Change the Game: The leader's route map to a winning, gender-balanced business

Introduction

At the time of writing in the summer and early autumn of 2020, the world seems to have been turned upside down. We’re in the midst of a global coronavirus pandemic that by early October has killed 43,000 people in the United Kingdom according to official ONS figures (amended to only feature those who had tested positive within 28 days prior to death) and 213,000 in the United States. The US has erupted into civil rights protests across multiple states as a result of the death of George Floyd, and President Trump is following in the footsteps of the UK Prime Minister by catching the virus and suffering evident damage to his health, but also at a critical and potentially pivotal moment during the US election campaign. Unemployment levels are rising, the pandemic is widening the inequalities of race and gender, and UK businesses are being told to prepare for a Brexit future that’s impossible to predict. We are entering uncharted territory and a new paradigm.

So against this backdrop of crisis and turmoil, I write to urge business leaders to use this burning platform, which is a moment of significant external impact and disruption to the status quo, to transform their organizations and maintain a focus on gender balance, women’s inclusion and diversity. They can take their place in history by truly changing the game for the benefit of women, business and society. It is essential in a time of crisis to optimize business resources and work more efficiently and effectively. We must press the reset button now and take the opportunity to create a greener, smarter, fairer world for our lifetime as well as future generations.

Business teams with a balance of diverse women and men make better decisions than homogenous teams, leading to superior financial performance. This is due to their different but complementary insight, perspectives and propensity for risk. The rise in female purchasing power means that businesses with a better understanding of this customer will provide products and services with a broader appeal and so reap the returns in an economically challenging environment. We also know that the skills needed so urgently today, such as critical thinking, judgement and the ability to adapt quickly and pivot to new business models in a crisis, are found to a greater extent in inclusive teams. A gender-balanced diverse team is more important now than ever before.

In Chapter 1, I will outline the business case for higher diverse female representation in business. We must be mindful that women are still far away from having economic parity with men, impacting the wealth of the world as a result. McKinsey Global Institute in 2017 estimated that a whopping £150 billion would be added to UK GDP by 2025 if women participated equally in the economy.¹

However, the report also stated that at the current rate we wouldn’t achieve economic parity for at least 200 years, so reaching it by 2025 is a naive pipe dream. There’s no doubt that the pandemic and the economic aftershocks are likely to stall this slow progression without radical intervention. The little progress made to date has resulted from huge step changes in societal attitudes such as equal pay and valuing the contribution of women in the workplace, along with scientific breakthroughs such as the contraceptive pill enabling women to work without employers assuming that at any point they would be ‘incapacitated’ by becoming a mother.

The shocking 200 years figure mobilized me in 2016 to personally take action to attempt to accelerate the pace of adoption of gender balance in business, in the firm belief that as well as improving business profitability it will also improve women’s equality, social mobility and our society as a whole. I founded the Automotive 30% Club in 2016 to significantly grow the female representation in the sector by filling 30% of key leadership roles with women by 2030, and joined the steering committee of the Global 30% Club.

To achieve parity in my lifetime we must set out a robust plan to achieve it, understanding that the pace of change is usually exponential, and so reaching a critical tipping point of 30% may take the longest and be the hardest part of the journey. We usually overestimate what we can achieve in the short term and underestimate what we can achieve in the longer term. I believe the seismic shift caused by the rapid adoption of digitalization and remote working accelerated by the pandemic will enable inclusive organizations to reach this target earlier, and may lead to gender parity at least in many key roles in some businesses by 2030. In these companies, parity could be reached in ten years rather than 200, having a huge positive impact on the career progression of women and the carer opportunities for men.

Like the vast majority of women, I have experienced misogyny, sexual harassment, bullying and exclusion, and I would suggest that all women in the UK have suffered from at least one of these. I have had to curtail business events to travel home safely, be mindful of the clothing I wear and appease men who were making lurid jokes or telling me to smile. As a graduate intern at a car dealership, I’ve had keys thrown at my head by a male customer, and as a gender-balance campaigner I’ve been shouted at and had a finger jabbed in my face by an angry old senior male business leader who accused me of stirring things up.

However, I’ve also been lucky to have some brilliant women inspiring and guiding me. I’ve enjoyed the support of many fantastic feminists and am part of a large and growing team of mainly male leaders, advocates and allies who are running with the ball, have mobilized their people and are making huge changes to their organizational cultures and the profile of their teams. I firmly believe we can make the change happen.

This book walks you through the key issues surrounding gender balance and talks you through how to take action. In Part 1, I will provide evidence to support the business case for creating gender-balanced teams, explain the importance of inclusive leaders and how to be one, and urge you to act now because inclusive organizations are best equipped to manage the business transformation needed to weather the impact of the current multiple external crises. I assert that inclusive leaders are strong, are values driven and expect high performance standards, and show zero tolerance of the destructive forces of sexism, racism and homophobia in their businesses. I will show you how to create a perfect pitch to convince your team to be change makers and reduce opposition by dispelling the myths surrounding women’s equality and positive discrimination. These should be replaced with facts and new legends to be passed on through your company. I explain the importance of removing unfair advantage by lifting up others and removing their impediments rather than disadvantaging the privileged, and talk about what both men and women can do as individuals to help the cause.

I will also share with you the secret of finding your purpose and reason for being, or Ikigai. This will lead to your fulfilment as a legacy-leaving game changer who will not only make a huge positive impact on the business but also on wider society.

My Six Steps to Success route map in Part 2 sets out a path to achieve a gender balance. The steps advise you to examine your data before jumping to solutions, identify female talent pools, recalibrate your practices and culture to ensure all good performers can thrive and adjust your recruitment processes so that they don’t disadvantage diverse women. I also guide you through how to ensure women progress through the promotional pipeline and how to retain women in the business.

I use case studies from my Automotive 30% Club members to demonstrate the great work that is already being done by businesses today. I use the automotive sector as a microcosm of wider UK industry that since inception has been predominantly male. It has a stigmatized reputation for the undesirable characteristics that can result from a highly competitive macho culture, and I hope that by sharing the amazing changes that these automotive companies have already made, the practical applications can be noted and adapted for implementation in many other business settings.

Game-changing leaders create a compelling story to inspire others to adopt new norms. They implement new protocols to nudge people to adopt required behaviours and while leading the change from the top, they create change agents and champions at every level to drive the new ways of working. Now more than ever, it’s essential to tap into the potential profits that your company might be missing out on and act to build a winning diverse gender-balanced business. In Part 3 of the book I reveal how to be a game-changing inclusive leader, and the importance of starting straight away.

This book will encourage, inform and give practical tips to those who know they must act to change the game now, and want to know how.

Part 1 Changing the game

1The business benefits of balance: Don’t settle for less

Businesses with a better gender balance are more successful, and employing more women in senior roles boosts financial performance for individual firms and the national and global economies. There is much evidence of this and every gender equality seminar and conference opens with citations to support it. It’s not about a battle of the sexes, but an understanding of the benefits of balance; women and men working together achieve better results due to the different but complementary qualities and perspectives they bring, whether through nature or nurture, and combine to make better decisions. In this chapter, I will outline the broader business benefits of creating a business with values and achieving a more diverse gender balance. Marc Benioff, CEO and founder of Salesforce, succinctly summarizes this in the title for Part 1 of his book: ‘Values Create Value’.¹

More than a hundred years after women secured the vote in the UK, and 50 years after it was made illegal to pay women less than men, why are we still debating the benefits of employing the female half of the population in senior business roles? In contrast, we don’t expend time and energy on arguing whether it makes business sense to employ men, or seek to justify that with evidence of enhanced performance for male-only teams (spoiler: there isn’t any). In fact, there is evidence from studies of classroom behaviour that in predominantly male groups both males and females actually underperform. A quick google of ‘business case for employing men’ threw up no directly connected results, only those linked to gender-balance articles. In contrast, ‘business case for employing women’ gave 103 million results.

Why are we still discussing whether there is a place for women in leadership roles in business, and seeking justification for it on any grounds other than ‘why on earth wouldn’t we appoint women to top roles in 2020?’

You can rest assured that creating an inclusive culture and employing women in key decision-making roles will make your company more successful than if you only employ men in these jobs. The business case for the hiring and development of diverse women is supported by:

oSuperior business profitability for gender-balance pioneers

oProfitability penalty for laggards

oWinning teams combine gender and diversity

oImproved customer insight and orientation

oIncreased productivity and innovation

oAbility to attract talent

oAbility to attract investment due to effective and ethical decision making

Let’s now examine each of these points.

Superior business profitability for gender-balance pioneers

Companies that address gender balance reap the returns. I am proud to be a steering committee member of the 30% Club, a campaign with a global mission to reach at least 30% representation of all women on all boards and C-suites globally. On the ‘Who We Are’ page of the website, we make it abundantly clear that there is a robust business case:

Gender balance on boards and in senior management not only encourages better leadership and governance, but diversity further contributes to better all-round board performance, and ultimately increases corporate performance for both companies and their shareholders.²

McKinsey & Company reviewed a 1,000-company strong dataset in 12 countries.³ Their analysis published in 2020 found that companies in the top quartile of gender diversity on executive teams were 25% more likely to experience above-average profitability than peer companies in the fourth quartile. They also found that the higher the female representation, the higher the likelihood of outperformance. Companies with between 10% and 30% women are more likely to outperform those with fewer or no women executives, and those with more than 30% women on their executive teams are significantly more likely to outperform all those with fewer female leaders.

Earlier studies also found a strong business case for gender-balanced teams. An MIT study by Peter Dizikes found that professional services firms that switched from being all-male or all-female offices boosted their revenues by 41%.⁴

MSCI (an investment services firm) examined US companies with at least three women on their boards in 2016 and found that they had 10% gains in return on equity and 37% gains in earnings per share while those with no female directors had declines in both measures over a five-year period. MSCI found the same basic pattern in a global snapshot of companies in 2015.⁵

When Sodexo increased the number of women from 17% of the workforce in 2009 to 40% in 2015, it saw a 4% increase in employee engagement, a 23% rise in gross profit and brand image improved by 5%.⁶

There are many more sources of information providing evidence that businesses that are more balanced in terms of numbers of female and male leaders and, importantly, have reached a tipping point of at least 30% female representation, significantly outperform their peers.

Profitability penalty for laggards

We know there is a financial benefit to gender balance, but there is also a significant financial penalty relative to peers for tolerating a gender imbalance. McKinsey & Company’s 2020 report identified a widening gap between those companies with the best and worst female representation, with a substantial performance differential of a huge 48% between the most and least gender-diverse companies. In 2019, fourth-quartile companies for executive-team gender diversity were 19% more likely than companies in the other three quartiles to underperform on profitability. This is up from only 9% in 2015, before the gender-balance pioneers started to break away from the pack.

McKinsey & Company also took a close look at the roles women occupy in the executive team. Only one-third of women executives in the 2019 dataset occupied line roles, with two-thirds occupying support or staff roles. Further, for companies in the bottom two quartiles for gender diversity, the proportion of women in staff roles is even greater. If more women could be employed in line management positions with the most direct influence on business performance and which provide a stronger path to the CEO position, there could be an even greater performance improvement.

Winning teams combine gender and diversity

Women comprise 51% of the population and are not a homogenous group. They have a range of ethnicities, cultures, ages and social backgrounds. Women are not all heterosexual and are not all mothers. When focusing on gender, it’s easy to fall into the trap of picturing the female mirror image of the default white middle-class male on the board or on the executive committee, but we know that leadership teams with diverse