Men, Women and Prosperity

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.

Your views?

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s