By Savita Iyer-Ahrestani (New York City)
One could say it’s laughable that, in the year 2011, women are celebrating Christine Lagarde’s appointment as the first female head of the International Monetary Fund (IMF). But, says Subha Barry, Senior Vice President and Chief Diversity Officer at Freddie Mac, “every ceiling that we break must be celebrated,” and Lagarde’s appointment is yet another major breakthrough for professional women.
Her progress at the traditionally male-dominated institution that is the IMF “is going to be carefully watched by everyone and will make it so much easier for other women,” Barry says.
Barry, like most women of her ilk, holds Lagarde in high esteem. She has no doubt that Lagarde will be highly successful in her new role, and that she will take the Fund – an institution that scores of people the world over have, for the better part of the past couple of decades, loved to hate – forward on a new course. Her presence at its helm will help a great deal in restoring the Fund’s credibility – even if that effort had, despite his unsavory exit, already been undertaken to a great degree by former IMF chief Dominique Strauss-Kahn.
Taking the Helm at the IMF
“Credit needs to be given where it’s due and the Fund went through a huge turnaround under Strauss-Kahn,” Barry says. “Its relevance and credibility, especially in the eyes of the emerging and BRIC countries from which it really needed to find its core support, have been restored, and as Christine Lagarde takes on her new role, she will continue on the path of her predecessors and use her own experiences to build upon it.”
There’s little doubt that Lagarde takes charge of the IMF in extremely trying times. Europe is mired in a deep debt crisis that threatens to rip its foundations apart and the world economy is teetering on the edge. Within the IMF itself, emerging market nations – countries that undoubtedly are the engine of global growth today – have been unhappy with their representation and have been clamoring for greater clout and a stronger voice. And of course, morale needs to be restored within the ranks as well.
But while she has a lot on her plate, if anyone is capable of dealing with these challenges, it is definitely Christine Lagarde, says Sasha Galbraith, a partner with Galbraith Management Consultants, whose writing on women in the corporate world has been published by Forbes.com and by the Huffington Post. Lagarde has proven her capabilities numerous times in tough situations – she was the first and only woman finance minister in the Group of Seven nations, she was a key negotiator for a bailout package that supported the Eurozone in 2010, and the first female chairman of Chicago-based Baker & McKenzie.
“I think that she, of all people, understands the difficulty of running a heavy-handed multilateral institution like the IMF, that it’s a lot easier said than done,” Galbraith says. “In order to take the Fund forward and change its approach, she will demand that only the best, the smartest and the most savvy people get ahead, but she will also demand for people to be genuine and to have a heart.”
More Women Taking on Leadership
Lagarde’s appointment is also yet another example of the new kind of tough leadership roles that women today are increasingly being asked to play.
“Women first rose through the ranks to what were seen as softer parts of a business, and not to the front line,” says Barry. “Now, that has changed, and we’re seeing so many more women in tougher roles that are at the center of a business, where they are being called upon to make decisions about how organizations are run.”
Lagarde has everything it takes to be in the front line of the IMF, yet one of her greatest strengths is that she believes in the power of women as women, and that she does not reject her gender, says Galbraith. Indeed, her gender will play a key role in the way in which she takes the IMF forward, she says, and it will come to bear upon the way the multilateral institution runs in the future.
Research has shown that organizations headed up by women tend to be more productive and perform better in the long-term, largely because the “Beta-style” of management that’s been ascribed to women is more oriented toward the greater good of an institution as a whole, says Liz Nickles, senior vice president and chief marketing officer at FTI Consulting, who has written about women in management. Studies have shown that women tend to apply a management style that’s more team-based and flat in its approach, as opposed to the “Alpha-style” that’s characteristic of men, which, Nickles says, tends to be more hierarchical and focused on short-term goals.
Lagarde will certainly be looking at the IMF in a more holistic fashion and examining its role within the context of the global economy. To this end, one of her greatest focus points will be diversity – something she’s already committed to increasing within the Fund’s workforce in terms of gender, academic qualifications and ethnicity.
Importance of Diversity
Diversity is perhaps the single-most important factor for the future productivity and success of organizations like the IMF, says Patricia Greene, professor of entrepreneurship at Babson College and board chair for the Center for Women’s Business Research, an organization that tracks women-owned businesses.
“The fact of the matter is that everything we do in terms of finding talent has been based on models that study men and the practices of men,” Greene says. “If we truly believe that we can learn from and improve through diversity, we should be basing ourselves on different kinds of models and looking to hire the best and most diverse talent.”
To that end, the IMF could find no better example of diversity than Lagarde herself:
“This is an institution that has always valued economists and to rise in the ranks, you had to be an economist,” Barry says. “Not only is Christine Lagarde a woman, but she is also not an economist, she’s a lawyer. To be heading up an institution that values economists when you’re not an economist is a huge deal and a key aspect of diversity.”