S&P Milestone
It was announced this week that the last of the S&P 500 companies that had an all-male board named its first female director. Although this news might seem ridiculously mundane prompting an “it’s about time” reaction, to many of us who have been pushing for the advancement of women in the executive suite and boardrooms, it seems like someone, somewhere, should be ringing a bell.
A news article said that earlier in the year, the Washington Post singled out Copart for being the last company in the stock market index to be gender-homogenous. At the time of that call-out, Copart indicated that it was planning to add a “highly qualified, accomplished woman” this year. I’m so glad they made this clear because I’m sure the company’s shareholders would be tremendously upset if they felt that “any woman would do”.
The often-made comment that women who are being sought for board service need to be “highly qualified” is an indication of a bias (and I won’t even call it unconscious) that in order to increase diversity and to be more inclusive, a bar might need to be lowered to get that done.
There is nothing that can be further from the truth.
It also assumes that every man sitting around the table is there because he is “highly qualified and accomplished”.
I have witnessed a few exceptions to that assumption.
In over fifteen years of board service on public companies, I have worked with incredible men and women dedicated to organizational oversight and stewardship. Most boards are made up of individuals who bring unique skills and backgrounds that gives them a perspective that is valuable to the company's strategic challenges. On some boards, there is sometimes a person who shows up, rarely says a word, and whose voice is only heard when a motion needs to be made or seconded. I’m never quite sure why they are there, and hope that perhaps in between board meetings, they are somehow adding value and helpful counsel to the CEO and leadership in another capacity. Short of doing that, I think of these as “taking up space” directors who need to be removed through good governance and strong board leadership.
I can honestly say that I have never seen this trait with female directors. The women with whom I serve on boards have always “hit the ground running” making a substantial contribution from the first day they are at the table. In large part, this is due to the hurdles we had to overcome on the way to becoming “highly qualified and accomplished” during our executive careers. Regardless of the industry from which we hail, we had to learn to be heard, overcome significant biases, and achieve results in spite of many odds and very few role models. For this first generation of women who are joining corporate boards, there is no doubt that by the time they pass the tribulations of their careers, scrutiny of executive recruiters, and interviews of nominating and governance committees, they will pass the test of being “highly qualified and accomplished”.
Hurray for the Copart decision, and for the S&P milestone that was achieved this week. May we always govern in a way that causes us to never doubt the qualifications of any public company directors – be they male or female – as the world continues to become more complex and challenging for public corporations. And may we eliminate the term “highly qualified and accomplished” from our lexicon in only describing board candidates who look different from the norm.
CES - Implications for Board Leadership
At a recent Texas TriCities NACD peer-to-peer dinner, hosted by Grant Thornton, a group of directors gathered to hear about and reflect on the impact of the 2019 Consumer Electronics Show. At this year’s event, Grant Thornton organized a curated experience of the massive conference, to help streamline and focus the experience of board directors faced with over 4,500 booths of technological innovations.
We learned about things that were coming: 5G connectivity (potential for instant simultaneous translation), 8K televisions (imagine watching sports), flying cars, armor-protected drones that can stop bullets, and various applications of AI and block chain.
We could have spent all evening speaking about all the fascinating gizmos and technologies that are being developed, but reined the conversation back quickly to the implications for us, as directors, relative to how we guide strategic dialogue in the boardroom. Three primary takeaways: (1) Creation of new business models, (2) How do existing companies recognize disruptive technology, and (3) The importance of being directors who are engaged in digital transformation.
New business models
There is no doubt that with the exponential growth of new technology applications, there will be new business models that emerge. Whether it’s travel/entertainment, retail, healthcare, or financial services, the applications of the likes of AI, 3D printing, and 5G will undoubtedly create opportunities for more companies such as Uber/Lyft, AirBnB, Apple, and Tesla to redefine how we go about our day-to-day lives. To grasp the pace of change, one only has to consider today’s definition of what a “phone” does to what one did a generation ago. Learning today takes place not only in classrooms, but in the circuits of machines that will be accessible through applications such as “Google Mind”. Augmented reality may today be thought of as a helmet worn over our heads for gaming, but as we consider its applications around human exoskeletons, it has implications for workplace health and safety yet undefined. Understanding the possibilities of new business models is crucial if we are to guide companies through this exciting next chapter of innovation.
Challenges for established companies
The fact that most business disruption happens from outside mainstream companies suggests that most large organizations miss many strategic shifts. This is mostly likely due to the past success of organizations that might have been yesterday’s disruptors. Countless case studies are written with the “how did they miss it” narrative, as though long-established, innovative companies (cue Sears, Kodak, Blockbuster) should have seen the advent of disruptors that wiped them out. It’s as though hindsight is a missing leadership skill. The difficulties are numerous; how to deliver of continued performance results in an existing business model whilst giving permission and space for innovation to create a wholesale shift, the ability to attract different sets of investors, and how to build a new skill base in the workforce to move from “old” to “new” economy. The emergence of corporate venture capital groups, creation of internal innovation hubs, and collaboration with start-up incubators are just a few examples of how established organizations are trying to create pockets of innovation that might end up sun-setting the very characteristics that define success today.
The Role of Directors
The role that independent directors play in understanding how technology can impact the business is crucial. As individuals who are not mired in the daily exercise of customer capture, cost control, and personnel matters, directors are uniquely positioned to help the executive team explore options and consider implications on the existing business. They should challenge executives to push the boundaries of “what could happen” that would wreak havoc to the revenue stream, and what skills are needed to answer future strategic imperatives. This requires a constant quest for learning and gathering external input, and participating in events such as CES, forcing us to consider a business horizon that goes far beyond our board tenures. Of the many memorable quotes from the evening, one that stood out was, “You can’t read a label from inside the jar.” Perhaps the greatest enemy of progress is a board that is too comfortable with what it knows and understands.
The most important characteristic of a world-class organization is that it consists of individuals – in both the executive suite and boardroom – energized by learning. The board processes must then allow that information to be integrated into regular, deep strategic dialogue. CES provides an incredible backdrop for a conversation around what “could be” that will undoubtedly, eventually morph into the “what is”.
International Women's Day
On the eve of International Women's Day, I had the opportunity to speak to the inaugural gathering of HollyFrontier Corporation's WiE event (Women in Energy) at its corporate headquarters in Dallas. A local gathering of over 100 employees, combined with satellite offices connected via technology, resulted in 800+ members of the HFC family who tuned in for a conversation about Diversity and Inclusion.
The great thing about this event was that it wasn't just women who attended. Men and women, from all levels of the organization, representing different ethnic and national backgrounds, from across the company's North American footprint (and possibly the Netherlands if recent Sonneborn acquisition members joined) engaged in listening, learning, and participating in a dialogue about Unconscious Bias -- a topic which is critical to understand if we are ever to make progress in the D&I arena.
The presence of Unconscious Bias is the result of two primary forces that make us who we are; (1) How we are raised (including our environment and family structure) as well as (2) Our life experiences (education, religion, travel, work environment, interactions). Understanding how these factors contribute to the manner in which our brains store and organize our thoughts is critical to mitigating the personal impact of biases we bring to the workplace every day. We are unable to go back in time and change how we are raised, but we can certainly create life experiences that expose us to different people, places, and perspectives to help us raise our game of inclusivity.
Talking through examples of Affirmation Bias, Confirmation Bias, and Attribution Bias gave the audience context for many of the behaviors that we experience every day. These biases can often explain why some people seem to have greater fortune in their careers than others. Our propensity to identify with those who share demographic makeup, agree with our political viewpoints, or resemble those who we are accustomed to seeing in various roles all play into the absence of true meritocracy in the workplace. Further discussion about Likeability Bias and Maternal Bias brought focus on some disadvantages that women, in particular, have on the job -- the tradeoff between being "competent" and being "nice", and the assumptions that are made regarding women who are mothers or in childbearing years.
Holding an event that involves participation of a wide cross-section of an organization broadens the conversation about Diversity and Inclusion, and truly addresses the primary goal of any such endeavor; that of building talent in a company. I am witnessing a new chapter in the D&I journey. It's no longer just about senior management commitment to D&I. The past 30 years and subsequent lack of progress demonstrates that showcasing companies and CEOs who say the right things doesn't move the needle in the corporate world. The new movement is grassroots. It recognizes that change can only occur if the ownership of meritocracy belongs to the entire organization. Identifying examples of Unconscious Bias and holding one another -- all colleagues -- accountable for its presence and impact is key to creating a truly inclusive workforce.
Lessons from Herb Kelleher
I read yesterday that Herb Kelleher passed away. He was founder/leader of Southwest Airlines, and touted as one who redefined the airline industry. He was someone whose leadership style was simple, authentic, and seldom replicated in a world confused by multiple stakeholders, media priorities, and political agendas.
Many years ago when I was a mid-level executive with Amoco Oil Company, I held a job titled, Manager - Customer Focus. In that role, I explored best practices of different companies in different industries, studied the then-popular topic of TQM (Total Quality Management), and brought ideas and suggestions back to the company. It was one of the best jobs I ever had because I worked for a great boss, had a ton of freedom (no one ever had the job before me), and got to meet a lot of external people -- something you seldom get to do when you work in a large corporation. Southwest Airlines was one of the companies I studied. I was so impressed that the culture Herb set at the top of the firm permeated the entire organization. Wherever he was, there was a buzz...and when he left, the buzz never stopped.
My favorite Southwest Airlines story happened during that assignment, when I was actually flying a Southwest flight between Kansas City and Chicago. I boarded the flight based on my boarding pass number (they didn't have boarding groups then...just numbers based on when you physically arrived at the airport check-in counter). I got to choose my seat, and sat next to the window a few rows into the plane. A young man sat next to me, and over the duration of the flight, we struck up a conversation. As it turns out he was a Southwest Airlines employee -- worked as a baggage handler in Kansas City, and was going to Chicago to visit a girlfriend. What struck me was how he served as an incredible ambassador for his company. He spoke highly of his boss, the people he worked with, the things the company did to make people feel good, the pay, benefits, and why he enjoyed working there -- because it made people smile when he spoke about his company. I have used this as a story when I make presentations about culture and leadership even today. I've never forgotten the sparkle in that young man's eyes when he spoke about his company.
Companies pour large amounts of money into building their brand through advertising, social media, and PR. They spend hundreds of thousands of dollars hiring consultants to improve culture and measure satisfaction. The one lesson Herb Kelleher taught me is the one that is most important: “Your employees come first. And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with employees and the rest follows from that.” It's really all so simple.
Shortcuts to Board Leadership - Part One
Shortcuts to Board Leadership
As a board director for over half of my professional career, I often get called for advice on how to get on a public board. “Can you introduce me to your recruiter friends?” “Which networks should I join to meet the right people?” “Would you look at my resume and tell me what you think?” As willing as I always am to speak, meet, and introduce them to people I know, I shake my head when I realize that in many of these cases, people are looking for a shortcut. They contact a recruiter, send a resume with a cover letter, and then wait for the call. They attend some networking events, pass out a load of business cards, and then wait for the call. I meet up with them again in a few months, and they wonder why they’re having such a hard time. They believe that because it’s a game of “who you know” that merely by meeting the right people, they will have an inside track onto a public board.
It doesn’t work that way.
There are no shortcuts.
Contrary to popular belief, it’s not about networking. It’s not about being at the right place at the right time, or attending the right conference or giving your card to the top board recruiter in every recruiting firm. There are countless business cards that have been passed out, resumes sent, and cover letters written. That’s the problem; there are countless. Cutting through the ocean of names that want to be put on boards is the real key.
As a result, I’ve spent some time recently reflecting on which recommendations I’ve made that have yielded success...and which have not.
To be recommended for a board position, you need two things: (1) A good narrative, and (2) Being top-of-mind. They sound simple, but both of these require personal investment and effort over an extended period of time, and in an ideal situation, the effort begins to happen long before you want to get on a board.
Your narrative
To get on a board, a strong advocate has to relay a compelling narrative, or story, on your behalf. It’s your reputation, your personal brand. In a short conversation or paragraph, in addition to your professional resume, every interaction you have with that advocate up until that moment becomes part of that narrative. The more they know you, the better the story can be. A strong narrative consists of the WHAT and the HOW of your story: What you know best, and how you are to work with.
The headline of the narrative is about your WHAT -- those skills that make you unique and valuable. The best boards are made up of individuals who not only represent the interests of the stakeholders, but who serve as advisors to the executive team for any issue that a company might face.
Do you have particular skills/experience for the standing committees a board needs to fill: Financial, Compensation or Governance? If so, boards often look to add to the bench strength in these areas.
If the company is going through a merger or acquisition, have you been through one? If so, what was your role? Having had M&A and integration experience is a great asset to a boardroom.
Is a company in an old industry that is getting disrupted by an outsider? Have you experienced this or have you started your own business? Expertise in innovation and disruption is critical in boardroom strategic conversations.
Is a company expanding into new global markets? Have you had experience running a business in a different country? Expertise in emerging markets can be invaluable.
Is the company looking for industry or operational expertise? Have you faced many of the issues that the executive team is looking at? Having industry (or similar) operational experience can be critical in examining strategic choices and operational performance.
Are you well versed in the digital world? Increasing focus on cybersecurity and 24/7 communications is becoming an important component in enterprise risk management.
In addition to the examples cited above, there are many other skills that, based on a company’s strategic focus, are desired in the boardroom. It is imperative that you craft what that headline is. Think about the career choices you've made, the risks you've taken. What gives you a different perspective than anyone else in the room? It’s like giving yourself a professional Rorschach test – what are the attributes that immediately come to mind when people hear your name? It’s a 30-second answer to the question, “What makes you uniquely qualified to be a board director?”
The second thing your narrative reveals is the HOW – what are you like to work with? This part of the story usually includes how the person knows you; whether you worked together, someone introduced you, or whether you met in another professional setting. Are you friendly? Genuine? Trustworthy? Boards only meet 4-6 times a year, so they need people who can hit the ground running, and be a full contributor from day one. Many board relationships evolve into strong friendships, primarily as a result of open dialogue, debate, and mutual respect.
Being top-of-mind
Whether your name surfaces through an existing board member or an executive recruiter, it’s essential that you’re top-of-mind when a board opening presents itself. This means going beyond just giving your card or sending a resume to someone, and calling them up every few months. Being top-of-mind means that when an opportunity comes up, you have created a strong enough impression in their mind that you’re the first, second, or maybe third person they think of. You’ve become the “no-brainer” and “easy sell” to a company looking to fill a board seat.
If you’re a sitting or former public company CEO or CFO, it’s easier. You’ve held a position that people believe qualifies you to sit in a boardroom, because you’ve already done it. Unless you’re someone who nobody likes being around, your path to a board career is much simpler. You need to call on a few people who are on boards or doing board placement, and let them know you’re available. You still need to differentiate yourself (see above regarding narrative), but the sacrifices/investment you have made in your career is certainly an advantage.
If your resume does not have “CEO/CFO” listed as a job you’ve held, you have more work to do. Your willingness to invest in relationships is what will make a difference. People need to be convinced that you are board-worthy, and that your experience is something that boardrooms are desperately seeking. Non-CEO/CFO directors often are some of the most valuable members on a board because of the different perspectives they bring to the conversation. However, becoming “top of mind” is imperative, and far more dependent on how strong a personal narrative you've developed, and how much you invest in professional relationships.
The more time you invest in a relationship with a potential advocate, the more comfortable he/she will be in telling your story. Handing out a business card to me has never yielded a recommendation. Sending a strong resume increases the likelihood. Having firsthand experience in seeing you go through a few years in your professional life gives me a narrative worth sharing. Good advocates are great storytellers. You need to provide a good story to tell.
Getting on a public board is not, and should not be, an easy feat. Corporations are increasingly scrutinized not only on their performance, but also on their behaviors and contributions to society. Correspondingly, director accountability and workload continues to increase.
Securing a position on a board requires significant commitment to self-improvement and investing in relationships. Investing effort in improving your narrative and deepening relationships with professional advocates is what makes the difference. As with everything else, in our professional and personal lives, the investment that we put into our endeavors is directly related to the outcome.
Leadership and Workplace Culture
As we near the end of yet another International Women’s Day, I look back on the past year and feel encouraged about the progress that has been made. As someone who has been advocating for the advancement of women in business for over three decades, I have often felt frustrated at the pace of progress, and the continuing barriers that prevent half of the employable workforce from feeling empowered and valued. The world in which I spend most of my time – that of public corporations – has tried for years to develop programs and policies to mandate equality and inclusivity. What the past year has taught us is that until we are shaken to the core, very few people modify behaviors that have been emulated by those in power.
It can be argued and debated whether there was an actual event that triggered this cultural tsunami. Certainly the sound bites of Donald Trump talking about “locker room behavior” incited media and a population of women who had been on the receiving end of such remarks over the years. A few months later, the wave of media moguls who were called out, including Kevin Spacey, Harvey Weinstein, Matt Lauer, and Charlie Rose provided momentum in an industry that found itself on the “story” side rather than the “reporting” side of the news. Continued focus was drawn to the horrendous stories of gymnastics coach Jack Nasser, multiple sports figures, cultural arts centers, and finally, in the halls of academia and corporations. No industry is spared, and focus is now centered on governance: Who knew? Who should have known? Who should be held to know?
As we sift through the ramifications of accusations and dismissals, most of us are left wondering how different things might actually become. There is a sense of relief that bad behavior is no longer condoned in most circles, and that calling out bad behavior can result in positive outcomes for victims. It’s also reassuring that the topic of culture is being covered in many boardrooms, and subjects such as unconscious bias are becoming more widely discussed and understood.
Organizational leaders today are scrambling to understand whether they have risk in this area. With the power of 24/7 communications via network and social media, an accusation of harassment in the executive ranks can bring immediate and significant damage to brand image and stock or reputational value. Here are some ideas to consider in assessing risk:
If you haven’t regularly taken a pulse of how it feels to work in your organization, now is an opportune time to do so. Send a quick survey to employees, contractors, and partners who work there regularly, asking how the culture feels.
Re-examine any policy or employee manuals to ensure they include topics of harassment and ethics. Many of these documents are decades old and likely need refreshment.
Institute or refresh a whistleblower program. Be sure to communicate the guarantee of anonymity. For public, private and nonprofit organizations, there should be a mechanism for direct escalation to the board of directors.
Consider implementing a 360-degree evaluation of top leadership to get a comprehensive look at how they are perceived by peers as well as direct reports. This provides a quick and complete look at your leadership team, and will identify any significant issues.
Examine any formal mentoring program in the organization. What is covered? How is it measured? Based on the 360-degree evaluation, you might want to reconsider whom you assign as mentors!
Institute routine “skip meetings” where leadership has an opportunity to meet with people two levels (or more) below them. This encourages more open dialogue, and increases likelihood of people speaking up should a problem exist.
The silver lining to all of the unsettling media frenzy is that many organizations will utilize tools such as those listed above to examine culture, leadership practices, and governance. There is, however, a downside that needs to be avoided as the #metoo movement continues to build. If men in an organization become unduly concerned or nervous about how to behave around women, or worse yet, if it is believed that any accusation lodged against a man is immediately considered valid (without due diligence undertaken), the resulting culture could be devastating. The proverbial “seat at the table” that women have fought so hard to win might once again disappear, and we find ourselves thrown back 30 years to when men only had business dinners with other men and critical decisions were made in carefully curated golf course foursomes.
Men and women must work together toward the same goal; that of creating a culture that is respectful and professional, without losing friendliness and ease of conversation. As much as both men and women need to call out bad behavior, they must also intervene when unintended comments or actions are misunderstood or misconstrued. We have come too far to allow the actions of a few outliers spoil a future we all hope to see. Here are a few suggestions to keep the pendulum from swinging too far to the wrong side:
Talk about concerns. Ask one another how you feel about the wave of allegations that have surfaced. Share stories and outcomes. Be sure everyone understands how accusations and complaints will be handled. It’s important to fill in any gaps in understanding that might exist. Without this, your organization will revert to assumptions based on biases people hold, and you might easily find yourself in an unhealthy “us vs. them” environment.
Consider intent, and don’t jump to conclusions. If you overhear a questionable comment, think about what the person was intending to do. In most cases, intentions are not malicious, and comments are made out of frustration or awkwardness.
Remember that people are human. In the workplace, friendships form, and familiarity breeds casual language. Remind one another that comments taken out of context can be misconstrued. Have one another’s backs, and be open to provide and receive feedback.
Be aware of the slippery slope. When conversations and humor take a turn toward being offensive, steer it back up. Remind one another to keep biases in check.
The progress made this past year has been encouraging as we are now openly discussing things that women have privately lamented to one another for decades. Unprofessional and inappropriate (and in some cases illegal) behavior will no longer be tolerated in a work environment. As we cull these bad players out of the landscape, let’s be sure we preserve, and in some cases create, an environment where all will thrive and contribute.
Unconscious Bias - The Real Culprit Behind the Glass Ceiling
When I recently prepared to speak to a group of female entrepreneurs on the topic of women in business, I found myself once again pulling out presentations I’ve given over the past 25 years on the topic. Unfortunately, the slides and comments didn’t take long to update as data over the years hasn’t changed all that much. Women today earn the majority of bachelor’s degrees (57%), master’s degrees (62%), and most advanced degrees of PhD, medical and law (53%). We enter the workforce on equal footing with male counterparts in practically every industry. Nevertheless, the percentage of women in organizations decreases significantly as you move up the organization’s managerial ladder, until at the board level, the percentage is consistently at or below 15%. The results for women of color are even more abysmal.
I have always held that most acts of gender and racial bias in the workplace are not done out of malice. There are very few men (maybe just a few) who wake up in the morning thinking, “I’m going to make it especially difficult for women and minorities today.” Instead, most people go through the day exhibiting behaviors that have made them successful, and they have little reason or motivation to change. To the extent that the workplace is made up of a homogenous group of people, it’s a strong likelihood that a dominant behavior permeates, and the majority are oblivious that anyone is left out.
The problem is that when this hardwired behavior exists, decisions that take place in selection committees – where lists of names are considered for job opportunities – can be seriously flawed. In addition to the formal process of examining job descriptions and background of candidates who are qualified, two considerations are often made. The first is one of visualization, or “Whom can I picture in this job?” The answer to that question is usually pictured as someone who has performed the job in the past (or a younger version of themselves). This bias works against not only women, but also minorities who are underrepresented in management ranks. To the extent these jobs have been skewed towards white males, this becomes the first instance of unconscious bias.
The second consideration is subtler. It consists of assumptions often made by men, about women.
Societal biases toward traditional roles underpin assumptions about what women’s preferences regarding our lives. As a result, women are often denied job critical job opportunities based on these assumptions. The following are actual assumptions I have witnessed (or heard about secondhand) regarding women during their careers, and subsequent outcomes that limit their progression:
Assumption: Women don’t want to relocate if it means their husbands would have to find a new job. Outcome: Women get fewer opportunities for promotions as well as fewer overseas assignments.
Assumption: Women prefer jobs that have consistent hours; they like to know when they can be home. Outcome: Women end up holding more functional roles than P&L roles, which limits chances of attaining C-suite jobs.
Assumption: Women don’t like working in plants. Outcome: Women hold in more functional than operational roles in manufacturing industries, with less opportunity for important lateral development or promotions.
Assumption: Women all have a difficult time returning from maternity leave. Outcome: There is a reluctance to give women big responsibilities during childbearing years.
Assumption: Women become even less committed to their careers after they have two children. Outcome: There is reluctance to invest in training/development for women during critical years ages 25-40.
As a result, women are found most often in companies holding functional roles – HR, IR, PR, Marketing, and Finance. Of these functional roles, the only one that consistently can lead to the job of a CEO is the role of CFO. Most CEO tracks go through the line organization; most executives come up through the profit/loss positions.
Assumptions like the examples given above become more difficult to voice when there is even one woman present in the room. In that instance, people (including men) become more sensitized, and are quicker to offer alternative views. As a result, I’m an advocate for the idea that selection committees – those discussing the slate of names being considered for a job – should be diverse. People are better at keeping biases in check when they are sitting amongst people who come from different backgrounds.
The significance of unconscious bias is far greater than the attention it is given. When it comes to the topic of diversity, people are often looking for behavior out of malice and overt prejudice. However, in spite of countless programs installed, quotas established, and diversity training implemented, the needle has barely moved. Examining and mitigating unconscious bias is key to shifting the outcome.
(This post appears as a guest blog entry for 1871 Chicago).