For some companies, improving gender balance is about social responsibility, for others it’s about compliance and avoiding lawsuits, but what many businesses already know, and what many more are coming to understand, is that having women at the table is a bottom line, business imperative.
Barbara Annis and Keith Merron have spent decades working with companies seeking to improve their gender balance, and they have conducted thousands of gender intelligence workshops for their leaders and employees. What they teach is difference: that men and women tend to think, act, and communicate differently and that when businesses recognize and leverage those differences, they can add significant value.
Here, Annis and Merron discuss the implications of women’s growing economic might, and explain why companies that are gender intelligent now have the competitive edge.
As consumers, women are a huge and growing economic force; if a business doesn’t understand how to serve this consumer base, is that a significant weakness?
Keith: Without a doubt. Some of the trends that we’re seeing are higher numbers of women starting companies, and by the way as a percentage of starting companies, successfully starting companies. Second, we’re seeing more and more woman move into the middle management ranks, and slowly starting to infiltrate the upper management more and more. So, even though the glass ceiling still exists, it’s going to be broken in our lifetime. Whether it will be 50/50 in the executive ranks, I don’t know. But certainly more and more women will break that glass ceiling, and you’re seeing some evidence of that now.
Even though the glass ceiling still exists, it’s going to be broken in our lifetime.
More and more women are graduating, so they’re in a position of decision-making -- practically, economically, and from a business standpoint -- all over the country, and to some extent in other pockets throughout the world. This portends a paradigm shift in the way in which we collectively do business and think about business. The companies that are seeing that -- and seeing well beyond just the fact that women, from a consumer standpoint, buy more than men -- are calling for a shift in the way in which businesses orient themselves to women. When women are satisfied with a buying experience, they get loyal to the brand; when employees get satisfied with the culture in which they exist, they get loyal to the company.
Barbara: I often say women don’t buy brands, they join them. When women feel empowered and valued, whether they're clients or whether they’re employees, the way that they engage is quite different from the way men engage; women can be your worst promoters or your best promoters.
In the US alone, women spend $5 trillion annually, which is over half of the US GDP. So it’s an indisputable business case.
In the US alone, women spend $5 trillion annually, which is over half of the US GDP. So it’s an indisputable business case. When you have greater gender balance in companies we see that it produces better results in terms of increased revenue. And when we’re talking to CEOs or other seniors executives about this, often they’re unaware that there is such a compelling business case.
With globalization and technology, the average consumer base is now much more complex and multi-faceted. Do women have a particular faculty when it comes to reading such a marketplace?
Barbara: Absolutely. Women are hard-wired for that. They have that empathy, they have that focus on the consumer, and they move beyond just focusing on the next quarter’s results. They bring in the relational and the contextual; they really read the consumer base and see how that could impact a company’s decision-making.
Keith: The big aha moment that happens in our gender intelligence workshops, is that people start to recognize and appreciate that men and women do things differently: they act differently, they make decisions differently based on differing factors, and therefore we may need to expand the way in which we interact with our customers and clients.
When you interact with a woman as if you’re interacting with a man, and she is thinking differently, you actually hurt your cause.
Companies that are changing the way they orient are now actually having the advantage; the companies that don’t may actually be at a disadvantage. Because when you interact with a woman as if you’re interacting with a man, and she is thinking differently, you actually hurt your cause.
Great decision-making lies at the heart of a successful business. Why does a room with both men and women result in a better decision?
Keith: Often when you have predominantly men in the room, you make decisions within a paradigm that is highly linear in its construct; so what men often do well is that they engineer solutions to problems. They break down problems into their component parts.
When you have both men and women working together you have a far greater breadth of thinking and greater breadth of decision-making.
What women are often very good at is looking at problems more holistically and more spaciously. So what happens when you have a dominant male model is that you narrow the focus, and when you have both men and women working together you have a far greater breadth of thinking and greater breadth of decision-making. That increases the options available to a business facing a particular problem. It doesn’t always mean that you’re going to go in the more spacious direction, it simply means that the options are greater, and when options are greater then you automatically have an opportunity for expanded action.
Barbara: Women tend to look at things contextually; they can see the potential implications of a decision. We certainly see this in finance, and there are studies that have shown that when you have gender balance on a financial team, such as having a woman CFO, you are better at risk management. Women have different hard-wiring in their brain, in terms of long-term memory and also consequential thinking, so women look at risk in a very different way, and when you include that, you do actually have better results. But you need both ways of thinking: the divergent thinking and the convergent thinking.
Company culture and reputation also helps attract high caliber talent which can make the difference in a company being competitive.
Keith: It appears to be, in our estimation, an untapped opportunity. It becomes a differentiator in the market, and that probably won’t be true 25 years from now. When you differentiate in the marketplace in terms of the quality of your culture, and the welcomeness of your culture to women, and your ability to be gender intelligent with women and men, you have such a leg up on your competition who haven’t figured it out.
When women have an experience with a company or a brand, good or bad, they remember that forever.
Barbara: We worked with a client for a number of years. When we first started with them, their turnover was huge: 27% turnover for women versus 11% turnover for men. This was costing them millions in terms of the salary turnover metrics. But the other metric here, was reputation, and what we found was that as we began rolling out our “Men and Women Working Together” workshops, women started coming back to the company, and they went on to increase their market in terms of women clients; they had a huge increase there. And remember, when women have an experience with a company or a brand, good or bad, they remember that forever.
When talent leaves, companies incur all kinds of costs. What are some of the consequences when a company has a high turnover in female employees?
Keith: When organizations analyze the cost of turnover, their focus is typically on the cost of finding a replacement: the amount of time and energy, the loss of productivity, and the cost of training a new person to get them up to speed. They estimate sometimes fairly significant numbers like three times a person’s salary for a year. So, if you have a $100,000 person, the cost is about $300,000 for turnover. So that alone ought to be a wake-up call because when you see a company with a higher turnover of women in the executive and upper middle management ranks, that higher turnover translates into dollars and cents. That’s about as far as most companies have gotten in analyzing the cost of turnover and it’s already astronomical.
When you see a company with a higher turnover of women in the executive and upper middle management ranks, that higher turnover translates into dollars and cents.
But there’s a hidden cost that I think is even greater, which is the loss of confidence on the part of other women when they see talented women leave. We know of a company that has lost two executive women in the past year, and there was great hope for these women representing other women and doing a good job in the executive ranks. The deflation communicated by the other women in the upper middle management ranks was huge. The sense of discouragement, the feeling of it being hopeless for them to ever have a real seat at the table, that was the hidden cost of the turnover, and that is rarely mentioned or measured, and Barbara and I see it all the time.
Barbara: And if you want to look a little deeper at costs, in the last ten years the gender discrimination cases in the US increased by 400%. The average verdict amount is half a million dollars. So, CEOs will say, “Yeah, we have to pay some guilt money,” but again, as Keith is saying, they’re not seeing the long-term implications, in terms of their brand and reputation, and in terms of how women are experiencing it: feeling deflated or quitting and staying, which is also so costly.
Can you talk about how gender balance and gender intelligence can boost a company’s productivity?
Barbara: The fact is when you have gender intelligent teams, we see an increase in innovative decision-making, because adding a richer collection of view points and perspectives actually produces better results. I had an investment company which had this idea to have both a female and male financial advisor with the client, and they were able to increase not only their closure rate, but also the amount of the deal. Because what the woman brought in terms of perspective and building the relationship, was complementary to the man. In one of these teams, the man had been through gender intelligence training and he had this huge aha moment where he realized that he had been trying to manage his partner to his mindset and his paradigm. Once he realized that and stopped doing that, all of a sudden their rate of deal-making together increased exponentially.
When you have gender intelligent teams, we see an increase in innovative decision-making, because adding a richer collection of view points and perspectives actually produces better results.
And it’s not just productivity; it’s also how women sell. Women tend to sell and network differently, and often they are measured based on a male model of selling. At one technology company, we found that women weren’t excelling in sales and they were leaving. The company had this huge turnover of women even though they wanted to create better balance. Once they understood the gender intelligence, they decided to shift the sales model and let the women do it the way they naturally do it for a year. And this company brought in an additional $850 million in sales that year. Not only that, but the type of clients the women brought in were different. The company’s strategic model was based on big-big clients, but women got mid-size and smaller clients. So it really changed their business model.
This interview has been edited.
For more information and inspiration visit MariaShriver.com