McKinsey’s October 2010 quarterly report entitled Moving women to the top shows that senior executives believe that one of the best ways to boost gender diversity is for the CEO to be directly involved in monitoring the outcome or results of any diversity initiatives. This emphasizes the point that diversity has to be part of a business strategy embraced by senior management, and like any strategic initiative, results have to be monitored.
Diversity initiatives that are not an integral part of a strategic business plan are nothing more than window dressing – they are a defensive reaction to pressures from governments, shareholders, employees, and other industry bodies. How much data needs to be produced to convince business leaders that gender-balanced organizations deliver better long-term, sustainable results?
McKinsey’s own study in Oct 2007 Women matter: Gender diversity, a corporate performance driver found that the 89 listed European companies with the highest levels of gender diversity also had higher returns on equity, operating results, and stock price growth than the averages in their respective sectors from 2005-2007. The non-profit organization Catalyst has also produced similar findings.
In the U.S. the majority of undergraduate degrees, almost half of the MBAs and the majority of PHD’s are awarded to women. Similar trends in education are happening throughout the developed world. Any kind of argument made to justify the lack of diversity which persists cannot be supported by the data. If an organization is serious about creating a well-balanced workforce, its CEO will lead the charge and follow the normal, commonsense business approach to making things happen:
- Set targets
- Get buy-in, across the whole organization, but especially managers
- Implement actions to achieve targets
- Monitor results
- Reward results
If gender diversity is just an HR initiative, it will die in HR. Business leaders know this to be the case. The smart ones lead by example (MBWA in practice).