Mills’ all-day conference “Creating Shared Value and Evaluating Impact” looked at measuring the impact of socially-conscious ventures. Investors need to gauge return on such programs–yet how do you assess progress on initiatives that require huge timelines? How do you quantify the “results” of human conflict or emotional deficit?
Impact is often invisible and seemingly impossible to express. Lacy Aspill, Founding Co-Director of Moving Forward in Education, summed up the frustration: chipping away at massive social problems requires “a high level of emotional resilience” to keep believing that change is possible.
Glass Ceiling for Women: Cracked but Far from Shattered
Deborah Merrill-Sands, Dean, Simmons School of Management
Deborah Kolb, Deloitte Ellen Gabriel Professor of Women and Leadership, Simmons School of Management
Much has been said about progress in shattering the glass ceiling in business. But recent studies show women have not attained the level of leadership opportunities that would have been expected by 2010.This has considerable implications for business in these uncertain economic times.
In a study of 4,100 graduates of elite MBA programs Catalyst, a research organization on women’s advancement, found that women consistently lag behind men in compensation, rate of salary growth, and promotions. What is perhaps most surprising is that the disparity starts from their very first post-MBA position. Moreover, contrary to conventional wisdom, the success gap persisted even when researchers controlled for aspirations for leadership and for parental responsibilities.
These findings of persistent gender inequities stand in bold relief to the findings of a second study of 1,800 executives presented by Bain and Co. at the 2010 World Economic Forum. This study revealed that men and women hold markedly different perceptions of the extent of gender parity in leadership opportunities. Approximately two-thirds of the men queried said that promotions to executive and board levels are equally attainable by both sexes compared to one-third of the women. Yet, the stark reality, as portrayed by the Catalyst study, counters these perceptions.
If inequities in hiring and promotion begin with the first job of the most talented MBAs, and if this disparity is not recognized by business leaders, then we have significant cause for concern – both for women and for our business organizations.
Studies by Catalyst and McKinsey have shown that stronger financial performance is positively correlated with greater representation of women in executive and board positions. Further, gender analyses of male and female managers in standardized assessments have shown that women are consistently rated higher than men in the majority of leadership skills needed to run effective organizations, such as setting high standards, driving for results, motivating staff, and building high performing teams.
To understand the different career outcomes of men and women and ensure strong organizational performance, we must dig under the formal systems of hiring, promotion, and compensation to uncover the subtle ways that gender may be operating. In hiring, for example, access to informal networks can provide potential employees with a way to gather information and to negotiate roles and compensation. Many of these networks, however, are male-dominated and can leave women at a disadvantage. It is often claimed that that women do not negotiate hard enough for positions and pay. However, research shows that women are often penalized when they do, thus putting them in a double bind.
Gender assumptions can also shape specific paths to leadership. For example, women are more likely to be given leadership opportunities in human resource management vs. strategic business development. There are numerous examples of women not being approached for global assignments on the assumption that they will not be willing to relocate their families.
These findings are a clarion call to action. With women now earning more academic degrees, they represent the majority of the talent pool available to organizations. High performing organizations must eschew complacency about gender parity and tackle these issues head on in order to be successful. This will require more than reexamining systems of hiring and promotion, or strengthening policies for workplace flexibility.
Organizations need to look closely at themselves to understand how subtle gender assumptions shape the leadership opportunities and career outcomes of men and women differently. And they need to intervene strategically to change these gender assumptions and the work practices that perpetuate them so that the cracks will enlarge enough to shatter the glass ceiling.
Perceptions Shape Women’s Paths to Leadership
A new study by Bain and Co. reveals a significant gap between men and women in their perceptions of the extent of parity in opportunity for men and women to attain management and leadership roles. The survey of over 1800 business professionals was reported in Wall Street Journal on January 28, 2010 and School of Management Professor Kolb was quoted extensively. See http://bit.ly/wsjlead
The Wall Street Journal reported findings that “81% of men said opportunities to move to middle management are gender neutral, compared with just 52% of women. Similarly, 66% of men said promotions to the executive level are equally attainable by both sexes, versus 30% of women. As for appointments to leadership and governance roles, 69% of men and 31% of women said consideration is granted evenly among the sexes.”
Yet, the stark reality counters these perceptions. Catalyst’s 2009 census of Fortune 500 companies shows that only 3% of chief executive officer, 13% of all executive-officer, and 15% of board positions are held by women. The even more discouraging news is that these numbers have changed little since 2000.
Given this reality, it is disturbing that a majority of men, and even a third of women, believe that there is full parity of opportunity for advancement. This perception will lead organizations to be less vigilant in their efforts to bring about change that ensures unfettered opportunities for women to advance to leadership roles. And, as often happens, it will reinforce the popular narrative that places the onus of responsibility for lack of advancement onto women and not on the organization – ‘women are not at the top because they do not have what it takes to get there.’
Our research at the Simmons School of Management and its Center for gender in Organizations challenges this narrative and shows that subtle gender dynamics still shape women’s opportunities and paths to leadership. Change will only happen as managers (and women in business) come to understand these dynamics and make strategic interventions to change them.
Simmons School of Management Professor Deborah Kolb shared this perspective in the WSJ article:
“ ‘Perceptions may play a role in women lagging behind men in advancing their careers’, says Deborah M. Kolb, a professor specializing in women and leadership at Simmons School of Management in Boston. Ms. Kolb says studies have consistently shown women are seen by bosses and colleagues—men and women alike—as being less capable of serving in leadership posts than men, despite evidence to the contrary. ‘Women often get asked to take career detours, to go into areas like human resources, to be on the diversity committee,’ she says. ‘Men get asked to take on strategic-development activities.’ Similarly, studies suggest that women are disproportionately assigned to oversee change within businesses—assignments that pose greater risk of failure, adds Ms. Kolb. ‘They get asked to clean up messes, so they might not have a track record of success and mistakes may follow them,’ she says.
Business Ethics: Back in the spotlight
Business ethics are back in the business school spot light, yet again. And that light is shining hotly and brightly.
The current global economic crisis, unleashed by the sub-prime mortgage scandal, has made us question what, if anything, we learned from the corporate scandals that grounded high-flying companies such as Enron and WorldCom, just a short eight years ago. Once again, we have been propelled into an economic crisis by executives’ myopic focus on short-term results at the expense of long-term organizational performance, by organizational cultures that tolerate unbridled risk-taking over sound judgment and integrity in decision-making, and by a relaxed regulatory environment that reflects an uncritical faith in the corrective power of the markets. As we experience every day, the cost of these crises to companies, communities, and to each of us as individuals is enormous, reaching all corners of the globe and impacting future generations. To put this in perspective, the $700 billion bailout of the US financial services industry alone is greater than the 2007 annual GDP of 92% of the countries in the world!
And, yet, despite the repeated shocks to the system, we cannot seem to break the cycle. Wharton professor Thomas Donaldson argues that “creeping industry precedents” or bad practices that become institutionalized, are the hidden danger underlying these crises. “People may have ethical doubts about a practice, but after a while if a whole industry does it, you think you can’t compete” and “the danger becomes normalized.” This is exactly what occurred in the subprime crisis. Mortgage brokers minimized the assessment of risk and pushed subprime mortgages aggressively out to households that could not afford them. Then the risk was passed on as larger companies repackaged the mortgages into other complex instruments where the real value and risk was difficult to assess. Does this reflect innovative business practice and a tolerable pursuit of profit and self-interest? Or, does it reflect poor ethical judgment and, ultimately, irresponsible business practice? To me, the lessons from the corporate crises of the past eight years are obvious: maximizing short term gain without carefully assessing and holding oneself accountable for the longer term impact on stakeholders and the organization’s sustainable performance reflects poor business practice and failed leadership.
So what do business schools need to teach to help shape leaders who will integrate ethical considerations into managerial decision-making and not blindly repeat the mistakes of the past? The problem is not trivial for business schools. A recent study by Rutgers University of 54 universities found 56 percent of graduate business students admitted to having cheated – more than in other professional schools in the survey. In 2007, business schools were rocked by a cheating scandal at Duke University’s Fuqua School of Business that involved an extraordinary 10% of its graduating class. Positively, Duke University took bold action. Convicted students were either expelled or suspended for a year. Duke’s action set a good precedent. It is up to leaders of business schools and leaders of business organizations to shape organizational cultures that incorporate ethical values explicitly into managerial decision-making and leadership behavior. It is up to us to ensure that a blind eye is not given to ethical malpractice and that such malpractice is not institutionalized to become normal operating procedure as Professor Donaldson has warned. This is critical to what we call “principled leadership” at the Simmons School of Management.
I see our role at the School of Management as equipping students with 1) the judgment to evaluate all businesses practices and decisions through an ethical screen and ensure that bad practices do not become “institutionalized” through complacency; 2) the skills and courage to be able to identify ethical lapses and call them out for critical scrutiny; and 3) the principles to hold themselves accountable for ensuring that the pressure for short term results is not met at the expense of long term organizational performance.
At the MBA level, we have integrated attention to business ethics throughout the curriculum and the co-curricular activities. Our first case in Foundations of Business focuses on an ethical dilemma as does our final case in Strategy and Leadership. Students analyze the causes of the ethical dilemma and develop strategies for addressing it in ways that are good for them and for their organization. While attention to ethical decision-making is woven throughout the curriculum, ethical analysis and decision-making is a primary focus of our capstone course Leadership, Governance, and Accountability and students’ mastery of these skills is assessed in this course. The School of Management MBA Alumnae Association has also instituted a student award for principled leadership.
In the undergraduate management program, required courses for the undergraduate management major include readings, discussions and speakers on ethics in management and principled leadership. Ethics are an integral part of managerial analysis in Managerial Accounting and students’ mastery of the ethical concepts and analytic skills are assessed in this course. Attention to ethics is also integrated into the capstone senior seminar course and electives in corporate ethics and socially-minded leadership are offered on a regular basis.
As we move to the next level in teaching business ethics, we are supplementing our case method approach, which helps students to analyze and understand ethical dilemmas in the workplace, with a new approach to teaching students the skills they need to speak up and to give voice to their values when they observe ethical malpractice in their organizations. We are joining MIT, Yale, and 33 other business schools in piloting an innovative curriculum called Giving Voice to Values in both our MBA and undergraduate management programs. This approach, recently highlighted in the Financial Times, has been developed by former Harvard Professor Mary Gentile in association with the Aspen Institute’s Business and Society program and the Yale School of Management (see article in SIMMONS magazine, Winter 2008).
As dean, I am committed to continuing to strengthen our focus on developing innovative means to educating our students to be effective principled leaders and managers who know how to pursue profitability and success from a foundation of ethical decision-making, not in spite of it.
I am grateful to the EILEEN FISHER company and the MBA class of 2008 for their generous support for our efforts to strengthen our teaching and research in ethics and principled leadership.
Philadelphia Inquirer, Sept. 21, 2008, http://www.philly.com/philly/business/20080921_Lenders_lost_moorings__some_say.html; Knowledge@Wharton, Eyes on the Wrong Prize: Leadership Lapses That Fueled Wall Street’s Fall, September 17, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2048
New York Times, “34 Duke Business Students Face Discipline for Cheating,” May 1, 2007, http://www.nytimes.com/2007/05/01/us/01duke.html; Christian Science Monitor, ‘Duke’s B-School Cheating Scandal,” May 4, 2007, http://www.csmonitor.com/2007/0504/p08s01-comv.htm
Excellence in Women’s Leadership: The importance of vision
Harvard Business Reviews’ January 2009 issue on “Transforming Leaders” summarized a recent study comparing the leadership skills of men and women executives. The study shows that women are perceived to outperform men in most dimensions of leadership except for one – vision.
INSEAD conducted a global study of 2,816 executives’ 360o assessments of their leadership skills in which 22,244 subordinates, peers, and supervisors evaluated the executives’ leadership skills. Twenty percent of the executives and 27% of the observers were women. Similar to earlier studies, they found that female leaders were rated higher than male leaders in 7 out of 10 dimensions of leadership from both male and female leaders. These findings demonstrate, once again, that women are perceived to be successful in leadership roles.
However, the study revealed one critical area where women were not rated as highly as men — vision. Male peers, in particular, gave women significantly lower scores in vision than they gave men. This perceived deficiency for women leaders is important. First, the research shows that envisioning is perceived by observers as critical to effective leadership and carries more weight than other dimensions when evaluating overall leadership effectiveness. And, second, envisioning is what enables a leader to identify opportunities and obstacles, set strategic direction, and mobilize people to achieve exceptional results.
The researchers conclude that in order to continue to build the ranks of women in leadership, women need to give higher priority to developing their vision and strategy and communicating it more broadly across the organization, particularly to peers and supervisors.
This is an important “wake up call” for all of us in leadership roles.