Capturing the diversity advantage - Our experiences in elevating the representation of women in leadership - A letter from business leaders (2011)
Our experiences in elevating the representation of women in leadership
A letter from business leaders
Capturing the diversity advantage
For most Australian companies, the transition from Phase 1—Getting in the game, to Phase 2—Getting serious, will be most relevant. However, a number of our companies have been in Phase 2 for some time. Some of us see a path to continued improvement, with a payoff that will go further than just gender balance. Woolworths and CBA’s experiences, starting on page 30, show how individual companies have navigated Phases 1 and 2, and how they are beginning to think about the next phase of their journey.
Our collective experience tells us that after steady wins, many of us reach a plateau. Most of us have weak spots in our organisations where we’ve still made little progress.
Why do we reach this plateau? We believe it is because deeply embedded cultural factors get in the way. Many of us speak of members of our own management teams who don’t share our confidence in the vision. Exhibit 15 suggests that our efforts haven’t yet fully translated into initiative-taking in the broader organisation. As such, the shift from Phase 2 to Phase 3 is about tackling the underlying cultural barriers that work against the goal of greater representation of women in leadership.
While some organisations and their leaders will struggle with the business imperative to shift beyond Phase 2, most of us hope for real gains beyond the plateau. Part of the challenge of describing this phase of the journey is that few of our companies would claim to have achieved the aspiration of a culture that fully supports gender balance.
Given this, we can take encouragement from other cultural transitions we have made in areas such as customer service, collaborative leadership and safety. This requires an integrated change program.
Taking a safety analogy, we know that safety cultures take decades to build. However, leaders do not negotiate safety objectives. In safety cultures, safety metrics receive focus akin to financial ones. Data is shared openly with an expectation of accountability. In a safety culture, the CEO is a role model. The CEO complies with on site policy, even when in the CBD head office. Before descending every staircase, force of habit sees them conclude their phone call, and return the handset to their pocket.
In safety cultures, there is a belief that every injury is preventable and accidents are not met with an attempt to excuse. Every person in the organisation, from newest to most experienced, is responsible for safety. Safety cultures are blindingly obvious to new joiners—a three-day safety induction builds capability and sets the tone. Safety ‘shares’, where recent incidents are highlighted, provide regular reminders and reinforce accountability. In a safety culture, people with poor records are not promoted—a contractor who jaywalks outside the head office is not invited back.
Consider what our organisations would look like if gender balance was ingrained in our culture the way safety is. We wouldn’t shy away from a ‘zero defect’ type of goal. We would not tolerate behaviours that were careless or inconsistent with a culture of gender balance. No leader would be promoted if they had a poor record on diversity. We would be open about failure—we would conduct challenging reviews of our mistakes to ensure we didn’t repeat them. We would operate with more flexibility.
We also don’t believe that the imperative for cultural change will be solely elevating the representation of women in leadership in itself. It is more likely to be part of a broader transformational change. Says Ralph Norris of CBA, ‘What really matters is changing underlying mindsets and behaviours. We’ve come a long way in our journey towards a customer service culture. I believe that diversity is a big part of the next stage in our cultural journey.’
This shift in culture requires engaging a much broader cross section of the organisation. In Phase 2, the centre of gravity shifted from HR to senior leadership. Now the whole system is engaged—from top to middle to front line.
To unlock the benefit of gender balance as part of a broader change, there are a number of actions to focus on:
1. Develop inclusive leaders who harness talent. Telstra believes that building leadership capability is at the foundation of its culture and future success. Says David Thodey of Telstra, ‘in my mind, gender (diversity) and inclusiveness is a broader leadership issue. Great leaders know how to get the best out of their people regardless of their gender, ethnicity or sexual orientation.’
We know that the highest performing leaders are inspiring. They bring out the best in others. They motivate others by creating common purpose and building on individual strengths. They foster collaborative leadership and decision making. They engage others and they turn difficult situations into learning moments. They also create the energy to sustain change.
As a result, these leaders do things differently. They develop others and build accountability through coaching and feedback. Most importantly, gender does not get in the way. They also build high performing teams to execute faster and get better results.
Giam Swiegers at Deloitte says, ‘I’m most proud that our efforts to build a team that values gender diversity are paying off. It’s common now for our Practice Leads to proudly share stories and evidence of their successes in developing, sponsoring and promoting female talent.’
2. Weed out entrenched biases. We find that corporate and individual mindsets, particularly biases, can be hard to shift. Our experience is consistent with McKinsey & Company research in the US that provides evidence of common biases, and how they sabotage promotions processes.
For example, this research shows that many managers commonly overlook women for certain jobs. One cause of this is ‘best intentions’—wanting to prevent a woman from failing because ‘everybody knows you can’t put a woman into that particular slot’ or ‘that slot could never be done part time’.
Another aspect outlined is that often women are seen as more risky choices for open positions, and therefore managers look more to their experience than their potential (whereas men are more confidently promoted on the basis of potential).
There is also a sense that women must watch what they say—in a masculine world, they can seem aggressive when men seem assertive. This can create real self-consciousness and a sense that women are not truly accepted in their organisations. It can also reduce perceived and actual performance. Also, men will often give more direct and personal feedback to men than to women—often with best intentions—but with significant lost development opportunities.
As a first step, many of us have introduced training or workshops that seek to surface unconscious bias that gets in the way of merit-based appointments and flexibility. Cameron Clyne at NAB believes it is a critical issue to address, ‘How do we counter it, how do we change the way we select, recruit, induct to overcome that unconscious bias within an organisation that may lead us down a more narrow recruitment and development path.’
This year, almost 200 senior leaders at NAB will complete their Consciously Addressing Unconscious Bias program. The lessons learned will then be applied in everyday decision-making processes that commonly occur in the workplace. As a part of this program, each leader receives one-on-one coaching to support them in recognising their own biases and addressing these on an individual level.
Exhibit 15: Building commitment to gender diversity is challenging
Exhibit 16: Shifting culture to build gender diversity at Rio Tinto Alcan Bell Bay
Context and Objectives
ANZ recently sponsored an Australasian tour of a diversity expert that focused on the business case for building more inclusive companies. Awareness sessions with 800 leaders, including ANZ’s top 200 executives, community groups and clients, served to surface issues and encourage additional actions to address mindsets that might work against women’s advancement. This approach will be cascaded across the organisation, asking leaders to develop personal plans for building a more inclusive business.
Telstra’s efforts have focused on moving from a compliance-based approach to a culture that builds inclusive leaders. This approach has involved vigorous work to change attitudes and behaviours both internally and externally. Engaging men, and all leaders across the organisation, has been a priority. One example of this approach is ‘Kitchen Table’, a series of group-level discussions, aimed at fostering conversation and shifting mindsets around diversity and inclusion.
In advance of a ‘Kitchen Table’ discussion, senior leaders in each Business Unit are sent granular data about their specific groups’ diversity objectives, performance against them, and gaps that might exist. Leaders are engaged in an open discussion about their own group’s story and dynamics. They are invited to come up with the reasons and biases that might be getting in the way, together with solutions to improve.
The focus is on shifting mindsets and individual behaviours by holding a mirror to each part of the organisation and the role individual managers play, rather than applying ‘one-size fits all’ programs. Action plans are then owned by the group’s leaders, not by HR, with leaders directly accountable for inclusive approaches in their everyday team leadership.
Rio Tinto Bell Bay provides an example of shifting mindset and behaviours to those more supportive of gender balance. Exhibit 16 details how Bell Bay doubled the share of women working on site within two years. This story highlights the investment required to shift mindsets, and the payoff for doing so.
At Bell Bay, many workers believed that having more women on site would hurt the site’s safety record. To address this, rosters were analysed for correlation between gender and accidents. Others expressed concern that women weren’t strong enough. In response, a consultant looked at physical requirements for roles and at how women’s capabilities met these requirements.
In these instances, the management team worked hard to listen—without immediately refuting staff concerns. In Rio Tinto’s fact-based culture, the key was providing evidence that more women wouldn’t lead to more incidents or to the job not being done properly.
Armed with this information, and supported by diversity champions with experience of working with women, management was able to build a culture that would support greater diversity—with very strong results.
Rio Tinto Bell Bay managed to reach its goal of moving the share of women from six to almost twelve percent in the two year timeframe. Management and staff alike felt strongly that Bell Bay was a better place to work.
So, we can all agree that improvement requires changing underlying mindsets and behaviours across the organisation. To do so, we must understand what exactly it is in our culture that is standing in the way. Is it a rigid image of what success and a career path looks like? Is it fear of working with people who are different? Is it tradition? Is it fear of change?
3. Take flexibility from marginal to mainstream. Research tells us that the two biggest barriers to women progressing in organisations are the ‘anytime/anywhere’ business culture and the ‘double burden’ on women who are likely to take up more family commitments outside of work hours.
Exhibit 17: IBM flexibility example
Context and Objectives
Over the last decade, IBM has worked to foster a culture where flexibility is viewed as a positive work choice with individual, team, organisation and client benefits. Flexibility is a core part of IBM’s retention and engagement strategy for both men and women.
The focus is twofold: first, on how the world of work is evolving; and second, on IBM’s goal of building an inclusive work environment.
Our companies agree that a genuine commitment to flexibility is fundamental to elevating the representation of women in leadership.
Says Gail Kelly of The Westpac Group ‘Flexibility needs to be mainstreamed—it’s the key to unlocking a huge part of our talent pool.’
While we all have flexible work policies in place and provide options for women and men who are balancing work and family life, it remains unusual for men to take advantage of them, or for women to take advantage of these policies at senior levels. This suggests that there remains a prevailing bias in our organisations, that you cannot be successful as a senior executive on a flexible program. There may be fear among men and women that choosing a flexible work arrangement creates the perception that they are no longer serious—that they are ‘opting out’.
Many women (and men) feel forced to trade off work and family. We will have fully captured the diversity advantage when those trade-offs aren’t as stark, and perhaps don’t have to be made at all. Says Andrew Stevens from IBM, ‘Is it career or family? Let’s make it both.’
For more than 10 years, IBM has worked hard to build flexibility into its culture. This has required education for both managers and employees alike, as shown in Exhibit 17. It has also particularly helped with the retention of women. Most of us are a long way from having flexibility so ingrained in our cultures that women (and men) will always see a way to stay engaged in the workforce.
Pacific Brands provides an early glimpse of what it might look like when ‘flexibility goes mainstream’. There is a strong belief across the company that with today’s technology, going home for dinner often should be possible for most, including senior leaders.
There is also a shared understanding around how appointments are made at Pacific Brands. As Sue Morphet says, ‘first we find the best person for the role, based on capability, and then if we can, we will work to adapt to suit any specific need that the person might have for flexibility’.
Unusually, Pacific Brands has achieved this without a formal set of programs and initiatives—but rather through embedded cultural norms and role modelling. While the organisation believes it has a long way to go before it captures the full ‘diversity dividend’, it has achieved real progress.
Sue Morphet believes that ultimate success will be characterised by organisations structuring working models with the assumption that men and women equally carry the responsibility of managing the household. In that state, the work and family trade-off will be less stark. There will be enough senior roles that can accommodate gender balance.
In this third phase, we aspire to a cultural shift. We recognise the need for inclusive leaders who harness talent. We counter biases—both conscious and unconscious. We also aspire to free our employees from the trade-off between work and family by providing a path to senior roles that allow flexibility.
Where mindsets are deeply entrenched, it will take years and perhaps multiple CEO terms to sustain the journey. It takes more than the CEO and top team, the whole organisation must engage in the cultural shift. However, by eliminating cultural barriers, companies can move beyond the plateau. Diversity will become part of our organisations’ DNA, and the way we operate. It will be sustainable and will enable us to capture the leadership advantage.
Questions we would encourage you to think about:
If you had to design your organisation from a clean sheet so that you eliminated barriers to women’s representation in leadership, what would it look like?
Given that most of your executives are unlikely to be deliberately sexist, what are the more subtle or unconscious biases that get in the way of elevating the representation of women in leadership?
Where have you had success in achieving cultural change in your career? What did you do? How would those actions translate to creating a culture supportive of greater female representation?
As with any fundamental change, the path to achieving greater gender balance is not easy or smooth. Not all levers are likely to be at the disposal of even the largest companies. We all know that long-term investment is required. We also know that if we take the pressure off we risk making no progress, or worse, sliding backwards.
Some of us believe that fundamental policy reform at a national level is key to progress. They point to changes in policies around childcare, immigration and tax as essential enablers to elevating women’s representation in leadership.
We all believe that changes to the broader Australian culture would also help. However, our collective experience tells is that there is much improvement to make before these obstacles are true constraints.
We don’t have all the answers, but we hope that by telling our stories, other Australian companies can advance themselves along this journey, and in return share with us their own lessons and breakthroughs.