Archives for November 2019

[Ed: Last week, Anne Glenn laid out the key hurdle limiting the number of women leaders.  Here, she looks at solutions]

For women just beginning their careers, “promotion gaps” at a pre-managerial level create the biggest single hurdle for their future and the futures of businesses that currently employ them.

Nearly 30% of women recently hired at the very bottom of the managerial promotion process miss a critical “first rung” promotion opportunity.  Their male counterparts do not.  As a consequence, men’s careers charge ahead, while almost one-third of women’s careers are left behind.

The newly identified “broken rung gap” challenges all businesses who believe a diverse workforce is  among the most important driving strategies for their own successful futures.  Among these companies, 73% of leaders said achieving diversity in their workplaces was a top priority. (“Women in the Workplace 2019”).

“Bias does continue to have a role in promoting women managers”, says Carolyn Tasted, Group President, Procter & Gamble, North American Operations in the report.  “But achieving business results means that we have to find a way to pull all our talent up through the pipeline.”

The tools, partners and experience needed to drive this change initiative are the same ones used during 2015-2019 to grow women in executive leadership teams by 42%.  This time, the focus shifts from the top level of the organization to the very bottom.

 

Five Must-do Steps

Here are five components used in the past to “crack the glass ceiling” which must be revised and applied to the lowest employment levels until diversity is firmly established as company policy and operational practice.

• 1. Hold managers accountable for increasing gender parity at all levels.
• 2. Set goals for getting women into first-level management positions. Put targets in place that set goals for hiring and promotions plus other processes that directly shape employee representation.
• 3. Deliver promotional opportunities with transparency, fairness and a goal of diverse candidate slates for all management level positions.
• 4. Make meaningful corrections to lower bias in performance and promotion reviews.
  • Require training in unconscious bias for all evaluator levels. Unconscious bias can play a large role in decisions about who is hired, promoted or left behind.  Many companies may be less likely to provide training to evaluators at the important, lowest decision- making levels.
  • Establish clear evaluation and promotion criteria (with the right processes and tools) before any hiring or promotion processes begin. Be certain the criteria gather only subjective, measurable inputs.  Start with job descriptions using language that is gender neutral.

• 5. Put more women in line for the first step up to management
  • Allow them to get the experience they need
  • Give them opportunities to raise their profile in the organization – leadership training, high visibility assignments, sponsorships, mentorships and high potential development programs and key skills

As business leaders work through the planning steps above, it is important to remember that the true goal of diversity is “providing equal opportunity and fairness to everyone in the workforce.”  All have equal access to the same opportunities and the system works for everyone. When an issue gets in the way of a “good for all” vision, management must address the barrier immediately.

Opportunity and fairness are the top two predictors of employee satisfaction. The happier employees are, the more likely they are to stay with the company and recommend working there to others.  Employee satisfaction then fuels business success.

The “Women in the Workplace 2019” study proved just how elusive fairness in American business may be in the employees’ minds. Most individual employees interviewed believed they personally had an opportunity where they were working, but they were not certain the “system” was fair to everyone.

 

Fairness is Critical

Less than one-half of the people believed the best opportunities went to the most deserving candidates and less than 25% believed that only the most qualified candidates were promoted to managers. Based upon these replies, “fairness” is clearly important to both men and women equally.

When diversity is well aligned with sound corporate business strategies, it positively impacts an organization.

Successful diversity alignment inside a company means that D&I is fully integrated into the organization’s planned objectives and business goals. Well aligned organizations enjoy higher rates of employee satisfaction and success with new hires (33%) and fewer resignations (13%) compared with un-aligned (24%) businesses.

Company reputations also grow with D&I. In well aligned companies, 66% of the workforce and leadership believe that financial performance is positively transformed as compared to un-aligned businesses (27%).

Diversity and Inclusion is almost mandatory in companies which serve, or hope to serve, global markets. Their employee populations must reflect the geographies of the customer they serve. Global workforces must find ways to operate and go to market that cannot be achieved by only one, homogenous set of employees. They need people who continue to bring different perspectives and experiences into the business.

Inclusive, fair leadership processes begin at the top of any organization. In the USA, there is a CEO Diversity Pledge that is signed and publicly displayed to show employees, potential employees, customers and partners that the business is committed to a diverse workplace environment. Participating companies also clarify three or four related goals they want to accomplish and then focus upon them until they are extended throughout the entire organization.

For help, look to executive recruiting firms. Particularly those with international bases of business can offer assistance and partnership in “first rung gap” solutions. They have tools, experts and experience in each one of the five critical elements of successful diversity and inclusion programs.

Cornerstone International Group is one of those firms both motivated and equipped to help business leaders to understand the rewards of D&I and the means to attain it. Our members include leading international authorities on diversity in the workforce.

Use this link to chat or request the latest Cornerstone global survey on women in leadership:  editor@cornerstone-group.com

For five years, a report on Women in the Workplace has studied 590 major companies employing more than 22 million people.  The latest of these reports by McKinsey & Company identifies a systemic failure in management processes which handicaps women throughout their working lives. Let’s start with some numbers.

The Good News

• The number of women holding “C-Suite” positions has increased 24% since 2015 when McKinsey’s reporting began.
• Fifty percent of participating companies reported an average of three women on their executive leadership teams, a 42% increase during the past five years.

Growth in the number of women occupying high-profile positions is crucial for working women as well as their business peers and entire communities. While actual study numbers reflect only a small, select group of working women, each added promotion symbolizes top-tier corporate achievement and increases the probability of a more level playing field in the future.

High-visibility women in top leadership positions can be examples of, and advocates for, greater inclusive workforce changes in their companies and industries. They are inspiring role models for younger women beginning their careers who are more likely to be attracted to businesses perceived as being more supportive of their future success.

The rapid rise in women holding top leadership positions during the past five years illustrates just how quickly levels of management could move toward greater diversity. Rates of increase are driven by certain conditions and a committed leadership team. These conditions include embracing diversity changes that are completely intentional, completely supported by senior management and incorporated into a company’s vision/mission statements. And diversity goals must align and support the key operating strategies of the business.

The Not-So-Good News

The rate of improvement in career paths for women at all other levels of management moved much more slowly from 2015-2019 than the “C-Suite” level discussed above.  The study revealed that the rate of growth for women promoted into more general managerial roles has only minimally changed since the earliest diversity reports in the 1980s.

Based upon this current slow improvement rate, forecasters predict it will take at least another 30 years – an entire new generation of working women – before gender parity becomes a reality in USA businesses.

Gender parity is the optimum standard measure of long-term well-being for women in workforces around the world and younger ones who are starting to plan their futures.   Gender parity is also important to companies who recognize that diversity and inclusion are key business drivers of future success.  They have been shown to increase financial performance, raise employee satisfaction, improve employee retention rates, and build Company reputations.

Continually being able to hire and promote the best, most talented people is essential for the long-term survival of a business .  As the speed of business escalates, it is tempting to expect gender parity at all managerial levels will move at similar speeds.  In the United States, 2019 results do not support that belief.

The Gap Revealed

“Women in the Workplace 2019” uncovered a critically important fissure in the management promotion processes of companies studied. This fissure or “Gap” pattern repeats itself across all businesses in every industry.

The gap comes at the very beginning. The biggest hurdle faced by women on the path to senior leadership is the first step up to manager. For every 100 men promoted and hired to manager, only 72 women are promoted and hired. Thus begins a path of disparity: not surprisingly, men end up holding 62 percent of manager-level positions, while women hold just 38 percent.

This gap adversely impacts position and compensation for women their entire working lives.  The report aptly names this the ‘broken rung” on the ladder to success for minorities.

• Women represented 48% of entry level hires but less than 38% of first level manager promotions.
• Men and women entering the workforce start at essentially the same hiring status and pay rates.
• At the very first promotion opportunity (initial, junior, first management levels) men’s careers move sharply ahead of women by almost 30%.
• For every 100 men promoted to manager, only 72 women were

Due to the broken rung phenomenon, over 1,000,000 women’s careers will be left behind in entry level positions during the next five years because these women missed their first rung of management promotional opportunities while their male counterparts did not.  Even when these same women receive promotion opportunities and rise to junior managerial level later, their gap, as measured by titles and total compensation across an entire career, never closes.  They never catch up!!!

If we are truly committed to improving life for all Americans in the workplace, including women and children, we must accept a financial and human responsibility to address the causes of our current “gap” and close it as quickly as possible.  Our futures and businesses depend upon the actions we take now. The question is no longer “if” we do it, but when and how.

Think with me for one minute. Can any of us afford a million careers derailing during the next five years due to one missing step – one broken rung?  As a working woman with daughters and granddaughters, and a small business owner, I won’t accept just a rate of “status quo” improvement.  The largest challenge is clearly defined and we have tools and skills to create solutions now.

From now until 2025, will our businesses be able to operate as well as they could without the talent, ideas, contributions and discoveries represented by underutilized women?

As families, can we continue to educate our girl children, encouraging them to be all they are capable of being yet not allow them to use everything they bring to their working environment?

Five years is too long to wait when we can start now making it right and fair to everyone.

“If women participated in the American economy at the same rate as men, it would add $4.3 trillion dollars to our economy and create financial security for millions of families.”  (Sheryl Sandberg and Rachel Thomas, WSJ, 10/15/19). 

As business leaders looking to access the strongest possible future talent to achieve our own company goals, addressing the problem of first-level, promotional “gaps” is an issue that should be solved quickly.  It’s been proven that focused leadership with positive intention has altered gender diversity issues in the highest levels of management.

Now we know we have to apply the same level of intention, strategies and techniques to alter the gap by fixing the bottom rung.

 

Can you grow executive talent?   A new report by Beamery, a global talent acquisition specialist, would seem to suggest so. In fact, cultivating cabbages or CXOs seems to follow quite similar best-processes.

The executive talent recruiting industry has become very complex. Those eligible are more aware of their value and more concerned about maintaining a career growth curve. Those doing the seeking have increasingly complex needs combining laser-like focus with the broad view of the philosopher.

The smart organizations respond to the challenge by going back to basics. There’s nothing more basic than a garden.

Beamery’s Talent Attraction Index mimics biblical parables of preparing the soil and supplying nourishment in order to nurse growth.  It evaluates the environment of the recruiting challenge  beyond the simple “fit” and zeroes in on the components that will ultimately influence a rewarding outcome versus a merely adequate one.

There are four measurements.

1. Employer Brand presence.

How well does the company articulate its brand to candidates, using the channels available to it?

2. Employee Activation

Do the companies leverage the voice of their current employees to bring in new ones? Do they encourage referrals?

3. Team Specialization

How specialized are the recruiting teams of these companies?

4. Candidate Conversion

Is there a talent community or network to guide candidates to the application point?

Each item contributes 25% of the final score and the Index was applied to the Fortune 500 in the USA.  According to the report, there is a direct correlation between the index and not only recruiting performance – the top firms in the Index engaged seven times as many key players as the lowest group – but also with financial performance, based on their ranking in the Top 500.

The strongest scores among the Index Top 10 are also interesting. Employer Brand Presence (which has been around the longest) was the leading attribute for the top three companies followed by Employee Activation.

You can download the complete report here.

Cornerstone International Group has more than 30 years of hands-on experience with the qualities of leadership, selecting and training talent to the level of CEO for the world’s leading organizations. In recent years we have seen how the profile and the role of the chief executive has gone through an evolutionary process.

It is no longer enough to have an integral vision of the organization and its markets. To keep pace with evolution, new leaders must not only fully understand the business, but also have the ability to focus, anticipate and lead change in a dynamic and complex context.

Among the main challenges to the qualities of leadership that the CEO must keep in mind are:

1. Technology is rewriting borders, digitalization and globalization are forcing organizational change. These are the main external forces on which CEOs have focused.
2. Decisions are getting closer and closer to the client. Organizations are reforming into more agile and smaller structures to be closer to them.
3. Sustainability leads a cultural change. Organizations must understand and incorporate social and environmental responsibility in the agenda, contributing to the progress of the countries where they operate.
4. The transformation is not only technological, it is also normative, organizational and competitive, which leads to new business models.
5. The digital transformation is that of mindset, culture and leadership style. The CEO is the principal manager of change in this evolutionary process.

Change is the only constant in the equation and a lot of skill is required to lead organizations in this context.  Recently in Peru, we recognized the top 25 most profitable CEO, who, through their leadership and good practices in a dynamic market, have achieved sustained growth in sales and profitability.

Our Latest Survey

Every year, since 2005, Cornerstone has conducted a global survey that aims to understand the role of senior management in organizations, as well as the factors that will affect their business over the coming years.

Our 2019 annual survey represented a wide variety of businesses, cultures and regions. (In Peru, we interviewed 26 CEOs.)

The results of the survey are available in a downloadable report from our website.  Here are the main findings.

 

1. The impact on the organization

Given the change and the need for speed and flexibility, organizations are bringing decision making to the client. While large organizations can continue to function as a multiple matrix organization, decisions are made as closely as possible to the client. This is manifested in two organizational changes.

First, companies tend to create smaller and more flexible units within the organization. Executives are divided into these units so they can move where they are most needed.

Secondly, the board and senior management are looking for ways to obtain valuable information about customers, the market and the competition as soon as it is available.

The effect that these two changes can have on management is enormous. A manager will have to change his management style to direct people who could stop being direct reports. In addition, market information will reach him or her at the same time that such information, without filtering, reaches senior management. As a consequence, the planning time is reduced and the action is emphasized.

The main challenges come from the alteration caused by our digital environment.

Risks increase with speed

A faster environment demands greater risk taking. This is a challenge for senior management. Speed is now a fundamental factor and to gain market share, top management must take more risks than ever.

Speed will also dictate local and global priorities. It will be more difficult for regions to present global contracts profitably. Companies are looking for tailored solutions, not only with respect to product specification but also time to market, terms and conditions, local legal requirements and sustainability and demands related to corporate social responsibility (CSR).

 

2. The impact on talent

New technologies and techniques have caused a change in functional roles and responsibilities in employees. Finding the right candidate, with the background, experience, necessary skills and potential is considered one of the main challenges to achieve established goals.

The employees of the new generations need to share the values ​​and mission of the company they want to work for. Companies face a strong push from social and environmental sustainability movements, and they need to take the CSR issue to a higher level, not only on the agenda, but also in the organization, even in the board.

The ‘generalist’ era may not be over, but our survey shows a clear trend towards specialization in some way. Companies are looking for candidates who have generic skills necessary to lead projects in different situations. On the other hand, they also seek to have the ability to specialize in a specific topic.

The legendary route from young messenger to CEO seems to be history. Executives who aspire to leadership do so by reaching the top of a functional operation and are increasingly trying to add a second.

 

3. The impact on the CEO’s world

A CEO communicates through what he says and does. An executive of that level must be authentic and live the values. Often, the company is driven by values, attitudes and a particular culture, rather than facts and figures. To motivate, encourage and train employees, the CEO must be a visible leader in creating the right environment.

Respondents point out that it is no longer enough for a CEO to have a “panoramic view” of the organization and its markets. The evolution of the CEO today revolves around change, the leader needs to anticipate, focus and lead the change.

The CEO’s ability to anticipate the competitive threat has also changed significantly. Today, competition in some sectors is just as likely to come from outside the business segment of the organization, as from within.

This is particularly noticeable in the telecommunications, IT or financial services businesses, but is by no means restricted to them. The powerful auto industry, with all its resources, was not fast enough to develop an electric car; Elon Musk and Tesla took the leadership position.

The CEO’s radar today has to constantly scan a much wider field.

 

The relationship with the board

Finally, the relationship between the CEO and the board is also undergoing a change. Not long ago, the CEO was the filter between the board and the team of managers within the entire organization. Our study shows that the board and the team of managers are moving much closer to each other.

Today’s board needs to be closer to the business. It makes sense that the board and the team of managers meet regularly to share timely information.

Finally, as a result of our experience, we see two essential key competencies of the CEO of the future.

• The first is transformational leadership, which is oriented to the ability to risk, change, influence, anticipate and adapt quickly to changes.
• The second is resilience, the ability to face problems, see solutions where others do not, and see crises as business opportunities.

The future is today, and tomorrow’s leaders need to anticipate and begin to develop these skills.

[Editor: this article is available in English and Spanish. The Spanish version first appeared in Semanaeconómica.com