By Katty Kay and Claire Shipman
The sexy new discussion in policy circles around the world, thanks to the recession, is whether a significant shift of power from men to women is underway or whether it should be. Accounting giant Ernst & Young pulled out charts and graphs at a recent power lunch in
All those right-brain skills disparaged as soft in the roaring '90s are suddenly 21st-century-hot, while cocky is experiencing a slow fizzle.
The numbers make a compelling case. The studies Ernst & Young rounded up show that women can make the difference between economic success and failure in the developing world, between good and bad decision-making in the industrialized world, and between profit and loss in the corporate world. Their conclusion: American companies would do well with more senior women.
And it's not only one study, but at least half a dozen, from a broad spectrum of organizations such as Columbia University, McKinsey & Co., Goldman Sachs and
Pepperdine found that the Fortune 500 firms with the best records of putting women at the top were 18 to 69 percent more profitable than the median companies in their industries. McKinsey looked at the top-listed European companies and found that greater gender diversity in management led to higher-than-average stock performance.
Is there a magic number of women? In some cases, it's just three. Catalyst, a research firm focused on women and business, found that Fortune 500 companies with three or more women in senior management positions score higher on top measures of organizational excellence. In addition, companies with three or more women on their boards outperformed the competition on all measures by at least 40 percent.
It's time to admit the obvious. Men and women are different, and our management styles are different. Research by the
Gender stereotypes aren't politically correct, but the research broadly finds that testosterone can make men more prone to competition and risk-taking. Women, on the other hand, seem to be wired for collaboration, caution and long-term results.
According to a 30-year study of fund managers released last month by the National Council for Research on Women, female investors and professional money managers used more measured strategies. They didn't take huge risks, but they also didn't lose big. Their returns were consistent. Men took larger risks and wound up with results that varied more widely. A study by the French Fund association found that funds managed by women had more consistent results over one-year, three-year and five-year measurements. Female-managed funds weren't usually top performers, but they were never at the bottom.
Whatever the future, we hardly need to explain why, after all the trouble the testosterone-infused Wall Street culture brought us, a bit of that caution would be a healthy ingredient in our financial mix.
If that all seems too touchy-feely for left-brainers, here's more hard math. The "diversity prediction theorem" is part of the most cutting-edge thinking about best business practices. Scott Page, an economist at the
There's a sound business reason why
Americans aren't so enamored of social engineering, of course, so how do we get to that profitable mix? To us, the answer is clear. Professional women have been leaving the workplace in droves, and we need to stop the brain drain. Recent studies show that almost a third of professional women opt out at some point in their careers and, strikingly, that MBAs are more likely than lawyers or doctors to choose to stay home with their children.
Beyond a certain point, many women find that the costs to family of a high-octane career are just too great. We need to recognize that the glass ceiling is in part a self-imposed, defensive perimeter. But we can't afford to have women take themselves out of the running for top slots. And the only way to prevent that is changing the workplace to allow us the freedom to fit in our personal lives.
Luckily, that freedom makes economic sense, too. That's why companies such as Wal-Mart, Capital One, Best Buy, Sun Microsystems and Sara Lee, to name just a few, say they have glimpsed the future of work and have decided it's an extremely manageable place. They've discovered that allowing people to work the way they want from home; at night; from the sidelines of the soccer field actually increases productivity. Best Buy found that changing the work rules boosted productivity by an average of 40 percent.
And though progress is slow, women are negotiating nontraditional paths to senior management. Witness Sara Lee's chief executive, Brenda Barnes. As a PepsiCo executive vice president, she left corporate
Katty Kay is a