13 Dec Catalytic Convertor
by Jackie Krentzman
“Women make up about 51 percent of the US population. They earn 60 percent of all master’s degrees and control or influence more than 70 percent of consumer spending in the United States. Yet only about 5 percent of CEOs in Corporate America are women and only 26.5 percent of executives in the S&P 500. For women of color, the numbers are even more dismal. And in almost 10 years, women in senior roles in the United States increased 1 percent. Just one.”
— Catalyst CEO Champions For Change Initiative
For decades, women’s leadership development has been on the table for corporations, think tanks, and government commissions. Sadly, although there has been progress, gender parity is a long way off in Corporate America.
In 2017, Catalyst, arguably the most influential organization in the United States and Canada that fosters and fights for women’s leadership development and advancement, launched an initiative, Catalyst CEO Champions For Change. This initiative takes a new tack; it puts the responsibility, even the onus, on CEOs. Just one year in, more than 50 Fortune 1000 CEOs are active members of the initiative and have pledged to advance more women into leadership ranks within their companies.
Cathy Engelbert, CEO of Deloitte, a founding member of Champions For Change, who is also the board chair of Catalyst, says real change is not possible without full buy-in from CEOs.
“If the leaders in an organization set the right tone, others will follow,” she says. “The key is that the tone needs to be clear, action oriented, and authentic. It’s not about ‘saying the right thing,’ but by talking about what matters most to your company and your people, and backing that up by following through and creating change. CEO Champions For Change gives CEOs the platform and support they need to do that.
“People within the organization want to feel like they’re aligned with what leadership is saying in terms of values, principles, and objectives. It matters that that tone is coming from the top and backed up by teeth, and people know that senior leadership is tracking behaviors and actions—and if we don’t get the diversity we are seeking, there will be real consequences.”
Arnold Donald is the President and CEO of Carnival Corporation and is also a founding member of CEO Champions For Change. He says he joined because he knows from personal experience in his company that adding women’s voices in leadership is necessary.
“I enrolled in Champions For Change because I believe in diversity of thinking as a key imperative for business, and diversity of thinking is required for innovation,” he says. “Businesses have to innovate or they don’t sustain themselves over time. Diversity itself doesn’t guarantee diversity of thinking, but it certainly increases the probability.”
Each CEO has the latitude to implement change in the manner that works best for the company’s business model and culture. The initiative is already working. More than 50 companies have joined the initiative, and those companies are already outperforming their peers in the S&P 500 in all areas of women’s representation.
The obstacles for women to advance into leadership positions are myriad, and they begin early. According to the Global Partnership for Education, an estimated 130 million girls worldwide remain out of school and face multiple barriers to education. That’s why Engelbert is a firm believer that part of the solution lies in public–private partnerships that work with families and schools.
Companies also need to initiate family-friendly policies that give women the flexibility to focus on both their jobs and their families.
“Working families need more expansive leave programs than the government provides,” she says. “Deloitte, for example, has a family leave program that gives up to 16 weeks of paid leave for any family health matter—not just the birth of a child.”
Within companies, women face a whole new set of barriers to advancement. According to a 2014 Pew Research Center study, about 40 percent of the public believe that higher standards are set for women than for men, and that companies show a lack of readiness to hire women for top positions. The same study found that 53 percent surveyed did not think women will achieve parity with men in top executive business positions in the foreseeable future.
“That’s why CEOs need to engineer the change,” says Donald. “You’ve first got to align your leaders around a common objective, and if they are diverse and talented, they will out-solution the homogenous group every time. I’ve been a part of transforming three industries, not just three companies, but three industries. And in each one of them, I’ve personally engineered diverse teams in my company that then were a catalytic group that also led to the transformation of the industries.”
Donald has spent years studying how to overcome the barriers faced by women, particularly women of color. His solutions can be distilled into four tasks.
• Find common objectives.
• Promote diversity of thought.
• Set criteria for advancement—and tie them to performance reviews.
• Be intentional.
Find common objectives
When Donald was at Monsanto and assembling a team for a particular project, he chose a PhD scientist from Bolivia, a woman who grew up in rural upstate New York, a man from France, and a young African American man from Louisiana who grew up in a farming community. Ostensibly, they had very little in common.
“I threw them together and gave them a seemingly impossible problem to solve—and they solved it,” he says. “The key was making sure that everybody
understood that there was a common objective. That was step one. Step two was getting them together and putting them through some team-building exercises so they had a chance to get to know one another and discover what they had in common. Then, they were in position to better learn how to celebrate and appreciate their differences rather than focus on the differences and treat them as a negative. Team building is key.”
Promote diversity of thought
Diversity takes many forms, including race, ethnicity, gender, and physical ability. Another is diversity of thought. Donald recommends that all companies encourage putting together teams that are diverse in how individuals think, problem solve, and work, as well teams that are diverse in ethnicity and other ways. “Everybody has something to bring to the table,” he says. “For example, women are different from men. You want that difference—that’s where creative sparks come from.”
Engelbert stresses creating a “culture of courage,” in which everybody is encouraged to feel empowered and entrepreneurial. “When you have that culture, it leads to diversity of thought, innovative solutions, and better results. For women, this means being courageous and proactively seeking out opportunities to build their capabilities. We all need to be investing to develop more diverse pools for the next generation of leaders.”
Set criteria for advancement—and tie them to performance reviews
Both Engelbert and Donald emphasize that everybody in the organization must be held accountable for the advancement of women into leadership positions. Therefore, performance metrics for supervisors should include such criteria, which should be tied to their performance and compensation reviews.
“Not everyone is motivated by money, but it does matter to a lot of people,” says Donald. “Therefore, if you tie to managers’ compensation review how many women they advanced into leadership positions, as well as how frequently they gave women leadership training and opportunities, you will see change.”
Increasing the number of diverse employees within an organization by promoting qualified diverse candidates through the ranks doesn’t happen on its own. A company needs to set goals and act with intention.
“We have 10 brand presidents at Carnival and four are women,” says Donald. “I’m constantly trying to engineer diversity. Take, for example, our procurement officer, who is a minority woman. I basically forced my team to keep trying until they found a qualified woman to fill this position. We ended up with a woman from Macau who happens to be a Filipina and is a digital marketing expert. So I hired a procurement officer with incredible digital marketing expertise and a woman of color at the same time.”
But what do you do when your employees are resistant to change and deeper recruiting is called for to find greater diversity? According to Donald, a clear explanation needs to come from the top.
“In my experience, it’s not so much that people are resistant—it’s just that they don’t know how to be intentional,” he says. “You have to change the criteria and say, ‘I’m looking for someone who can really make a meaningful contribution, and I am looking for someone who is diverse.’ When the CEO is very clear, people will understand.”
The beauty is that promoting women’s advancement increases a company’s bottom line, say Engelbert and Donald. According to the 2017 Deloitte Global Human Capital Trend Reports, companies with inclusive talent practices in hiring, promotion, development, leadership, and team management generate up to 30 percent higher revenue per employee and greater profitability than their competitors.
Data points like this are one reason Catalyst found such enthusiastic buy-in when it launched CEO Champions For Change. Personal experience is another.
“It still surprises me that people talk about me as the first female CEO of a US Big Four professional services firm,” says Engelbert. “I knew it was a big deal to me personally, but I underestimated the broader reaction. It’s time that having female leaders is the norm, not a novelty. That means bolstering what we’re doing within our organizations—such as mentoring and sponsorship initiatives—and also looking beyond our four walls. We need to look at strengthening the talent pipeline by focusing on the foundational elements. There are too many talented women, with significant potential and too much to offer, for us to continue on this same path.” DW
Women and corporate boards
If women are underrepresented in the upper echelons of Corporate America, they are not going to be well represented on corporate boards. According to Catalyst, women hold only 21 percent of S&P 500 board seats, and women of color hold less than 4 percent of Fortune 500 board seats.
To complement its CEO Champions For Change initiative, Catalyst launched Women On Board. The program’s objective is to pair board-ready candidates with CEOs and board chairs who help them prepare and get into a position to earn a board seat. To date, Women On Board has led to more than 167 board appointments, with approximately 63 percent of alumni having earned seats on corporate boards.
According to Meesha Rosa, senior director of Catalyst’s Corporate Board Services and head of Women On Board, the program is a game changer for both these exceptional board candidates and the companies they serve.
“Having a diverse board with women, including women of color, enhances problem solving, drives innovation, provides a competitive edge only the full talent pool can bring, and sets companies up to win in the market of the future,” she says. “Our country is getting more and more diverse.” According to the US Census Bureau, by 2060 women of color will be the majority of women in the United States, but as of 2016, they represented only 3.8 percent of Fortune 500 board seats. Can any board afford to ignore the majority?