Yesterday was Women’s Day and I was at a panel discussion about “Women Inclusivity and Key Business Imperatives” at Infosys. It was a good discussion but I came away feeling that we didn’t do justice to the new business case for gender diversity.
The original business case for gender diversity is anchored in talent shortage. It goes back to WW II when women were inducted into the US workforce in large numbers. Today, sectors of the Indian economy, particularly IT industry, are facing a talent crunch. As a result the ratio of women in the workforce has grown steadily. In US, 46% of the workforce is women, In the UK the ratio is 44%. In the Indian IT industry the ratio is above 30%.
Soon companies started looking beyond the talent shortage issue. AT&T (my old employer), IBM and others started framing the workforce diversity issue in market-based terms. The argument was that having a diverse workforce is a competitive advantage because it aids in understanding of markets, which are, after all, diverse and multicultural. Companies that embraced this worldview have generally done well with their diversity programs. The erstwhile AT&T has produced two women CEO’s (Carly Fiorina and Pat Russo) and IBM has a very healthy ratio of women among its top executives.
Now the needle is moving again. Companies are realizing that diversity, particularly gender diversity, is critical to having an adaptive capability in the organization. This linkage between gender diversity and company’s adaptive capability has humble beginnings.
It all started with evidence that mixed-groups are better at problem solving than like-minded ones. Then, as the concept of self-directed teams began to take root al least among knowledge workers, there was a realization that pull-based change works much better than push-based change. Now you needed managers that could get their team members to visualize a personal change gap and create a bias for action. Suddenly EQ was more important than IQ; context more important than text; and being able to motivate by creating meaning more important than doling out money. Essentially, this has meant that a new paradigm of leadership is now coming on stage. This new leadership paradigm goes beyond the coach metaphor of leadership and focuses instead on collective transformation of a company.
The Big Leap
This connection between diversity, particularly gender diversity, and an effective adaptive capability is not an easy one to make. It’s abstract, intangible and somewhat esoteric.
What’s not esoteric is the fact that even successful companies now need to reinvent themselves frequently and constantly. Speed, agility and flexibility in recognizing and capturing opportunities in existing markets are now critical to survival. What this means is that having an effective “adaptive strategy posture” (see Strategy Under Uncertainty, Hugh Courtney, et all, HBR, Nov 1997, subscription required) is now not a matter of choice.
This is why, I think, gender diversity in top management leads to superior corporate performance. Catalyst, a research firm, has found that companies with the highest representation of women on their top management teams experienced better financial performance – 35% higher Return on Equity and 34% higher Total Return to Shareholders - than companies with the lowest women’s representation. To me this seals the business case for having a diverse senior management team.
Women on top
I have learnt the hard way that despite the business case and good intentions, it’s not easy to get gender diversity to happen within your top management teams. There are still biases and wrong stereotypes that persist. So repeated training of the current team is important.
I have been fortunate to have worked with some really talented women managers. This has given me the chance to see the role-model effect in action. It’s really powerful. So I have become a believer in inorganic action (i.e. lateral hiring) to seed the management team with women leaders.
There is work that’s needed on the part of women managers as well. There are two things that I have found. One is that women are too respectful of boundaries. They need to get a lot better at testing and pushing existing boundaries. They also loathe doing self-promotion (and some is needed). This is mostly the result of social/environmental conditioning than anything innate. These are eminently fixable problems in my opinion.
The whole question of innate differences between men and women (and therefore between men and women managers) is an important one to tackle as well. But this is an issue for discussion some other time.
Blog from Sharad after panel discussion yesterday…
I agree with you Sharad. Especially on the boundry part. Being in the diversity office, my challenges is how do I convince women on this!
I absolutely agree with you - its not just the business imperatives - which the Catalyst study amply illustrates. Its`also the willingness of companies to get into a pull based strategy - it can still retain meritocracy - needs to be evangelized a lot more. The third point about women themselves, stepping out of the boundaries that society and history has imposed on them, will definitely add to the pressure to break the glass ceiling.
Overall it was an interesting discussion and a refreshing change in listening to your perspective!
I totally buy your point that the glass ceiling doesnt break just from below… a change in top management and a few strong role models are necessary who would drive the cause from above too. In my opinion, another major deterrant is the respect that women have for boundaries… this nature has been cultivated into us by our parents and teachers… it is a lot of social conditioning. It takes a conscious effort from a womans side to break free from this nature… And that should be the focus of initiatives like IWIN… and moreover, the attitude change has to come right from childhood… it is easier to build a nature at that age… the teachers and parents also have to take ownership for this.
PS: It was really enriching to hear your POVs in yesterday’s discussion.
Pravin, Srimathi, Rajeswari and Rekha, thanks for your comments. Rajeswari, you did a great job moderating the discussion. I quite enjoyed the session.
Another challenge for a lot of two-professional families is to balance the demands of home and work. Usually this problem is solved by the woman giving up her professional career. In order to achieve a good mix of genders at different levels of the org we also need to see more men giving up their careers. Even more importantly, corporations need to fundamentally enable better work/life balance by supporting part time work at an institutional level.
Ashish - Good point about fathers also taking a break. As you point out corporations needs to do better in enabling part-time work, flexi-time, etc. Sometime back I had come across an article on ROWE, “results-only work environment” - see here - these concepts need to be embraced. Finally, the there is need for better transportation infrastructure. Right now it soaks away a lot of family time.