. In view of the many psychological factors shaping the sensitive innovation process the LBS research suggest that the optimal gender mix is 50/50 and, thus, more than the Catalyst study (above) suggested.

Unfortunately, that remains an imaginary number in many organizations. Herminia Ibarra of Insead, an authority on gender and leadership, says that “…when it comes to large multinational organisations the days of explicit sexual discrimination are by and large over, but what remains are pretty subtle biases … and those have proven more intractable simply because you can’t dictate them away with a policy or a practice …

Scholars Tyson and Ibarra have also found interesting differences between how men and women build relationships with others when they are in a minority. When men are in minority they network with others in the group, but when women are in a minority they network outside the team. When women are in a minority they build stronger networks with other women, not men, throughout the organization.

Conclusion? To improve the potential for innovation eliminate minority experiences by actively constructing teams with equal proportions of men and women.

The long march

Men may be from Mars and women from Venus and those differences should be treasured. But at work we are on the same planet, at work we have much in common. Today young men and women alike expect to be able to develop their full potential at work and achieve a work-life balance. They don’t expect to get lost in a maze of gender-based hurdles to reach the top in private and public organizations.

In many countries, including my own Sweden, women today account for a majority of university graduates and, therefore, they represent the most advanced talent pool available for organizations. The moral and business cases for increasing gender diversity and decreasing gender gaps are clear, at least in countries that do not treat women as second class citizens.

The governance case ought to be equally clear. We know from the data that, everything else equal, giving women the same rights, responsibilities and opportunities as men in companies will boost innovation, competitiveness and prosperity.

The Economist lists several reason why professional women do not reach the top. Work remains structured to suit the man-as-breadwinner model, which do not fit women. Having babies and caring about them (!) obviously have an impact on careers. Women tend to be less self-confident than men and “do not put their hands up” like men do. Women are also more honest than men, at their own peril. Discrimination against women, like Ibarra said above, continues in subtle ways.

But the problems is even deeper. My former college Lynn Roseberry, who I appointed Chief Equal Opportunity Officer at Copenhagen Business School, summarizes it as a profound leadership challenge.  Her idea is that effective and responsible leadership requires knowledge about gender differences, stereotypes and the ability to challenge these. The problem, she says, is that these knowledge and skills are not taught. Neither in business schools nor in other executive courses. Having worked at four business schools in different countries and contributed to many more, I agree.

The lack of such leadership seems to be inherent in the way corporations have been structured since the early 20th century. Already in the 1970s Elisabeth Moss Kanter noted that the higher up in the hierarchy the more you rely on personal discretion and trust based on social relationships with co-managers. She labeled this “homo-social reproduction” and the consequence is that men-leaders are choosing more men to work with because they trust each other.

Lynn is determined to challenge this paradigm and, in her view, this requires the rare kind of transformational leadership called “authentic” and one that also includes gender as part of the system – “gender-authentic leadership.”

I look forward to helping her.


The Lost European Dream

2011-12-15

The Lisbon Strategy have failed but the intentions must remain.

In 2004 Jeremy Rifkin optimistically described the emergence and evolution of the European Union and presented it as an alternative to the philosophical, social, economic and political system of the US. He contrasted the “harder” American Dream of individual accumulation of wealth with the “softer” connectivity and respect for human rights that he argued defined the European alternative. Rifkin argued that the European soft power should be able to win greater influence in the long-term at considerably less expense. Europe, once more he said, would have critical importance to the global future but this time as a positive force for humanity.

This optimistic thesis The European Dream reflected real progress among the member countries at that time.  With new members lined up and plans drawn up for further monetary, political and social integration it is easy to understand the hope the EU inspired throughout the world. In fact, in many parliaments and boardrooms at that time decision makers throughout the world expected Europe to invent a new industrial model that would result in a better world than the one known from the industrial revolution and manifested by the hard capitalism of the US.  Rifkin summarized his hope: Europe has become a giant laboratory for rethinking humanity’s future and the world is watching. The contrast with the sad European realities of today is striking.

The good intentions of the Lisbon Strategy

Let’s go back a decade when the renowned Lisbon Strategy (or Agenda) from 2000 boosted the EU self-confidence. At that time European leaders realized that innovation is the engine of economic change, that knowledge-based economic development is a must and that sustainability ought to become a basic parameter of economic development.The EU leaders boldly stated that:

  1. The European Union is confronted with a quantum shift resulting from globalisation and the challenges of a new knowledge-driven economy. These changes are affecting every aspect of people’s lives and require a radical transformation of the European economy. The Union must shape these changes in a manner consistent with its values and concepts of society and also with a view to the forthcoming enlargement.
  2. The rapid and accelerating pace of change means it is urgent for the Union to act now to harness the full benefits of the opportunities presented. Hence the need for the Union to set a clear strategic goal and agree a challenging programme for building knowledge infrastructures, enhancing innovation and economic reform, and modernising social welfare and education systems.

The aim of the Lisbon agreement  was to make the EU “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010. Yesterday  I quoted this sentence to a visitor from Asia and we both agreed it felt a bit odd to even say it in view of the current Euro mess.  Never-the-less, at that time this strategy intended to strengthen the EU economy, create employment and promote social policies in line with Rifkin’s softer approach, which would drive economic growth even more. All in all, the Lisbon Agenda resulted in many new policy initiatives to be taken by all EU member states and has been the foundation for the development of the EU over the last decade. And it did strengthen Europe but in an uneven way.

The end of the party

In 2007, the EU was still celebrating a welcome economic upswing after five years of positive growth and optimism. In a region long blighted by joblessness, the rate of unemployment had fallen to its lowest level since the early 1980s. But then the international crisis hit. So profound was the crisis that many of the Lisbon Agenda’s key targets and principles have been loosened or suspended. The consequence is that less than only seven years after Rifkin’s book was published our decision makers have been unable to realize the many good intentions from Lisbon. The European Dream has become a reality only for a few, an illusion for some and nightmare for many. As I write this article the COP 17 meeting in Durban is heading for another mega-disappointment and the EU leaders are alone in their want to do more than the Kyoto Protocol calls for.

Already in the 2008 Simon Tilford and Philip Whyte published the report Lisbon scorecard: How to emerge from the wreckage in which they provided a harsh analysis of the performance of the Lisbon strategy. “Picking through the wreckage of the past year, it is legitimate to ask what remains of the EU’s Lisbon agenda”  they bluntly said in their introduction. The implicit assumption of the Lisbon strategy was that Europe’s main challenges are on the supply side, but that doesn’t make sense. Leaning on Nobel Laureate Paul Krugman they argue that while supply side factors are the key determinants of a country’s prosperity, measures to improve the supply side will “…do little to lift the EU (or the rest of the world) out of its current hole.”  Why? Because the short-term challenge is the demand side and the Lisbon Agenda doesn’t provides any tools for influencing  business cycles, demand and the global dynamics driving it. Today, three years after this report, virtually all EU governments continue to struggle with this demand side.

How do the EU countries score a decade after Lisbon? With some Scandinavian exceptions, the 2008 performance was less than encouraging. In the words of the authors: “No honest assessment of the Lisbon agenda can ignore two inconvenient facts. The first is that the EU as a whole will not meet any of the targets it set itself in 2000. The second is that the gap between the best and worst performing EU countries is arguably larger now than it was when the Lisbon agenda was launched. There is no evidence that the situation have improved after 2008, on the contrary.

The implication of their finding is that countries that fail to make progress on their Lisbon targets are likely to suffer from weak levels of productivity and employment: “…countries which fail to reform will condemn themselves to lower living standards”.  Adding pain to injury, the public finances of such countries will make them more exposed to rising income inequalities flowing from increasing globalization and technological change. Not surprisingly, the “villain” (versus “heroes”) group of countries in their analysis of Lisbon performance is remarkably similar to the EU group of nations sarcastically named “PIGS,” which are now in desperate need of financial assistance to avoid bankruptcy.

The education agenda

It is difficult to argue against the good intention of the Lisbon strategy. Innovation, deregulation and life-long learning are key to nations’ competitiveness, economic growth and social cohesion in any part of the world. Much empirical research has  shown that education raises labor productivity, but the link between higher education and innovation is a weak one (as illustrated by Sweden and Denmark). Far from all research generates viable innovations and far from all people with higher education innovate, but more many other reasons  investment in education are always valuable for nations.

In view of global competition many European countries need to continually upgrade the level and quality of education of its citizens.  Globalization, technological development and the inclusion of a large portion of the world into the world economy simply calls for it and an increased education level is also essential to maintain social cohesion in our societies. Unfortunate, the Lisbon Scoreboard shows that many  EU countries – particularly in Southern and Central Europe – are not doing well on this dimension.  Tough but necessary austerity measures are not the best driver of this strategic agenda, however.

The OECD program for international student assessment (PISA) shed light on how well students in the OECD countries are prepared for future challenges in terms of their abilities to analyze, reason and communicate effectively. The key question is to what extent they have the capacity to continue learning throughout life, very much in line with the Lisbon strategy. The findings, however, are as sobering as the Lisbon Scorecard because they show how European countries, with the exception of Finland, are lagging behind. It is not surprising that governments even in high-performing countries like Denmark and Sweden are driving significant reforms through parliament to improve their educational systems.

A new dream?

Despite the sad picture from the Lisbon Scoreboard its policies remain necessary to increase EU’s long-term competitiveness in view of the global competitive onslaught from BRIC and other countries. Together China and India represent 1/3 of the population (read: potential brain power, consumers, entrepreneurs, innovations, etc.) on this planet and their priority is not always the softer values of the Europeans. In Europe we have no choice but regard the current difficulties with the Euro zone as a self-inflicted hick-up in the bigger picture, get our act together and increase the speed of reforms needed to boost the quality of education, research and innovation.

The last time I was in India and China their Dreams were clear and present. When the current nightmare is over it is high time for a new European Dream.


American Unreason

2011-12-15

The anti-science rhetoric by the political establishment in the US is worrying.

As I write this article the Chairman of the Nobel Foundation, Dr. Magnus Storch, has just finished his introduction speech for the 2011 Nobel Ceremony in Stockholm. In his speech Storch stressed the importance of the values Alfred Nobel manifested in his will more than a Century ago: The importance of science for improving the human condition combined with inspiration from the humanities and the struggle for world peace. In the face of the grand challenges of today, including the current sovereign debt crisis, Storch stressed that we really need the contributions of science more than ever. Not surprisingly his message went down really well among the enthusiastic audience of Believers in Reason, for the occasion in full evening dress.

As I watched the handful of proud scientists-Laureates – survivors of decades of harsh academic scrutiny – I was reminded of a 2005 article in the New Your Times about a geologist digging into the Grand Canyon to prove the “Young Earth” theory: “Geologists date this sandstone to 550 million years ago and explain the folding as a result of pressure from shifting faults underneath. But to Mr. Vail, the folds suggest the Grand Canyon was carved 4,500 years ago by the great global flood described in Genesis as God’s punishment for humanity’s sin.”

Already at that time NYT reported that almost 1/2 of Americans think God created human beings “pretty much in their present form” within the last 10,000 years. More disturbing is that the same study found that 5% of scientists adopted the “Young Earth” view. As far as I know, these numbers have not diminished. Religious discourse in places of worship and at the departments of theology is one thing but replacing reason with religion is another.

I am not alone in having these concerns. As a longtime subscriber of Scientific American I have noted a growing sense of alarm among its editors and columnists about the recent anti-science tone and rhetoric of the US political establishment.  Authors in similar eminent scientific journals also debate what they perceived to be a clear and present danger of growing American Unreason. This is a worrying tendency not only for America but for the entire world.

The Enlightened US

The American researchers who have received the ultimate Nobel prize from the hand of the Swedish King is a tribute to their nation’s founding ideas of Enlightenment, the great European cultural and intellectual movement of the 18th Century that sought to advance knowledge and improve society.

France was the center of the early Enlightenment movement with hundreds of scholars like Diderot, Voltaire and Rosseau all challenging the unreason of their time. For example, the very idea that Diderot’s pioneering Encyclopédie (1751-1772) claimed to contain all knowledge of the time and that the 35 volumes sold more than an astonishing 25,000 copies of which half outside of France created fertile grounds for the pursuit of more science and reason.

The Enlightenment ideas clearly inspired Benjamin Franklin, Thomas Jefferson and the other founding fathers of America to build their new and free society on reason instead of the unreason of religious dogma and hereditary succession of monarchs-tyrants (see Thomas Paines’ famous pamphlet Common Sense from 1776).  The American Constitution and the French Déclaration des droits de l’Homme et du Citoyen manifests the political philosophy of the ideals of the Enlightenment. In contrast to Mr. Vail’s crusade in The Grand Canyon those ideas of reason also encouraged a new wave of more or less religious-free scientific discoveries and developments across the disciplines.

In modern times the great American nation has been the natural leader of enlightened research, education and innovation as demonstrated by the 2011 Nobel Prize winners and it still is. The US has welcomed and developed the best minds in the world, invested heavily in research and education, generated unparalleled ingenuity and entrepreneurship. Even today the US remain the world’s powerhouse of research, education and innovation in terms of ranking of universities, number of Nobel Prizes, attractiveness to students from across the planet, patent generated, entrepreneurship and the like.

Have the lights gone out?

When the NYT journalist mentioned to “creation-geologist” Mr. Vail that 80% of Christians walk away from their faith when studying science he throws a stick into the sand in frustration and exclaims that “we’re raising a generation of confused children, and it’s the public schools that are doing it!” As a reminder: this was in 2005, not in 1776. And it seems that a large portion of the US population today think he has a point.

It is precisely in view of its grand history that it is so sad to observe the decline of the values, assumptions and rhetoric of the Enlightenment among American decision makers. Many prominent Republicans, for instance, are well-known to seed suspicion about the research showing human causes of global warming and in other ways let ideology or religion trump scientific evidence.

Poisonous claims about matters of science by ignorant politicians surface all the time and everywhere and no political party has a monopoly on such unscientific thinking and dogma. For instance, when presidential candidate Michele Bachman (the Tea Party person) claimed that the HPV vaccine was a “very dangerous drug” that could lead to mental retardation, even some of her arch-conservative Republican peers criticized her. But what is worrying is that in their quest to win votes among the growing mass of science deniers, prominent American politicians place anecdotes over scientific evidence and sometimes even portray scientists as the perpetrators misinformation, like in the case of global warming.

Unfortunately, American politicians frequently use religion as a warrant to justify more unreason. Constrast Nobel Chairman Storch’s message about the need for science with the latest video ad by US presidential candidate Rick Perry’s (R), Strong, uploaded to YouTube only a week earlier. Perry’s main message is that President Obama is waging a “war on religion” and that “faith makes us stronger”. This 30 seconds video illustrates the growing religious dogma among the conservative American political class, which unfortunately is coupled with unscientific thinking, tone and action. But there is hope: of 4.7 million hits on Perry’s YouTube video (10 December) 33 times more people dislike than like it. I am not sure, however, if that high ratio of dislike reflects the science-denying portion of the US population.

By any measure, Parry’s statement – a possible next leader of the world’s only superpower – seems far from the Enlightenment ideal of his nation’s Founding Fathers. Free exercise of religion is one thing, but as Thomas Jefferson pointed out more than two Centuries ago, government must be neutral among religions and non-religion, which is also the spirit of the first amendment of the US constitution.

Perry is not alone to bring faith to the forefront of political debate in the US and probably he will probably not be the last in an increasingly religious America, in an increasingly religious world. Just recall how George W. Bush said that he received “prompts” from God about what to do and that he claimed he was on a mission from God when he launched the invasions of Afghanistan and Iraq. Also recall that he pushed through legislation to make it more difficult to pursue stem cell research.

Faith-based Universities?

A few years ago I attended a Harvard program for new university presidents and found myself as one of the token foreigners. I was awe-struck by the apparent role of “faith-based” institutions of higher education in America. The Islamic madrasah is a well-known faith-based school system by which students mostly learn how to memorize the Qur’an. But to have faith as the foundation for education in general, but especially in higher education, was more than I expected.  This even in view of the strong religious heritage from the 102 pilgrim-immigrants on the Mayflower in 1620, who undertook the voyage to escape religious persecution in England.

It was soon apparent that I had very little in common with the challenges facing the Deans of those institutions and they received different “prompts” than I and from very different sources. Although faith-based higher education might be innocent enough in the beginning, what stops it from extending into, let’s say, faith-based research (like that of Mr. Vail), faith-based academic titles and journals, faith-based evaluation of faculty and research outcomes or faith-based innovation? If policies and practices of science and education are based on faith more than the ideal of the Enlightenment of the US, the pluralistic world has a good reason to be concerned.

Oxford professor in evolutionary biology and renowned science author Richard Dawkins has often confronted the influence of religion on society and debated why science is fundamentally different from religion. In short, his argument is that “…science is based upon verifiable evidence. Religious faith not only lacks evidence, its independence from evidence is its pride and joy, shouted from the rooftops.” Controversional columnist, literary critic, author and “anti-theist,” the late Christopher Hitchens was harsher in his critique of the influence of religion on society, summed up as “religion poisons everything.”

It is tempting to dismiss Vail’s, Parry’s and Bachman’s statements as shouting “blind faith” from the “rooftop” to science-denying believers and assuming that, if they come to power, nothing would really change. But that would be a disservice to science. Science and religion will typically have different answers to epistemological and ontological questions (What is knowledge? How is knowledge acquired? How do we know what we know? What categories of being exist?) Science and religion will, to paraphrase President W. Bush, also give us different “prompts” about what to do, which may result in real decisions that impact real people.

Perhaps it is my pluralistic Scandinavian roots that makes me prefer the peaceful coexistence of science with different interests, convictions and lifestyles over what Perry, Bachman et al. are metaphorically shouting from their rooftops. As a scholar and leader in academia I am uncomfortable with mixing legitimate activities of no-matter-what religion with science, education (theology exempted) and innovation. Perhaps it is my training in scientific methods and scholarly dialogue that make me weary when Non-Reason is spread within the very institutions that are tasked with the advancement of Reason and Enlightenment. Like Professor Dawkins, and unlike Faith-Based Geologist Vail, I see very little connection between religion and research in today’s enlightened societies.

Have Faith in Reason

Many Americans may be listening to the anti-science and religious unreason spread by Parry, Bachman and others. However, the US remains a wonderfully cosmopolitan melting pot of brain power and resources that are needed in the pursuit of science, education and innovation. I am convinced this will remain so for decades.  In contrast with the nationalism and chauvinism that is weakening other nations, and despite the increasing anti-science tone of presidential candidates, the US remains a beacon of reason in the world, for now.

In his notorious video, Parry said that “faith made America strong” and that he assures that it will make her strong again. I question his premise. Science, technology and the ideal of Liberal Arts made America strong and that cocktail of reason can make her even stronger. To deflect the shouts of unreason from the rooftops, scientists and leaders of science need to cultivate allies across the political and religious spectrum and help keep the public debate informed and factual, especially in America.

A century ago, Alfred Nobel stressed the importance of science, the humanities and peace for improving the human condition. His endowment has enabled the ultimate price in physics, chemistry, medicine/physiology, literature and for efforts to make the world a more peaceful place. A century later, Science and Reason continue to beat Blind Faith and Unreason as the most innovative, effective and responsible way to improve the human condition. Let’s hold the course.