From glass ceiling to glass cliff?

In February this year the mainstream and social media gave the 100th anniversary of International Women's Day a huge boost. But why? In 2011, why are such awareness days required? One look at the business world - particularly large corporates - provides the answer. Although women make up 52% of the population of Australia, 46% of the workforce, and in recent years, 56% of university graduates, women hold only 2% of CEO and 10.7% of senior management positions in ASX200 companies. Perhaps more disturbingly, according to research by Mercer, despite growing interest in workforce diversity among organisations in Australia and New Zealand. only 1 in 4 (26%) have a clearly defined strategy to attract and retain women long enough to reach senior leadership positions.

On the one hand, greater representation of women is now widely viewed no longer as a moral imperative, but a business one. McKinsey released a study in 2007 that showed companies with three or more women in senior management functions performed better than companies that had no women in these roles.

Megan Dalla-Camina, director of strategy for IBM Australia and New Zealand, says these companies outperform their sectors in terms of return on equity, operating result and stock price growth.

However, she adds that Australia has lagged behind the rest of the world for too long in most aspects of gender equity, whether that be paid parental leave, numbers of female employees/managers/executives, and women on boards. While there are some marginal improvements, much more needs to be done.

“For Australia, this is an economic imperative, especially in light of the ageing workforce and skills shortages,” says Dalla-Camina.

Quotas

While there seems little debate that organisations can do more, there is less clarity on the Government’s role. At the big end of town there has been pressure put on ASX-listed companies since January this year to disclose in their annual reports the company’s performance in achieving gender objectives set out by the board, in senior management and employed throughout the organisation. While this is a step in the right direction, critics say it does not go far enough. They are asking for quotas to be introduced. While an extreme measure, quotas have had some success in Spain, France and most impressively Norway, which moved from 7% to 40% women on boards in just five years.

Rosemary Howard, executive director and conjoint professor of AGSM Executive programs, says a less extreme option is for the Australian Government to set a three-year deadline in which to see a substantial improvement in gender equality on boards - before it considers introducing strict European-style quotas. Howard believes quotas should only be considered if non-compulsory measures fail. She says the preferred path is accurate measurement of gender ratios, and making Chairs and CEOs responsible for putting measures in place to lift the gender ratio of boards and the ranks of senior management, coupled with an accountability to report publicly on the progress.

“My first preference would be that we voluntarily choose to manage this well, at individual corporation level and at the country wide level, because if you force something with quotas you may get the right numeric outcome but you won’t have solved anything, because you won’t have changed those cultural dynamics, those underlying unconscious bias’ which will continue to set people up for failure, even if they don’t mean to,” says Howard.

The controversial quota idea poses an ethical and moral dilemma for organisations: it’s placing women in these roles and giving them career paths to make up the numbers, yet it can also potentially be potentially setting both the individuals and the organisation up for failure. Howard likens is to a “glass cliff”, where the women are put in positions that are untenable. “You have a very high chance of setting individuals up for failure if don’t do this right,” she says. “It’s about peeling back the onion, understanding what a deep cultural change this is, and enabling the women, and enabling the men, and therefore enabling the organisation, to provide a different context for gender diversity to really flourish.”

Wendy Montague, director of leadership and talent at Hay Group, also believes initiating a quota based system is not the answer: “Though some leaders see gender quotas as the last hope for improving board gender balance, this approach may cause resentment and reverse discrimination,” she says. “Hay Group believes that organisations do not need to be pushed along by a big stick to do the right thing when it comes to fostering diversity. There are business benefits for organisations to embrace diversity.”

Mindset shift

All the experts agreed that sex inequality goes much deeper than board representation. The Australian Census of Women in Leadership 2010 showed that only 4.1% of line management positions (from which managers are promoted to executive ranks) were held by women, hinting that much of Australian business suffers from ‘mono-culture’ and ‘groupthink’, and also much deeper discrimination. Howard believes a cultural shift is required within Australian business, and among women.

“I think it’s not just a shift in mindset, it’s a shift in the capability of women. Even for Gen Y coming into the workplace, many of them have assumed that the workplace will have moved on in terms of its acceptance for gender diversity. I don’t think that’s necessarily the case. There is still this propensity for women to think, ‘if I work hard, if I do really well in the job I’m in, someone will come along and tap me on the shoulder and give me that promotion that I always wanted’. That isn’t the way it works. Women must learn to be responsible for their own careers, not just be excellent in the job they’re currently in, but actually plotting their pathway across different levels,” she says.

Authenticity in leadership is also crucial. Howard says that women often model themselves on other leaders, usually men, and while that is usually done with the best of intentions, the failure to model on something they’re not does not lead to authentic leadership. “I need to work out who I really am in order to be authentic and in order to influence people,” says Howard. “Women have to learn how to do that, at the peer level and the next level up, or to drive change in organisations, which is extremely influence- and thought leadership demanding.”

Best practice

Like any business problem, solving it starts with measurement; if you don’t measure it, you can’t improve it. At IBM, for example, metrics are collated on areas of gender equity – hiring, pay, retention and representation at all levels. Hay Group also recommends undertaking a comprehensive gender diversity audit. This doesn’t just mean looking at numbers of women, but rather getting to the heart within a specific organisation about the underlying issues preventing the strong representation of women in leadership roles.

Howard says a vital initial step is to ask women about what they need, and then ask the same question of men, in order to match up what’s happening for both. Common practice, she says, is that women will say there’s a problem, while the men will say there is not. “Until you can get those two perceptions to align and make sure you’re addressing the issues for the men as well as the women, you probably won’t shift it,” she notes.

The next step is to identify which processes or cultural archetypes are preventing women from moving up into the executive suite, suggests Montague. This can be achieved by talking to current women executives and/or connecting with senior women who have left the organisation. For example, a global technology company asked the Hay Group to interview a globally dispersed sample of women and minorities to understand how they were or were not successful and particularly:

·         What personal traits helped and what hindered their leadership effectiveness?

·         What organisational factors helped or hindered their success?

·         What insights might be helpful to other members of their constituency in the future?

Once the barriers to promoting women are understood, companies that adopt best practice identify and remove the barriers identified, starting with the top team and taking hold of the organisational culture that the organisation wants to create. Many global Best Companies for Leaders place identifying and developing top talent from a diverse gender and cultural range of backgrounds as a key priority. 

From there, organisations can identify inconsistencies and areas that do not align or discourage women from moving up the career ladder.

To address that paucity of women at middle management level, retaining female talent is obviously an issue for many businesses. Two-fifths (40%) of Australian and New Zealand organisations surveyed in Mercer’s Women’s Leadership Development Survey indicated they do not offer any activities or programmes targeted to the development needs of women leaders. Twenty eight per cent of Australian and New Zealand organisations said they offer some activities or programmes, and only 8% said they are planning to add programmes and activities in the future, which is slightly ahead of the survey’s global average of 6%.

According to Mercer’s survey, the top programmes currently offered by Australian and New Zealand organisations that target the needs of women leaders were; flexible work arrangements, mentoring, coaching, and diversity sourcing and recruiting.

Notably, the same four programmes listed by survey respondents were also identified as the most effective in developing women leaders. 

 "In addition to flexible work arrangements, women need stronger networks and coaching and mentoring as well as senior level support," says Marianne Roux, leader of Mercer's human capital talent management segment. "In Australia and New Zealand, there is still a strong belief that you have to be anointed - not appointed - meaning that you need a senior leader who can sponsor your career transition into the top ranks of the organisation. One of the main obstacles specific to women who aspire to be leaders is the lack of access to informal networks and senior executive mentors." 

Dalla-Camina says a crucial part of this is investing in career development and mentoring so that female talent is not lost at that mid-point of their careers.

“Dr Sylvia Ann-Hewlett talks about on ramps and off ramps, building flexibility and options into women's careers that enables them to manage changing circumstances, such as raising small children or looking after aging parents,” she says. “For me personally, IBM has supported me completing two Masters degrees over the past eight years, enabling me to further my professional development and contribution I make to the business, whilst supporting me to take on roles that play to my strengths. It’s important to note that increasingly, this is not just a female issue, with more men and Generation Y's of both genders wanting more career options that allow for further study and inclusion of additional personal interest. It’s now about inclusiveness, not just diversity.”

IBM has also introduced a number of flexible work options including working from home, compressed work weeks, job sharing, and self funded leave.

Reinforcing the message

Based on Hay Group research conducted in conjunction with Richard Hackman at MIT and Ruth Wageman at Harvard into what makes great top teams work, it’s now possible to help top teams to visualise the future, set goals and role model the behaviours that will reinforce their diversity message. Hay Group works with clients to increase their awareness of the psychological drivers of prejudice and develop strategies to overcome structural biases that block the progress of diversity.

One example is Unilever, which went through a systematic process and now over 30% of their managers worldwide are women with over 30 nationalities represented in their top 200 positions.

"Culture is all-important in setting the tone for people's behaviour in organisations, and culture always begins at the top," says Montague. "Many organisations let their culture 'happen' rather than seriously understanding and addressing the dysfunctional attributes for their culture which may have a demoralising effect on both males and females in their organisation. However, opportunities exist for organisations that choose to act quickly and decisively, to build an organisational culture which will enable them to thrive in the new world of diversity." 

Some keys to cultural change:

Understand precisely what needs to change: Without articulating and measuring culture, any culture change efforts will be costly, unguided and unpredictable.

Stating the goal is not enough: People need concrete directions as to what needs to change; from where, to where and how. Organisations need to communicate continuously; not just where they are going culturally, but how they are going to get there.

Culture change requires strong, versatile and decisive leadership; and particularly the ability to manage people’s performance not only in relation to financial performance but in relation to behaviours. Leaders need to strongly encourage ‘new’ behaviours and sanction unacceptable ‘old’ behaviours through their performance management process and ongoing dialogues.

As a final tip, Howard says it’s very easy to pay lip service to all these factors mentioned above. She says that many organisations in the past have been guilty of only looking at the output of initiatives – the numbers of women in various roles. Those are the lagging indicators; far more important are the leading indicators. “How much are we investing in women to give them the leadership capabilities that they need to be successful? How much are we helping men understand unconscious bias? Often people don’t mean to be discriminatory, but they may not understand the way in which they are. We’re talking about deep cultural change here,” she concludes.