Joanna Barsh | 2018 MAKERS Conference
Joanna Barsh, Director Emerita, McKinsey & Company, on early findings for a MAKERS research study on equality in the workplace
ANNOUNCER: Ladies and gentlemen, Joanna Barsh.
JOANNA BARSH: We only have 15 minutes. I am going to give you a lot of words in 15 minutes, and a lot of pink-- and I'm sorry about the pink! And you're going to see in a minute-- 2017-- you knew this, I don't have to tell you-- it has been a year of total disruption. If you are comfortable right now, you shouldn't be here-- we're all uncomfortable.
Why? I'm going to tell you the story, and then I'm going to run through some data, and then we're going to talk about the new research, which is really, really exciting. So the story is about everybody-- Sheryl Sandberg tells me never to say everybody, so I'm going to say almost everybody-- knows that we have a gender issue and a diversity issue in all companies, practically-- not all companies-- in America. And there has been slow progress-- and I will show that to you.
We have total uncertainty coming into 2018, because there are tailwinds making us go faster, and tailwinds making us go slower. Is this the watershed moment for women, for us, for you leaders-- men and women in this room. I actually think it is, and our new research is going to show you why. So your mission-- I need the Mission Impossible music, please-- if you choose to accept it, I will get to it in a minute.
So first some facts-- we all know that women graduate more than men from college, from graduate schools-- in many majors, in most majors. And what are women doing-- this is a ridiculously hard chart-- I know that, that's my job to show it to you-- which is, women are flocking into the majors that pay a lot less than the other majors. So if you were thinking of going to college or grad school-- anything with the word engineering in it, that's high paid. So that's what this shows you.
Next, the pipeline-- thank you [? Linda ?] McKinsey for the pipeline, I love this pipeline-- and now we've got three years to look at. Rachel will be here later to talk to us more about the pipeline, but I'm telling you there just isn't a whole lot of progress. Now you shouldn't see a lot of progress in just a few years-- you should see it over the long term-- but this is disturbing. It's also disturbing that women are leaving, and we are leaving jobs to get other jobs for different reasons than men.
Men in the audience, you know why you leave-- for that money. And for women, it's for a whole host of other reasons, which include things that possibly companies could have done differently to keep women on board. The progress at the very top-- we always like to look at women CEOs-- and it's pretty exciting to think that we got to 32, until you realize this is the Fortune 500. So now there are 223 women missing from this chart.
What about boards? Boards are out of steam as well. We were climbing in terms of our percentage of new board seats, and then we kind of got stuck at 28%, 30%-- and in fact, women are 21% of the total S&P 500 board seats. And that's not all those women, because many women, as you know, they sit on many board seats-- let's just leave it at that. We have set records-- we have set great records. And this is venture capital for example-- wow 4.4%.
Aren't you excited? Come on. That's 368 deals out of 7,002 deals. And that is 2.2% of the money-- and that's OK because the all men teams are getting 79% of the funding, because some of the teams have men and women on them. But why is that happening-- when you realize that women teams actually do really well. In fact, 63% of the time these companies with female founders are doing better.
Why do we have to do this every year? Hey, wait a minute-- we did make a lot of fuss about getting equal pay. It seems to be paying off-- at least companies are announcing that they are going to address it. I'm excited about this. And many of these companies actually have done something about it. And now I'm not going to talk to you about abuse-- you know all there is to know about abuse.
But time is up-- we learned that last night. And in fact, we made all this happen-- we the people of America made this happen-- the women-- the brave women who made it happen. And now the debate is broadening-- so that's a lot. But where does that put us-- where are we? And can we in this room, up there to, all agree on four things?
First thing-- can we agree these advances are fantastic, but that progress has stalled? Yes or no? Yes? Yes. Can we agree that the only way to get to the next horizon is through disruptive thinking. Because growth is there, we just have to change the way our heads are working. Do we agree on that? Thank you. But do we agree that it's time to act, and we have to act boldly? Yes. Then do we agree that in this room, we will be participants and not spectators?
JOANNA BARSH: Yes. Which means none of this-- like I don't know, that doesn't sound that bold to me. Let's go-- I'm going to show you the new research. Cone of silence-- this is a progress review. Anybody ever worked with a consultant-- you know what that means. It means that I reserve the right to change everything if the data comes in differently as we go forward.
This is the first time that Maker's has, in fact, joined forces with-- well, a team of us, let's say-- to look at this research. This is a pretty exciting research. Why? For the first time ever, we are having in-depth honest conversations. You don't want women to get ahead? Great. Tell me, I'm listening. We need 50 company data points to actually get enough critical mass to really understand what it means.
And we're talking to 50 people on the business side, 50 people on HR to see if we're all aligned in what we're saying. And what am I looking for? I am looking for the bold moves. They don't have to be new, they don't even have that exciting, they just have to be a big move forward that accelerates our progress. So where are we today? This is all anonymous and confidential.
If your company has not yet signed up-- trust me, I'm the only one with [? Uma-- ?] where is [? Uma? ?] Are you the audience? Wave your hand wildly-- she is working with me. And just to show you, I was from BCG-- sorry, I was from McKinsey, she was from BCG-- we're working together-- Uma and Joanna. 25 companies have signed up-- I need 25 more. I've done 23 interviews with [? Uma ?] so far-- and we are learning from both wins and losses.
And this is what we're learning-- and you already know this, but I'm going to run through it again. It is actually very hard to move beyond dialogue for the leadership. If you're in the audience, and your leadership, I feel your pain-- I know somebody else once said that. Absence of women at the top-- if you don't have women at the top, the whole pipeline just doesn't work.
What about the evaluation process? There is bias in it-- like in the water-- in those meetings. It makes it hard for women to advance. And what about the business pace-- anybody here is on the business side knows it's unpredictable, it's fast-- you're moving at lightning speed. HR just finds it hard to catch up-- to keep up. What about work norms? They're so embedded-- 24/7, talk to me any time you want.
These things are hard for women, but also for men. And they're not changing without disruptive thinking. And then what about sponsorship? We have proven six ways to Sunday that sponsors make the difference, and yet women are not getting sponsored at the same rate as men. And finally, the biggest mother of them all, that game we are playing in business today-- can I say it? Sucks. It's zero sum, winner take all.
And there are a lot of highly talented women, and men as well, who choose not to play that game. So those are the problems-- let's take them one by one. And I'm going to give you sanitized disguised quotes to give some color to what we're looking at. To make progress, we've got to do more than talk-- you know that. So here is a chief diversity officer from a major company-- who used to be a business leader-- saying
I'm one of 15 direct reports, and I'm the only one, beside the CFO, who gets to report out pretty much all the time. That's because the CEO wants diversity to happen in our company-- it's a necessity for him, and for all of us. And that CEO is about performance-- so what does that mean? We're benchmarking, we're communicating, you have to have progress.
And he treats it the same way he treats revenue and other initiatives-- so he expects the numbers to improve-- the numbers are improving. Concept number one-- take no prisoners. What does that look like? You know what it looks like-- you set targets. You put those targets in the leader's objectives, you link those objectives so that you have strategy and diversity linked, you share the scorecards, you report on the progress, and you get paid on the progress.
And there are consequences in your wallet. And why does that work? Everybody's aligned-- hey, we've got the wallet involved now, so everybody participates. It is a top priority. What about the next role? Rooney role-- now, that's been in place, as we know, in the NFL for years and years-- it doesn't always work, there's a lot of debate about it. But what if we did it for real?
What if we said there have to be qualified women on every slate? What if we said the HR is not on the line to bring the women, but to enable the business leader to get the women that he or she needs? And what if the CEO actually does review every single new promotion, inside or outside, that happens. And holds the slate open-- and this is the kicker. What happens then? More women join at the top.
What about the next one? If we had more women at the top, what would happen? So here is an Svp talent officer on the HR saying it's happening Joanna, the CEO wouldn't put up with it. So there's this one guy-- runs the division, not any women on the team-- and we talked to him. We're not too heavy handed-- and the next year, he shows up with more women on the team. Oh, that wasn't hard.
How does it work? We make room for women-- that's how we do it. And there are two interesting ways companies are doing that right now. One is to completely restructure the executive team in the operating committee, and just put more women-- add people of color-- on those teams. Not hard to do-- but then you have to actually work with a brand new, much larger, team-- and that is hard to do.
But if you do it, what happens? Now you have voices that are different sharing different perspectives on the issues. Sharing your customers' perspectives. This enables a cultural shift throughout the company-- it's amazing. What about this one? Somebody is doing this one as well-- take the top roles and split them into two. CEO, COO-- I'm not telling you who's who in this picture.
But why would you do that? You would do that because you need more leadership in today's turbulent times, you need more bench, because people quit and you want to protect the company's interests. This is not a very expensive thing to do. Third point-- without bias-- imagine a world without bias, wouldn't that be lovely? Well it can happen.
And here is a professor telling me there is bias in everything everybody says. You could say the same thing about a man and about a woman, and it would help the man and hurt the woman, or vise versa. We don't want to do that. She says, let's just make criteria that match the role, make sure it's transparent, make sure it's good, and then actually use it in the meetings.
So how do we do that? Rip out the bias. Here's the first way we do it-- we actually put all the criteria on paper, we evaluate every candidate actually gets the criteria-- not against Tom. Tom, of course, is the best person in the entire pool. And when we evaluate against Tom, all the women show up in the 2 2 box-- which is bleh, she's hardworking.
But we're not going to do that anymore, because we're going to call it out. And how does that happen? It happens-- that we reduce the subjectivity that really hurts women. Here's an even bolder idea that is in place in one company, which is let's evaluate all the women in their own meeting first. The men get to wait until the afternoon after lunch in that lull. In the first meeting, we put all the women candidates up against the criteria, and we advance every single one who is ready.
That makes sense, right? Logic-- that's not bold, that what you're supposed to be doing. But there are no men in that pool. Then after lunch, we evaluate all the men, and we decide who also meets all the criteria and are ready for advancement. In an open world where we have lot of room for advancement, all those people get advanced. If, for some reason, the company is on a budget, we advance as many men as we can.
This results in disrupting the pattern of how we do reviews, making people conscious about their criteria, and looking at each candidate against the criteria, and more women advance. Like from 19% to 32% in this company. Not bad. Number four-- HR mismatch of pace with business. How does HR get ahead of business in order to fulfill all of those hiring needs?
And what this CEO says-- look, this is not easy. We're all on a short term reign, and I have to deliver results-- and the head of the business has to deliver results-- and by the way, Tom, who we all know is the best one in the pool, is ready to take that job any time we want to give it to him. So what do we do? We anticipate and we stockpile talent.
How do we do that? Concept-- we shift the talent process-- this is happening in one of the companies-- by adding discovery to the talent process-- that's what you're looking at here. What does that mean for any HR People in the room? Networking very extensively, knowing your target, setting a much higher target so that we're bringing in 50% women right from the beginning.
Opening up new sources, particularly for people of color, so that we can go where they are getting schooled. And we bring in the talent, regardless of their skill-- we train them, and now they're ready for a lot of jobs. And by the way, we take the internship program, and put it on steroids. So what does that do? We just get a whole lot more diversity right into the funnel from the get go, we give them exposure to our company, we get exposed to them, and before we know it, we're making a cultural shift.
Let's go on to the next problem-- how work gets done. Does anybody really like to work 24/7 80 hour weeks, and travel on a whim-- does anybody really like to do that? No. And here's a woman who's doing diversity-- used to be a marketer in a very large company-- saying to us, OK, I'm in the messy middle-- I have young kids. I get it-- I had to take my kid to the doctor at 4 PM-- she was very sick-- I didn't get home till 8 PM-- but I worked till midnight, and that's fine for me.
I can do my job, it's all about performance-- and I'm going to have it that way in this company because they are totally flexible. What about your company? So the concept is to hang on to these people, and help them hang in there until life and work gets easier. So how do you do that? You have to be willing to change or bend the rules.
This is a simple to do-- And there are a myriad of ways to do it. For example, remote work-- on your schedule, not on my schedule. You work when you want, where you want to work. What about new practices that solve an issue? Like, this one company pays for mothers to travel with their baby and their mother-in-law-- god forbid-- or their nanny.
What about the benefits that reduce friction? People, it's not that expensive to put a hospital grade pump in every office. What about parent friendly rules? This company said men and women who are new parents, whether you had it or adopted it, or-- can't be a dog, has to be a baby-- and you get to stay home all year.
What happens? People feel empowered, they feel like somebody is listening, they feel like they can shape their own way they work. That's not that hard to do-- it's not that expensive. I know, sponsorship-- I'm going to skip the text, but you'll see it later. How about we just make it easy? How does that work? We need low risk trials-- what does that mean?
Rotations for young people-- I see a lot of young people in the audience. Imagine following them around the COO, or the Chief Marketing Officer, or the Chief Financial Officer-- imagine being a chief of staff to that person. All those things will work to give you exposure to the young talent, and it will work to bring people together naturally instead of saying hey, you over there, you sponsor her over here-- that's not going to work-- this is going to work.
What about the final one-- which is the hardest, the mother of them all-- do we have to change the game? I know, I'm an old lady-- that's not going to happen in my lifetime. So how do we do it? It's a vicious world out there for the men along with the women. This is for everybody-- do we want a more collaborative workplace, do we want to stop zero sum winner take all behavior among our very kind colleagues?
More coming on that, because we are just starting the interviews. The game, I want to tell you, is actually changing for some people. And mindsets are shifting-- and when mindsets shift, behavior shifts too. In fact, HR teams are coming to the fore and inventing. There is significant progress-- some of these companies have made huge differences in two or three years.
However, I am learning that all gender programs will tire over time. And as they tire, you need to refresh. So your mission, if you choose to take it, is to mobilize the people in your company who are with you on this-- to join us at the front line research. If you're early on or if you're doing your thing, just set up learning experiments, and share back to Makers what you are learning. We all can learn together, and we can all act together. This is not a one woman effort, it is not a makers alone effort-- it requires at least 50 companies to be on board. If you have any questions, find me later. I've had a blast-- I hope you learned something. Goodbye.