Move Over Boys – Issue 42
I have been home sick for a few days, which has afforded me the opportunity of catching up on listening to my favorite pod casts. One, This Week in Tech or TWIT, focuses on technology news, gadgets and Silicon Valley gossip e.g. how sick is Steve Jobs and is it right for Apple not to let shareholders know the intimate details of his health status? The podcast is hosted by a guy named Leo Laporte who is joined by other guests, generally men; I guess there simply are not many girls out there that like to talk geek. However, on rare occasion such as this, they found one.
The topic discussed was the new CEO of Yahoo, Carol Bartz who took over from co-founder and former CEO Jerry Yang January 20th. The conversation centered on the appropriateness of e-mails Bartz sent out to everyone in Yahoo in her first weeks on the job. Apparently, the e-mails were very personal: describing her experiences, feelings and impressions of her first weeks on the job, including commentary on the food offering in the Yahoo cafeteria. As you might expect, the men on the podcast didn’t think much of all of the ‘girl talk’ and went so far as to proclaim the personal nature of the e-mails completely inappropriate for a CEO. The lone woman in the pack thought the opposite and applauded Bartz for her honesty and human approach.
We girls do like to talk much more than men do. Before we get down to a business conversation there is no better way to get loosened up than to run through a quick wardrobe critique or discussion of who got eliminated on So You Think You Can Dance. Building communities within a group is a basic trait of female survival; it is this ability to form relationships that makes women excellent communicators. So if you’re good at it, why wouldn’t you do it all the time? Face it; women are more relational than men. They also have greater intuition and like to share their feelings, observations and beliefs. So who can blame Carol for being Carol?
These so called feminine traits: holistic thought, creativity, collaboration and playfulness are associated with the ‘right side of the brain’; while the left side of the brain focuses on analytical thought, logic, language and science and math, generally considered to be male traits. There has been a great deal of talk lately about connecting to the right side of our brains because we are moving into a business climate where greater clarity, transparency and trust are desired. As a result, many companies are wondering how to get their people to be more right brained to get with the times.
It’s not just companies; some countries are even recognizing the benefit of feminine traits. As of January 2008 companies in Norway must have 40% of their directors be women or face dissolution. Spain is on the same path and Sweden has also proposed making gender diversity a legal issue. It seems a radical way to break up the ‘good old boys network’. Of course the reason they would do this is not ideological, or an effort to be fair to the ladies, they are doing this because there is data that indicates having women on the boards of companies can lead to better results.
Studies have shown that when women are on company boards they actually show up to the board meetings, you might wonder why people get paid to be on boards if they fail to show up, but apparently many blokes don’t bother. On the other hand women were 30% less likely to have problems with attendance and on the boards that had women involved, data showed a 9% reduction in male attendance problems! Obviously the women nag the male board members to show up for the board meeting. You might believe that this confirms women are nags, but if you sat next to Hoa on timesheet day you would know that a Chinese man can give most of us women a run for their money.
Women directors in companies are also more prone to be involved in committees. They are 7.5% more likely to sit on audit committees, 19% more likely to be on nominating committees that select directors and board members and 7.6% more likely to be on corporate governance committees. It is interesting to note that they are 11.8% less likely to be on compensation committees; perhaps this explains why women are still underpaid compared to men.
In companies where there are more women directors there is also a greater degree of equity based pay compared to fixed cash compensation. This means you get paid to do something right, not just for showing up; it also establishes a stronger alignment with the interests of the shareholders. Speaking of shareholders a study by the performance consultancy Catalyst found that companies with women in senior management earn their companies a higher return.
On the topic of high returns, let’s review the returns that Fred, Tom, Andy, Dennis, Eric, John, Stephen, Antonio and Paul produced for their respective companies. They were the boys that ran those British banks that have lost billions of dollars. Recently they got to go before the British Parliament’s Treasury Select Committee to answer for their acts and guess what? – the committee was a bunch of blokes – go figure. The banking industry is a fine example of why we might want to take this discussion about the difference in female leaders seriously. After all banks are industries long ruled by men and look how well they are doing today?
Some people go as far as to link the global financial crisis to testosterone and the higher degree of risk taking behavior displayed by men. Believe it or not, there is some legitimacy to this idea. In a study with Wall Street traders it was found that traders made the highest profits when they had the highest levels of testosterone in their spit. Elevated levels of testosterone lead to riskier behavior. Of course one can’t help but conclude that if there were more women, or any women, on the boards of some of the failed banks around the world, they would not have been so cocky and irresponsible. One of the top financial sector officials in London said “There are quite a lot of alpha males with testosterone streaming out of their ears”.
It is safe to say women would never do something that had the run on effect of impacting their ability to shop in the future. Women would have been more cautious and this is why countries like Iceland, who are really down the crapper, have turned over key aspects of their finances to women. They now have a woman prime minister and women leading two of their major banks all in a desperate attempt to pull the country out of bankruptcy.
Girl power isn’t limited to companies; it has been found that women are making more decisions at home now too, hence the phenonemia ‘womenonimics’ that you have heard me talk about. What has led to this is the increase in the disposable income of women, in fact it has risen 50%. In 2020, 53% of the millionaires will be women and right now in Australia, Gina Rinehart is the 5th richest Aussie according to the 2008 BRW Rich List. She is expected to top the list soon. Of course smart companies know there are gals out there with high disposable incomes and are falling over one another to get a piece of it.
Tapping into the female mindset is not an exercise in returning to the old feminist doctrine, but a move that is occurring because it makes good business sense. Mark Sinnock, the Chief Strategic Officer at the advertising agency Fallon London says “It’s about simple, clear & intelligent communication that has the ability to cross all segments, male or female”. The result is marketing that is more human / intuitive and cerebral, with a strong dose of humor.
I am not going to weigh in on a male / female – who is the better leader argument. In my career I have run across many arrogant, egotistical cowboys and girls so reject the notion that great leadership has to do with the kinds of chromosomes you carry. At the end of the day, being cocky or irresponsible is not gender specific and regardless of whether it is a man or woman doing the damage, it hurts a business equally either way.
In the debate over whose at fault for the GFC, to me it is clearly the dudes. And in the time honored tradition, it will be the women who come along later to clean up the mess. It kind of stinks really. Being the mother of two teenaged boys, I have spent a considerable amount of time encouraging them to pick up after themselves and have often pondered how you teach them to exercise the appropriate amount of risk taking behaviors? You can’t be a weenie in life, particularly now in these times it will pay have a bit of courage, but this courage must come with smart choices and that generally means engaging others in a debate.
I will leave you with a quote from Ian Davis – McKinsey’s Worldwide Managing Director, he is talking about what he calls ‘The New Normal’. “The business landscape has changed fundamentally; this is not a turn of the business cycle, but a restructuring of the economic order. Tomorrow’s environments will be different, but no less rich in possibilities if we are prepared.” So I hope we prepare well and find the right balance, if that means tapping into our inner Sheila, then we should.
Adams, Renee, If Women Ruled Boards, BRW, January 15, 2009
Hoff, Robert D, The Difficulties Bartz Faces at Yahoo, Business Week, January 28, 2009
Hoff, Robert D, Yahoo’s Bartz Shows Who’s Boss, Business Week, February 26, 2009
Horin, Adele, Sometimes Lady Luck Kicks you Where it Hurts, The Sydney Morning Herald, Weekend Edition March 21-22, 2009
Sullivan, Kevin and Jordan, Mary, Men Behaving Badly: Testosterone Had its Role in the Lost Billions, The Sydney Morning Herald, February 12, 2009
Women CEO’s of the Fortune 1000 Business Week, March 13, 2009
This Week in Tech podcast, Episode 177