vivienweldon“Organisations are shadows of their leaders”

You can’t look too far these days without coming across something in the news about “Gender Diversity” or “Women in Leadership”.

There is pressure in the market, and expectation from the government, that British Business – specifically the FTSE100 – will lead the way in creating “Balanced Boardrooms” with at least 25% female representation by the end of 2015.

Since his initial report “Women on Boards”, published in 2011, Lord Davies has recently reported that the FTSE100 is making significant progress towards that goal with women now occupying 20.7% of all FTSE100 board seats. However, he is not resting on his laurels. The pressure is intensifying and he is “naming and shaming” those companies who are failing to make progress, claiming that those companies that “do not get the mood of society on this issue, actually deserve to go out of business.”

So, whilst there has been a 12.5% increase of women occupying FTSE 100 board seats over the last 36 months, what are these statistics not telling us? Of the FTSE100, there are still 64 companies that have yet to achieve 25% female representation at board level and two companies still have all male boards. Of the FTSE 250, there are 48 companies with all male boards. So what is really going on here? What is the root-cause of the Gender Diversity issue and why is it taking some companies such a long time to shift the balance of their workforce? Let’s take a closer look by examining the business case that sits behind Gender Diversity.

Diversity and Inclusion is a hot topic in the world of business, particularly Gender Diversity. What is all the fuss about? Why can’t we just get on with running our companies and wait for this whole thing to “run its course?”

Newsflash

Newsflash – This “thing” is not going away – it is here for the long run, with quotas looming round the corner, so you need to be thinking tactically and strategically about it now!

First thing is first

First thing is first; let’s get the debate out of the way. Balanced workforces outperform those that are not – yielding a 42% increase in return on sales, a 66% increase in return on invested capital and a 53% increase in return on equity. Gender Diversity is no longer considered an ethical issue; it is a strategic imperative for any company looking to improve performance.

So why are so many (64% of the FTSE 100) organisations struggling to hit the 25% goal? In order to answer that question we need to understand what is happening to the Female Talent Pipeline within many organisations.

On average, 60% of graduates in the UK are female and many of the FTSE100 organisations ensure that at least 50% of their graduate in-take is female. Following a significant investment in Attraction, Recruitment and On-boarding, many of these graduates embark upon a 12-24 month graduate programme which delivers on the “Employer Brand Promise,” laying a foundation for their career path within the organisation.

culturalbackground

The Cultural Delta

The critical break in the Female Talent Pipeline occurs during the transition from the graduate programme to the start of their “live” career in the workplace. This is where the rubber meets the road and the gap (the Cultural Delta) between the “aspirational culture” and the “actual culture” is experienced. The graduate programme simulates a desired or “aspirational culture,” and to a certain extent, insulates the graduate from the realities of the real or “actual culture.” The moment of truth is when the graduate experiences how far removed the “actual culture” is from the “aspirational culture” by experiencing values and behaviours that are not consistent with the “Employer Brand Promise.” Trust is broken.

The size of the “Cultural Delta” will directly affect the employees’ relationship with the company, their level of engagement, level of performance and ownership of their career development – as well as the likelihood of them staying with the company. In fact, in many of the FTSE100 organisations, the “Cultural Delta” is so significant that rapid disengagement, sub performance and attrition are realised almost immediately following transition into the “live” work environment.

Why is this such an important issue for female talent? Because women make the decision to work with companies that espouse similar values and behaviours. When that “emotional contract” is breached, trust is broken and the disengagement begins. Without a clearly articulated vision for the future, one where diversity and inclusion is understood and valued, there is little left to hold their attention and the attrition begins.

Without addressing the “Cultural Delta”, this critical link in the Female Talent Pipeline will be permanently broken. With highly valued and invested-in female talent haemorrhaging from the organisation, the organisation continues to plough more money in recruiting more female graduates, to go through more graduate programmes, only to lose them due to the “Cultural Delta.” This “continuous loop” systematically drains time, money and effort from the organisation but more importantly, breaks the career pathway for high performing females who would be considered executive and boardroom pipeline material. Add to that the females, who have “quit but not left”, what you end up with is high attrition of female talent, disengaged existing female talent and lack of female talent to feed the leadership talent pipeline.

Is there a shortcut?

Is there a shortcut to Gender Diversity? If you mean, is there a shortcut to building a high performing organisation with a diverse and inclusive workforce, the answer is no. Are there tactical investments that can be made to repair the Female Talent Pipeline, retain and develop latent female talent, accelerate your fast-track females into the boardroom and ignite a cultural change, then the answer is yes.

Cultural change takes real leadership: Inspiration, Courage and Commitment – to stay the course. It is not an easy journey, but one that will return financial, cultural and legacy benefits that will create a sustainable trajectory of higher performance to those of your competitors.

Don’t just “tick the boxes”, run some initiatives and hope this “thing” goes away. Lead the transformational change that is required to unlock the true performance of your organisation with inspiring, focussed and committed leadership. Make the right investment now to return to your employees, customers, shareholders and society the results that you know are possible with your company.

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.
Nicola Machiavelli