The Advancing Leadership Blog

The Status Quo is Costing You: Diversity as an Economic Imperative

International Women's Day 2013

 



International Women’s Day is a wonderful opportunity to celebrate the progress that has been made for gender diversity in the workplace, but also acknowledge the steps that must still be taken to maximize the benefits that equality can bring to businesses.

Ignoring for a moment any sociological benefits of or ethical reasons for gender equality (of which there are many), diversity in the workplace makes good business sense.

Abundant research has shown a connection between increased female leadership at the executive level and enhanced financial performance, innovation and business success. For example, according to a 2012 Credit Suisse research report, companies with at least one woman on the board of directors achieved an ROE 4 percentage points higher than those with none. There are many theories as to why diversity is beneficial to the bottom line – from access to a broader talent pool, to an enhanced mix of leadership skills, to improvement in corporate governance. While the case for diversity is clear, progress has in many ways been agonizingly slow.

Women across the globe are graduating with the majority of university degrees, but a 2012 Catalyst Inc. Census of Fortune 500 Companies found that they hold only 14.3% of Executive Officer positions and 8.1% of Executive Officer top earner positions. These statistics have remained relatively unchanged for years, and it’s not just the top posts that seem persistently out of reach – the odds are consistently stacked against women at every step up the corporate ladder. Excluding women from leadership roles is in effect excluding 50% of the world’s intelligence, ideas, and perspective. In a time where knowledge has become increasingly critical in moving forward, it seems unwise to ignore such a vital source of economic growth.

What is holding women back from reaching the upper echelons of the corporate world? For those who understand the economic imperative of increasing gender diversity in their workplace, there are steps that can be taken to ensure that all talented and capable candidates are supported in becoming the next generation of leaders, regardless of gender.

Sit and Be Recognized

Facebook COO Sheryl Sandberg gave a compelling TED Talk in 2010 about why there are too few women leaders, and her most potent call to action was a personal one. In short, she believes that women need to “sit at the table”. Sandberg argues that women systematically underestimate their own abilities, and that it’s holding them back from the top. Men, she says, attribute personal success to themselves while women attribute it to other external factors. Women need to sit at the table, not on the sidelines, make efforts to be recognized and negotiate for themselves in the workplace.

Indeed, in a Catalyst Inc. study of female career advancement, the only strategy taken by women that was associated with compensation growth was making their achievements known; seeking credit and feedback, and asking for a promotion when they felt it was deserved.

Start From the Top

It’s not enough to place the onus exclusively on women as individuals, however. Research has shown that even when both genders take the exact same approaches to career advancement, women consistently lag behind men. As important as it is for women to sit at the table, there are still entrenched gender biases that need to be tackled at an organizational level, and it’s a good idea to start from the top.

To be fully embraced throughout an organization, gender diversity needs to be seen as a way of life, with top managers acting as ambassadors of the new way of thinking.

McKinsey & Company has identified visible commitment from the CEO and Executive Team as critical to the success of organizational gender diversity initiatives.

Eliminate Micro-Inequalities

Considering the great strides made in the pursuit of equality, it can be easy to think that gender bias is a thing of the past. The truth is, much of the bias remains in small, yet entrenched, micro-inequalities that can be easy to ignore or overlook.

Many of these biases are embedded in the talent management system: they can be found in the failure to appreciate leadership styles that do not mirror the current leadership team (who are most likely male), in judging women based on performance and men on their potential when assigning promotions, or in viewing characteristically masculine norms as the most desirable traits of a leader. Entrenched ways of thinking can be difficult to shift, so it’s essential to understand and address how these attitudes are at play, create a strategic plan for changing them, and hold people accountable for making it happen.

Men as Champions of Gender Equality

Company-supported gender diversity initiatives are an important first step in creating a culture of equality, but if a program focuses exclusively on women, it can inadvertently alienate men from the process and jeopardize its future success. Men can sometimes be less persuaded of the need for gender diversity initiatives (middle management appears to be especially prone to this), but it’s generally attributed to a lack of awareness of the inequalities that may exist.

Catalyst Inc. has found that the higher a man’s awareness of gender bias is, the more likely he will be to feel that achieving gender equality is a worthwhile endeavor. By making clear the costs of gender bias as well as the tangible benefits that equality can bring, and tapping into their sense of fair play, men can become crucial ambassadors in changing organizational norms that perpetuate the status quo.

Mentorship vs. Sponsorship

Mentorship programs can be a powerful professional development tool for both men and women, but studies have shown that while women are given developmental advice, men receive additional career support in the form of sponsorship – from strategic career planning to public endorsement. Women are much less likely to be fought for by their mentors in the same manner.

To ensure women make it up the corporate pipeline they need mentors who act as their champions, just as men do.

Women who connect with senior leaders are much more likely to rise up the corporate ladder than those with lower ranking mentors, so it’s important that senior executives (with clout) are engaged in the process. Think sensitively about the perceived misunderstandings that people might worry about (especially when it comes to mentor/mentee relationships between senior men and junior women), and put structures in place to alleviate these worries. Clearly communicate the intent of a mentorship program (i.e., actively helping to move people up the pipeline into positions they are well suited to, not just giving advice), so that mentors can take personal responsibility for – and pride in – creating opportunities for talented women in their companies.

Flexibility

Flexibility in the workplace has been a hot discussion topic for years and seen as a way to keep talented women in the workforce and in top positions, but that viewpoint leaves out an important fact: men want flexibility too.

Gen Y is especially looking for balance between work and life.

They want to spend more time with their families, but often don’t ask for flexibility because they fear it will harm their career prospects. A shift in the cultural mindset within an organization to normalize flexibility for all workers, not just mothers, is essential, and support from the top is imperative.

Some companies have begun to shift their focus from hours worked to results achieved, regardless of where the work takes place. Others have made it company policy to only schedule meetings within school hours; a subtle but important proviso for working parents. Rather than creating programs that appear to be gender-based, flexibility for all allows both parents to share the obligations of family rearing without stigma. The result for employers: higher performance, job engagement, and increased overall employee wellbeing.

Moving Forward

Although there is still much to be done in order to achieve true gender equality in the workplace, many people are optimistic about the future. If we are to achieve ongoing economic prosperity we need to tap into the talent of all workers, not just those who fit easily into the corporate comfort zone. Getting more women into the C-Suite is a slow and nuanced process that requires the concerted efforts of both women and men, but one that is surely worth the effort.

Additional Reading:

Why Women Still Can’t Have it All (The Atlantic)

Gender Diversity and Corporate Performance (Credit Suisse)

Women in the Participation Age (Huffington Post)

Women Matter 2012: Making the Breakthrough (McKinsey&Company)

The Myth of the Ideal Worker (Catalyst)

Sheryl Sandberg: Why we have too few women leaders (TED Talks)

Women in Management: Delusions of Progress (Harvard Business Review)

First Step: Engaging Men (Catalyst)

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