Why Women Mean Business

Understanding the Emergence of Our Next Economic Revolution

Avivah Wittenberg-Cox, Alison Maitland

• Publisher: Jossey-Bass
• Year: 2009
• Print ISBN: 9780470749500, 9780470725085
• eBook ISBN: 9780470685624
• Edition: 1
• Topic: Business
• Subtopic: Management
• Index: Business

WOMEN MEAN BUSINESS

"...gives example after example of the price that we all pay for a situation in which 'women may hold the keys but men still control the locks'."
The Times

"What's especially valuable is the authors' analysis of where companies go wrong in managing women...that's how it will help women in the workplace."
Harvard Business Review

"Lays out the importance of retaining women in senior leadership positions."
Harpers Bazaar

"Wittenberg-Cox and Maitland have opened new ground."
Management Today

WOMEN MEAN BUSINESS

They make up much of the market and most of the talent pool. Reaching women consumers and developing female talent is essential for sustainable economic growth in the 21st century. Studies show that better gender balance in business means better bottom line results and greater resistance to economic crises.

So why are there still so few women in leadership roles in business? Why are companies struggling to respond to today's female consumer? Why is there a persistent pay gap between men and women around the world?

Why Women Mean Business takes the economic arguments for change to the heart of the corporate world. Fully updated in paperback, the book shows why getting gender right matters – as much when the economy's bust as when it's booming. A must-read, packed with ideas from companies that have made it work, views from top business leaders and step-by-step guides to how we can all become gender bilingual.

Chapter One

WOMENOMICS

“Forget China, India and the internet: economic growth is driven by women”

The Economist

The 20th century saw the rise of women. The 21st century will witness the economic, political and social consequences. Few developments have had such far-reaching effects on the lives of every man, woman and child today than the rapid change in the status and role of women. Over the past 30 years, and for the first time in history, women have been working alongside men in the same jobs and the same companies, with the same levels of education, the same qualifications, and comparable ambitions. Today, they represent most of the talent pool and much of the market. They have unprecedented economic influence. In America, for example, women make 80% of consumer purchasing decisions.

Women’s mass arrival into the world of work in the 20th century is emerging as an economic revolution with enormous consequences. In developed countries, women are becoming central to labour market solutions to the combined challenges of an ageing workforce, falling birth rates and skill shortages. In the developing world, women’s economic participation is increasingly seen as the key to lasting, long-term development.

We embarked on the first edition of this book in very different economic circumstances from today. The exuberance and confidence of the bubble years have been smashed by a financial crisis the likes of which the world has not seen for 80 years. A recovery will follow, but the outlook remains deeply uncertain and the economic damage is likely to cause prolonged suffering for many.

From the perspective of this man-made global recession, our updated paperback edition is more relevant than ever. The crisis has led to a re-evaluation of the leadership, rules and regulations governing so many of our institutions, in particular those upon which the world relies for financial stability and security. It has cast a painful light on the male domination of the corporate sector in general, and the banking sector in particular. It has revealed much that was rotten in the system, and demonstrated that “business as usual” has changed forever.

The need for countries and companies to make best use of women’s potential in addressing the challenges of the 21st century is even more urgent today. It is only through the leadership of women and men, working as partners, that we can build a saner, safer and more sustainable model of capitalism.

International attention to the economic importance of women has been rising sharply in the past few years. The position of women is now recognised as a measure of health, maturity and economic viability. The World Economic Forum, organiser of the influential Davos conference, publishes an annual Global Gender Gap Report, ranking countries according to women’s access to education and healthcare, and their participation in the economy and the political process.

The Organisation for Economic Cooperation and Development (OECD) has declared that “gender equality strengthens long-term economic development”. In 2007, it set up a gender website to focus on “the implications of [gender] inequalities for economic development and what can be done to develop policies for parity”. In a similar vein, the World Bank launched a Gender Action Plan in 2007.

Goldman Sachs, the leading investment bank, is one of those using the term “womenomics” to express the force that women represent as guarantors of growth. It points to the huge implications that closing the gap between male and female employment rates could have for the global economy, giving a powerful boost to GDP in Europe, the US and Japan.

Reducing gender inequality could play a key role in addressing the twin problems of population ageing and pension sustainability. Crucially, Goldman notes, female employment and fertility both tend to be higher in countries where it is relatively easy for women to work and have children (Daly, 2007).

Not surprisingly, governments are looking anxiously for solutions to the persistent undervaluing of women’s skills. Vladimír Špidla, the European Commissioner for Employment, Social Affairs and Equal Opportunities, says the economic crisis has made it even more vital to close the gender pay gap and redress the serious under-representation of women in economic decision-making and European politics. “In today’s economic climate, equality between women and men is more important than ever,” he says. “Only by reaping the potential of all our talents can we face up to the crisis.” (New Europe, 2009)

Women have filled 6 million of the 8 million jobs created in the European Union since 2000, and 59% of university graduates are female. “Women are driving job growth in Europe and helping us reach our economic targets,” Špidla says. “But they still face too many barriers to realising their full potential.”

Angela Merkel, the German chancellor, has also pointed to women’s low representation in top jobs, arguing that this must be corrected to help Europe become the world’s most dynamic economy. In the UK, a government-appointed commission on women and work has reported that the country could gain £23bn - or 2% of gross domestic product (GDP) - by better harnessing women’s skills. (Women and Work Commission, 2006).

The economic downturn is changing the composition of the workforce in some countries, perhaps speeding processes that were already underway. The New York Times reported that women were likely to become a majority of the US workforce for the first time in 2009 because about 80% of the layoffs to date had fallen on men, notably in manufacturing and construction. (Rampell, 2009). Similarly, the destruction of blue-collar jobs in Australia meant that, in the first quarter of 2009, there were more women in full- and part-time jobs than men in full-time jobs (Megalogenis, 2009).

Women’s employment is more concentrated in areas like education and health care, which are less vulnerable to economic ups and downs. However, these are traditionally lower paid professions, and women generally are far more likely than men to work part-time. Many families are now relying on one income instead of two, and a lower one at that. Over the longer term, this may change as more men enter these female-dominated professions in search of stable employment, putting upward pressure on wages.

Why Women Mean Business takes these powerful economic arguments to the heart of the corporate world. We analyse the opportunities open to companies which really understand what motivates women in the workplace and the marketplace. We explain the impact of national cultures on women’s participation in the labour force. We show how corporate policies that make women welcome will help business respond to the challenge of an ageing workforce and the demands of the next generation of knowledge workers. We examine why many of the current approaches to gender have not worked and why we need a new perspective: one that sees women not as a problem but as a solution - and that treats them not as a mythical minority but as full partners in leadership. With the new perspective, we offer companies and managers a step-by-step guide on how to integrate women successfully into their recovery and growth strategies.

Gender is a business issue, not a “women’s issue”. The under-use of women’s talent has an impact on the bottom line. Taking action to address this will require sustained courage and conviction from today’s corporate leadership. This is an opportunity that must be seized. It is time for CEOs to get serious about sex.

The strategic side of the gender divide

Like countries, companies have forceful demographic and economic motives for making gender a top priority. The first motive is their need for skilled and talented people.

Even in recession, business knows that the best talent is scarce and is worried about how to find more of it or to hold onto what it has. Employers are still reporting shortages of key skills, and they know demand for such skills will increase over the longer term. They could start by doing far more to optimise an important part of the talent they already have - the female part.

Girls are now outperforming boys in many subjects and at almost every level of education. Women already account for a majority of university graduates in Europe, the US, and other OECD countries. This majority across the developed world is projected to rise from 57% in 2005 to 63% in 2025, according to the OECD. The OECD average figure hides wide variations, and women are expected to account for more than 70% of graduates by 2020 in seven countries: Sweden, Iceland, New Zealand, Hungary, the UK, Italy and the Netherlands (OECD, Higher Education to 2030). (Vincent-Lancrin, 2008).

Against the background of these profound shifts in the composition of the talent pool, we have seen two very different reactions from business to the topic of gender during the economic crisis. On the one side are companies that are using this turbulent time to think ahead and innovate in preparation for the post-recovery world in which they expect to have a competitive advantage. Most of these companies have already made enough progress to recognise the benefits of greater gender balance. They have discovered that women can be active agents of change and bring something qualitatively different to the table, along with improved performance to the bottom line. These companies have been using the difficult economic context to promote and position women to lead change. There may be unprecedented opportunities here for women to make their voices heard, amid increased tolerance for new ideas and contrarian views. We offer some examples of such companies later in this chapter.

On the other side are companies that have reacted defensively to the crisis, focusing on cutting costs and reducing “headcount” as much as possible. There is a retreat to approaches that have worked in the past, and a tendency to “hunker down”, protect trusted employees and hope the storms abate. This strategy has a high cost for women, as well as for a lot of men, as they tend not to be part of the establishment team and are treated as “nice to have” but not essential. Tolerance for new ideas, for difference of any kind, and for innovative proposals is not high.

Many companies have a long way to go in recognising women’s potential. Some have not even counted how many women they have. Others have made great strides in increasing their recruitment of women, but have not adapted their internal systems and cultures to ensure that these recruits make the most of their abilities over the course of their careers.

The low representation of women in senior leadership is a scandalous missed opportunity. It could weigh heavily on companies as they seek to survive the crisis and to thrive again. A recent report by DDI, the international talent management consultancy, found that women in companies around the world continue to be held back by hidden obstacles on the route to promotion. “Particularly in today’s sagging global economy, helping women move up the organization ladder could well be one of the best survival strategies that an organization could undertake,” say authors Ann Howard and Richard S. Wellins. “Isn’t it time organizations stopped blocking the development and progress of the kind of talent that could fortify the executive suite?” (Development Dimensions International, Inc, 2009)

The second motive for business to make gender a top priority is the importance of getting the right leadership team. Companies operating in a multicultural, heterogeneous and unpredictable world are beginning to acknowledge that changes in the make-up of their top teams may be a good idea. Executive committees and corporate boards composed of white men between the ages of 50 and 65 - often of the same nationality, sometimes with the same educational background - may not be best equipped to deal with so much cultural diversity and complexity. Can they really be promoting the best talent, if 80% or more of those they are promoting to the top are men?

Progressive business leaders have begun to speak out about why it is vital to redress the gender imbalance now. In an unprecedented open letter at the height of the financial and economic crisis, 17 chairmen and chief executives of well-known companies, including Anglo American, BP, Cadbury and Tesco, called for more women to be appointed to senior positions. They said that extraordinary times required innovative solutions and that it was more necessary than ever to deploy the best talent. “Business leaders have spoken out on the need for action on climate change and poverty,” they wrote to The Daily Telegraph. “It is time to do the same on gender.” (The Daily Telegraph, 2008)

The meltdown in the financial sector triggered much media speculation about whether things would have been better if there had been women in charge. Rarely has women’s invisibility at the top been so apparent. Remember the line-up of male leaders of Wall Street’s toppled giants, and the suited bank chiefs called to account for their actions before Britain’s fearsome House of Commons Treasury Committee? “This mess was made by men,” ran the headline in Britain’s Observer newspaper. “Now let the women have their say.” The Washington Post headlined its article: “In banking crisis, guys get the blame - more women needed in top jobs, critics say”.

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Table of contents

• Praise
• Title Page
• Copyright Page
• Foreword
• Acknowledgements
• ABOUT THE AUTHORS
• Chapter One - WOMENOMICS
• Chapter Two - MOST OF THE TALENT
• Chapter Three - MUCH OF THE MARKET
• Chapter Four - BECOMING “BILINGUAL”
• Chapter Five - SEVEN STEPS TO SUCCESSFUL IMPLEMENTATION
• Chapter Six - CULTURE COUNTS
• Chapter Seven - FIGURING OUT FEMALES
• Chapter Eight - TOMORROW’S TALENT TRENDS … TODAY
• Chapter Nine - CONCLUSION
• REFERENCES AND FURTHER READING
• INDEX