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06/02/2012

Why It Pays to Fix 'The Pyramid Problem'

The research showing that companies with gender diversity in leadership outperform competitors is compelling. For example, McKinsey & Co.'s Women Matter research finds that companies with more women in positions of influence outperform others on both qualitative and financial metrics including growth in share price. Given the growing evidence that gender diversity is good for business, it is surprising how few companies have made real progress.

I entered the business world in the mid-1970s as part of a wave of women joining traditionally male industries and jobs. Often I was the first, only or one of very few women in a position. I rose to the senior-executive level at Coors and was the first woman to do so. But it was lonely being the only woman, and I became a champion for women in leadership. Now I am in the business of helping businesses achieve gender diversity.

The Pyramid Problem

From my perspective, three-and-a-half decades is more than enough time for women to have moved through the pipeline. Yet women still are not proportionally represented at the upper levels of business. Women represent about half of entry-level employees and lower-level management positions. But at each level up the corporate hierarchy, the percentage of women is lower. In 2011 in the Fortune 500, women represented 14.1 percent of executive officers, 7.5 percent of top earners and 3.4 percent of CEOs, according to Catalyst, a nonprofit dedicated to helping women advance at work. While the retail industry tends to employ women in the lower ranks, McKinsey research from 2010 indicates women accounted for 16 percent of board members and 12 percent of executive committee members at consumer goods and retail companies. These declining percentages of women form a pyramid and point to what I call "the pyramid problem."

As I climbed the corporate hierarchy to the C-level, I read a stack of books (many very good) designed to help women navigate the "male-dominated" business world. From those books I learned, for example, that women don't (and must in order to succeed) speak up, ask for what they want, toot their own horns, take risks and speak confidently. They also need to take things less personally. In other words, they need to conform to masculine norms. Sadly, a recent research report by Catalyst concludes that, even when women do all these things, they still lag behind men.

I also learned from those books and from my personal experience that women face the double bind: If women act too feminine, they aren't seen as leaders; if they act too masculine, they aren't likeable (and may be called the "B" word). To succeed, women must get it just right.

Fixing the Problem

The pyramid problem results in substantial unnecessary costs for business, and it prevents business from realizing the documented upsides of gender diversity. It's time to shift the focus from how women need to change in order to succeed to how corporate culture can change in order to achieve gender diversity in leadership. That takes framing and talking about the issue differently.

Women can't fix this problem alone. Men in powerful positions can make the most difference. And yet interesting men in achieving gender diversity isn't easy. Many men don't seem to see what's in it for them to address this issue. Bonuses are tied primarily to bottom-line metrics–not to creating inclusive cultures that drive those metrics. Men may hear women talking about the issue as a complaint against men. How can women climbing the corporate ladder talk about the pyramid problem and enroll men in wanting to fix it? I suggest three things:

  1. Present the pyramid problem as a business issue and show the business case for fixing it.
  2. Bring attention to the strengths of both masculine and feminine approaches without stereotyping.
  3. Find male allies who see and will speak up on the issue.

The Business Case

Leaders need to articulate the business case with examples such as:

  • Diversity triggers more careful information processing and better problem-solving skills, according to a 2010 study by Northwestern University's Kellogg School of Management.
  • Diverse businesses are better able to tap diverse marketplaces, including the vast women's market, which is growing in economic power as baby boomers age, She-conomy reports.
  • Inclusive cultures have higher levels of employee engagement, which Gallup and the Corporate Leadership Council have shown increase productivity and bottom-line results.
  • To hire the best talent, businesses need to attract and retain women as well as men. Women make up close to half of the hiring pool, and women are earning more undergraduate and graduate degrees than men.
  • And the most important point: Gender diversity in leadership is correlated with higher financial returns, according to Catalyst's "The Bottom Line" reports.

Having women do all the adapting and conforming deprives businesses of the strengths of feminine forms of working and leading. It also means businesses fail to get the higher returns associated with gender diversity. Encouraging conformity also lowers engagement of women and contributes to the pyramid problem.

If women act too feminine, they aren't seen as leaders; if they act too masculine, they aren't likeable (and may be called the "B" word).

Women and men need to understand and appreciate feminine as well as masculine approaches to getting results, to model and leverage them and to point out their contributions to the bottom line. Those books that help women succeed in business can help us articulate what women bring to the table.

If women alone champion the cause of eliminating the pyramid problem, it will remain longer than if men and women combine their voices. Men's voices will carry weight because there are more of them in the upper ranks, and they have no perceived personal agenda (only a business agenda). In fact, Catalyst has a new initiative, Men Advocating Real Change or MARC, to engage men in the issue. If you can't find men who "get it," use the business case to convert a few.

As principal at DifferenceWORKS, Caroline Turner trains leaders to appreciate difference and leverage diversity in their companies. Turner is also the author of "Difference Works: Improving Retention, Productivity and Profitability through Inclusion." For more information, please visit www.difference-works.com