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Women in Business is Good Business
International women's day gives us a chance to reframe women in business
As stock exchanges consider changes to listing rules that will require a higher level of female board representation we consider a radical new approach to widening employee demographics for progressive organisations.
Recently, Nasdaq filed a proposal with the Securities and Exchange Commission that would require listed companies to have at least one woman on their boards, in addition to a director who is a racial minority or one who self-identifies as lesbian, gay, bisexual, transgender or queer. 6 of 22 markets have rules requiring a mandatory minimum number of women on corporate boards, with France setting the highest level at 40%.
Yet, only one in five businesses in the UK is run by a woman – even though women outnumber men in Britain by around 900,000. Just 9% of the funding funnelled into UK start-ups goes to women-run businesses, according to the Entrepreneurs Network. Women also tend to start businesses with much less available capital than male entrepreneurs.
But, women in business is good business. It is hard to argue with the logic that successful businesses openly embrace women, men, colour and creed. Well represented workforces are happy, balanced, productive and more likely to support their customers with the right-fit products and services. The demographics of your customer base should dictate the makeup of your organisation.
After all, your customers are a cross section of society. And society is about half female and half male. In the US about 13% of the population is black and about 18% is Latino. In the UK 14% of the population is from ethnic minorities rising to 20% for those aged 24 and below.
The percentage of women in senior management in the Western world is around 25%. The percentage of female CEO’s in Fortune 500 companies is 7.4%. Does this mean that women are less capable managers than men? I think we all know the answer to that.
Equally, is an ethnic minority employee less productive than a white employee? Is a mixed race person less able to play tennis or sing, or paint, design or become a celebrity or filmmaker, campaigner, engineer, accountant, prime minister or a Prince? Of course not. It's time that company leaders stood up and made sure that their organisation is more representative of society at large. This starts with employee demographics.
The last year has taught us all that we need to think and behave differently. This is as relevant in business as in life. International women's day should provide a reminder that in this modern, home-working, home-delivery world, where flexible working is working, women should be more capable and more equal than ever.
And yet after a year that has seen women more likely to be furloughed, lose their jobs, carry the burden of home schooling and domestic drudgery, women are increasingly fearful about their futures, with almost half of those surveyed in a Mumsnet poll for International Women’s Day expecting gender equality to go into reverse over the next few years.
Better women representation in business might even protect your organisation from sexual harassment. A UK based TUC/Everyday Sexism research found 52% of women had experienced sexual harassment at work, and of the one in five who had reported it, three-quarters said nothing had changed, while 16% said they were treated worse as a result.
We need to overturn the outdated stereotype of men doing the paid work and managing businesses while women look after the home and the kids. It will require adjustment on both sides. And this starts with employers changing their attitudes.
Even though many businesses hire a sizeable number of women, few of them have a proportionate amount of women in management tiers. And there are even fewer on boards. This makes increasingly little sense. And yet, tweaking our way to improving the situation may no longer suffice. It increasingly begs the question - what are men so afraid of?
Nowhere is this more transparent than in government. Government is supposed to represent the people. Cabinet's that are predominantly male, or white, or from a certain income category are bound to come over as out of tune - pandering to a small, hard core base rather than governing for their country. In business it makes even less sense. Your employee makeup directly affects your company strategy, your product design, manufacture, sales and service. Wider inclusion could equate to improved market share. Poor employee representation hits the bottom line.
We should rethink the approach. If we are trying to build a truly customer-centric organisation, then we should ensure that, at a minimum, the demographics of our employees matches that of our customer base. And ideally we should match it all levels of the organisation and in every department.
So, if 55% of our customers are female, 55% of our employees and managers should be female. You could argue that the CEO, as a result, should also be female. If 40% of our customers are BAME, then surely 40% of our employees and board members ought to be BAME. We should also factor in the income strata of customers and their education level.
Balanced representation should be be reflected across departments. Customer facing employees as well as product engineers, accountants and warehouse staff. If you skew product team demographics out of proportion to the makeup of your customer base, then you are less likely to develop market leading products. Equally a poorly representative sales force or customer service function may be less likely to optimize customer relations, customer satisfaction and sales.
We should also keep a firm eye on where demographics are heading in 10 or 15 years time. You don't want to structure your organisation for outdated trends. You want to shape it for where demographics are likely to land 10 years out.
We will need to be mindful of under-representation. If your customer base is predominantly one sex over another, or one ethnic race over another, you might want to strategically boost your female employees or employees of colour to make sure that you have the opportunity to widen your customer base and improve your market share.
The way to grow the sales of a chocolate bar that historically sells to teenage boys might be to hire more female employees and managers who develop the marketing and product packaging to appeal to girls as well.
If our customer and employee makeup mirror each other, then presumably your key supplier demography should become a larger factor in their selection. Your advertising teams male/female and ethnic mix will affect your marketing campaigns. But so too your management consultants and accountants. Indeed, you could argue that employee makeup should get reflected throughout the supply chain.
Until we reach the point where our employee base, across management layers and departments, fully reflects the demographics of society at large, we are undermining our organisations ability to maximize its market share and profits. More women in business isn't just the right thing to do, it's the value creating thing to do.
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