Aim and Action: Why are We Still Talking about Gender Diversity?

Oh Alison, my aim is true, my aim is true…

In his classic to an old girlfriend, Elvis Costello (laced with sarcasm), swears pure motives. Companies aiming to promote gender diversity and equality in the workplace sing a similar chorus today.

“The aim is true, the aim is true.” But what if we took the time to evaluate organizations’ success at diversity goals as we do their financial performance? We’d be trading most of them as penny stocks.

So is the aim disingenuous? Perhaps in some places. Is it pointless? Obviously not, as there are companies that continue to make significant strides in finding ways to promote and develop gender diversity among their leadership ranks.

The ability to understand the issue actually requires a complex and connected way of thinking about organizations and how true change is conceived and executed. This is not an issue that can be carved out and put on a single board agenda or recruiter’s goals for the year. Understanding this complicated and nuanced desire requires that we think about the whole of the organization.

Motives

The first critical step, in communication both internally and externally, is that boards and organizations come clean about their motive for “increasing gender diversity.” This is the strategy behind the decision. If it is just a mandate (“get a higher percentage of women in the company”), it is unlikely that the supporting processes, mechanisms, and development will be in place. A more comprehensive aim of increasing diversity in order to increase perspective, diversify style, and increase performance would likely lead an organization to explore the mechanisms necessary to make this successful. Unfortunately, many stop after building the recruiting arm to find women and attract them. Little thought is put into the managerial and development structures that would actually ensure success after the recruiters have left the room.

Milieu

The next step is to understand the context surrounding the organization, its leaders, and the cultural milieu in which they exist. If a board sets out to have a female CEO within five years, and yet the highest ranking female leader is somewhere in the depths of middle management, the board is ensuring failure. Imagine it. An external CEO will need to be brought in to meet the gender requirement. This new CEO will lack the context and organizational history. Having come from outside and being the only female leader in the board room, she will also likely not have the informal connections or stakeholder relationships that would ensure her success; and with the added microscope and pressure of being the first female executive above middle management, it is unlikely she will be given the time to mature, the support to fail, and the help to right her path before the experiment is deemed a failure. So even with good motives, if the existing organizational architecture (organization structure, employee development processes, compensation, and benefits) is not ready to support the diversity you require, your diversity initiatives may cause more harm than good. For a current example of this, see CEO Marc Bennioff’s recent move to adjust women’s salary at Salesforce. It cost him $3M dollars, but he knew it was necessary if he was going to realize his larger gender diversity goals.

Metrics

Perhaps the most important step is to understand how we measure success. What does true progress look like? Too often it is a percentage-based equation or a head count of top-level positions. This is a start, but what if from there we focused on increased performance and a better business? Perhaps we would be making different choices about who we hire, how we ensure they integrate, and how we work to make them successful in the long term (not just counting them as they come in the door). The recent McKinsey study finds that companies with the highest gender diversity, as compared to the industry average, see a much higher return on equity (10%), a higher operating result (48%), and a stronger stock price growth (70%). In addition, having at least one woman on the board decreases bankruptcy by a full 20%. These are simple, bottom line, dollars and cents statistics that point to the relationship between gender diversity and success.

Gender diversity is more than a cause. It’s a strategic advantage, but in order to realize this strategic advantage, our organizations have a great deal of work to do. We must admit our motives, understand our contexts, and be clear about our metrics.

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About

Mindy Millward

With over 25 years of experience as a veteran business advisor, Mindy has worked with a range of leaders including CEOs of Fortune 500s. Her goal is to help them and their firms navigate significant transitions in shifting strategy, redesign organizations, and deliver increased performance.

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