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The gender dividend


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The gender dividend

  1. 1. The gender dividend: Making the business case for investing in women By Greg Pellegrino, Sally D’Amato, and Anne Weisberg Global Public Sector
  2. 2. Contents 2 4 6 12 16 20 31 32 Sidebars 2 Good sense, good business 12 Why countries should care Foreword by Sharon Allen, Chairman Deloitte United States (Deloitte LLP) 16 Taking a world view: Women and foreign relations 4 Women and economic growth Interview with Melanne Verveer, Ambassador-at-Large for Global Reaping the Gender Dividend, gaining competitive advantage Women’s Issues 6 Why women, why now 28 The gender dividend in action: the Deloitte Initiative Talent, markets, and the role of women for the Retention and Advancement of Women (WIN) Interview with Barbara Adachi, National Managing Partner for WIN, 20 Building the business case Deloitte United States (Deloitte LLP) Investing in women and the bottom line 31 One man’s take on WIN 32 From intangible to intentional Paul Silverglate, Strategic Client Partner, Deloitte United States (Deloitte LLP)
  3. 3. Good sense, good business Foreword by Sharon Allen, Chairman of Deloitte United States (Deloitte LLP) After reading this foreword and turning the page, the first Looking back, I believe that the defining moment in shaping words that you’ll see are what the Gender Dividend is all our culture was the decision to create WIN—made, inciden- about—women and economic growth. tally, by the men who led Deloitte at the time. By providing new thinking about how women and men could relate as Women and economic growth is a reality that has played out leaders, business partners, and peers, the Women’s Initiative quietly for centuries. Whether this reality has taken place in the has enabled us to provide a culture of flexibility for all of our world’s most advanced economies or those that are rudimentary people. And, I might mention, it has been during the existence (not to mention those recovering from the devastation of armed of our Women’s Initiative that Deloitte has evolved as a leader conflict, excessive risk-taking, or ethical lapse), one constant in diversity while becoming the largest private professional remains—the participation of women in economic activity has services organization in the world. and will continue to spur economic growth. Why? Such a truth knows no boundaries. In India and South America, for example, visionary organizations like the Grameen Bank and Maybe because great value derives not only from women as Pro Mujer extend microloans to women. The result—countless leaders, but also from the diversity of thought that women businesses established and beginning to thrive. In the United can help provide. Deloitte is not alone in benefiting from this States, the changing face of business belongs to women, and phenomenon. In the pages that follow, you can read more not just because of women’s recent emergence as the majority about the positive and often double-digit difference in of the United States workforce. Today, women in the United productivity between those organizations with more women States wield purchasing power in excess of an estimated US$5 as leaders compared to those with less. trillion. Women actively use that power to buy half of all com- puters, half of all cars, and more than 80 percent of all consum- With such powerful results repeated time after time, it is er purchases. They also represent nearly half of all shareholders. incumbent upon boards to make talent and diversity of talent regularly scheduled items for discussion with senior manage- It would seem to make sense, therefore, that businesses would ment. By initiating such focus and oversight at a time when invest in developing women as workers, executives, and lead- economic growth is greatly needed, boards can be responsive ers. But impressive results and sound logic have yet to fully take to shareholders in search of returns, and stakeholders in search hold in many parts of the world, including the United States. The of brands that are attuned to the full spectrum of consumers’ advancement of women pales in proportion to their numbers. wants and needs. While some of the reasons are related to culture and custom, it’s important to recognize that where organizations have invested in You can learn far more in this report about the strong business the development of women, the results have been both profound case for investing in women. But don’t just read about it. and dramatic. With talented people and economic growth in high demand, take the action that your organization needs to develop all of I speak from experience and first-hand observation at Deloitte its resources, men and women alike. United States, my professional home for the past 38 years. With- out our Initiative for the Retention and Advancement of Women It makes for good sense and for good business—as well as the (WIN)—begun in 1993 to stem the tide of talented women leav- Gender Dividend that could be yours. ing Deloitte—I may not have become the first woman to serve as chairman of a major professional services firm in the United States. Sincerely, As beneficial as WIN has been for me, however, its impact on our organization has been far more significant. Today, because of our Women’s Initiative, our culture at Deloitte is very different Sharon Allen is Chairman of Deloitte LLP than it was nearly two decades ago. In fact, it is our culture of values, high performance, and individual flexibility that so many new hires say is what first attracted them to Deloitte. 2 3
  4. 4. Women and economic growth What will the next phase of sustainable economic standing women as consumers and their impact growth look like? Governments and businesses are searching high and low for the answer. Some on the economy and the bottom line. Done right, the Gender Dividend should be reflected in “The future belongs to are looking through the lens of geography— will it be emerging markets or current economic increased sales, expanded markets, and improved recruitment and retention of a key talent segment. those of us, female or heavyweights? Others take it by industry— technology or manufacturing? Services or retail? Reaping the Gender Dividend, however, will male, who can adopt While these are all relevant considerations, there’s require going well beyond eliminating the explicit growing evidence that leaders around the world in both the public and private sectors should discrimination that laws and policies have taken aim at over the past decades. It will require a and embrace the femi- be examining this problem from an unexpected vantage point: gender. Women may well be the concerted, strategic focus on how to fully integrate women’s experiences, perspectives, and voices nine archetype.” dominant source of economic growth in the near into the fabric of an organization; as history has future—and organizations that are able to capital- shown, this will not happen on its own. Instead, John Hagel III, ize on the roles women play as economic actors senior leaders must elevate women’s advancement cofounder Deloitte Center will most likely have a competitive advantage as to a strategic objective tied to their overall plan for for the Edge, the world pulls out of the global recession. growth—and having a business case is critical to getting started. Deloitte United States Fully integrating women into both the work- place and the marketplace can yield a significant return—what can be called the Gender Dividend. Much like the dividends that public corporations pay to shareholders, the Gender Dividend is a steady benefit that is earned by making wise, balanced investments in developing women as workers and potential leaders as well as under- 4 5
  5. 5. Why women, To understand why it is so critical that women play Historically, to encourage women in the work- a key role in building—and rebuilding—economies place, many countries have passed laws mandat- around the world, it’s important to consider the ing equal treatment. Several governments are rise of talent as a dominant business issue. In even requiring that women make up a critical the digital, knowledge economy, human capital mass of the boards of publicly traded companies. replaces natural resources as the basis for growth.1 But on their own, these laws have not ensured The businesses and countries that will lead in this that women are fully integrated as economic century will be the ones that are best able to har- actors. Women represent a significant percent- ness the innovation and creativity of their people. age of the workforce —and college graduates Women are undoubtedly a growing force in the (see figure 1)—and yet have not reached a talent pool. But the real power comes from women proportional role in decision-making in some key and men working together and using their experi- industries. ence to solve complex problems and accelerate innovation. True, much progress has been made in putting women on equal footing with men in the work- The importance of gender diversity is also inextrica- place. But progress has stalled around the world, bly linked to the growing role of women as consum- including in developed countries like the United ers. As the spending power of women increases, States. This represents a large-scale underuse they represent a growth opportunity for companies; of talent that can have serious repercussions in but, because women tend to spend differently from terms of competitiveness both at the national men, companies need to understand women’s pref- and organizational level. In the talent-driven 21st erences in order to capitalize on this growth. Having century economy, it is a trend that can ill afford both women and men in decision-making roles gives to be sustained and the risks of doing nothing organizations the perspective they need to increase are real. sales and fuel growth. Figure 1. Women’s Educational Attainment around the World US 58% Canada 61% % of college enrollment/graduation UK 58% Korea 45% Australia 49% Japan 49% why now Brazil 60% China 57% Russia 47% UAE 65% 0 10 20 30 40 50 60 70 Sources:; Center for Work-Life Policy, The Battle for Female Talent in Emerging Markets; All numbers are for 2009 except Japan (2006) and Korea (2005) 6 7
  6. 6. Talent and economic force, and, for more than two decades, The situation is similar in other developed The developing world is quickly catch- the major source of grants for doctoral In their quest for rewarding work, high- competitiveness women have comprised half of college regions. In Europe, women make up 45 ing up in terms of women’s educa- research, invests roughly US$500,000 in achieving women are also starting their Today, talent is playing a new role in graduates. Yet the U.S. Government percent of the workforce—and more tional achievement. The World Economic each doctoral student13 —as well as the own businesses. That is, they’re actively global economies. In the past, a coun- Accountability Office (GAO), reporting on than half of all college graduates—yet Forum reports that, in 2010, the global universities and businesses that depend creating jobs. Countries that want to spur try’s competitiveness was traditionally the progress of women in the workplace they comprise only 11 percent of cor- gender gap in educational attainment on this pool—the case for improving the growth need to learn how to support based on its natural resources. But to be between 2000 and 2007 across 13 indus- porate executives. At the current rate in many of these regions has almost gender return on investment is clear. these businesses, and companies need competitive in the 21st century, govern- tries, found no change in the percentage of progress, these numbers won’t reach closed.7 In Latin America, women are to learn how to incorporate them into ments must now focus on their people of women non-managers and only a one a mere 20 percent until sometime after more likely to attend college than men.8 The return on this investment is also their supply chains as well as sell to them. and developing talent within their percentage point increase—from 39 to 2035.5 Women in Europe also received From Brazil to the United Arab Emir- threatened in a world that is increasingly Consider that in the United States, nearly borders. This is particularly critical as 40 percent—in women managers.3 45 percent of the PhDs in science in ates, women are on the rise as part of mobile. When opportunities are lacking, all net job creation since 1980 has come populations age and shortages of skilled Similarly, the percentage of women 2006, but accounted for only 18 percent the educated, potential workforce (see workers today can more easily migrate from small businesses that have been op- talent emerge. Similarly, companies can corporate officers and board members of of the most senior researchers. In Japan, figure 1). In the BRIC countries (Brazil, to where the good jobs are. Indeed, erating for fewer than five years. Today, no longer rely on industrial-age strate- Fortune 500® companies has flat-lined. Eiko Shinotsuka, a commissioner in the Russia, India, and China), the Center for a recent Gallop poll says “a good job” the number of women-owned businesses gies to stay competitive, especially in According to Ilene H. Lang, president National Personnel Authority, cites Work-Life Policy estimates that in 2006 is what people the world over desire in this category is growing at twice the light of the fact that the rate at which and CEO of Catalyst, a leading research “… insufficient utilization of women as there were 26 million educated women most—and, historically, they have shown rate of growth overall. “Any economist market leaders topple and the level of and advisory organization that focuses human resources, particularly their intel- ready, willing, and able to work. How- a willingness to move for it.14 This holds will tell you, the job creation [we] need to competitive intensity have both doubled on issues of women and business, at lectual resources,” as a factor in the Japa- ever, labor force participation rates for especially true for women. As described fuel any kind of middle class is not going over the last 20 years. Now, more than this pace, “it could take [until 2075] for nese economy’s lackluster performance.6 women lag those for men, and even in Deloitte Touche Tohmatsu’s March to come from corporations, it’s going to 85 percent of corporate value creation women to reach parity with men on when women are working, turnover is 2010 report Paths to Power: Advancing come from small business,” says Harvard rely on the intangible assets of people, corporate boards.”4 higher for women than men or women Women in Government, more educated business professor Nancy Koehn. “With brand, and intellectual property.2 fail to advance. In other words, leaders women than men move from their coun- that in mind, what we need to start continue to overlook and underutilize try of origin in search of greater opportu- thinking about is how we capitalize on Yet talent as a key source of comparative women as a source of talent.9 nities (see figure 2). This has produced a this [vast network] of women entrepre- advantage is challenging. Unlike natural Figure 2. Migration rates of men and women with college education female brain drain of global proportions. neurs. How do we nurture them? How resources, talent has legs—and cars, While all organizations need top talent Countries and companies that lose edu- do we fund them? How do we use [this] trains, boats, and airplanes—and can 4.1 to succeed, those that require talent with cated women suffer a double loss—they national asset?”15 North skills in science, technology, engineer- lose a worker and a potential mentor. explore, via the Internet, opportunities America ing, and math—fields considered critical anywhere in the world. This increases 3.5 the urgency for both the private and to competitiveness—are all currently public sectors to focus on developing 6.1 Male experiencing serious workforce short- and retaining talent more aggressively Asia ages. In Deloitte’s 2010 survey of over and sustaining that retention over time. 7.3 Female 330 C-suite executives from around the world, 72 percent anticipate a shortage “When opportunities are lacking, To do this, governments and industries in research and development talent.10 In need to ensure that women are part of Europe 9.9 the European Union today, the informa- tion, communication, and technology workers today can more easily migrate their talent pipelines, from entry level to senior levels. In the United States, wom- en currently comprise half of the work- 10.4 sector, one of the most innovative and research-intensive sectors, has a short- to where the good jobs are. This holds 17.9 Latin America & Caribbean 21.1 age of 300,000 qualified staff.11 In the United States, women PhDs outnum- especially true for women.” bered men for the first time in history in 2010, but women are more likely 16.5 than men to “leak” out of the pipeline Oceania in the sciences before obtaining tenure 23.8 at a college or university. The loss of these women, along with the significant 17.1 growth of Europe and Asia as sources of Africa high-quality research, seriously jeopar- 27.7 dizes U.S. preeminence in the sciences.12 And given that the federal government, 0 10 20 30 Source: Migration rates of people with tertiary education, UNIFEM 8 9
  7. 7. An untapped, growing consumer history of the country.19 It is estimated they spend money differently from men. complex systems theory at the University zation. Women comprise 50 percent of fund,” says Cal PERS CEO Anne Staus- market that American women already control Yet many companies have failed to invest of Michigan.26 This is true because of two his senior management team, portfolio boll, “in the nation’s most ethnically and As women continue to enter the work- over 50 percent of personal wealth, in understanding women as consumers different dynamics at play at the same managers, and sales force. He has not culturally diverse state, we recognize that force in larger numbers, they will have or roughly US$5 trillion in purchasing and fully capitalize on their purchasing time: the dynamics of prediction and the had trouble finding qualified women, diversity is a competitive advantage and more money of their own to spend. power—larger than the entire economy power. Similarly, governments don’t fully dynamics of selection. The more diverse even in financial services, because he a critical business issue.”31 Already, women control roughly US$20 of Japan in 2008.20 account for women as constituents of the team, the more likely its prediction in insists that his search firms send him a trillion of total consumer spending glob- their services. Women are treated as a the face of uncertainty and ambiguity will balanced slate. He also takes a gender To that end, Cal PERS in 2008 adopted ally, and that number is predicted to rise Women’s earning power is growing even niche audience, when, in reality, they are be correct because each person puts things lens to investing—including examining amendments to its “Global Principles of to US$28 trillion by 2014.16 Or, put faster in developing countries, where the audience.25 Getting more women into categories based on his or her back- the representation of women in senior Accountable Corporate Governance” to another way, whether they work outside their earned income grew at a rate of 8.1 into the workplace who understand the ground and experience. How someone management and on the boards of further support corporate board diver- the home or not, women either make percent, compared to the 5.8 percent buying preferences of women creates a categorizes affects how they predict a cer- companies. In fact, as Keefe explains, sity. It also incorporates corporate board or influence up to 80 percent of buying rate for men.21 In Saudi Arabia, women virtuous circle, with the inside reinforcing tain outcome. Someone’s talent and their “We have had a policy for some time diversity into its “Focus List Program” decisions, on everything from appliances own an estimated 40 percent of the the outside and vice-versa. background have equal weight in terms that if a board slate does not contain portfolio companies and proxy advisors. to cars and medical services.17 private wealth, prompting the Al Rajhi of their ability to predict. The dynamics of any women, we withhold support and Bank, the largest bank in the country, Two different heads are better selection also favor diversity. For example, don’t vote for it. We then write a letter However, despite the compelling In the United States alone, the number to start a wealth management division than two similar ones in biology, the more variation in the current to the nominating committee explaining research about diversity, most senior of women with six-figure incomes is targeted at women.22 But perhaps the greatest benefit to having population, the more robust the popula- our policy and why we think this issue is management teams are anything but. rising at twice the rate of men, and in more women working alongside men is tion in the face of change. It is better at important. “The evidence is mounting,” According to Catalyst, men are 84 almost all urban areas, unmarried profes- In short, women constitute the largest captured by the old adage, “two heads are adapting; it is more innovative.27 adds Keefe, “that investing in women percent of corporate officers in Fortune sional women have either caught up emerging market the world has ever better than one.” It is becoming increas- makes good business sense. I think the 500® companies and 86.5 percent of with or are out-earning men.18 In fact, seen (see figure 3).23 And, as Goldman ingly clear that diverse perspectives and The link between gender diversity and burden should shift—and the question line executives—numbers that haven’t women of the Baby Boomer genera- Sachs has found, they have different experience are critical to solving complex business outcomes is evidenced in the should be why not invest in women?” budged since 2005 (see figure 4). The tion are about to become the richest buying patterns and preferences, spend- problems and innovating in the midst of performance of companies with a more public sector, while ahead of the private U.S. demographic ever, controlling more ing money on food, education, and rapidly changing conditions. In reality, the robust mix of women and men in senior Keefe is not the only investor asking this sector, also has room for improvement. wealth than any other group has in the savings products, for example.24 And question is not women or men, it’s how management. Today, Fortune 500® com- question. The California Public Employee In fact, in some cases, like the percent- to ensure women and men are working panies in the top quartile when it comes Retirement System (Cal PERS), with over age of women in statewide elected together in decision-making roles. to women’s representation on their boards US$220 billion in market value, also executive offices in the United States, outperform those in the lowest quartile by invests using diversity—including gender the numbers are not only low, they are When it comes to solving complex at least 53 percent on return on equity.28 diversity—as a key part of their strategy. backsliding. Figure 3. Women’s marketplace power: And a study by researchers at Columbia “As the nation’s largest public pension problems or innovating, a diverse group Growth forecast in trillions Business School and the University of of competent performers almost always outperforms a homogenous group of Maryland comparing the S&P 1500 com- star performers by a substantial margin, panies’ performance with themselves over 2009 15 years shows a gender dividend of over according to Scott Page, professor of 1.6 percent, representing US$35 million on Figure 4. Fortune 500 corporate positions held by women average.29 2014 In Europe, of 89 publicly traded compa- nies with a market capitalization of over 150 million pounds, those with more 15.7% $18 women in senior management and on the board had, on average, more than $6.6 10 percent higher return on equity than those companies with the least percent- 13.5% 10.0% Fortune 500 Executive $13 $1.8 age of women in leadership.30 Officer Positions (2009) $$4.4 $1.2 This research is why Joe Keefe, the CEO of PAX World Mutual Funds, insists on a 1996 1997 1998 1999 2000 2002 2005 2006 2007 2008 balanced team up and down his organi- Source: 2010 Catalyst, Targeting Inequity: The Gender Gap in U.S. Corporate Leadership Women’s income China’s GDP India’s GDP Source: Michael Silverstein and Kate Sayre, The Female Economy, HBR, September 2009 10 11
  8. 8. Why countries should care National prosperity and gender Reversing the demographic demise With many countries in the developed world— When UK Prime Minister David Cameron took Beyond GDP and competitiveness, there is another including Japan, Korea, Germany, Italy, and office in May 2010, he commissioned a report on very basic reason governments need to look at Spain—facing such low birth rates that they what the government could do to increase the women’s participation in the workforce: a lack of could literally disappear37, this revelation is a number of women on boards.32 Section 342 of population growth. As reported in a 2009 New York serious one. It is also critical to the developing the U.S. Dodd-Frank Act, legislation enacted in Times story titled “No Babies?”: world, where many countries are also expe- July 2010 in response to the Great Recession, re- riencing population deceleration: according quires every federal agency regulating the financial The accepted demographic wisdom had been that to the United Nations, “the birthrate in 25 services industry to improve its own retention and as women enter the job market, a society’s fertil- developing countries—including Cuba, Costa advancement of women and other underrepre- ity rate drops. That has been broadly true in the Rica, Iran, Sri Lanka and China—now stands at sented groups as well as monitor the progress to- developed world, but more recently, and especially or below the replacement level.”38 Tellingly, the ward these goals of the financial institutions they in Europe, the numbers don’t bear it out. In fact, only countries in Europe with replacement birth regulate.33 And the U.S. Securities and Exchange something like the opposite has been the case. rates are the same ones where women’s labor Commission approved a rule in 2009 that requires According to Hans-Peter Kohler of the University force participation is highest. disclosure of whether a nominating committee of Pennsylvania, analysis of recent studies showed considers diversity when identifying nominees for that “high fertility was associated with high female director and, if so, how. labor-force participation . . . and the lowest fertility levels in Europe since the mid-1990s are often found Why are governments taking these actions? Be- in countries with the lowest female labor-force cause not only do individual businesses stand to participation.” gain from more fully capitalizing on the talents of women, the economy as a whole gains. Govern- ments are also starting to recognize the benefits Figure 5. Relationship between GDP per capita and the to the economy of a financial services industry Global Gender Gap Index 2010 scores that better serves a diverse customer base. Says Joe Keefe, CEO of PAX World Funds, a collection of mutual funds centered on socially responsible investing: “The SEC doesn’t issue rules like that 100 GDP per capita (current US$ in thousands) without data regarding financial materiality.” The evidence is clear: the more women in the 80 workforce, the more per capita income rises. United States (see figure 5) According to the Organization for Economic Cooperation and Development (OECD), 60 “since 1995, narrowing the gap between male Sweden Iceland and female employment rates has accounted for half of the increase in Europe’s overall employ- 40 Japan ment rate and a quarter of annual economic Russian Federation growth.”34 In Japan, according to the Japanese Mexico Brazil Economic Foundation, an increase in the num- 20 Saudi Arabia ber of women in the labor force helped mitigate economic stagnation and kept the economy from South Africa Yemen Pakistan Lesotho a deeper recession.35 In Latin America, working 0 women helped bring the poverty rate for two- 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 parent households down to 26 percent, from India China Philippines 40 percent, in 2007.36 And the World Economic Forum has correlated closing the global gender Global Gender Gap Index 2010 score (0.00-1.00 scale) gap with increased competitiveness and higher GDP per capita. Source: Global Gender Gap Index 2010 and The World Bank’s World dataBank: World Development Indicator & Global Development Finance, online database 2008, accessed July 2010 12 13
  9. 9. It’s working mothers that are key to the long-term vi- Figure 6. Employment rates and fertility ability of countries, with both the public and private sector having a stake in the outcome. Paying women 1980 2000 to have babies, the way Russia and other parts of the world have done, has had very limited success. 34 26 Instead, countries that have made it possible for IRL parents to have a family and work are reaping the MEX reward in higher fertility rates (See figure 6). What 30 works is more high-quality child care and flexible KOR 22 ISL work options—and the fostering of cultural norms USA that encourage women and men to provide both 26 NZL Total fertility rate financial and emotional care to their families. Do- IRL NOR ing so will help reverse these trends and provide, PRT FRA AUS 1.8 Total fertility rate to use Goldman Sachs’ phrase, a “demographic 22 GRC DNK ESP AUS FIN transition”—a period in which the working-age NZL GER GER share of the population grows more quickly than the USA overall population, supporting higher savings and 1.8 ITA BEL FRA SWE KOR CHE per capita income.39 JPN HUN SWE 1.4 AUT NLD AUT CHE FIN POL This is exactly what the Nordic countries have done. 1.4 DEU JPN ITA SVK By having a strategic focus on supporting working ESP CZE parents and dual income families, it’s no coincidence that these countries have the smallest gender gaps, 1.0 1.0 in terms of economic empowerment and political 20 30 40 50 60 20 30 40 50 60 70 participation, according to the World Economic Employment rates of women Employment rates of women Forum, and boast some of the highest birth rates in Europe as well as some of the most stable econo- Source: Johannes Jütting and Denis Drechsler, OECD Development Centre, “Gender and Development: Introducing the Gender, mies. Institutions and Development Data Base” presentation to the Norway Ministry of Foreign Affairs, March 2007 In Japan, the government is also trying to create an environment where young women and men do not have to choose between parenthood and a career. In 2009, the Japanese Diet created new legislation around child-care leave that calls for a six-hour workday limit and an exemption from overtime for employees with children under the age of three have. Dual-income families are allowed child- care leave until the child reaches 14 months. The Japanese government wants to be “better than the United States” in terms of supporting working parents, says Ted Childs, the retired global diver- sity director for IBM. He views Japan’s actions to indicate an “economic war for talent”;40 that is, an issue of national competitiveness. 14 15
  10. 10. Taking a world view: women and foreign relations An interview with Melanne Verveer, Ambassador-at-Large for Global Women’s Issues In April 2009, President Barak Obama highlighted This means that Verveer and her colleagues focus the importance of investing in women when on how women’s issues can be incorporated into he appointed Melanne Verveer as the first-ever the U.S. State Department’s programs and policies, Ambassador-at-Large for Global Women’s Issues. with the goal of better outcomes for all. This often Recognizing the critical importance of women requires thinking and acting outside of traditional to economic growth, peace, and prosperity, the norms, for example, by applying a gender lens to position seeks to integrate women’s issues into the economic conferences that fail to address women U.S. government’s foreign policy. With the impact as critical drivers of economic growth. “Even U.S. relations has on the world stage and its long- though data show that GDP growth in many parts term economic and political implications, seeking of the world is significantly short-changed due to to bring women’s issues to bear in this sphere is a lack of participation by women, it often doesn’t a significant statement of the U.S. government’s occur to officials to include women as an economic commitment to elevating women’s issues. force on their agenda.” “The President and [U.S. Secretary of State Hillary Verveer acknowledges the challenges of integrat- Clinton] recognize that when it comes to the role ing women’s issues into foreign policy. Many view of the U.S. State Department and the work that we women’s issues as “solved” or something that do interfacing with the world, we cannot tackle all will naturally be addressed in the course of for- of the challenges we confront unless women are eign policy development and execution. But, she participating at all levels of society,” says Ambas- argues, women’s issues need to be addressed in a sador Verveer. “Because, very fundamentally, no very intentional way. country can get ahead if it leaves what amounts to half the population behind. Secretary Clinton has “Ideally, this office should not have to exist,” underscored this repeatedly—that women need to Verveer says. “If it didn’t exist because what it rep- be at the core of our efforts.” resents was happening, we would have achieved our goal—which is that women’s issues are integrated throughout our foreign policy consider- ations. The reality is, they are not. 16 17
  11. 11. “Very fundamentally, no country can get ahead if it leaves what amounts to half the population behind. Secretary Clinton has underscored this repeatedly— that women need to be at the core of our efforts.” - Melanne Verveer, Ambassador-at-Large for Global Women’s Issues “That’s what we are attempting to do,” she con- “We do have more and more women in positions That policy can have an impact not just on the eco- “Fundamentally, companies have to understand the tinues. “And we’re not attempting to do it because of responsibility, and many women are agents nomics of a society, but also its very stability. “We positive value of diversity and act on it,” she says. it’s the nice thing to do, because it’s a favor to of change,” points out Verveer. “But one of the are working now,” says Verveer, “to implement “That means women being promoted to executive women, because at least we should acknowledge problems we have is that women in many parts what the Security Council of the United Nations and management positions. That means there’s that women have some role to play. It’s because it of the world are still looked at through the prism recognized 10 years ago: that women are intrinsi- greater representation on the board of directors.” is in our fundamental interest. The data today dem- of victimhood. Women comprise the majority of cally linked to peace and security. That if you have onstrates very empirically that when these kinds the uneducated and illiterate, they are victimized conflict in a country and women are never part of “To me the ultimate goal is gender parity,” contin- of investments are made and women’s potential by violence, and they hold a second-class status the peace negotiations, or the peace process, or ues Verveer. “We need to address the fact that is tapped, when there is greater gender parity, the in many, many places. And while that is true, it they’re not engaged in post-conflict reconstruction women are not second-class citizens and fully tap outcomes are far more successful.” negates the growing reality of women as leaders.” or rebuilding— essentially if they have no role to the potential of men and women—it’s not women play in that process—it is very, very likely that peace better than men, it’s not men better than women. That data is a powerful ally to someone in Verveer’s No place is this more evident, Verveer notes, than will not be sustained.” It’s the fact that men and women together can position—and she points out that in the last in the political sphere. “If you look at the World build a more vibrant economy and more prosper- decade a proliferation of studies on the topic has Economic Forum’s [gender gap study], women’s For Verveer, however, women’s issues must extend ous societies. By negating, as we often do, the role helped advance her office’s objectives. Metrics political empowerment is at the bottom. Even in beyond public policy to the private sector as well. women have to play, we are penalizing ourselves. are often the key to making the case—but can societies that are doing really well and closing that Governments can promulgate policies and offices We are penalizing the kind of world we want to only take it so far. “Our challenge now is to act gender gap between men and women, the hardest like hers can lead the way, but, ultimately, com- create.” on the data that has been produced,” she says. nut to crack is the political one. Why does that panies must also do their part to move the issue While studies from the multilateral world like the matter? Well, it matters because if you don’t have forward. United Nations or the World Bank or from Deloitte the experience and the talent and the perspective or other private sector entities have added heft of women, you’re going to have a less effective to the argument, there are still significant barriers and less robust public policy.” to acting on the growing evidence that women’s participation at every level is critical. 18 19
  12. 12. Building the The data clearly shows that time alone will not ensure that organiza- tions reap the Gender Dividend; rather, there needs to be a clear, stra- tegic focus on gender. Consider this: a 2010 global survey of executives found that 72 percent agree that there is a direct connection between gender diversity and business success, but only 28 percent say it is a top-10 priority for senior leadership.41 And while many leading companies have a number of women-focused initiatives in place at any given moment, they don’t seem to be achieving the goal of consistently moving women into key decision- making and leadership roles—the roles that have the most impact on business business success. I am passionate about gender diversity issues and parental challenges. To me this is the change management project com- panies (including ours) have to undertake with renewed energy. case Why? First of all, because companies need to empower their female personnel or run the risk of losing them. Second, because women clients are more likely to be convinced of companies’ products and services when they are presented or delivered by a gender-mixed team.” - Eric Dugelay, Partner, Deloitte France What is needed, therefore, is a business response to what is essentially a business problem, that is, an evaluation of the bottom line impact of investing in women. Orga- nizations need to assess in real terms—revenues, profits, growth, productivity, customer satisfaction, or whatever metrics they use to deem themselves successful—what they will achieve by shifting their mindset, reevaluating investments, and reconsidering their leadership model to reflect a more balanced mix of women and men as work- ers and consumers. This shouldn’t be an abstract management exercise. Rather, organizations should use the same models that apply to any significant organiza- tional or policy change. Because to change the results, you have to change the model. 20 21
  13. 13. The dual-focus business case Figure 7. Enterprise value from intentional investment in women Rooted in the industrial era, the current model for investing in women these elements should operating in most organizations is to think of tal- be aligned with the compelling goals of attract- Enterprise Value ent as a cost, and women as a niche group. But ing talent and capitalizing on the growing market in the knowledge economy, talent is an asset, and strength of women. women are key to both the talent and consumer marketplace. An enterprise value map is a useful The following section helps establish the benefits way to help frame the economic benefits of this and risks of reaping the gender dividend, set- shift in thinking (see figure 7). ting forth a dual-focus business case that can be Operating Margin Asset Efficiency Revenue Growth Expectations applied to any organization as it seeks to make But capturing this value requires a gender lens to the argument for investing in women. Each side analyze both the internal and external challenges of the case—women as talent and women as • Reduce costs associated • Attract and retain top • Leverage women’s • Build firm’s brand through facing your organization: the impact of women consumers—can be bolstered by citing macro- with recruitment, training, talent through more role relationships and eminence of its people internally as workers in your organization and ex- level and historical business data, but analyzing and retention models experience to attract • Retain/build reputation ternally as your customers. This dual focus should the current status of women and women-related • Increase efficacy of exist- • Increase complex new business and design of organization as market be applied as the business case is built. Most issues and the impact on the bottom line within ing programs and com- problem-solving capacity new products leader in developing business cases present a challenge or deficiency to an organization will provide the most relevant and munications because they through gender diverse • More effectively sell to this talent be addressed or proposed action to be pursued, forceful data. And any data-gathering must begin address all employees teams and leaders growing market segment potential consequence (risks) if nothing is done, with key questions to be answered. Regardless of • Become a talent magnet the benefits of developing a course of action (bot- the tools used to gather this data, answer these • Reduce potential liability • Increase innovation • Mirror changing complex- tom line impact), and key data to support each of key questions and a powerful business case will and legal costs of through gender diverse ion of client organizations these. To construct the business case specifically ultimately emerge. addressing claims teams to compete more effectively • Increase productivity through improved morale/ esprit de corps 22 23
  14. 14. Attracting and retaining women Benefits Risks Action steps: answer these key questions Retention, the bottom line, and competitive advan- An organization that understands how to attract, Businesses and public sector organizations are Questions that need to be answered concerning tage retain, and advance women will be in a better po- experiencing an alarming rate of churn among the recruiting and advancement of women should • How many women voluntarily leave your organi- sition to capture its fair share of talent, reduce the their women employees. In the United States, center on three key areas: employment needs zation each year compared to men? costs of attrition, and generate a robust pipeline approximately 60 percent of women do not work and current efforts to attract women; retention, to leadership. continuously full time, a figure that appears to the bottom line, and competitive advantage; and • If women are leaving, why? And where are they hold up in other countries, such as Germany and building a diverse workforce. By adhering to these going? Attracting and retaining women is not an end in Japan.43 These women either drop out of the issues, a clearer picture can be established as to of itself for an organization, however. As noted workforce completely, or move from company to how women can help companies’ overcome tal- • If you have a gender gap in voluntary turnover, earlier, the goal is better decisions and more ef- company in search of better opportunities and ent shortages and contribute to its overall success. how much is it costing your company? fective leadership. Professor Anita Woolley, an career-life fit.44 Turnover is hugely expensive, • Are women going to competitors? economist at Carnegie Mellon who studies group especially when it occurs in occupations that Employment needs and efforts to attract women intelligence, reports in the journal Science that require highly skilled workers, who are harder— • What percentage of the talent pipeline, at both • What does government data say about the the collective intelligence of a group significantly and therefore more expensive—to replace. For the entry and experienced levels, are women? representation of men and women in your in- correlated to three factors: the average social example, the pipeline of doctoral candidates on dustry and how does your organization currently sensitivity of group members, the distribution of tenure track in the United States is very weak be- • Is your company experiencing talent shortages? benchmark? conversational turn-taking, and the proportion of cause of the high percentage of women scientists What is the gender make-up of the pool for females in the group—in part because the women who drop out. The relationships and institutional Building a diverse workforce these positions? scored better on the social sensitivity.42 Interest- knowledge that these workers have—their social • What is the representation of women at the bot- ingly, she found that “factors that one might have capital—is also hugely valuable and takes time to • Is your company actively identifying and training tom, middle, and top levels of your organization? expected to predict group performance—such as rebuild. As a result, a conservative estimate of the women to fill gaps? group cohesion, motivation, and satisfaction—did cost of turnover for knowledge workers ranges • What is the gender mix of your senior leadership? • How successful have you been in attracting not”; neither did the average individual intelli- from 200 to 500 percent of salary. That adds women with the education and experience your • What leadership roles do women occupy relative gence of the group members. Given the fact that up—but it is a number that too few organizations business needs? to men? much of today’s knowledge work is performed in track. Additionally, homogenous decision-making teams, companies that can foster more gender- groups, especially higher up in the organization, • What is your talent brand among women (as • What is the gender mix in your slate for senior diverse teams should have a competitive advan- present a risk of lower collective intelligence at the well as among men)? roles? tage—a benefit that extends to all the organiza- very least—and group think at the very worst. tion’s stakeholders. • Is there a certain stage of career advancement that women seem to be “getting stuck” and not moving into leadership? Why? 24 25
  15. 15. No longer a niche market: reaching women as consumers Benefits Today, a • Do you understand why women and men As discussed above, women are the largest woman The risk of assuming that men and women are who are current consumers buy or use your emerging market the world has ever seen and has just been the same is that you will miss a huge potential products, programs, or services? companies that invest in understanding their buy- named as Doug market. There are many areas where women are ing preferences will reap the reward. Campbell Conant’s successor as underserved as consumers, and they know it:48 • Do you understand why women and men Soup Company offers a great example. Although CEO, and women run business According to research, more than 80 percent who are not current consumers don’t buy or it knew that women were the ultimate buyers of lines that contribute to a majority of the com- of women feel that investment marketers don’t use your products, programs, or services? its products, the company had not intentionally pany’s U.S. profit. With a gender diverse leader- understand their needs and requirements, more • Do you know how women and men view focused on what women in particular wanted. ship and a strategic focus on engaging woman than 70 percent of women feel the same about your brand? But after slumping sales in 2002, Campbell had employees in product development, Campbell auto marketers, and more than 50 percent feel to jumpstart innovation. Senior leadership turned has delivered cumulative total shareowner returns the same about those who market healthcare and • Does your communications or marketing to the Women of Campbell’s Network, chal- above its peer group average. And Best Buy has food.49 No company seeking to grow can afford strategy take into account women’s views? lenging the internal group to design a product reduced its turnover rate among women, which to have such a high percentage of dissatisfied specifically for women. The result: the Select had been double that of male employees.46 WOLF customers. • Do you develop new products and services Harvest line of soups, which became a US$200 was so successful that the company has started using a gender lens? million business “practically overnight,” accord- opening stores designed with women in mind and Action steps: answer these key questions ing to Doug Conant, Campbell’s CEO.45 Similarly, has rethought its leadership model with a focus Women’s buying power is an unassailable reality Women’s roles in decision-making processes Best Buy, a leading U.S. electronics and appliance on understanding the woman customer.47 and should be a trump card in building the busi- retailer, started a women’s initiative, known as ness case for investing in women. First, however, • Are women represented on your company’s WOLF (Women’s Leadership Forum), in 2004 to Risks companies must understand how they currently key committees and in key decision-making better serve the company’s “woefully underserved Despite the rise of women as consumers, many serve women customers. Critical questions that roles? female customers” who influence 89 percent of companies fail to understand what women need to be answered should align along two key • Is the market power of women embedded consumer electronics purchases and spend US$68 want and how to market to them. Instead, they issues: women as a vital consumer (what women into the decision-making processes that billion on electronics each year. assume that what works for men will work for want) and women’s roles in your company’s influence how you market your products and women. Take the medical profession: for years, decision-making processes. services? But more than seeking out women consumers, doctors assumed that women’s cardiac health was companies need to advance women in order to the same as men’s and never studied women’s Women as a vital consumer sector • Do the men in key decision-making roles have the diversity of view that will embed wom- hearts. When they did, they were astonished • Does your company’s management know the understand how to deliver your products, en’s perspectives into core decision-making pro- to find that, in actuality, women’s hearts were gender make-up of your customer base? services, or programs to women? cesses. Both Campbell Soup and Best Buy did just physically different from men’s and that women’s this. Campbell Soup made targeted investments health risk factors also differed. Now, there are • Do you understand how women and men • Does your company engage in any specific in developing women throughout the company. drugs and even vitamins for men and ones for who are current consumers view the products activities that seek to promote women to women. or services you offer? decision- making roles? 26 27