Strategy& conversation: On women in leadership

Sabine and Annabelle met virtually to discuss gender roles, getting women into leadership, and the current state of diversity in the automotive industry.

Annabelle: Although studies suggest a positive monetary impact of around 25 percent in revenues in companies with diverse management teams, a recent Strategy& survey found that more than a third of executives in the automotive sector are skeptical about encouraging a higher proportion of women in management. I have to admit I was very surprised by the result. From most research, it is becoming increasingly clear that men and women would like their roles to converge more and more in order to achieve gender equality. Sabine, what do you think is the reason for this skepticism that our survey unveiled?

Sabine: The automotive industry has followed the same pattern for decades. “Engineered in Germany” was a real brand. Suddenly, its business model is changing massively. For engineers, this often means: If my classic business model, which has supported my personal success for decades, is no longer effective, then I experience it as a direct attack…on my competence and my career opportunities. Additionally, if leadership positions for women are now being increased to 25 percent, which e.g. is the case at Daimler, then some men may actually perceive it as a kind of offense. This in my opinion explains the rather negative attitude that is expressed in this study. I believe, however, change in the automotive industry is inevitable. The automobile will be different in the next few years and decades, and ultimately, the composition of job profiles in this industry will also change. And this makes more diversity possible.

Annabelle: Every discussion about diversity that is conducted publicly makes a difference, I believe. But the conversation should also inspire male executives to say, “Hey, this is also good for me — from an economic point of view, but also from a social perspective.” Are there any industries from which the automotive sector can take guidance for this development?

Sabine: This applies to all industries where business models are changing rapidly. The tech industry, for example, had women in top management back in the early 1990s. This has to do with the fact that technologies have a corresponding innovation boost and business models can also change very rapidly. What does that mean? Those — men or women — who can adapt to the changed conditions will have lasting success in such organizations. My achievement counts, not my age, gender, skin color, or background.

Annabelle: That’s a beautiful thought. The tough thing is: Prejudices exist not only on paper, but above all in our heads. We all like to think in boxes to make everyday life easier. When it comes to the issue of role allocation and equality, it is also a hurdle to overcome unconscious prejudices. For example, if I ask someone to think of a boss, most will automatically think of a man.

Sabine: In order to overcome prejudices in people’s heads, I believe one needs positive role models, especially from large corporations. Increasing public pressure also helps setting precedents, such as the 30 percent quota of women on supervisory boards of publicly listed companies in Germany. The annual AllBright report, which highlights companies that don’t follow diversity goals, also adds pressure. The quota alone does not change everything. But it creates the basis for women to have the chance to break down prejudices. The decisive factor, however, is that things will only change if the CEO makes diversity a top priority. When companies then report on their successes, social change can happen.

Annabelle: My point of view is slightly different. I believe women and men need to foster change themselves. One should not rest on what companies and politics are doing to change traditional gender roles. Women need to actively demand equality. But so do men: They also have the option of e.g. taking just as much parental leave as women. Even if equal parental leave is not yet the norm, men who would like to make use of this option should consciously and visibly stand by their decision and thus create new role models among colleagues and friends. One has to make sure that there are examples out there and not wait for them to come from elsewhere.

Sabine: I like your hands-on approach. The current pandemic has amplified the public debate about gender roles again. Especially with regard to working from home and family responsibilities. Personally, I believe the end of the previous office culture offers massive opportunities for women because long working hours spent in the office are actually a thing of the past. Companies have all noticed that — wow — people actually do work from home. As a result, women have a greater chance to organize their work themselves with greater flexibility. What do you make of the current debate about gender roles?

Annabelle: I do actually see a risk of gender roles caused by the pandemic. The public debate should not only look at whether e.g. the current school and nurseries’ closures are a risk for women and that women now also need time for homeschooling. The conversation should actually be around parents — mothers and fathers at the same time. It’s up to all of us to raise our awareness and think, hey, is that really a debate centered on women? Don’t we have to create offers and opportunities for parents in general, so they can fit everything into this new schedule?

Annabelle: Sabine, to conclude our conversation — what do you think needs to happen to drive the debate about gender equality and diversity forward? Do the responsibilities now lie with companies, government, the media, or each individual?

Sabine: It is indeed an interplay between the various actors. In my opinion, government must introduce clear parameters and make them law. From companies, we need a clear commitment to diversity from the CEO, with very clear KPIs [key performance indicators] and programs for implementation. I see the media’s role as naming positive and negative examples and increasing the pressure. Women themselves should actively take on management tasks, but also share their successes. That means leading by example — if I am a successful leader, then it is also my job to encourage and promote young women on their way through active mentoring. And one player that we haven’t even mentioned so far is financial investors. Stockbrokers can communicate clear expectations to management and give positive examples. This is happening in the U.S. right now. Investors are now starting to base their investment decisions on whether the company is diversely managed or not. This has to be taken much more seriously here in Europe, too. Only when the pressure is massive, something will change.

Annabelle: That’s an excellent point. Sustainability for instance was placed higher on the agenda because the E.U. has set specific goals that promote it. There are also ETFs [exchange-traded funds], for example, that list sustainable companies. Similar approaches could also set clear incentives for diversity. However, I agree, there is an interplay and the actors are interlocked. For me, the most important aspect is that diversity goals are set clearly, and that they are being monitored thereafter.

Sabine: Progress is happening, and I am positive that the debate is going in the right direction — with a women’s quota at management boards being introduced in Germany (as a first step). It would be wonderful if it became part of everyday life for companies to have a female CEO - or a male CEO with a diverse background: Since diversity does of course not only entail women or men, but the willingness to accept different generations, or people with a migration background or different sexual orientations. This should also be reflected in companies. Annabelle, what are your hopes for the future?

Annabelle: As exciting as this exchange is, I hope that such conversations will no longer have to be conducted in the future, simply because diverse management teams in companies will be part of everyday life. I wish for a future that no longer needs to address questions like “As a woman, you how did you get there?” or “Why do you promote diversity as a man?”