Gender parity in the workplace: Is it only a matter of CEOs believing the business case for change?

Nicki HeadshotBy Nicki Gilmour, CEO and Founder of (New York City)

Yes and no. Yes we need all CEO’s to understand the bottom line impact of this productivity issue on their businesses. However that is only part of the solution as strategic plans must be designed and implemented with some sort of a target attached and consequences if targets are continually missed- like any other business function.

The 2010 Catalyst awards dinner showcased their latest research Pipeline’s Broken Promise, which is an excellent piece of work. The new study highlights that men have higher starting salaries in their first post-MBA job than women even after taking into account number of years of prior experience, time since MBA, first post-MBA job level, global region, and industry. These salary differences are not due to different aspirations or parenthood.

Career profiles were examined from 9,927 alumni who graduated between 1996 and 2007 from MBA programs at 26 leading business schools in Asia, Canada, Europe, and the United States. As the Catalyst report points out, the premise of the promise of gender parity occurring sooner rather than later is that the pipeline for women into senior leadership is robust. After all, over the past 15 years, women have been graduating with advanced professional degrees in record numbers – often equal to or even surpassing the rates for men, swelling women’s representation in managerial ranks. Concurrently, companies implemented diversity and inclusion programs to eliminate structural biases and foster women’s full participation in leadership. However the percentage growth of women in senior leadership positions would suggest otherwise. Hence the promise is broken that there is a pipeline of women coming up through the ranks.

The needle is moving very slowly and we must ask why there is no sense of urgency behind achieving the 30% critical mass that is the widely recognized magic number.

CEO’s need to believe the business case for having a critical mass of female executives in their senior management teams and in the boardroom, and the good news is that some firms have exceptional leaders who are recognizing that this is a strategic imperative. Some 70 CEO’s of the Fortune 1000, those CEOs who “get it” and believe that parity equals profitability, were in attendance at the Catalyst Awards dinner last week at the Waldorf-Astoria in NYC.

Winners this year were Campbell Soup Company, Telstra, Deloitte LLP, and Royal Bank of Canada. Each company won because of a successful initiative that had resulted in a measurable higher promotion and retention rate for women in their firms. Campbell’s “Winning in the Workplace, Winning in the Marketplace, Winning with Women” program is as much about selling more soup as it is promoting women. The Campbell’s employee on one panel who worked at a plant seemed more interested in talking about her participation in the community outreach programs than promoting women in the workplace into leadership positions.

A week later it struck me: isn’t that the point? Gender parity starts with understanding and representing 100% of the population better.If you cannot engage and excite your employees, how do you expect to engage your clients? You can then design systems with checks and balances to ensure the top talent, regardless of gender, is developed and retained, whilemindfully considering gender in the programs that are offered. If the efforts are seemingly invisible but the outcomes are there, then that is better than a lot of noise around programs with nothing changing.

Irene Lang, President and CEO of Catalyst, commented on the bold result-oriented nature of the winning firm’s programs, “What makes this year’s winning initiatives so successful is they didn’t aim for minor improvements or incremental change. They went for game changers. They realized that in changing workplaces, they can change lives, and this year’s winners are examples of how it is done.”

After CEO advocacy happens, what needs to come next?

How to translate good intentions into real programs, and finally into real outcomes is still a work in progress for most firms. Dennis Nally, the CEO of PricewaterhouseCoopers is perhaps one of the most vocal CEOs in terms of really wanting to see action in this area.

“The real issue is – how do we peel the onion back? We need to get to a level where we can take this high level concept that we all agree with and determine why we aren’t making more progress. What do we really need to do to drive this through our respective organizations? What is the practical side of change that needs to take place ?”

PwC set up a global gender advisory council in 2006 and completed a piece of research called The Leaking Pipeline which investigates why women leave at different stages in their careers. It is an excellent read not least because it provides a “checklist for change” for three groups – business leaders, HR professionals and professional women.

The devil is in the detail of the programs to recruit, develop, promote, and ultimately engage women to stay in the game. The second element of why parity is taking so long is perhaps attributable to the lack of experience around designing and implementing programs. HR generalists or recruiters are not qualified to tackle the huge strategic effort needed to achieve deep cultural change management. I firmly believe that an effective diversity office is a separate function and cannot be just a list of tasks on other HR people’s to do list – because it is a huge endeavor in itself.

Ana Duarte McCarthy, Chief Diversity Officer for Citi chatted with yesterday about diversity as a business strategy.

She said, “Diversity is a change process. Whenever an organization is trying to shape their culture, you need a lead, generally, a diversity officer, who will work with stakeholders and sponsors to achieve these aspirational objectives, to ensure they are aligned to the business strategy.”

Implement review processes – just as you would in any part of business.

The fact remains that serious scrutiny must be placed on the recruitment processes, as highlighted by the Catalyst survey. Anne Mulcahy, Chairman of the Xerox Corporation, commented about the processes,

“One of the things companies have gotten very good at is managing grade levels and salary dispersions. But if you come in the door in the wrong placement, those systems aren’t going to adjust the imbalance. Most companies’ systems are designed to be all about equity among a like group of jobs and roles, it’s not looking for inequity in terms of initial position. This is a heads up that more work has to be done to make sure there isn’t inherent bias in the placement processes.”

She continues with a proposed litmus test for examining the results of existing processes to see if unconscious bias does in fact exist:

“Companies need to be doing a microcosm analysis—a factual assessment. We need to be asking how many managerial hires have we made externally? Do an assessment based upon skills and capabilities and a factual assessment of how they were placed. Take the last 100 resumes hired, take the names off of them and do an assessment of where they should be positioned and compare that with where they were [placed]. Individuals also need to pay attention. There’s a feeling that a level playing field exists. These findings tell us this hasn’t been realized yet. High potential women coming onto the job market need to be comparing companies. Which of them have a better track record for advancing women? Those are the ones they should be targeting as their employer.”

A good diversity office can provide a series of checks and balances to the other HR functions such as recruitment, training and development teams, compensation, succession planning and talent management. Real change will come if CEOs continue to advocate critical mass principles with targets attached, but on the ground we need better policies and systems for human capital professionals to have a shot at achieving adequate outcomes with the same input that we see now. Results are very telling.