There may be no quick fix to the current financial crisis, but fostering new perspectives by advancing more women into leadership positions is a sure-fire, long-term resolution, says Groundbreakers, a new report from Ernst & Young.
“Groundbreakers is about diversity of thought and not necessarily about race, gender, ethnicity, or sexual orientation, which we traditionally associate with diversity,” says Lou Pagnutti, Ernst & Young chairman and CEO. “Canada, and the world for that matter, needs business leaders who bring different skills, who think about familiar problems in new ways, and reject the kind of groupthink that may have contributed to the global financial challenges the world is facing.”
In Groundbreakers, Ernst & Young brings together telling research that makes clear the case for more women leaders in business. For instance, the report cites data from Goldman Sachs that found closing the gap between male and female employment rates could boost US GDP by as much as 9 per cent, Eurozone GDP by 13 per cent, and Japanese GDP by 16 per cent.
“Investing in women to drive economic growth is not simply about morality or fairness. It’s about honing a competitive edge,” says Pagnutti. “There is opportunity during this time of adversity – it’s time we recognize that, and build women into the leadership fabric of our organizations. Diversity is not a ‘nice to have.’ It’s a business imperative.”
Groundbreakers references an Economist magazine report that says over the past few decades, women have contributed more to the world’s GDP than has new technology or the emerging economies of China and India.
Groundbreakers also cites data from a 2007 Catalyst report that found that on average, Fortune 500 companies with more women on their boards of directors turned in better financial performances than those with fewer women board directors.
How can Canadian companies build leadership capacity for increased competitiveness?
1. Create a deliberate plan to get women into leadership positions. Don’t just wait for time to fix inequities. Implement programs to get women the right mentoring and experiences, and make sure accountability exists in order for this plan to be realized.
2. Work towards “functional diversity.” Professor Scott Page of the University of Michigan uses this term to capture the idea that we need people with diverse ways of perceiving problems, rather than groupthink, in order to devise better solutions. Research has shown that, under the right conditions, a group of intelligent problem solvers chosen completely at random will likely outperform a homogenous group of even the best problem solvers.
3. Don’t underestimate the power of critical mass. A 2007 McKinsey study showed companies with three or more women in senior management scored higher than companies with no women at the top over a range of measures for organizational excellence. It is not just about adding a woman here or there. It is about building the critical mass that gives people the power to speak up, and to have their views heard.
Ernst & Young is recognized as one of Canada’s Best Diversity Employers for 2009. For more information, please visit www.ey.com/ca.