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With California becoming the first state to require women on corporate boards earlier this year, “gender parity” has been one of the most popular issues of 2018. This critical conversation is long overdue, but it will all be for nothing unless we’re able to use this momentum to incite measurable change. Mellody Hobson, president of Ariel Investments, perhaps said it best during an inspiring discussion about the merits of diversity at a recent Fortune conference. “We don’t want to just admire problems; we want to try to find solutions to them.”
Just like in business and in innovation, we need to try new approaches and test new ideas. Improving the diversity of corporate America is driven through accountability. To inspire others to take action, leaders at the top must demonstrate their commitment to gender parity, beyond their voice, but also implementing incentives and setting goals that guide a systematic approach to progress.
There are a number of inspirational -- and aspirational -- examples of how this progress can be achieved.
According to Fortune’s annual “Most Powerful Women” ranking, four of the top five U.S. defense companies are now led by female CEOs, and Pew Research Center found that 19 percent of the CEOs in the aerospace and defense industries are female. Similarly, earlier this year, General Motors became the first major auto company in history to be led by a female CEO and CFO.
While this impressive progress should be commended, the numbers still paint a bleak picture overall. It’s ironic that we celebrate a stat like 19 percent female representation as progress, as it’s far below equality. Despite the heightened awareness around the issue, very little is changing, and a glaring lack of diversity still plagues the C-suites nationwide. There is, unfortunately, no shortage of data that demonstrates this discouraging trend. For instance, only 24 female leaders (a meager 4.8 percent) occupy CEO positions at S&P 500 companies -- and that figure is down from 32 women last year. Moreover, female founders received just 2.2 percent of the $85 billion total invested by venture capitalists in 2017. Take a moment to think about that. Only one in 20 top executives are women, and 98 out of every 100 dollars of VC funding goes to men. If corporate America really is trying to achieve gender equality in the workplace, it certainly doesn’t show.
I am a strong believer that change starts at the top. It’s up to current leaders to drive a transformation and create opportunities to learn and grow, equally. This isn’t only a culture and societal imperative, McKinsey found that having a healthy balance of men and women in positions of power improves a company’s performance by 15 percent, compared to competitors. Leaders are actively choosing to limit the potential of their business.
In order to achieve gender parity, corporate leaders should consider the following actions.
1. Create internal pathways.
Invest in talent. Leaders must ensure that varied experiences and opportunities for career growth are available to all employees and are diversely distributed to across gender, ethnic, regional and industry groups. Diversity enhances individual and business perspective. Offering these options and spreading the word is the employer’s responsibility, but it’s up to the individual to earn advanced placements, to show initiative and to take advantage of the opportunities that exist.
2. Promote role models.
Powerful women serve as an example to the next generation, regardless of gender. Role models who have innovative ideas and the passion to execute their vision can make a huge impact on the overall engagement and effectiveness of a workforce. Leaders should recognize talent and spirit and reward it accordingly, which will, in turn, motivate others.
3. Develop organizational incentives.
We must stop simply trying to instigate change and actually make it happen. This can be done by setting ambitious performance metrics for gender parity that reward or penalize staff based on the results. The most effective incentive to implement will depend on each company’s unique culture, but no matter what, employees must be held accountable. It’s important to remember that this is a continuous process. There is no such thing as permanently achieving diversity. Companies who don’t actively push for progress move backwards.
4. Encourage ongoing education.
Professional development opportunities are crucial for all employees. Continuing education, particularly in industries that are changing rapidly, such as those in the STEM fields, can significantly increase employee satisfaction in the workplace and drive innovation. If that isn’t incentive enough, SHRM found that the cost of losing an employee can be up to two times the person’s annual salary. Mentorship and coaching is an important part of this process, as female executives can encourage young woman to take similar paths, particularly when it comes to mustering the confidence to grow into a position. Leanne Caret, CEO, Defense, Space, and Security, The Boeing Company, famously said, “Not any one of us is ever fully prepared for the job that we take on. If we were, then it was too easy and we shouldn’t have taken it.”
5. Provide funding.
As I mentioned previously, there’s a huge gender disparity when it comes to securing the funding to get an idea off the ground. Pew Research Center found that 41 percent believe men are more willing to take risks than women, compared to just 8 percent who hold the opposite opinion. Is it possible that females are hesitant to invest their own money, due to a perception that they may not get that investment back if they don’t succeed?
Women entrepreneurs who see a gender disparity in access to capital believe the one factor that would have the greatest impact is gender-blind financing, according to Bank of America. To me, these findings prove that today’s business leaders need to alleviate women’s fear of failing by offering them monetary confidence in their ability to succeed. One organization I admire that furthers this mission is 1,000 Dreams Fund (1DF), a national non-profit that provides micro-grants to young women in the U.S. Harman has been lucky enough to develop an ongoing relationship with 1DF to continue to inspire and financially support women interested in pursuing careers in STEM.
The first step towards improvement is admitting you have a problem, and corporate America has certainly checked that box when it comes to gender parity in the workplace. Now, it’s the responsibility of executive leaders to support the rhetoric with action by investing in talent, championing female role models, developing goals that instill a sense of accountability, offering continuous education in the workplace and -- perhaps most importantly -- backing this action with investment. The phrase “put your money where your mouth is” has never rang more true.
Enough talk. It’s time for action.