5: Hold On to Your Women
We’ve seen the headlines. In March 2009 Forbes ran a cover story that featured a picture of five knock-your-socks-off, newly fired female bankers—all rising stars—along with a headline that screamed, “Wall Street’s Disappearing Women.” In the worst financial crash since the Depression, financial services and insurance firms have cut 126,000 jobs. Of these laid-off workers, 72 percent have been women, even though they constituted a smaller proportion (64 percent) of total employment in the sector before the crash began.
Hard figures are beginning to come in confirming two kinds of attrition among women in this recession: women are being disproportionately let go, particularly in certain key sectors. They are also disproportionately quitting—voluntarily leaving their jobs. Data from Hidden Brain Drain strategy sessions shows that women were more than twice as likely as men (84 percent compared with 40 percent) to have one foot out the door.
Whether forced or voluntary, a female exodus is bad for business. Losing any top talent is expensive for an organization; losing high-performing female talent is expensive in the short term and has serious long-term ramifications.
Links to the Bottom Line
Having significant numbers of women in management positions improves a company’s bottom line. Research conducted by both Catalyst and McKinsey & Company demonstrates that companies that do well by women have a much higher return on investment (ROI) than companies that do poorly. Women have the smarts, outperforming men in tertiary education systems around the world. They also have the power of the purse. According to management guru Tom Peters, women make 83 percent of all purchases. Companies trying to design and market winning products in a tight global market need to have a lot of tuned-in women on their teams—including leading those teams—or else they will find themselves outcompeted. The conventional adage that “the customer is king” is actually dead wrong. The customer isn’t king: she’s queen.
In addition, a new study from London Business School shows that when work teams boast a 50-50 split in men and women, productivity goes up. This research argues that gender balance counters groupthink —the tendency of homogenous groups to staunchly defend wrongheaded ideas because everyone in the group thinks the same way.
There’s even compelling new evidence that the global financial crisis might have been mitigated had there been less testosterone in top management. “Global Financial Crisis: Are Women the Antidote?” a study published in October 2008 by CERAM Business School, shows that firms in the CAC40 (the French equivalent of the Dow Jones Industrial Average) with a high ratio of women in top management have shown better resistance to the financial crisis. The fewer female managers a company has, the greater the drop in its share price since January 2008. For example, BNP Paribas, where 39 percent of managers are women, has seen its stock price fall by 20 percent since the beginning of 2008; Credit Agricole, on the other hand, where only 16 percent of managers are female, saw its share price drop by 50 percent. Michel Ferrary, the report’s author, concludes, “The feminization of management seems to be a protection against financial crisis.”
Not “Men in Skirts”
The first step for companies wanting to hold on to—and make the most of—their high-performing women is to understand why they might want to leave. It’s not that smart women aren’t deeply committed to their careers or that they don’t need to work. Our data shows that in December 2008, despite industry smackdowns, fewer than a quarter (22 percent) of high-performing women who had “one foot out the door” planned to take time out of the workforce. Most were seeking less onerous—and more meaningful—work.
At the heart of the problem is the fact that women are not male clones—not merely “men in skirts,” as the saying goes. Research by ISR (International Survey Research) reveals that equally talented men and women march to different drummers. According to this study, the top two drivers for male executives are career advancement and financial rewards, whereas the top two drivers for their female counterparts are high-quality colleagues and the desire to deliver a quality product to a customer or client.
Data from a recent Hidden Brain Drain study lays out a complex vision of what high-powered women really want. At the top of the wish list is a series of career goals that speak to the quality of the work experience itself. Talented women very much want to associate with people they respect (82 percent); to “be themselves” at work (79 percent); to collaborate with others and work as part of a team (61 percent); and to give back to society through the work they do (56 percent).5 They also value recognition from their company or organization (51 percent). Access to flexible work schedules, the only employment benefit on the female wish list, is a priority for 64 percent. Financial rewards are less important: only 42 percent of women cite a high salary as an important career goal.
Because their ambitions are constructed and fueled in ways far more multidimensional than making money, women are always revisiting priorities and recalibrating at the margin. As described in part 1 of this book, women are constantly asking the question, Are the opportunity costs associated with holding a high-pressure job—the missed family dinners, the working vacations—worth the benefits?
For many women involved in this constant recalibration, a nudge or a push—the departure of an admired boss, work demands spiraling up—is all it takes to shift the cost calculation in the wrong direction. Wrong, that is, for the employer.
What Companies Can Do
Over the past several years we’ve made progress on the retention and acceleration of women. Indeed, in the 2004–2008 period I spurred action among the companies that make up the Hidden Brain Drain task force. Over five years we’ve developed a core agenda and seeded seventy models of best practice that helped companies get up and running.
What is this action plan? For a detailed agenda see my book Off-Ramps and On-Ramps (Boston: Harvard Business School Press, 2007). Following are three basics.
1. Establish a Rich Menu of Flexible Work Arrangements
Flexible work arrangements go to the heart of what women want most. They dominate women’s wish lists. Reduced-hour options, flexible stop and start times, telecommuting, job sharing, and seasonal flexibility—time off in the summer, balanced by longer hours in the winter—are among the programs women yearn for. Many high performers see flexible work arrangements as a lifesaver, eliminating the need to quit a hard-won, much-valued job.
Flexible work arrangements are becoming more important in this recession. With pressure ramping up, increasing numbers of talented women want and need to flex their schedules.
2. Help Women Claim and Sustain Ambition
The data shows a serious falloff in ambition as women move through their thirties. Confounded by the escalating pressures of outsize jobs and penalized for taking a brief off-ramp, many talented women downsize their expectations. This is a huge issue. An employer cannot promote a woman if she herself is not greatly vested in this endeavor.
Women’s networks are part of the solution. At the simplest level, they boost confidence by connecting women to their peers. Often, high-performing women feel isolated—marooned in a sea of men. In addition, networks provide access to senior women who can act as mentors and role models; serve as a showcase for presentation and organizational skills; and expand business relationships—both within the company and on the outside.
3. Harness Altruism
As you have learned, the aspirations of talented women are multidimensional and tend not to be dominated by money. Financial compensation is important to women, but it’s not nearly as important as meaning and purpose. In Hidden Brain Drain strategy sessions women talked eloquently about their commitment to giving back to their communities (both their corporate community and those on the outside). Whether it’s saving the wetlands or feeding the homeless, talented women want to help heal the planet and improve the lot of humankind.
These and other action items developed by the leading-edge corporations that make up the Hidden Brain Drain Task Force have helped drive significant change.
For example, GE has moved the dial on senior women. Partly because of the efforts of its enormously effective Women’s Network program, 16 percent of GE’s top corporate officers are now women, up from 12 percent a few years ago. Johnson & Johnson has also created a powerful women’s network—the Women’s Leadership Initiative, or WLI—which has accelerated progress, transforming the numbers of women in top ranks. Some 30 percent of vice president positions are now held by women, and the J&J board of directors is 20 percent female. And Ernst & Young has made impressive strides. Today, all employees are given the opportunity to work flexibly and 10 percent of partners work on formal flexible work arrangements, as do approximately 30 percent of those on the rung just below partner. By creating a flexible and reduced-hour career track that takes you all the way to the top, E&Y has been able to hold on to a large number of its high-performing women.
The Impact of the Recession
The action agenda described here has been affected by the brutal economic downturn. Some standout players (think Lehman Brothers) have disappeared, and even GE, Johnson & Johnson, and Ernst & Young have had to prune programs and cut costs. But it would be wrong to assume that action has stopped—that CEOs have somehow forgotten that there’s a compelling business case to hold on to high-performing women. Indeed, some of the more prescient are discovering that now might be an excellent time to ramp up the women’s agenda.
On March 19, 2009, in Munich, German engineering giant Siemens launched its very first Diversity Day during which they unveiled GLOW, a new global network geared to the needs of the company’s talented women. The launch, presided over by CEO Peter Loescher, marked the first step in the rollout of an ambitious program that seeks to accelerate female progress particularly at the top of the house. This is an unprecedented step for an industrial juggernaut where the CEO, in November 2008, made a bold visionary step to appoint an Asian woman as the first chief diversity officer in Siemens’ 162 years. Currently only 7 percent of senior management is female.
When asked why Siemens was launching a groundbreaking women’s leadership initiative in a year when most companies were hunkering down, Loescher talked about links to performance and innovation and stressed that female talent was “the biggest untapped lever” in driving the company’s bottom line. He also talked about the “opportunities for leapfrogging in this crisis. Precisely because we’re doing better than other industrial players, this is an excellent time for us to surge ahead of competitors and attract and engage highly qualified women around the world.”
But you don’t have to be a new player to see the urgency of the women’s agenda in this recession. Citi is repositioning and expanding its flexibility programs, and Intel is newly emphasizing programs that target technical women.
“For us, brain share is critical in up and down economies,” says Rosalind Hudnell, corporate director of diversity at Intel. “We’re just focused on retaining key talent in these tough times.” To ensure that it hangs on to its women, Intel has created two projects that provide traction for female engineers: the Technical Female Leadership Series and the Women Principal Engineers’ Forum. Both of these programs help women hone their readiness for principal engineering positions. The Forum program has been particularly successful. Designed for women and led by women Fellows and principal engineers, it has been credited directly with doubling the number of women Fellows and nearly doubling Intel’s female principal engineer population over the past few years.
UBS, to its great credit given the problems that have beset the financial services industry over the last eighteen months, recently piloted two new programs aimed at supporting female officers. Connecting with Clients in Turbulent Times is an initiative designed to increase engagement, productivity, and profitability for some of the bank’s client-facing female officers; this three-month program is tailored to women who want to take their revenue generation skills to the next level. Charting Your Future is a career counseling workshop customized for high-powered women in Asia. “Participants list their priorities—in both their personal and their work lives—and then work with a team to figure out how they can achieve these priorities so that there’s no second-guessing about choices and goals,” explains Mona Lau, global head of diversity and campus recruiting at UBS. “The message from management is that the bank cares, we want you to stay and will respect your personal choices.”
Protect Your Brand
Failure to hold on to women—particularly senior women in this recession—creates two kinds of problems over the long run.
First, companies deplete their pipeline. When women at the top of the house are disproportionately fired—or disproportionately quit—it starts a downward spiral that’s difficult to break. Once you lose a cohort of senior female leaders, you lose the sponsors, mentors, and role models needed to inspire the generation of young women coming up through the ranks. And you tear a hole in the network for future female recruits. In short you risk emptying your pool of female talent into the distant future.
Second, companies risk tarnishing their reputation and brand. “Appearances are often more important than facts,” says Anne Erni. During Lehman’s three rounds of layoffs before the firm went bankrupt, there was a widespread perception among its women that female employees were being affected more than men. Erni oversaw an analysis that found that women typically were not impacted in greater numbers. But, she adds, “Psychologically, if you lose two out of ten women and twenty out of one hundred men, those two women are worth a hell of a lot more.”
The lesson here is to protect your good name in this recession. Understand that a carefully tended track record as an employer of choice for women can be undermined in a nanosecond. It’s easy to damage a reputation, and companies can’t afford to risk access to high-octane female brainpower.