Womenomics - Feminist management theorists are flirting with some dangerous arguments

Illustration by Brett Ryder
The Economist - Schumpeter Dec 30th 2009 | from PRINT EDITION
Womenomics
Feminist management theorists are flirting with some dangerous arguments

THE late Paul Samuelson once quipped that “women are just men with less money”. As a father of six, he might have added something about women’s role in the reproduction of the species. But his aphorism is about as good a one-sentence summary of classical feminism as you can get.

The first generations of successful women insisted on being judged by the same standards as men. They had nothing but contempt for the notion of special treatment for “the sisters”, and instead insisted on getting ahead by dint of working harder and thinking smarter. Margaret Thatcher made no secret of her contempt for the wimpish men around her. (There is a joke about her going out to dinner with her cabinet. “Steak or fish?” asks the waiter. “Steak, of course,” she replies. “And for the vegetables?” “They’ll have steak as well.”) During America’s most recent presidential election Hillary Clinton taunted Barack Obama with an advertisement that implied that he, unlike she, was not up to the challenge of answering the red phone at 3am.

Many pioneering businesswomen pride themselves on their toughness. Dong Mingzhu, the boss of Gree Electric Appliances, an air-conditioning giant, says flatly, “I never miss. I never admit mistakes and I am always correct.” In the past three years her company has boosted shareholder returns by nearly 500%.

But some of today’s most influential feminists contend that women will never fulfil their potential if they play by men’s rules. According to Avivah Wittenberg-Cox and Alison Maitland, two of the most prominent exponents of this position, it is not enough to smash the glass ceiling. You need to audit the entire building for “gender asbestos”—in other words, root out the inherent sexism built into corporate structures and processes.

The new feminism contends that women are wired differently from men, and not just in trivial ways. They are less aggressive and more consensus-seeking, less competitive and more collaborative, less power-obsessed and more group-oriented. Judy Rosener, of the University of California, Irvine, argues that women excel at “transformational” and “interactive” management. Peninah Thomson and Jacey Graham, the authors of “A Woman’s Place is in the Boardroom”, assert that women are “better lateral thinkers than men” and “more idealistic” into the bargain. Feminist texts are suddenly full of references to tribes of monkeys, with their aggressive males and nurturing females.

What is more, the argument runs, these supposedly womanly qualities are becoming ever more valuable in business. The recent financial crisis proved that the sort of qualities that men pride themselves on, such as risk-taking and bare-knuckle competition, can lead to disaster. Lehman Brothers would never have happened if it had been Lehman Sisters, according to this theory. Even before the financial disaster struck, the new feminists also claim, the best companies had been abandoning “patriarchal” hierarchies in favour of “collaboration” and “networking”, skills in which women have an inherent advantage.

This argument may sound a little like the stuff of gender workshops in righteous universities. But it is gaining followers in powerful places. McKinsey, the most venerable of management consultancies, has published research arguing that women apply five of the nine “leadership behaviours” that lead to corporate success more frequently than men. Niall FitzGerald, the deputy chairman of Thomson Reuters and a former boss of Unilever, is as close as you can get to the heart of the corporate establishment. He proclaims, “Women have different ways of achieving results, and leadership qualities that are becoming more important as our organisations become less hierarchical and more loosely organised around matrix structures.” Many companies are abandoning the old-fashioned commitment to treating everybody equally and instead becoming “gender adapted” and “gender bilingual”—in touch with the unique management wisdom of their female employees. A host of consultancies has sprung up to teach firms how to listen to women and exploit their special abilities.

The new feminists are right to be frustrated about the pace of women’s progress in business. Britain’s Equality and Human Rights Commission calculated that, at the current rate of progress, it will take 60 years for women to gain equal representation on the boards of the FTSE 100. They are also right that old-fashioned feminism took too little account of women’s role in raising children. But their arguments about the innate differences between men and women are sloppy and counterproductive.

People who bang on about innate differences should remember that variation within subgroups in the population is usually bigger than the variation between subgroups. Even if it can be established that, on average, women have a higher “emotional-intelligence quotient” than men, that says little about any specific woman. Judging people as individuals rather than as representatives of groups is both morally right and good for business.

Caring, sharing and engineering

Besides, many of the most successful women are to be found in hard-edged companies, rather than the touchy-feely organisations of the new feminist imagination: Areva (nuclear energy), AngloAmerican (mining), Archer Daniels Midland (agribusiness), DuPont (chemicals), Sunoco (oil) and Xerox (technology) all have female bosses. The Cranfield School of Management’s Female FTSE 100 Index reveals that two of the industries with the best record for promoting women to their boards are banking and transport.

Women would be well advised to ignore the siren voices of the new feminism and listen to Ms Dong instead. Despite their frustration, the future looks bright. Women are now outperforming men markedly in school and university. It would be a grave mistake to abandon old-fashioned meritocracy just at the time when it is turning to women’s advantage.

from PRINT EDITION | Business

Fixing the Economy? It's Women's Work.

washingtonpost.com > Opinions > Outlook & Opinions
Fixing the Economy? It's Women's Work.
By Katty Kay and Claire Shipman
Sunday, July 12, 2009

While the pinstripe crowd fixates on troubled assets, a stalled stimulus and mortgage remedies, it turns out that a more sure-fire financial fix is within our grasp -- and has been for years. New research says a healthy dose of estrogen may be the key not only to our fiscal recovery, but also to economic strength worldwide.

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 Washington with female lawmakers to argue a provocative bottom line: Companies with more women in senior management roles make more money. The latest issue of Foreign Policy magazine sweepingly predicts the "death of macho." Economists at Davos this year speculated that the presence of more women on Wall Street might have averted the downturn. Adding to this debate is the fact that the laid-off victims of this recession are overwhelmingly men.

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 University, that document a clear relationship between women in senior management and corporate financial success. By all measures, more women in your company means better performance.

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 University of Pittsburgh and Cambridge University, among others, finds that some of those differences are intrinsic, thanks to hormones.

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 University of Michigan, uses mathematical models to demonstrate that a diverse group will solve a complicated business problem better than a homogeneous group. In fact, diversity is even more important than expertise. In other words, a bunch of white male brainiacs won't usually reach the best conclusions.

There's a sound business reason why Norway now mandates that corporate boards be 40 percent female. Why Iceland, after its embarrassing financial mess, put major banks and its government in female hands. And why Hermes, the only French company to outperform expectations during the recession, also has, you guessed it, a management structure dominated by women.

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 America for seven years to raise her children. Her return is a singular achievement, but it suggests a future in which careers can move in waves, not straight up, or straight off of, a ladder.

Corporate America, take the first step toward economic recovery. Open your minds and offices to new ways of working and succeeding. Not because you are nice guys -- but because it will help the economy and your bottom line.

womenomics@gmail.com

Katty Kay is a Washington anchor and reporter for "BBC World News America." Claire Shipman is the senior national correspondent for ABC's "Good Morning America." They are the authors of "Womenomics."