7
Gender Diversity Isn't a Plus, It's a Business Imperative

When I was attending my daughter's varsity basketball game last spring, I took a few minutes to observe the crowd around me in the bleachers and noticed something interesting. Many of the women in attendance were sitting toward the top of the bleachers, grouped together closely to both enjoy the game and socialize, while the men watching the game were spaced a few feet apart along the benches. They bantered back and forth, exchanged fist bumps and high fives after good plays, but their social interactions were otherwise limited.

I'm not here to advance a theory about the reasons why those men and women behaved differently at the basketball game, but it did raise a few questions about the social habits and personality traits of men and women. There is no doubt that, when observed as a group, men and women tend to behave differently from one another. Whether those differences are a result of the social and cultural expectations of the times or are due to other factors is a difficult question to answer, but the fact remains that observable differences in behavior do exist.

That very point, that differences exist, that they are palpable, demonstrable, and have far-reaching impact, is the starting point for this discussion of why gender diversity matters. Nature promotes diversity all the time, even if that isn't always reflected in our culture at large. Take, for example, a 1995 study where Swiss scientist Claus Wedekind had women smell the undershirts worn by seven different men and rank them according to their level of attraction. Upon analysis, each woman was most attracted to the shirt worn by the man whose immune system differed from hers the most.1 In other words, genetic diversity was the better choice.

The question is, if we agree that diversity is a good thing, why don't we see more of it? This chapter examines the current gender diversity climate in the business world and will make a case for its social and economic importance. In my mind, there is no question: achieving gender diversity is a must for any company that wants to remain competitive and grow their business.

State of Diversity Today

Gender diversity in the tech and business worlds seems to operate along the same dynamics as media and television (70/30, and depending on how you measure it, tech is even worse). It seems to me that companies may be in need of a business-oriented Bechdel test. For those of you unfamiliar with it, the Bechdel test is a criteria-based yardstick used to measure the levels of gender diversity and female representation in the media. To pass the Bechdel test, a program must satisfy the following requirements:

  1. The program has to have at least two women in it,
  2. who talk to each other,
  3. about something besides a man.

It seems simple enough, right? But you'd be surprised to learn that in a survey of over 1,600 films from 1970–2013, only 53 percent passed the test. In 47 percent of those films, there wasn't a single scene that satisfied those simple rules. You'd never find those rates of failure if the test focused on men. As one critic sardonically put it, “Plots need to advance, after all.”2

But here's the really interesting thing: movies that pass the Bechdel test, that give female characters more substantial roles, earn higher returns relative to those that fail. In a 2014 study, FiveThirtyEight found that “the films that passed the test had about a 37 percent higher return on investment (ROI) in the United States, and the same ROI internationally, compared to films that did not pass the test.”3 Overall, gender diversity leads to greater financial gain in the film industry and, as you'll see, has the potential for similar impact in business.

What would a business Bechdel test look like? My criteria would be a bit stricter than those applied to media:

  1. A business would need to hit a minimum ratio of 45/55 of men and women in either direction,
  2. where at least two women are included on every project,
  3. and who represent half of C-suite leadership.

I'll be the first to admit that Bluewolf currently does not satisfy each of these requirements, but we are working on it. We are closest to satisfying the project rule and currently have at least two women working on 72 percent of our projects. Three out of nine members of our executive leadership team are women—Corinne Sklar, CMO; Jolene Chan, chief of staff; and Caryn Fried, VP global talent management—and our current workforce ratio is 35 percent women to 65 percent men (see Figures 7.1 and 7.2). As I said, we have work to do, but we are committed to change, not just in the name of equality but because it makes good business sense.

Figure depicting Bluewolf executive staff gender breakdown.

Figure 7.1 Bluewolf Executive Staff Gender Breakdown

Figure depicting Bluewolf gender ratio with 65% male and 35% female.

Figure 7.2 Bluewolf Gender Ratio

Economic Case for Gender Diversity

There are many social crusaders who pursue gender equality and diversity solely on the strength of moral righteousness. I am not one of those people. It's not that I disbelieve or don't support the inherent social good of the movement, but I find a stronger case can be made when looking at these issues from an economic standpoint. And as we know, a rising tide lifts all boats.

Let's begin with a discussion about education. According to the Center for American Progress, women:

  • Earn almost 60 percent of undergraduate degrees and 60 percent of all master's degrees;
  • Earn 47 percent of all law degrees and 48 percent of all medical degrees;
  • Earn more than 44 percent of master's degrees in business and management, including 37 percent of MBAs; and
  • Make up 47 percent of the U.S. labor force and 59 percent of the college-educated, entry-level workforce.4

And yet, women:

  • Are only 14.6 percent of executive officers, 8.1 percent of top earners, and 4.6 percent of Fortune 500 CEOs;
  • Hold just 16.9 percent of Fortune 500 board seats;
  • Make up 54.2 percent of the labor force in the financial services industry, but are only 12.4 percent of executive officers and 18.3 percent of board directors. None are CEOs;
  • Account for 78.4 percent of the labor force in health care and social assistance but only 14.6 percent of executive officers and 12.4 percent of board directors. None, again, are CEOs; and
  • Hold only 9 percent of management positions in information technology and account for only 14 percent of senior management positions at Silicon Valley startups.5

Women make up nearly half of the workforce and hiring pool. They are earning more undergraduate and graduate degrees than men, and some studies indicate the trend will continue to increase. If you want the most skilled and talented workforce, you need to hire and retain women as well as men. If you don't make it a priority to expand your search pool, you'll be missing out on a highly skilled, motivated workforce.

According to Judith Warner, author of the Center for American Progress report, at the current rate of change, “it will take until 2085 for women to reach parity with men in leadership roles in our country.” In my mind, to accept that standard is to accept failure. At our current speed of innovation, we can't afford to falter in our pursuit of the economic potential of gender diversity. The rest of the country may choose to move forward at a snail's pace, but those who embrace this challenge and move toward gender parity will reap the benefits at the expense of those who drag their feet.

A McKinsey report released in September 2015 found that if the global population reached its full potential scenario of bridging the gender gap, it would generate an additional $28 trillion in gross domestic product (GDP) by 2025. McKinsey defines a full potential scenario as one where women and men contribute to and participate equally in the economy. Looking specifically at North America, they estimate an increase of 19 percent in annual GDP if gender equality is fully realized.6 As a business manager or owner, can you really afford to leave your slice of a potential $3.1 trillion pie on the table?

Let's look at this from another, more specific angle and take it down to the level of individual businesses. In a study of over 22,000 businesses, the Peterson Institute of International Economics found that companies with at least 30 percent female executives rake in as much as six percentage points more in profits.7 Looking at results like this, it's clear that achieving gender parity at a basic employee level isn't enough. Companies need to institute standards and programs to help ensure men and women have equal access to leadership positions. If women are earning more than half of all undergraduate degrees and represent half of the workforce, doesn't it seem odd that they occupy less than 20 percent of major leadership positions across the board? Studies like the Peterson Institute's are helping put empirical data to the problem, raising awareness, and giving life to strategies for improvement.

Some countries in the EU have instituted quotas for female representation on corporate boards and in the C-suite. While I have suggested that companies set individual standards for themselves, I disagree with diversity being mandated by law. While it may work in some cases for those companies already sympathetic to the efforts to achieve gender diversity, these types of laws also have the potential to backfire and create hostility and distrust.

It's a bit like being forced to play with your next-door neighbor as a kid. Neither party wants to be put in that awkward situation, and everyone walks away from it unhappy. With these types of quotas, despite hiring very qualified women, there are some people who would approach it with the belief that women in these positions were given the role to satisfy the letter of the law—to get the feds off their backs—not because they've earned it. It's neither a fair nor accurate judgment, but it's the reality of the world at large.

It seems far more effective to promote the economic benefits of diversity as a proven incentive. Any company worth its salt and interested in long-term profit and success will recognize the value and importance of diversity and adjust accordingly.

Now, I can foresee some critics reading the education statistics and pointing out that I neglected to mention that women are currently earning only 18 percent of computer science degrees, compared to 37 percent in the 1980s (see Figure 7.3).

A bar graphical representation depicting 37% women with computer science degrees in 1980s, and 18% now.

Figure 7.3

How can we improve gender diversity ratios in technology fields if women aren't pursuing science, technology, engineering, and mathematics (STEM) degrees? I'll leave the answer to that in the very capable hands of Lindsey Armstrong, COO of InsideSales.com.

I'll also say this—I, myself, am an arts graduate. I have a bachelor's in English from Berkeley with an emphasis in Shakespearean literature and I now run a global technology company. Yes, we should encourage young girls to study math and science, but a degree in the humanities isn't a liability. It's an asset, and if we can tap into it effectively, we'll open up another significant wellspring of opportunity and growth.

Organizational Benefits of Gender Diversity

Apart from the economic benefits of gender diversity, there are numerous other advantages that businesses can experience. I'd like to first discuss some of the reasons why we prefer familiarity over diversity and then dive into the benefits of fighting that impulse.

Why We Are Drawn to the Familiar

A homogeneous population is defined as one that is made up of the same kind of people or things. In other words, the group shares more similarities than differences. We, as people, are drawn toward others who are similar to us. We are comforted by the familiar and naturally seek it out, whether those similarities are physical or mental. (It's important to note that what is familiar isn't always the healthiest, smartest, or safest choice.)

Every occupation is stressful on some level, and since we are programmed to seek out familiarity for comfort to combat that stress, it's not surprising that we are naturally inclined to work with similar people. This inclination leads to the formation of homogeneous groups, even among companies that pride themselves on innovation. However, we also know diversity is a prominent driver of innovation, so despite the fact that stress triggers a need for familiarity, it's important to diversify team structure to keep up the pace. It takes a conscious effort to overcome instinctual triggers, but the benefits of that diversity extend beyond your bottom line.

Employee Turnover

As I mentioned in the previous chapter, employee turnover can be very costly. According to a series of studies compiled by the Workplace Gender Equality Agency, both men and women are more likely to stay with a company that promotes and practices gender diversity because it is perceived as “fair.” Workplaces that support gender diversity also tend to have more flexible work-life balance and family leave policies, things that both sexes value and that increase women's ability to participate equally in the workforce. Lastly, both men and women believe gender-diverse organizations have fair, transparent salary practices, which further increases their trust and desire to stay with those companies.

While I use the terms “perceive” and “believe,” that doesn't mean that you can use smoke and mirrors to create the illusion of gender diversity. You have to be honest with your employee culture and commit to the real thing. Otherwise, you can bet the employee culture will sense in a flash any action or signals that undermine the gender diversity commitment you made and it will write you off as just another dishonest, manipulative manager, and a pretty poor one at that.

Improve Access to Target Markets

In the United States, women control or influence 73 percent of all household spending.8 They aren't just buying on behalf of themselves, but their children, elderly parents, and partners. Even if they aren't the ones clicking the “buy” button, you can bet their opinion has a big effect on that final decision. Since they represent the majority of the general consumer audience, it makes sense to include women on the teams responsible for selling to them.

Pursuing gender diversity could mean the difference between a business faux pas like Bic offering a new line of pink pens for women, and the success of Nike's latest ad campaigns that focus on the strength, competition, and drive of both men and women in sports and fitness. Diverse teams naturally put checks and balances in place, helping to guard against thoughtlessness toward their audience. Getting input from women about their own experiences and those of other women can enhance the empathy of your campaigns, creating a deeper, more effective customer connection.

Enhance Reputation

If your business is recognized for gender diversity, it can have a positive impact on recruiting and attracting new clients. Valuing gender diversity doesn't just communicate that you value women, but that you value fairness and equality across all aspects of your business. This enhanced reputation can lead to more meaningful relationships with your current customers, prospects, partners, and employees.

Men Benefit, Too

Studies have shown attitudes that inhibit gender diversity in the workplace have a negative impact for both men and women. The viewpoints that can prevent women from being hired or from moving up in a company are the same perspectives that can limit the work-life flexibility for men in the same office.

Men with children increasingly have partners in the workforce and are taking on more responsibility at home. They cite flexibility as an influential benefit, and companies that offer such flexibility see returns in increased productivity and commitment.

I can say with confidence that almost every man over the age of 35 who has children has experienced some form of censure (spoken or unspoken) from their colleagues when taking time off for the birth of a child or leaving early to attend a sporting event or recital. Thankfully, these attitudes are changing—just look at Mark Zuckerberg setting the example for Facebook employees when he took paternity leave after the birth of his daughter. At Bluewolf, work-life balance and making family a top priority are values we take pride in. I never apologize for adjusting my professional schedule for the needs of my family, and I don't expect my employees to, either.

These flexible policies have a positive impact for every employee and should be embraced by leaders who want to engage with their employees, improve customer connections, and enhance the quality of life they and their employees experience. More than embrace, they should model them wherever appropriate.

Increase Innovation

Anita Woolley, a researcher at Carnegie Mellon University, conducted a study in 2010 on the collective intelligence of groups.9 She and her team found the overall intelligence of a group wasn't significantly impacted by the individual intelligence of the group members, but by “the average social sensitivity of group members, the equality in distribution of conversational turn-taking, and the proportion of females in the group.” While they caution against tokenism, including at least one woman in a group had a significant impact on its collective intelligence.

With the current speed of change, it comes as no surprise that innovation is one of management's top priorities. As I mentioned above, diverse teams enhance creativity and innovation by bringing numerous viewpoints to the discussion. Despite active individual intelligence, groups that occupy the same mind-set have more difficulty expanding beyond their innovation status quo. If you take a look at Figure 7.4, you can see how effective gender diversity is in increasing self-confidence, team efficiency, psychological safety, and team experimentation.

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Figure 7.4 London Business School, Innovative Potential: Men and Women in Teams, 2007

Unconscious Bias and Its Effects on Gender Diversity

These days, the word bias has a negative connotation, but our biases are what help us make sense of the massive amounts of information we are bombarded by every moment of every day. They help us make split second decisions and guide us through the jungle of our daily lives. For example, if you're a New Yorker and you see a subway car packed with people and the one next to it is empty, you'll choose the crowded car. Why? Because your biases against bad smells, heat, messy spills, and so on caution you to stay away from the empty car. Even if you can't pinpoint exactly what it is, you know something is wrong with that car and you cram yourself into the crowd to avoid it.

Those types of bias are useful to have—they can help you make better decisions, avoid discomfort, pain, and embarrassment, get you somewhere faster, and more. Where our biases fall short is in the people category. Our biases in favor of some people and against others have an overall negative effect on how we hire, fire, promote, and collaborate.

Many of our biases appear innocuous. So what if you prefer Downy over Tide, Southern California over Florida, and extroverts over introverts? How on earth does that affect how you do your job and interact with others at your company? But consider this—I went to Cal, and if I allowed my bias in favor of Berkeley graduates to color my hiring decisions, I would potentially lose out on some incredible candidates. Acknowledging that bias and moving beyond it doesn't mean I can't still mentor undergraduates or contribute to Cal's scholarship fund, but it does mean I can shake off a limitation inhibiting more evenhanded decision making.

The next big question many people wrestle with is whether gender bias really exists. I'm here to tell you it does, and it has a major impact on the number of women we see in leadership positions and on corporate boards, as well as in our general employee makeup. And we are all in this together; women display gender bias just as much as men. The problem is when we encounter it, we have trouble acknowledging that's what it is, even to ourselves.

Let's consider gender bias at the very first level of entry to a company: the hiring process. Numerous studies have proven unconscious gender bias in candidate evaluations.10

In one such study, university professors were split into two groups and shown identical résumés with just one minor change—their names. One set of résumés identified the candidate as “John” and the other set “Jennifer.” In the results, John was rated significantly higher than Jennifer.11

When asked for their reasons for the high or low scores, the professors used identical data to come to different conclusions, such as “John completed three projects last year—that's impressive” and “Jennifer only completed three projects last year—what was she doing with her time?” They never cited gender as a factor, and yet it had a demonstrable effect on their evaluations.

I can see some people asking themselves, “Why does this matter to me? Does the tiny bit of bias that creeps in occasionally really have that big of an effect? Don't my conscious decisions in favor of diversity matter?” And the answer is yes, of course they do. However, it's equally important to be realistic about unconscious bias and the ripple effects that you may not notice on a day-to-day basis.

In an impressive workshop on overcoming unconscious bias in the workplace, Google's director of people analytics, Dr. Brian Welle, cited an interesting study about the impact of gender bias on corporate leadership.12 Researchers designed a simulation in which an entry-level workforce, 50 percent female and 50 percent male, went through eight levels of evaluations, each time experiencing 15 percent attrition. They randomly assigned them various skills and competency levels and added one final thing: a 1 percent selection bias in favor of men and against women. The researchers ran the simulation 20 times and came up with the same results. By the time this group reached the top rung of the ladder, the split between genders was 35/65 women to men, exactly what we see in business leadership today.

I will say, just as Dr. Welle does, that there are other factors to consider before ascribing the leadership gap solely to unconscious bias. But the fact remains that even a tiny bit of bias can have a far-ranging, cumulative effect on the gender diversity of your teams at all levels, and it's a necessary and worthwhile endeavor to change it.

Strategies to Overcome Gender Bias

There are many methods to overcome bias, but I'd like to focus on three that Dr. Welle covers in his workshop: defining success, collecting data, and accountability.

One of the most effective ways to prevent bias from influencing your hiring decisions and performance evaluations is to define success. Work with your teams and define the specific criteria that you think make a person in that role successful. If you articulate what matters for a role before you review résumés or write that evaluation, you are much less likely to be influenced by any biases. Be fair and be consistent in how you apply those standards, and get your teams involved in the process.

Collecting data is one of the most powerful tools in your arsenal. Remember, you can't improve what you can't measure. Don't phone it in and say gender bias is too hard or too fuzzy to capture. With all of the advanced analytics tools at your fingertips, you have the ability to not just measure your current standing but track your progress against your diversity goals.

Collective, generic info can be used to confirm biases because it's easy to interpret it in the way that seems most favorable. The more ambiguous the information, the more bias can creep in and affect the results or conclusions. For example, some studies have shown that when a review committee is told a group of men and women have done a great job on a project and are given a list of each team member's accomplishments, there is no bias, and congratulations and positive reviews are spread evenly across the team. However, if these specifics are withheld and the committee is simply told that the team did well, they are less likely to rate the women on the project as having done as well as the men. Success is ascribed to the male members of the group, and the women are assumed to have contributed less.

Some of the most readily available data—how many women are on your project teams, working as developers, engineers, and managers, and the entire company ratio of men to women—can give you a very solid starting point. Then, take a deeper look at your business to discover what else you can measure to help counteract bias. It can be anything from the gender representation at leadership retreats and conferences to how sales leads are routed among your teams. It very well may be that in some of these areas, you're doing well. The point here is not to assume compliance with your gender diversity standards, but to objectively measure your standing and target areas for improvement.

The last strategy I recommend using to combat unconscious bias is accountability. This goes beyond accountability for the measurable goals discussed above. I am asking you to embed accountability into your day-to-day actions. When you make a decision about anything, from your project team makeup or written review to new hire, discuss the reasoning behind your choices. This would preferably take place with another person, but it's also very effective to write it down for yourself. By consistently reviewing your actions and openly acknowledging your reasons and motivations, you can cut down on bias significantly.

That same standard of accountability should be applied across your organization. Make a point to hold your employees accountable for the decisions they make. If you can't have an open discussion about the challenges, opportunities, and achievements in your pursuit of gender diversity, these unconscious biases will not surface and will not change.

How to Achieve Gender Diversity in Your Organization

Achieving gender diversity, like anything worthwhile, takes time and concentrated effort. Here are the top strategies your organization can use to help improve gender diversity.

  • Acknowledge unconscious bias and work to break it down. Refer to my advice earlier in this chapter.
  • Mentorship: Establishing a mentorship program not only increases social bonding and professional development but also helps even the playing field for men and women as they pursue leadership positions within the company. Taking the time to nurture an employee and his or her career breaks down assumptions, unconscious bias, and increases management's investment in their success. It also helps increase mentees' confidence, business acumen, and leadership potential.
  • Data and accountability: As mentioned earlier, data can be your best friend as you work toward gender diversity. Find out where you stand, establish goals, and set standards to hold yourself and your teams accountable for achieving them.
  • Parental leave: If your company doesn't already have a paid leave policy, seriously consider implementing one. Research has shown that people who work for companies with paid leave policies are more likely to return to work and stay with the company longer. If you think you can only afford a short leave, consider offering on-site day care so new parents can return to work but still take care of their children.
  • Work-life balance: Life happens. Your kids get sick; they make it unexpectedly to the championship game happening at four o'clock on a Thursday; you forget to sign a permission slip and have to turn around to drop it off at school. Be flexible and strongly communicate that policy throughout all levels of your organization. Make it an integral part of your culture and you'll reap the benefits in terms of productivity and commitment.
  • Standardize your hiring process: Define success criteria, create a standard set of questions to ask candidates (question set can vary depending on position), and make it a group decision (see accountability discussed previously).

One very important point to remember is these efforts need to encompass your entire business. Gender diversity won't have the impact you expect or desire if you achieve a 50/50 ratio of male and female employees, but all of the women are concentrated in one or two departments.

Lastly, don't insulate yourself or your efforts. Partner with or found a group whose primary goal is to support women in business. As I've said repeatedly throughout this chapter, and the entire book, collaboration and diverse teams help us innovate faster and more effectively. If it holds true for an individual organization, it certainly applies to the professional community at large.

From a practical perspective, I strongly believe companies with balanced genders perform at a much higher level than those that don't. In our hypercompetitive, resource-constrained world, a gender-balanced business has a much better chance to succeed than one that operates with an uneven ratio favoring men over women.

I know this because I have worked with women and men in the tech space for 24 years. I know this because I have listened to experts in this field whose research supports gender diversity and equality. I know this because I have watched incredible things occur repeatedly when men and women work together. It's that simple. My first job out of college was on Oracle's inside sales team. Back then, our gender diversity ratio was progressively high, as I recount the colleagues on my team. And that team performed at the highest levels in the software industry. I don't hold an advanced degree in human behavior, but it's clear to me that men and women bring different qualities and approaches to collaboration. I have seen my share of disasters when a room, project, or a company is overloaded by one gender. Whether it's a leadership team, a sales call, or complex enterprise transformation, I am convinced a balanced team wins every time.

Bluewolf was cofounded 15 years ago by two men: Michael Kirven and me. But our first hires were women. Our decisions weren't based on gender, but because we had worked with them successfully in prior companies. Our company growth skyrocketed as we hired our first sales directors, Caryn Fried and Lexy Werner; our VP of delivery, Jolene Chan; and our VPs of recruiting, Stephany Samuels and Wendy Duarte. All of these women are senior leaders in our company to this day, and the list is deeper than space allows here. They have been married, relocated, reorganized; they have had children; they have hired and mentored hundreds of employees; they have contributed to our business in their own unique and incredible ways.

Gender diversity is an incredibly powerful asset for any company. Great ideas, great work, and unbelievable results come out of melting pots. It is time to stop hiding behind our fears on this topic. We need to give it transparency, speak in real terms and relevant language, and make gender diversity—and in turn, equality—our primary and common goal.

Notes

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