Women Matter 1 Brochure

7/29/2019 Women Matter 1 Brochure

1/28

Women MatterGender diversity, a corporate performance driver


2/28

McKinsey & Company is an international

management consulting frm that helps leading

corporations and organisations make distinctive,

lasting and substantial improvements in their

perormance. Over the past eight decades, the

Firms primary objective has remained constant:

to serve as an organisations most trusted

external advisor on critical issues acing senior

management. With over 7,500 consultants

deployed rom some 90 ofces in about

50 countries, McKinsey advises companies

on strategic, operational, organisational andtechnological issues. The Firm has extensive

experience in all major industry sectors and

primary unctional areas, as well as in-depth

expertise in high-priority areas or todays business

leaders. McKinsey & Company also helps a

diverse range o government institutions, public

administrations and non-proft organisations with

their management challenges.


3/28

Women Matter

Companies with a higher proportion o women in top management may

perorm better

Women Matter s a study conducted by McKnsey & Company as part o ts global

partnershp wth the Womens Forum or the Economy & Society.

The study suggests that the companes where women are most strongly represented

at board or top-management level are also the companes that perorm best.

Conrmng the exstence o the gender gap most notably n the composton o

corporate management bodes the McKnsey study oers act-based nsghts

nto the mportance or companes o osterng the development o women n the

busness arena, so that a greater number attan postons o hgh responsblty.

Fnally, buldng on these nsghts and observatons, and hghlghtng the man

barrers to emale representaton on management bodes, ths study seeks to brng

the practcal debate o how to make the transton rom awareness o the stuaton

to the mplementaton o change.

Are women the uture o busness? The queston s open


4/28

iWOMEN MATTER

Contents

Too ew women in business:

a persistent reality

4 As things stand, change will come only very slowly

4 Known dspartes

4 The derence s even more strkng n top management

postons and on boards

6 Natural growth n the number o women graduatess nsucent to brng about change

7 A model which remains predominantly male-oriented

7 The anytme, anywhere perormance model rreconclable

wth the womens double burden

8 Masterng male codes as the only way to rse through the ranks

8 Womens ambitions restrained by an acute awareness o barriers

8 Dculty n dentyng wth success

9 Lower ambtons

9 Optng out: a real and serous reason or the gender gap

n top management


5/28

WOMEN MATTERi

Major economic potential

10 More women in business: an imperative or competitiveness

10 A response to the upcomng talent shortage n Europe

10 Women: a growng advantage or companes?

1 More women in control: a corporate perormance lever?

1 Womens postve mpact on organsatonal excellence

1 and on nancal perormance

Reinventing the model?

17 Increasing womens participation in the workplace:

the crucial role o political bodies

19 Pursuing tried and tested initiatives within the workplace

19 Four best practices or achieving gender diversity

19 Create transparency by mplementng gender dversty KPis0 implement measures to enhance the work-le balance

1 Adapt the human resources management process

1 Help women master the domnant codes, nurture ther ambton

1 The pivotal role o the CEO

Womens path to success:

what you need to know

15 The Big Three-O: a time or setting aspirations

15 Career plans beore amily considerations

16 Do women pay a higher price or success?

Conclusion

Going urther?


6/28

4 iWOMEN MATTER

It is widely recognized that women are stillunder-represented in European business,both in number and in status, but has thesheer size o the gender gap in managementbeen truly grasped?

Known disparities

Although women account or 55% ouniversity graduates in Europe1, they area smaller part o the labour market: theiremployment rate is 21% lower than that omen2. There are also signicant disparitiesin their levels o responsibility and in theirpaychecks: according to the European

Commission, theaverage wagegap between menand women is as

high as 15%3

. Women are also less likely tohave ull-time jobs: 33% o women workpart-time, compared to 7% o men3.

The disparities are wider in the privatesector than in the public sector. In Francesprivate sector, only 42% o workers arewomen4, against 58% in the public sector,and the pay gap is generally wider (19% asopposed to 14% in the public sector).

The dierence is even more striking

in top management positions

and on boards

Within companies, women are particu-larly under-represented in managementand decision-making roles: inEurope, they rep-resent on aver-age just 11% othe membershipo the governing bodies o listed compa-nies5(Exhibit 1).

The situation varies greatly rom

one European country to another: inNorway, women hold more than 32%o top executive jobs, against just 1% inLuxembourg. More generally speaking,gender diversity is stronger in Northernand Eastern Europe than in the South orin Germany. And despite being at the topo the class, Norway and Sweden are still along way rom achieving gender parity.

The employment rate or women

is 21% lower than or men

In Europe, women represent

only 11% o the membership

o the governing bodies o listed

companies

As things stand,change will come

only very slowly

Too ew

womenin business:a persistentreality

Thirty years ago, we would never have

thought that there would be so ew women

in the boardrooms Charwoman o the board o a holdng

o an nternatonal company


7/28

WOMEN MATTERi 5

32 %

24 %

21 %

21 %

19 %

12 %

11 %

8 %

7 %

6 %

4 %

3 %

1%

Share of women in executive committees in the top European companies*

Norway

Sweden

UK

Finland

Latvia

Bulgaria

Germany

France

Netherlands

Belgium

Italy

Luxembourg

* European statistics on the top 50 listed companies per country in 2006

Source: European Commission

EU average: 11% women

Spain

Exhibit 1

Women represent only 11% o the membership o governing bodies o listed companies in Europe


8/28

6 iWOMEN MATTER

2005

2035***France

58 %

11 %

Germany

* Female graduates with the equivalent of a masters degree

** European Commission statistics on the top 50 listed companies per country

*** Extrapolation based on trends 19752005

**** Female graduates with the equivalent of a masters degree in economics, law or sciences, or from the Grandes Ecoles and MBA programs

Source: OECD; national statistics; Eurostat; European Commission; McKinsey; data from French institutions

Country

Sweden

1970s 2000s

61 %1978

24 %2006

41 %1975

2006 8%

1976

2006

32 %

11 %

1975

2006 2035***

2005

2005

2035***

2005

2035***Spain

Female graduate trajectories

Even if these projections are applied only to

the academic channels that traditionally produce

company managers****, the proportion of women

on management boards in France would still

only reach 16% in 2035

32 %

17 %

64 %

25 %

61 %

49 %

4% 8%

University graduates*

On executive committee** c. 30 years later

Proportion of women:

1970s, 2000s, linear projection for 2035

Exhibit

The increase in the number o emale graduates will have a limited impact on diversity

Natural growth in the number

o women graduates is insucient

to bring about change

Gender inequality continues to exist inmanagement unctions, and the increase inthe number o emale university graduateswill not itsel be sucient to close thegap. As shown by the linear projectiono the historic trends in numbers owomen graduates applied to womensrepresentation in top managementpositions, unless the current rules othe promotion system are changed, the

growth in emale graduate numbers willhave a very marginal impact on womensrepresentation on governing bodies. InSpain, or example, volume alone would

merely raise the proportion o womenin top executive positions rom 4% in2005 to 8% by 2035 (Exhibit 2). Eveni these projections are applied only tothe academic channels that traditionallyproduce company managers (MBAs andengineering schools, or example), thegain in France would amount to just8 percentage points by 2035, with theproportion o emale top executives risingrom 8% to 16%.

In essence, unless we address the rootcauses o the problem, the notorious

glass ceiling will stay rmly in place,and womens participation in corporateleadership over the next 30 years willremain low.


9/28

WOMEN MATTERi 7

* Sweden, Norway, Finland, Germany, Belgium, UK, Latvia, France, Estonia, Hungary, Slovenia, Lithuania, Poland, Spain, Italy

Source: Eurostat

4:11

4:32

4:15

4:45

5:20

4:29

4:55

4:30

3:47

3:42

2:18

1:35

1:37

2:22

2:22

2:18

2:38

2:21

2:22

2:29

Women

Italy

Spain

Poland

France

UK

Belgium

Germany

Norway

Sweden

EU 15* average

+143

+198

+114

+128

+110

+73

+85

+131

+225

+117

Time spent

hours

2005

Difference between men

and women, minutes

Men

Domestic tasks (including childcare and preparing meals)

Exhibit

European women devote on average twice as much time as men to domestic tasks

To gain an understanding o the mainbarriers that prevent women achievingtop-management positions, we collatedndings rom the many studies in this areaand interviewed more than 50 companyCEOs, men and women, throughoutEurope.

It emerges rom this research thatwhile social policies can be more or less

avourable to womens employment,corporate models historically designedby men orm the pillars on which theglass ceiling is supported.

The anytime, anywhere perormance

model, irreconcilable with womens

double burden

The double burden syndrome thecombination o work and domestic

responsibilities weighs heavily. Womenremain at the centre o amily lie, withall the attendant constraints (maternity,child-rearing, organising amily lie, careo the elderly, etc). The impact o the

constraints may vary rom one countryto another, depending on the supportoered (inrastructures such as day-care centres, tax policies that encouragewomens participation in the labour orce,etc.), but on average European womencontinue to devote twice as much time asmen to domestic tasks: 4 hours and 29minutes a day, compared with 2 hoursand 18 minutes or the men in our sample6(Exhibit 3).

The question arises o how compatiblethe double burden which is currentlyinherent in our model o society iswith the demands associated with seniormanagement. The dominant model in thebusiness world (or the one perceived assuch) equates leadership with unailingavailability and total geographical mobility

at all times (anytime, anywhere). Themodel also presupposes a linear careerpath, with no space or career breaks orthe rejection o a geographical mobilityoer.

A model which remains

predominantly male-oriented

The rst question I am always asked by

women students is how I manage to balance

my private and proessional lie Charwoman o a meda group


10/28

8 iWOMEN MATTER

70% o emale respondents rate

their own perormance as equivalent

to that o their co-worker while 70%

o men rate themselves higher than

their co-workers

This dominant model is elt by women tobe the main barrier to career advancementand success, because it cannot be reconciledwith the double burden. For example,maternity leave and reduced mobility areseen as serious handicaps: in the US, 62%o women perceive amily or personalobligations as an obstacle to promotion7.

Fully 96% o emale graduates romFrances elite grandes coles believe thathaving children, or being o child-bearingage, is a real or perceived barrier oremployers8.

Mastering male codes as the only way

to rise through the ranks

The predominance o the masculine modelor upward mobility is a urther barrier

to womens participation in corporategovernance bodies: it requires a greatereort o adaptation or women to be moreassertive in making their way to the top.

The interviews we conducted show, amongother things, that one o the keys to suc-cess lies in the ability to promote onesel

and to be asser-tive about onesperormance andambitions. Wom-en, it appears,

tend to minimisetheir own contri-

bution, as a survey o MBA students9 sug-gests: 70% o emale respondents rate theirown perormance as equivalent to that otheir co-workers, while 70% o men ratethemselves higher than their co-workers.

I women are thus less naturally inclinedthan men to recognise and appreciate their own perormance, it is probably moredicult or them to assert their talents

and gain recognition in the company, andhence to capture every opportunity orpromotion.

An added nal handicap is that it appearsharder or women to nd a mentor.According to a Catalyst10 study o MBAgraduates, only 33% o the womeninterviewed said that it was easy tond a mentor, compared with 42% omen. And yet, 61%11 o women see thelack o mentoring as a barrier to careerdevelopment, as opposed to 31% o men.

All these acts underscore the diculty thatwomen experience in applying the leverso in-company promotion with the sameeectiveness as their male counterparts.

In addition to these barriers, there arealso psychological obstacles: womensdiculty in identiying with success, andtheir lesser ambition, which combinedwith a greater ocus on their amilies,seem to lead many women to opt out oa business career.

In a male-dominated environment, in

which women nd it dicult to achievepositions that t with their constraints,we have endeavoured to understand towhat extent womens readiness to opt outrom success may account or their relativeabsence in managerial unctions.

Diculty in identiying with success

A third major barrier that has emergedrom our research involves the diculty

women have in identiying with success,which appears to hamper their proes-sional development. The absence o emale

When, or personal reasons, I declined the

top job in an overseas branch, I was told I

was excluding mysel rom the system. It wasseen as career suicide

Head o marketng, French subsdaryo a leadng European bank

Womens ambitions restrained

by an acute awarenesso barriers

On the same project, the men will

demonstrate 100% ambition even i they only

have 50% o the required skills, whereas the

women will be concerned about only having

80% o the required skills

Board member o a bankng group


11/28

WOMEN MATTERi 9

role models seen as a barrier by 64% owomen in the US11 is compounded by a

heightened per-ception o thediculty oachieving successin todays busi-

ness environment. In France or instance,77% o women believe their career devel-opment aces barriers, a perception sharedby 49% o men12.

Lower ambitions

Perhaps because o their perception o thesebarriers, women seem to have lower pro-essional ambitions than men. In act, 48%o men according to a Harvard Business

Review survey13 see themselvesas extremely orvery ambitious,while only 35%

o women have a comparable sel-image.Furthermore, only 15% o highly quali-

ed women aspire to positions o power,against an average o 27% o men.

Opting out: a real and serious reason

or the gender gap in top management

Ultimately, opting out a voluntarydecision to discontinue ones career isboth the result o the barriers identiedand an additional cause o the shortallo women in corporate executive bodies.Among the US college graduates surveyedby Harvard Business Review13, 37% o

the women voluntarily stopped workingat some point in their career, against 24%o the men. One o the main reasons putorward by these women were the needto spend more time with their amily(mentioned by 45%) (Exhibit 4). An evengreater cause or concern is that out o the93% o women who have taken careerbreaks and intended to get back to work,only 74% have managed to do so, andonly 40% have ound ull-time work.

Need more time forthe children

* Survey of 2,443 women and 653 men in the US, ages 28 to 55, who obtained a college degree with honours or a graduate degree

Source: Harvard Business Review 2005

Proportion of US graduates*

who interrupt their careers Main factors behind career break decisions

Sufficient household

income

Lack of job satisfaction

Need more time for

other family members

Feeling of being stuck

in a rut professionally

45 %

32 %

29 %

24 %

23 %

Men Women

37%

24%

2005

Factors behind career break decisions

Exhibit 4

Career breaks or women are mainly motivated by the need to spend more time with amily

64% o women see the absence

o emale role models as a barrier

to their development

Only 15% o highly qualied women

aspire to positions o power, against

an average o 27% o men


12/28

10 iWOMEN MATTER

Given this situation, is change really need-ed? Egalitarian considerations apart, arethere any other reasons why we shouldradically enhance womens urther integra-tion into the corporate world, particularlyin senior management positions? A num-ber o reasons suggest that gender diversi-ty is a real issue or business, and one that

deserves to be tackled urgently. Corporatecompetitiveness is at stake.

A response to the upcoming talent

shortage in Europe

The shortall o European workers is ex-pected to increase in the coming decades,especially or the most highly qualied jobs.Tapping the underutilised pool o skilledwomen (and older people) could thus play

a major role in the war or talent. The g-ures speak or themselves: i the employ-ment rate or women remains constant,

Europe can expect a shortall o 24 millionpeople in the active workorce by 2040;i, on the otherhand, the ratecan be raised tothe same level asor men, then the projected shortall dropsto 3 million (Exhibit 5).

Women: a growing advantage

or companies?

To adapt to changing social and consump-tion trends, companies increasingly needto integrate women into their decision-making processes, as women now have amajor infuence on purchase decisions: inEurope, they are the driving orce behindmore than 70% o household purchases14although they account or only 51% o thepopulation.

Even in industries where buyers are tradi-

tionally male, women represent a growingproportion o theconsumer base:or example,women infuence60% o new car purchases in Japan15 andmake up about 47% o PC users in Eu-rope16.

Gender diversity is also an asset or thecorporate image and helps bring closertogether the company, its employees, its

shareholders and its customers. Accordingto a study by the European Commission17diversity programmes have had a positive

Europe can expect to see a shortall

o 24 million people in the active

workorce by 2040

Women are the driving orce behind

more than 70% o purchasing

decisions

Majoreconomicpotential

More women in business:an imperative or

competitiveness


13/28

WOMEN MATTERi 11

impact on employee motivation or 58%o the companies that have implemented

them, and oncustomer satis-action or 57%,while 69% o the

companies noted an improvement in theirbrand image.

Furthermore, capital markets and investorsare paying more and more attention tocorporate perormance in terms o genderdiversity. For instance, investment undssuch as Calpers in the US or Amazone inEurope include this indicator among their

investment criteria, while rating agencies(Core Rating, Innovest, Vigeo) are nowdeveloping tools to measure genderdiversity.

Exhibit 5

Increasing womens employment rate oers one possible response to the demographic challenge

With an equal employment

rate, women represent

a pool of 21 million jobs

* Total population aged 1565 years multiplied by employment rate (for the European Union 27 countries excluding Slovenia, Slovakia andCzech Republic and including Iceland, Norway, Sweden and Albania)

** Estimate based on employment rate of women in 2005 (56%)

*** Based on employment rate of men in 2005 (71%)

Source: Eurostat; Global Insight; McKinsey

Active workforce*

Million

2000 05 10 15 20 25 30 35 2040

Status quo**

Equality between employment

rates of men and women***Today

24 million

3 million

190

200

210

220

0

180

60% o new car purchases in Japan

are infuenced by women


14/28

1 iWOMEN MATTER

To examine whether greater genderdiversity might correlate with bettereconomic perormance, we conducted twotypes o research on two cross-sections obusiness.

Womens positive impact

on organisational excellence

In the rst study, we used a proprietaryMcKinsey diagnostic tool, which measuresthe organisational excellence o a companyagainst nine criteria: leadership, direction,accountability, coordination and control,innovation, external orientation, capability,motivation, work environment and values(Exhibit 6).

With this tool, our experts examinedthe evaluations o 115,000 employeeso 231 public and private companies,

as well as non-prot organisations, anddemonstrated a correlation between acompanys level o excellence in these nineorganisational dimensions and its nancialperormance. The companies ranked mosthighly according to these organisationalcriteria tended to have operating marginsand market capitalisation twice as highas those o the lower-ranked companies(Exhibit 7).

We then selected 101 companies thatpublish the composition o their governing

bodies, mainly large corporations inEurope, America and Asia, across aspectrum o industries, rom energy todistribution and nancial institutions.We analysed the answers o 58,240respondents to our survey, and thencompared the results or these companiesdepending on the proportion o womenon their governing bodies: it emerged thatcompanies with three or more women insenior management unctions score morehighly, on average, or each organisational

criterion than companies with no womenat the top (Exhibit 8). It is notable thatperormance increases signicantly oncea certain critical mass is attained: namely,

at least three women on managementcommittees or an average membershipo 10 people. Below this threshold,no signicant dierence in companyperormance is observed.

Correlation is not necessarily cause, but

the correlation between organisationalexcellence and womens participation inmanagement bodies is nonetheless striking.Such a correlation echoes a number ocomments and remarks that we heardduring our interviews with CEOs.

We then set out to research whether

companies with women top managers alsoperormed better nancially.

and on nancial perormance

To this end, we conducted a second study,jointly with Amazone Euro Fund. We

When women sit on an executive committee,

the nature o interactions changes But,

one woman there is not enough, you need

several o them

Board member o a bankng group

I think the real benet o having women and

diversity in a team is that you have a richer

set o ideas. So, I truly believe there is a direct

relationship between team perormance and

having a diverse team with the best talents

Vce-Presdent Europe o a leadng globalhealthcare company

More women in control:

a corporate perormance

lever?


15/28

WOMEN MATTERi 1

Exhibit 6

The level o organisational excellence is measured against nine criteria

Articulate where the

company is heading,

how to get there,

and align people

DIRECTION

ACCOUNTABILITY

Design structure/reporting

relationships and evaluate

individual performance

to ensure accountability

and responsibility for

business results

Shape employee

interactions and foster

a shared understanding

of values

Measure and evaluate

business performance

and risk

Inspire and encourage

employees to performand stay

Generate flow of ideas so

that the company adapt

COORDINATIONAND CONTROL

INNOVATION

EXTERNAL

ORIENTATION

MOTIVATIONCAPABILITIES

ENVIRONMENT

AND VALUES

Ensure internal skills and

talent to support strategyand create competitive

advantage

Engage in constant two-

way interactions with

customers, suppliers,

or other partners

Ensure leaders shape

and inspire the actions

of others to drive better

performance

LEADERSHIP

Organisational Performance Profile (OPP)*

* A proprietary McKinsey tool

Source: McKinsey

Exhibit 7

The best-ranked companies on organisational perormance tend to have an operating marginand a market capitalization more than twice as high as those o the lower-ranked ones

Bottom quartile

Top quartile

Middle quartiles

68 %

X 2.2

48 %

31 %

Level of organisational

performance* an above-average** EBITDA***

Probability of having

62 %

X 2.0

52 %

31 %

an above-average** valuation****

* Quartiles based on the arithmetic average of scores obtained by 231 institutions, rated on 9 criteria by 115,000 employees

** Earnings Before Interest, Taxes, Depreciation and Amortization

*** Based on data either for the year of the survey or averaged over 3 years; the surveys were carried out at different times in different companies

over the last five years

**** Enterprise value to book value ratio

Source: McKinsey OPP analysis

Companies economic performance according to their organisational rating

selected the 89 European listed companieswith the highest level o gender diversity intop management posts. The companies wereselected rom all European listed companieswith a stock market capitalisation o over150 million, on the basis o the ollowing

criteria: the number and proportion owomen on the executive committee, theirunction (a CEO or CFO having greater

weight in corporate decisions than aCommunications Manager) and, to alesser extent, the presence o more thantwo women on the board, or statisticson gender diversity in the annual report.McKinsey then analysed the nancial

perormance o these companies relative tothe average or their sector. There can beno doubt that, on average, these companies


16/28

14 iWOMEN MATTER

Exhibit 8

Companies with three or more women in top management unctions score more highlyor each organisational criterion than companies with no women at the top

Work

environment

and values

Direction

Coordination

and control

Leadership

51

56

68

48

72

61

57

55

External

orientation

Motivation

Innovation

Capability

Accountability

63

70

64

52

64

53

65

71

66

67

To what extent is your company effective

in each of the 9 organisational dimensions?Percentage of employees with positive evaluation*

* Analysis conducted on a sample of 101 Worldwide companies, or 58,240 persons surveyed

Note : Given the sample size, a 1% difference is statistically significant

Source: McKinsey

Companies with no women (n=45)

Companies with 3 or more women (n=13)

+7 pts

+6 pts

+5 pts

+4 pts

+3 pts

+3 pts

+1 pt

+1 pt

+1 pt

outperorm their sector in terms o returnon equity (11.4% vs an average 10.3%),operating result (EBIT 11.1% vs 5.8%),and stock price growth (64% vs 47% overthe period 2005-2007) (Exhibit 9).

What conclusions should we draw? Thesestatistically signicant studies show that

companies with a higher proportion owomen on their management committeesare also the companies that have thebest perormance. While these studies donot demonstrate a causal link, they do,however, give us a actual snapshot thatcan only argue in avour o greater genderdiversity.

Exhibit 9

Companies with a higher proportion o women in their top management have better nancialperormance

Economic performance of the companies with most gender-diverse

management teams compared with their industry average

Companies with most gender-

diverse management teams*

Industry average

* 89 companies, identified with the scoring system developed by Amazone Euro Fund

** 87 companies, data not available for two companies

*** 73 companies, financial sector not included

**** Of the 89 most gender-diverse companies, 44 have a market capitalization greater than 2 billion euros

Source: Amazone Eurofund database; Amadeus; Research Insight; Datastream; Bloomberg; McKinsey

Average ROE**

2003-2005

11.4%

10.3%

+ 10%

Average EBIT***

2003-2005

11.1%

5.8%

+ 48%64%

47%****

Stock price growth**** 2005-2007

compared with Eurostoxx 600

sectorial indexes

x 1.7


17/28

WOMEN MATTERi 15

Having established the benets o genderdiversity, our study then moved on toexamine the individual motivations and thecareer turning-points that aect womensadvancement in the corporate environment.In July 2007, we surveyed a sample o male(482) and emale (409) middle and seniormanagers rom around the world (36%in Europe, 31% in the US, 33% in RoW),asking them about the decisions or eventsthat had a signicant and lasting impact ontheir career development. It emerged that

the successul women who had risen to thehigher echelons o major corporations putcareer ahead o amily as did the men but came up against a greater numbero obstacles on their way to the top. Thiswas true or women in top management(about 30% o our respondents) as well asin middle management.

The Big Three-O: a time or setting

aspirations

As our survey showed, the rst moment otruth in the career path o men and womencomes ater about 8 years o work, around

the age o 30. But this milestone appears tobe more critical or women: more womenthan men (25% vs. 20%) said that at 30they decided to take more active control o

their careers, and that it was a time whenthey aced the choice o whether or not torevise their ambitions upwards (22% owomen, 16% o men).

Career plans beore amily

considerations

An unexpected nding emerged rom thesurvey: most executives agree that theactors which most strongly infuencedtheir career choices were related to their

work environment (89%) and changes intheir personal aspirations (79%). Familyconsiderations, by contrast, were o lesserweight or both women and men (42%vs 49%) (Exhibit 10). These ndings aresimilar or men and women, both withchildren and without. A large majority orespondents (89%) added that they didnot regret this career orientation, which,or 75% o them, has had a positive orvery positive eect on their income and,or 90%, on their intellectual stimulation.

Opinions were more mixed (36%),however, on whether the impact o theircareer development on their work-liebalance had been positive.

Womens path

to success:what you needto know


18/28

16 iWOMEN MATTER

Do women pay a higher price

or success?

Two signicant dierences between themen and women were brought to light bythe study.

n First, 27% o women, versus 7% o men,admit that they have elt discriminatedagainst during their proessional career;

n The second dierence is demographic,revealing a substantial disparity in thesituations o the respondents: 54% o

women in our sample vs only 29% omen were childless, and 33% o thewomen were single, compared to 18%o the men.

A Harvard Business Review18 surveyconrms that the higher women climb up

the corporate ladder, the ewer children theyhave, whereas the reverse is true or men.In the 4155 age range, or example, 49%o the best paid women (over $100,000a year) are childless (compared to 19%o men), while the gure or well paidwomen ($55,000 to 65,000 depending onage) is 33% (compared to 25% or men).

This survey suggests that, in a male-centricmodel, women who are today carving outprime positions or themselves ollow thesame path as men, and make the samechoices imposed by the dominant model

particularly that o putting career beoreamily. But it seems that this dilemma thechoice between proessional success andwork-lie balance has more consequencesor women, who might have to pay a higherprice or success.

Exhibit 10

The career choices o middle and senior managers men and women are mainly infuencedby their proessional environment and personal aspirations

What were the factors that influenced the most crucial moment in your career*?

* Survey of a representative sample of male (482) and female (409) middle and senior managers from around the world

** CEO, CFO, CIO, COO, CMO, managing director, board members and chairperson

Source: McKinsey

90

77

42

49

81

87

Work environment

Percentage

Personal circumstances

and aspirations

Family circumstances

Middle and senior managers

87

78

43

47

80

81

Senior managers only**

Women

Men


19/28

WOMEN MATTERi 17

Faced with this evident inequality, andgiven the urgent need and good businessreasons or companies to react, we haveattempted to determine pragmatic solu-tions to increasing womens participationin business, and in particular their pres-ence in the boardrooms and top manage-ment o large corporations.

Increasing womens participation

in the workplace: the crucial role

o political bodies

There is a correlation between womensshare o the total volume o hours workedand the presence o women in the compa-nys top echelons, as shown by a McKinseystudy covering 25 countries and publishedin June 200719. However, this study alsoindicates that womens employment ratehas little or no impact on their participa-tion in the corporate governing unctions.Together, these ndings suggest that there

is a need to create the right conditions orincreasing womens share o the total num-ber o hours worked (Exhibit 11).

Greater participation by women incorporate senior management willrequire social environments that are moresupportive o working women. Two typeso lever can be applied: support servicesand acilities should be developed to helpreconcile work with amily lie (childcare,amily support, amily subsidies, etc),and gender equality promoted in theworkplace (equal pay, equal hours, equal

responsibilities).The priorities or action may vary romone country to another. For example,although France and the UK have similaremployment rates or women (60% and67% respectively), their improvementpotential and policy requirements dier.In France, women enjoy benets thathelp balance amily and proessional lie,thanks to a pro-amily policy and a widerange o public acilities, but equality inthe workplace is more dicult to achieve,

and has to be legislated or. In the UK, bycontrast, while day-care structures or stateaid or childcare have shown improvement,there is a strong tradition o workplaceequality. The measures required thereoremainly concern support acilities.

Having more women in the workplace is aprerequisite or breaking the glass ceiling,but will not be sucient in itsel: womenquickly come up against the barriersinherent in the dominant model. Even

the Nordic countries, which score best onevery indicator, are still a long way romachieving gender equality in corporategovernance (Exhibit 12).

Reinventing

the model?


20/28

18 iWOMEN MATTER

Womens share of total hours worked

* Excluding maximum (Norway: 32%) and minimum (Luxembourg: 1%) in terms of proportion of women in top management

Source: European Commission 2006; Eurostat 2005/06; McKinsey

Percentage

Female leadership (share of women in corporate decision-making bodies), 2006

25 30 35 40 45 50 55

0

10

15

20

25

5 MaltaIceland

Denmark

Sweden

Finland

Netherlands

UK

Estonia

Austria

Portugal

Germany

Lithuania

Latvia

CyprusFrance

Bulgaria

RomaniaHungary

Poland

ItalySpain

r2 = 0.60*

Ireland

Belgium

Exhibit 11

There is a correlation between womens share o the total volume o hours workedand the presence o women in the companys top echelons

Exhibit 1

The public policy requirements vary rom one country to another

Work-life balance(Childcare, family support, employment rate of mothers)

Gender equality(Board representation,

female employment

rate, working hours,

wage gap)

Even the best-placed

countries are a long

way from parity

Pro-egalitarian

Sweden

Norway

Finland

GermanyFrance

UK

Belgium

Spain

Non-interventionist

Pro-familyTraditional-conservative

AustriaNetherlands

Italy

Portugal

Source: Eurostat; OECD; McKinsey

Margin for progress

Hybrid forms

European countries typology


21/28

WOMEN MATTERi 19

Pursuing tried and tested initiatives

within the workplace

To learn more about the most eectiveinitiatives, we interviewed a dozencompanies notable or the progress theyhave made in womens participation in theboardroom and in top management. From

their insights, we have dened our bestpractices or the development o genderdiversity.

There are no miracle solutions or gender

diversity; you just have to keep plugging

away with the tried and tested measures

HRD o a telecom group

FOUR BEST PRACTICES FOR ACHIEVING GENDER DIVERSITY (Exhibit 13)

Creatng and montorng gender dversty ndcators s the rst step towards achevng any change.

The man ndcators nclude: the proporton o women n the companys varous busness lnes, at

each level o management, and among new recruts; pay levels and

attrton rates between men and women n smlar unctons; the rato

o women promoted to women elgble or promoton. Montorng such

perormance ndcators should rase awareness about the magntude

o the gaps to be closed wthn the organsaton; t should also serve as a tool or denng and

drectng prortes or acton.

Quotas are not regarded as approprate, as ther secondary eects are vewed as unacceptable

by our ntervewees.

Some ndustral rms, or nstance, whch have dculty attractng women, have decded to make

womens recrutment a top-prorty lever, even gong so ar as to commsson publc normatoncampagns. One such company s iBM, whch has been organsng presentatons n prmary and

secondary schools to make grls, and ther teachers, aware o careers n scence and technology.

One thousand French secondary and hgh-school pupls beneted rom ths ntatve n 2006.

1 - Create transparency by implementing gender diversity KPIs

Recruiting women under an obligation

would be disastrous

CEO o an ndustral corporaton


22/28

0 iWOMEN MATTER

Two types of measure are required:

nFlexible working hours. Flexblty (e.g. remote workng, part-tme work, fextme) s not a women-only polcy, but should orm part o the general development o the companys busness model,

requrng the company to nvestgate how to adapt ts organsaton

and culture. At a practcal level, actors such as property costs

mght encourage companes to make workng rom home a general

opton, ntroducng a number o moble oces. The nancal benet or the company tsel

would come on top o the benet such a move would brng to ts employees.

nCareer fexibility and support durng breaks not just or one day, one week or one yearbut throughout a career. The act that women tend to take career breaks needs to be taken

nto account to prevent any negatve mpact on ther career paths or pay. 58% o emale

graduates questoned by Harvard sad ther careers were not lnear and only 5% o women

lookng to return to work ater a break want to go back to ther prevous employers13. Ths gves

a measure o just how ar busness needs to change.

Maternty leave s the bggest career break, and needs actve management to ensure that

women go back to work. The companes that manage maternty leave best retan contact

throughout the perod, have personal meetngs beore and ater to ensure ther employees are

properly rentegrated nto the workorce, and keep a watchul eye on pay rses and bonuses n

the years ollowng return. Some companes go even urther, sendng ther managers brochures

explanng what to do, or producng dedcated tranng modules.

- Implement measures to acilitate the work-lie balance

Flexible working hours should

not be restricted to women alone

Exhibit 1

Interviews with companies with signicant results in terms o gender diversity revealedour best practices

1. Gender diversity KPIs 2. Measures to facilitate

the work-life balance

3. Evolution of the HR

management process

4. Support to leadership

Promo-

tion

Recrui-

ting

Pay

levels

Women

%

Satis-

faction

Turn-

over

Training

Work-time

flexibility

Investigate how to

internally adapt the

companys

organisation and

culture

Career

flexibility

Support women

before, during and

after a break

5

2

3

4

1 Mentoring

Coaching

and training

Networking

Role models

Make sure recruitment

includes female candidates

and interviewers

1

Check that the appraisal

system is neutral and

performance centred

2

Support and individualize

career management3

Make sure women are onpromotion shortlists

4

Care forhigh-potential

achievers5

Source: McKinsey


23/28

WOMEN MATTERi 1

The pivotal role o the CEO

Interviews with companies that arechampions o gender diversity reveal thattheir eorts in this area amount to nothing

less than a cultural revolution. The changeprogramme must be set up as a companytransormation initiative in its own right,and driven by top management. Practiceswill not develop unless top managementis convinced that diversity brings acompetitive advantage, and commits toimplementing change, under the leadershipo the CEO. Almost all the companies inour study that have succeeded in pushingthrough genuine change beneted rom thepersonal commitment o the CEO.

PriceWaterhouseCoopers observes thatgender diversity makes signifcant progressin those subsidiaries where the managingdirector gets personally involved in thetopic.

To persuade managers o the need to act,Barclays organises monthly breakastmeetings at which women leaders telloperational managers about the barriersthey have had to ace in the course o their

career.

I have mentored many women in my career.

I challenged them; they began to think in a

more ambitious way. Today they have moved

into very senior positions

Vce-Presdent Europe o a leadng global

healthcare company

At the same tme, companes must ensure that ther recrutment, apprasal and career

management systems do not hold women back n ther proessonal development. The process

or dentyng hgh-potentals oten ocuses exclusvely on managers between the ages o 28 and

35; to avod potental optng outs, or nstance, t could be altered to ncorporate more fexble

crtera, such as the number o years o servce n the company, n order to make allowance

or perods o maternty leave. Lookng beyond the reengneerng

o processes needed, human resource unctons have an essental

role to play n senstsng ront-lne managers and spottng potental

women canddates. When t comes to promoton, many managers

now suggest havng at least one woman on every shortlst. Some

rms, such as JP Morgan, have organsed tranng or recruters and

operatonal managers to make them aware o the mportance o dversty and to denty prejudces

that aect ther decsons. Fnally, the company must be n a poston to oer personalsed career

paths, n order to retan the best talent. Flexblty n the management o human resources goes

hand n hand wth fexble workng tme, as advocated above.

Coaching, network-building and

mentoring programs can be highly

eective in enabling women to

manage their careers in a male-centric

environment

Fnally, women need help to master the company codes. Coachng, network-buldng or mentorng

programs can be hghly eectve n rasng womens awareness o the lmtatons they mpose on

themselves and enablng them to manage ther careers n a male-centrc envronment.

The FTSE-100 Cross-Company Mentorng Programme n the UK and

the comparable CAC 40 programme n France brng emale hgh-fers

together wth the heads o the bggest corporatons n the country, to

provde the women wth both mentorng and new career prospects.

Women also need to be made aware o the vtal mportance o

networkng. Settng up womens networks wthn the company senstses women to ths act,

and creates opportuntes or broader proessonal exposure, whle also rasng the prole o

emale leaders n the organsaton, whch s essental n helpng young women to denty wth

role models.

By motvatng women and acltatng ther development, these ntatves are oten remarkably

successul n retanng and even expandng the emale talent pool wthn companes.

Many companes, reluctant to ntroduce measures that concern women exclusvely, broaden such

ntatves to cover the entre workorce.

4 - Help women master the dominant codes, nurture their ambition

- Adapt the human resources management process

No one size ts all ... its always got

to be tailored, case by case, or menand or women

Charwoman o the board o a holdng

o an nternatonal company


24/28

iWOMEN MATTER

Conclusion:

Going

urther?

Our interviews with senior civil servants,politicians, and the men and women at theoreront o business have revealed areasthat our study does not cover but that needto be properly addressed i we really wantto achieve the mindset revolution needed tospeed up change. Two main areas requireconsideration.

The rst is education. In some elds engineering and management in particular women are under-represented and arethereore deprived o a large number

o potential jobs, especially in topmanagement. We must look at how togive career advice greater prominence insecondary schools, so as to improve accessto these elds at tertiary level (especiallyEuropean MBAs and engineering schools)and also to the jobs they lead to. Itmight also be appropriate to redesigntop executive proles in order to enablecorporate leadership positions to bereached via other career tracks than thosecurrently in avour. Finally, a challenge

even urther upstream would be to changethe binary perception o mens jobs andwomens jobs at a very early stage ochildhood.

The second area or consideration relates tomodels o amily balance. The traditionalsocial pressures on men to be breadwinnersare not so strong in the younger generation,which has greater reedom o choice and amore balanced distribution o roles withinthe household. Nevertheless, some work

remains womens work or which womenare totally responsible and ace all relatedconstraints. For example, motherhoodmakes mothers vital to the well-being otheir babies and, as we have shown, thislimits their career choices and prospects.Men enjoy greater reedom. In seeking tocreate a balance in the work environment,should we not also encourage and enable adierent, more equal balance at home?

In conclusion, it is only air to acknowledge

that we have come a long way in thequest or gender diversity in business. Butbusiness cannot meet this challenge alone.That will require concerted, concrete,repeated action upstream o working lie atall levels o society and in all institutions,by individuals and by groups. Slowly thiswill create the cultural and organisationalbasis or change.

Very ew women study engineering so veryew apply or the engineering positions I

oer and thereore I hire very ew women

CEO o a company n the transportndustry

I you let things happen naturally,

women may not rise in the organisation ...

Its not an easy task but it can be done and

we can change the proportion o women

and men in the organisation i we really

want to do it. It takes time to get it right.

You are bound to have the strategy and

the commitment. You can never let go!

Vce-Presdent Europe o a leadng global

healthcare company

Everyone makes the decisions in

his or her own lie. What they have to

decide is: What do I want to accomplish

with my lie, my time and my career?

What do I eel comortable with? This is theone lie that I have. How am I going to spend

it?

Ex-presdent o a European country


25/28

WOMEN MATTERi

1 Share o women n tertary students, EU-27, Eurostat (2004)

2 Employment rates, EU-25, Eurostat (2005)3 Report on equality between women and men, 2004 data, European Commsson (2006)

4 Chires cls 2006, lgalit entre les emmes et les hommes, data or 2003 (share o women) and 2004(pay gap), Servce des Drots des Femmes et de lEgalt (2006)

5 European Commsson statstcs, Executve Boards (2006)

6 A statistical view o the lie o women and men in the EU-25, data or 15 countries, Eurostat (2006)

7 Women in Leadership: A European Business Imperative, Catalyst-Conerence Board (2002)

8 Le parcours proessionnel des diplms des Grandes Ecoles : regards croiss hommes / emmes, ipsos / GEF(2007)

9 More women at the top : The Impact o Gender Roles and Leadership Style, Alce H. Eagly, n Gender: FromCosts to Benets, ed. U. Pasero, Wesbaden: Westdeutscher Verlag, 2003, pp. 151-169

10Women and the MBA: Gateway to opportunity, Catalyst (2000)11Women in Leadership: A European Business Imperative, Catalyst Conerence Board (2002).

12 Le parcours proessionnel des diplms des Grandes Ecoles : regards croiss hommes / emmes, ipsos /Grandes Ecoles au Femnn (2007)

13The Hidden Brain Drain - O Ramps and On Ramps in Womens Career, Sylva Ann Hewlett, Carolyn Buck Luce,Peggy Schller, HBR Research Report, Harvard Busness Revew 83 (March 2005): 31-57

14 Altema, publ. Ress. Accordng to the study Think tank: marketing to women, by Peter Crush, 83%o consumer goods purchases n the US are made by women

15 Nssan

16 Estmate based on the number o people between 15 and 74 wth iT sklls, accordng to OECD statstcs

17Cost and Eectiveness o Diversity, European Commission, 200318Executive Women and the Myth o Having It All, Sylva Ann Hewlett, Harvard Busness Revew 80 (Aprl 2002):

66-7319A Wake-Up Call or Female Leadership in Europe, McKnsey & Company (June 2007), Clauda Funke,

Anke Domschet , Katrn Suder

Sources


26/28

4 iWOMEN MATTER

Pascal Baumgarten is an Associate Principal in the Paris oce o McKinsey &Company. He works mainly or insurance and social-sector companies on organisationand change management issues. Prior to joining McKinsey in 1998, he worked ininvestment banking and electronics.

Pascal Baumgarten graduated rom lcole des Hautes tudes Commerciales.

Sandrine Devillard-Hoellinger is a Principal at McKinsey & Company in Paris. Sheis one o the core leaders o the European Retail practice. Since joining McKinsey in1993, she has worked in numerous European countries and in Asia. In addition to clientwork, Sandrine Devillard is co-leader oMcKinsey Women in EMEA and sits on the

International Advisory Board o the Womens Forum or the Economy & Society.She graduated rom lEcole des Hautes Etudes Commerciales in 1993.

Georges Desvaux is a Director o McKinsey & Company. Based in Paris, he worked

in our Beijing oce rom 1999 to 2006. In China, Georges Desvaux advised Chinesestate-owned enterprises, designing corporate portolios, restructuring organisationsand processes. In France, he advises companies in the high-technology, transport, andconsumer goods industries. He is also an expert in marketing. A member o our globalpeople committee, he leads our talent development in France. He ounded McKinseysAsia House in Frankurt, which develops our Asian consultants in Europe.

Georges Desvaux holds degrees rom Ecole Centrale de Paris, and an MSc rom MIT.

Authors

Additional contributors

McKinsey & Company France

Hlne Chatillon, Business Analyst

Ccile Kosso, Communications Manager

Chantal Pommier, Communications Advisor

Brigitte Brami, Computer Graphics Designer

Womens Forum or the Economy & Society

McKinsey & Company Germany

Claudia Funke, DirectorDr. Katrin Suder, Principal

Anke Domscheit, Engagement Manager

authors o A Wake-Up Call or Female Leadership in Europe (2007)

Amazone Euro Fund

Marc Cattelani, Co-Founder

Nicolas de Malzieux, Co-Founder

and their teams

The McKinsey Quarterly Survey team

Acknowledgements

To all the companies we interviewed or this study


27/28

W

omen

Matter


28/28

Copyright 2007 McKinsey & Company, Inc.

Women Matter 1 Brochure

Documents

Transcript of Women Matter 1 Brochure