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Knowledge@Australian School of Business

Women and Leadership: Putting Unconscious Bias Top of Mind

Published: May 10, 2011 in Knowledge@Australian School of Business
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In 2006, when Sally Macdonald became the first female chief executive of luxury goods company OrotonGroup, her appointment could have been seen as risky. She had no high-level operational experience, having come to the company as a consultant, previously having worked for the Boston Consulting Group. However, she had also managed a part of clothing brand Gap's business that was larger than OrotonGroup when she was the assistant buyer for Banana Republic's US$300 million women's suits and separates business. "But it's a very different prospect managing all parts of a small operation compared to one part of a large operation," observes Macdonald.

At the time, the ASX-listed company had made a A$9 million loss in a bull market and Macdonald was faced with making half the workforce redundant and selling off non-core parts of the business - well-known labels such as ALDO, Marcs and Morrissey. She could have been viewed as facing "the glass cliff", a syndrome identified in a 2005 British Journal of Management article, which proposed that women tend to be placed in risky situations when promoted to senior leadership positions. If things then get worse, onus for the failure is placed on gender. Former Hewlett-Packard CEO Carly Fiorina, who was the first woman to lead a Fortune 20 company, is a high-profile case in point. However, Macdonald's strategy worked. Four years on, the picture for OrotonGroup is very different. In 2009/10, in an uncertain retail environment, the group posted after-tax profits of A$23 million and analysts fete Macdonald as a star retail operator. Not a bad result for a CEO with no track record at the executive table.

Female CEOs are a rare breed in Australia, particularly at the very top. The nation has the lowest percentage of women in top business roles compared with the UK, the US, Canada, South Africa and New Zealand. A 2010 census by the Equal Opportunities for Women in the Workplace Agency (soon to be the Workplace Gender Equality Agency) reveals just six female CEOs in the top 200 companies where women hold a mere 104 of 1300 key executive positions. This does not bode well for efforts to get more women on to the boards of publicly listed companies, as former senior executives tend to make up the majority of board directors.

Why are women executives so woefully under-represented in Australia? Certainly inequitable pay is seen to be a contributing factor. The federal government is doing its part to right the imbalance. In March this year, the Minister for the Status of Women, Kate Ellis, announced that workforce pay equity is to be enshrined in the Equal Opportunity for Women in the Workplace Act. Businesses will be required to report on pay equity, allowing the federal government to measure progress.

Among other reforms, businesses are to report on the gender composition of their organisations and their boards, as well as on their employment conditions, and whether they have flexible work practices for men and women. They will also need to report tangible outcomes of workplace gender equity plans. CEOs and employee representatives will be required to sign off on the reports, which must be provided both to employees and shareholders. The first reports under the new system are scheduled for 2013.

Lack of a national paid maternity scheme has long been seen as an issue impeding women's progress, with Australia lagging behind advanced economies, including Sweden, the UK and New Zealand. But this situation was remedied in January 2011 with the introduction of the first national paid parental scheme. However, this is unlikely to contribute to a boost in senior female executives, as many large companies have run their own paid schemes for years, as have government departments and agencies.

Someone Like Me?

Is Australia's poor track record on gender equity down to unsupportive corporate environments or does the corporate hierarchy believe that women do not have what it takes to run a major company? Sally Macdonald dismisses the notion that Australian business has a lack of confidence in senior women executives, but admits that in this country "like hires like". She believes there's an unconscious bias towards leaders of a certain age, gender and race. "We all have to be aware of that bias and realise that leaders come in all sorts of shapes and sizes, it's ability that counts," she says.

Unconscious bias, whether it concerns gender, ethnicity or age, is hard to measure. It is one of the great "known unknowns" in business today, but there's nothing new about the concept. "We've always known it's there and seen it as a key barrier," says Colleen Harris, executive general manager of human capital strategy at National Australia Bank.

In the past, diversity specialists examined data on the composition of teams and new hires for bias, but new thinking suggests the only way to tackle the issue is through direct conversations with individual managers or teams about their attitudes and values around diversity. Unconscious bias is now part of the broader diversity language. Comprehensive research on the topic has been conducted and practical methodologies and tools have been created to tackle the issue.

NAB is piloting such a tool, not specifically concentrating on gender but taking a pan-diversity approach. Harris says the results to date show gender bias and she's not surprised. "It's part of the picture and we would expect that. Our starting point is that `everyone has unconscious biases and that's okay'. Clearly if you are holding up a mirror to individuals or groups, in order for them to be willing participants and not feel confronted, it's very important that this issue is communicated in the right way." Certainly, human resources professionals feel that there is a lack of understanding of the issue. Gender Equity in the Workplace, a recent survey by the Australian Human Resources Institute (AHRI), showed that two-thirds of 920 respondents did not believe managers and supervisors in their organisations were equipped to manage gender bias.

"Once you begin to engage in the idea and the language of unconscious bias, suddenly it becomes clear why and how it happens," according to Rosamund Christie, who heads a new AGSM Women in Leadership program that kicks off in August 2011. Understanding how unconscious bias works is a key theme in the course, in which OrotonGroup's Macdonald, along with Jillian Broadbent, director of the Reserve Bank, and Ralph Norris, CEO of the Commonwealth Bank, will be guest speakers. "Very few men know the advantages they have just by being a man in the workplace," says Christie. "When I'm running leadership courses with both sexes in the room, and I ask what part gender plays in the way they exercise leadership, the men haven't a clue what I'm talking about, whereas every woman in the room gets it." The idea behind the program is for participants to take the concept of unconscious bias back into their organisations and engage peers in an understanding of it. Two to three women are seen to be the tipping point to influence change in any organisation. "We see it as a partnership between these women and the senior people who nominate them for the course. But the discussions that take place on unconscious bias need to be constructive and that can only happen when women develop the confidence and capability for that discourse," Christie notes.

"Frankly it isn't best practice to have a separate program for women," says Rosemary Howard, head of AGSM Executive Programs. "You need diversity in those programs to get people to able to perform at their best going forward. However, we've decided this program is needed because of the grave situation of the lack of women at senior executive levels in Australia." The course aims to build women's capabilities to be much more self-aware and resilient in a range of leadership techniques.

Hard Work or Network?

There are many reasons why women fail to make the cut. For one, they may try too hard. Women who put in the hours, take on extra workloads and excel at what they do are less likely to get a seat at the senior executive table, according to Howard. "Women tend to think if they work really, really hard and are doing a good job then someone's going to notice and promote them. In fact, often the opposite happens. They are not demonstrating an ability to network and influence senior people – something that's required to go to the next level of management."

Women opt out of a career in the senior corporate echelons either because the environment does not promote them or because they do not have a sense of entitlement. Peter Wilson, AHRI national president, who ran the Business Council of Australia's mentoring program that paired 11 high potential women with CEOs from other top 200 companies, agrees, saying it's a particular issue once women have had children: "Some women report feeling disconnected when they return to work following maternity leave," he says. "It may be that the technology's gone through a major upgrade, or people, events and customers have all moved on." Wilson says there's been some discussion between mentors and mentees that the mentees are on the program because of the merit they have shown. "It's been made clear that if they've had a maternity break, the organisation has at least as large a role in supporting them to make the transition back," he says.

Many mentoring pairs have focused on influencing techniques, whether that is with the board or male peers. Some mentors have identified the need for media training and developing the more proactive presentation skills that are important in advancing to rarified executive levels. Certainly, there's a growing need for good talent management pipelines for high potential women inside companies. Companies have recognised this but few, outside the largest corporates, are actually walking the talk. AHRI's survey reveals that, while three-quarters of respondents say their organisation is supportive towards gender equity, only half of that number have taken positive action to effect that sentiment. "It's always good to have high-sounding principles, but the rubber isn't hitting the road, rhetoric isn't adequately matched by actions," says Wilson.

Women are seen to have a lack of confidence in their abilities and are less likely to put their hands up for promotion. "Research shows that women feel that they need to fit the role perfectly, whereas men are willing to put their hand up for a role where they may not tick some or all of the boxes," notes NAB's Harris. Several hundred female NAB employees will go through the bank's recently introduced organisation-wide Realise program for high-potential women. The scheme targets women managers who have the ability to become senior managers. "We've always taken the view that you can't just look at the top level of the organisation, but the female talent pipeline as a whole," Harris says.

As with other large corporations NAB has gender targets. The current senior executive level comprises 23% women and the target is to improve that to 33% by 2015. As for the talent pipeline, the target is 50:50 gender balance for graduate intake from 2012 onwards. Harris declares: "We don't claim to have solved the issue, but we have absolute intent to work on it until we have."

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