Thursday, May 24, 2012

What Was “New”?

So, what was “new” about the Women in the Boardroom event held May 22, 2012 in Los Angeles?

Sheila Ronning worked hard to elevate the content of the latest LA program, the "301 advanced event", and succeeded admirably. We’ve watched many other groups “compliment” Women in the Boardroom by emulating the basic program, even to the questions asked of panelists.  Yesterday’s WIB event took it up a notch in the following respects.

First and foremost, of course, no panel would be complete without an excellent moderator, and Teena Hostovich of Lockton fit that bill perfectly. Just enough introduction to whet our appetites, and a steady hand on the questions, guiding us through the day’s event.

Two of the women panelists were corporate investors, which is a very strong path into the boardroom.  Kimberly Alexis, CFA, has a background as a financial expert and technology hardware analyst for major Wall Street firms. She founded her own investment firm, Alexy Capital, which invests in businesses and builds boards for same.  She serves and has served on major corporate boards largely because of her financial and technology acumen plus a reputation as a collaborative governance advisor.

Sharon Stevenson, co-founder and managing director of Okapi Venture Capital, with her focus on life science investments, came up the clinical path as a veterinary surgeon, and also acquired an MBA from the UCLA Anderson Graduate School of Management, a PhD in Comparative Pathology from UC Davis, and a Master of Science in Veterinary Pathology and Doctor of Veterinary Medicine from The Ohio State University.

The third panelist was Dr. Maria Klawe, president of Harvey Mudd College, former dean of engineering and professor of computer science at Princeton University and previously at the University of British Columbia, IBM Research in California, and University of Toronto.  Dr. Klawe’s impact has been significant on elevating the percentages of women in science, technology, engineering, and math (STEM) fields in undergraduate studies at Harvey Mudd, but also through her extensive leadership roles in academic and government organizations advancing educational opportunities for all.

Clearly, these are women who “love constant learning.”

The women elevated the concept of “networking” as building a reputation on a foundation of performance and delivery of valued results, rather than simple card-swapping or schmoozing. They redefined “mentoring” as speaking well about the women we know who perform outstandingly well. Interesting that many have been asked, “Would you mentor me?”  They suggested, instead, that women focus on what they could offer of value -- something that makes them “worth mentoring.”

Their stories re-affirmed the reality that many opportunities are serendipitous consequences, not entirely directly, of initiatives or actions or deeds taken many steps beforehand and often long ago.  The idea that we could chart a continuous, carefully-constructed linear path into the boardroom was replaced by the impression that good results take time to stew, that good deeds do mature into benefits, but that it may take more time and certainly less control, and much more sheer persistence, than we might have expected.

But, results happen. That is what matters. And it is especially impressive to see women in leadership so absolutely “comfortable in their skins,” so authentic in their delivery, and so open in their honest communications with the next generation of leaders who would follow in their footsteps.

Monday, May 21, 2012

A Definite Change in Tone

Jack Welch and Women Clash at WSJ Women in the Economy Forum: - May 4, 2012

How Women Can Get Ahead -- Advice from Female CEOs - May 18, 2012

There is a definite change in the tone of this exchange compared, say, to the clash that occurred in January 2005 when Lawrence Summers made his now infamous quote about alleged “innate differences” between men and women among top academic ranks. These comments from both Welch and some of the Women CEOs suggest we are finally beginning to focus on performance as the criterion of success for women as much as men.  

Interesting, too is that the 11 of the 18 current women CEOs of F500 firms interviewed by John Bussey pretty much agreed with Welch. “Their advice is practical. And notably, it echoes much—but not all—of what Mr. Welch had to say, albeit with a bit more nuance and finesse.”

One woman stated that now that she is in leadership, she has the capacity to make change happen from the inside. Heather Bresch, CEO of Mylan said, "What I found was that expectations of women were simply lower, and this resulted in being overlooked for certain opportunities. Now as a leader, I strive to create an environment different than the one I faced, an environment where good ideas can come from anyone—young, old, men, women, assistant, executive—and opportunities are open to everyone."

"The biggest myth that I'd like to set to rest is that women can't have a family and a successful career," says Ilene Gordon, CEO of Corn Products. "The skills that make a good business leader—organization, drive, trust, delegation and compassion—also go a long way to balance the responsibilities of work and family life."

It’s clear who, exactly, is perpetuating this myth.  In the video of Alan Murray’s interview with Suzy and Jack Welch, Suzy said that once her children reached the age when they could talk, they started to intimidate her by giving her a guilt trip about her leaving home.  She couldn’t stand it, so she stayed home. The most obvious comment would be that a woman who cannot train her own kids to develop positive expectations about her contributions as a professional probably would be challenged to lead adult employees through the very same briars of workplace mythology.

Even putting that aside, Bussey and Welch are “celebrating” the positive contributions women are making among leaders in the workplace.  That, all by itself, is a major change in the tone emanating from this debate.

Saturday, May 19, 2012

Constructing a Resource Base

If you are an entrepreneur, another “must read” research piece is this:  “From initial idea to unique advantage: The entrepreneurial challenge of constructing a resource base” by Candida G. Brush, Patricia G. Green, Myra M. Hart and Harold S. Haller (1 February 2001: Academy of Management Executive, pp. 64-78; Vol. 15, Issue 1).  If you’ve read my book, Women Leaders at Work, you will recognize the Brush-Green-Hart trilogy as the three women of the Diana Project. This is another example of their excellent collaborative research.

In summary, the article’s premise is “You can’t succeed alone. Here’s what you need to do.”

An entrepreneurial strategy to attain competitive advantage can only be accomplished if you develop and configure -- transform, literally -- existing resource strengths into a valuable and unique resource base. As an entrepreneur, you are alone, initially, until you recognize the wealth of resources that you have developed yourself to this point, that are available to you through your network, and that you potentially could attract to your endeavors.

The shortages you face too typically overwhelm at the beginning. You have:

            No customer base
            No reputation for performance
            No shared experience as a management team.

Most enterprises fail within 5 years due to lack of resources:

            Ineffectual management
            Under-capitalization
            Human failings
            Inability to attract or keep qualified personnel

Those enterprises that do succeed are the ones most adept at attracting basic resources:

            Money
            People
            Information

The “trick” is to know what you don’t know and get what you don’t have.

Brush, Green, Hart & Haller describe the successful path to resource development and value transformation.  Resources can be dropped into six “buckets:”

            Human
            Social
            Financial
            Physical
            Technological
            Organizational

First, it’s a case of knowing what you have now and what you need to grow and succeed.  Resources can be simple (tangible, discrete, property-based) which means they probably are easy to get, but limited in impact.  Complex resources, on the other hand (intangible, systematic, knowledge-based) hold a greater capacity to be transformed and combined to lead to a unique competitive advantage for the enterprise.

Second, it’s a case of knowing what resources directly solve problems versus those that could be leveraged for strategic advantage.  Resources can be utilitarian (machinery, trucks, office space) versus instrumental (like money, capable of generating other resources).

The more resources are developed at the simple, utilitarian levels, the more likely the enterprise will stay immature.  The more effectively resources are identified and gathered at the complex and instrumental stages, the more transformational they will be for the business’ strategic and competitive edge.

When resources become an integral part of the enterprise, combined and integrated well together, the company can perform or produce with greater effectiveness and efficiency.  When knowledge, skills, and enabling resources are “institutionalized” into the company’s operating routines and tacit knowledge banks, they become the core competencies that propel the company forward to “strategic wealth creation.”

The steps to this transformation are as follows:

1.         Assemble a team from the entrepreneur’s “personal resource endowment.” Who do you know who has the education, experience, reputation, and industry knowledge to complement your own?  Build a core team with the key skills to start the new venture.

2.         Attract resources needed to start up the trajectory.  “Use the time-relevant language or symbols… to create an image of success that will encourage providers to commit resources to the venture.” These language and symbols are business plans, pitches, prototypes, or offices/amenities that will prove sufficiently persuasive that you and the enterprise are credible.  Leverage these suggestive resources to attract substantive financial capital, assets, equipment, vendors, or customers.

An example is the formation of a credibility-building advisory board of experts in law, marketing, advertising, technology, management, or other specific functionality not yet within the enterprise.

3.         Combine resources based on the entrepreneur’s different beliefs about the relative or comparative value of resources and their potential returns to the firm.

4.         Transform personal strengths and resources into an organizational foundation on which the enterprise can build unique business advantage over all possible competitors.  The “institutionalization” of knowledge and skill resources is what transforms the venture into an entity capable of sustaining growth, complexity, and value.

As an entrepreneur, you must build a plan of action to construct a powerful resource base.  There are seven essential steps to this process:

1.         Resource specification: what do you have, what do you not have, what do you need?
2.         Quantity, quality and timing: what is the sequence of delivery and design of the “manufacturing process” or the essential assembly of resource components?
3.         Stage resource acquisition: when do you need what, how much do you need when?
4.         Avoid over- or under-estimating; fine tune the acquisitions
5.         Identify suppliers and providers and their comparative costs, timing, and reliability
6.         Use your core asset base to attract additional resources: reputation, capability, commitment, conduct and performance
7.         Transform: create organizational or institutional predictability by creating “formalized learning experiences” to produce value-extending strategies.

Entrepreneurs are in the business of making “something” out of “almost nothing.” But, from a core of credibility, intelligence, integrity, reputation, and a personal knowledge base, amazing and valuable resources can be attracted, grow, and thrive. That is the heart of entrepreneurship.

Tuesday, May 15, 2012

What the Hell Happened to Wal-Mart?

That’s a question I’d really like to ask the “magic three women” corporate directors at the retail giant.  Wal-Mart de Mexico, according to the New York Times report April 22, 2012 (http://tinyurl.com/6t4t8kq), allegedly became a bastion of corrupt foreign payments from possibly 2003 to 2005. That was “a long time ago,” responded the latest press releases explaining the fiasco from company communications executives.

Ok, so if it happened recently, that would be a bad thing, right?  Does that mean that the passage of time turns corrupt foreign practices into enhanced ethical compliance under the corporate Business Conduct Code?

Wal-Mart really has a problem when board member Aida Alvarez, small business and diversity expert, former cabinet member and graduate of Harvard University with two honorary law degrees, can’t keep the reins on guys like the leadership of Wal-Mart de Mexico, where they (again, allegedly) spent fortunes buying expedited permits to expand stores at an incredible pace over the years cited.  Didn’t anybody on the board with global experience marvel at the pace at which the firm was able to build out superstores?

M. Michele  Burns, Chairman and CEO of Mercer Human Resource Consulting, a subsidiary of Marsh and McLennan Companies, Inc. and Linda S. Wolf, former chairman of the board and CEO of Leo Burnett Worldwide, Inc., a division of Publicis Groupe S.A., weren’t much better in catching the alleged fraud.  Perhaps incoming board member, Marissa Mayer, Google Vice President of Search Products and User Experience, has the skills necessary to assess global risk.

The shareholder lawsuit filed May 3, 2012 by CalSTRS (see: http://graphics8.nytimes.com/news/business/walmart-shareholder-complaint.pdf) highlights the attempts by Maritza I. Munich, then general counsel of Wal-Mart International, to pursue the ethical path of an objective investigation -- to no avail. She pushed the board of Wal-Mart in 2004 to adopt a strict anticorruption policy barring all employees from “offering anything of value to a government official on behalf of Wal-Mart” and requiring every employee and every agent of the company to report the first sign of corruption. Munich left Wal-Mart in 2006 and is now Chief Legal Officer & General Counsel, Medical Card System, Inc. in Puerto Rico.

But, it takes leaders with spine to enforce strategic best practices from the board to the CEO to all of his direct reports, including the head of Mexican operations.  Didn’t the board wonder why suddenly some special efforts might be required to corral illicit foreign practices?  Aren’t women among independent directors supposed to be asking probing questions?

And where were the compliance officers among management?  How on earth could they miss the fact that the perpetrators of the fraud were given carte blanche to “investigate” their own misdeeds?  Doesn’t corporate counsel also discuss and analyze with the board of directors the risks associated with ongoing internal investigations?  How many people are asleep at the wheel among Wal-Mart senior leadership?  Maybe it is time for Mike Duke to leave. But, is there anyone in the C-suite ethically capable of taking on the task of cleaning these Augean Stables?

June 1, 2012 will be yet another opportunity for shareholders to speak up about the contemporary management ethos at Wal-Mart.  As with the case of the Doris Dukes class action lawsuit, the fundamental question is whether Wal-Mart is being led by an ethical tone at the top on the part of a cohesive leadership -- as envisioned by its founder, Sam Walton -- or whether Wal-Mart has degenerated into a collection of questionable fiefdoms with morally-challenged princes instead of well-trained and inspired management.  Is Wal-Mart the castle or the moat of crocs?

Vote your shares in the Bentonville, Arkansas proxy meeting. And vote your consumer conscience by driving to the ethical retail outlets in your neighborhoods and communities.

Monday, May 14, 2012

McKinsey & Company on Women’s Potential

McKinsey & Company studied the “women at work” in 2007 and updated that research in 2011 in their latest report, “Unlocking the Full Potential of Women at Work” (see:  http://www.mckinsey.com/Client_Service/Organization/Latest_thinking/Women_at_work)
The typical beaming faces of 81 women pictured on the cover of the report belies a more austere message in the pages that follow.

“Progress remains elusive” among US-based women in leadership at the 60 top tier companies (mostly Fortune 500) interviewed.

We beg to differ.  This latest report shows substantive differences over previous research.  Noteworthy is the focus on what happens to different women within the pipeline.

At the entrance, an amazing 325,000 women entered the pipeline at these 60 companies.  This is a positive reflection of the increased educational and employment opportunities in our modern economy.  About a third of these women (140,000) make it to midlevel management positions.  Then comes the challenge -- only about five percent of these (7,000) make it to the C-suite level as vice presidents or senior vice presidents. That is 2 percent of those who entered.

Predictably, McKinsey & Company diverts the discussion to “the barriers that hold women back” and to the unsupported attribution of “child-bearing challenges” as a dominant cause of the pipeline leakiness.  Since the research provides zero information on the age or family size of the women, the latter conclusion is speculation at best, unfounded at worst.

A new conclusion from this research is that some companies do succeed in increasing their C-suite percentages from the overall underperforming 19% levels to 36% to 40% by two methods:
one, they increase the size of their entrant pipeline (create a “fat” funnel) or, two, they reduce the trickle-out (create a “steady” funnel).

A crucial finding is the fact that women, more than men, tap out at the transition from “staff” or supporting/helping roles to the “line” or leadership roles where they would be responsible for P&L.  The “leak” begins at the director level (just above manager).  McKinsey & Company attributes the “leak” to barriers or failures of leadership in “helping” women successfully navigate that crucial transition.

But, McKinsey & Company, this year, goes on to report the thinking of “a lot of women [who] have successfully entered leadership ranks.”  And, they explicitly state that their interviews with 200 women executives “offered encouragement.”   Here are some of the lessons learned from the women in leadership:

            70% experienced accelerated progress early in their careers
            79% had line experience
            90% had significant sponsorship often while raising families (83%)

In other words, some women “get it.”  There was great diversity in the ways they “did it” too:  some were serial entrepreneurs, some worked their way up from the shot/store floor, some joined firms as functional experts (law, human resources, or communications) and then broadened that expertise to take on leadership roles.

“There was no one formula for a successful career.”

This part of the report is the absolute essential read:  how the women did it was not different from the way successful men accomplished leadership career goals:

            Results-oriented
            Robust work ethic
            Resilience
            Persistent in getting feedback
            Team leadership -- a desire to make people better, help them to stretch and grow.

Women with career aspirations that include entering the C-suite positions were “passionate about the company and their work.” “They saw leadership as the best way to make a big difference.”

Nevertheless, even among successful women executives, 51% stated they did not aspire to the C-suite.  Why?

Some said they “settled” for where they were, that their current position gave them “sufficient satisfaction” and that they “no longer aspired,” as before, to higher leadership positions. Some said they did not like what they saw ahead of them and concluded they would have to change --- too substantively -- to achieve the next rung.  Altering their “authentic self” was not something they were comfortable doing. 

Others wrapped the next level of advancement in the amorphous blanket characterization of “politics” which somehow suggests all things evil in organizations.  When pressed to elaborate, they used terms that said they believed executive ranks needed to be:

            More open
            More honest
            More authentic
            More team-oriented

As we know, “politics” simply is the term for “people and their inter-relatedness.” Yet, somehow a majority of women do not want anything to do with them.

So, something happens in the minds of even a significant percentage of successful women executives that persuaded them to abandon all things positive which had propelled them to this point.  “Abandon hope, all who would enter here.”

What happened?  Did the women try and fail at this point?  Did they get explicit messages from the C-suite occupants telling them something different from all that they had heard up to this point?  Did they run out of courage, perseverance, resilience, and work ethic?

Is it possible that all things corrupt and antediluvian dwell in and among the few who do occupy the C-suite?  Are all of our leaders so uninspiring that they only attract similarly undesirable clones among them?

If that were true, it would be incredibly appropriate that ethical, undaunted, executive women should aspire to take the reins from these demons and “make the change happen” that they perceive only leadership from the inside could accomplish.  If women believe they can bring out the very best in “people” -- populi -- then should not women be the very best ones to take on “the politics” that they see stifling a talented workforce -- themselves included?

What is there that persuades ambitious, resilient, results-oriented women to progress to the edge of the very goal line, but then stop abruptly and demand that “someone else” remove barriers, or sponsor them, or otherwise make it easy for them to accomplish that final score.  Why do women suddenly expect someone else to take over and give her the career goal satisfactions she seeks?

If demons exist in that political hotbed called the C-suite, what are the odds that they would suddenly become enlightened saviors, welcoming in those women who would dramatically upend the C-suite, making it more open, honest, team-oriented, and authentic?  How na├»ve could we possibly be?

I submit that we need to focus with far greater precision on this “inflection point” -- the point at which executive women change from rejecting that “recording [playing] in my head” (rejecting self-doubts about her capacity to alter her world positively) to that state where she now believes the negative messages and accepts the world as a hopeless, unalterable future.  What makes her suddenly refuse to challenge the negative messages now? Is she overly-satisfied? Where went her aspirations and motivations that were so encouraging -- up to this point?

Some women go on, continually succeeding and advancing.  Why are they different in their passage through this “inflection point?” What are THEY thinking?  To me, that is far more interesting and important than the thinking of leaders in place -- those who are not inspiring and those whom we hope ethical and authentic women will soon replace.

If authentic women would be true to themselves, nothing would stop them from crossing the goal line: from building a business that reflected their genuine belief in ethical beings and equal opportunity for all.

Tuesday, May 8, 2012

How Do You Know Women Are Ready?

The women who are ready to serve on company boards are the ones who can sustain an intelligent content-rich conversation on the subjects that concern directors.

They can converse on the topics relevant to governance. They understand governance.  That includes: the duties of directors, what constitutes conflicts of interest, whence come the risks that boards must address from within the company operations, whether the board is adequately informed about foreign transactions or the quality of international vendor sourcing, whether internal controls are more costly than effective, whether wages are fair across all employee categories, or how proxy meetings should adopt what new digital formats.

Intelligent board-ready women have something interesting to add to the conversation.  They do not simply “share” the latest spin-sister screed or “like” yet another empty article or tirade by journalists who have never seen the inside of a boardroom.  They actually read books by governance experts, experienced board members, or others weathered by the battles of the boardroom.

We anxiously await the insightful conversation of an intelligent woman executive who is competent to talk about the challenges of building and sustaining growth strategies of a next generation business. There is a delight in listening to an accomplished woman executive speak knowingly about the value of her global experience in an otherwise provincial world.  There is a special value in learning new strategies tried, tested, and found to succeed by women executives willing to find innovative solutions to persistent problems.

When you see and hear a woman who is ready to serve, the difference is crystal clear, the talent is patently outstanding, and the self-assurance so comfortable to be around.  That is when you know that this woman is ready to be a part of a board of advisors or directors.  

Are Women Ready to Serve?

When I first started my research about women on boards of directors, I asked a woman executive search professional the very same question.  Her reply was that there was a shortage of supply of “qualified women candidates” for corporate board roles.  Is the same true today? Are women who attend events oriented to advancing women to boardrooms “ready to serve” on corporate boards?

As with the general population sample, probably only a small percentage of women executives truly could be considered “ready to serve.” By that, I mean that their careers have accumulated enough broad leadership experience that could be transferred into valuable strategic insight worthy of a company board role.

A primary reason the large numbers of women in executive ranks are much greater than the much smaller numbers of candidates whose business value could serve a company at the board level is that many senior women today reached their positions by “supporting” and “helping” other executives (typically men)  succeed more than they propelled their own careers forward. 

The same is not true of the next generation of women who are strategically more self-sufficient and capable of focusing on what it takes to advance their own careers.  This is not selfishness.  Rather, it is self-awareness -- to which our current, younger generation is much more a-tuned.

There continue to be way too many women who over-board on non-profits in the failed belief that hob-nobbing with wealthy, powerful men will result in her selection as a corporate board member.  There continue to be way too many women who avoid sharpening their professional swords with financial competency courses or experience. And there continue to be way too many otherwise intelligent and talented women who simply are waiting for legislative fiats (quotas) to sweep them into the boardroom like entitled princesses.

It is the sharp executive women who tap the knowledge fountain of governance education so abundantly available to them from NACD, Corporate Secretaries, colleges, universities, business and law schools.  Sharpening their intellectual swords.

Sharp women invest in the intellectual enhancement that governance readings and education offer them.  They are interested in the issues and debates that underlie modern governance. They say,

“If I want to achieve this, then I must take the appropriate steps, myself, to ensure I am prepared.”

“If I wish to accomplish worthy goals, then I need to prepare myself for that journey.”

“If I want corporations to avoid the undesirable behaviors, then I need to be part of the solution that ensures companies take the alternative path to growth.”

Having pursued their ambitions, women become valuable and valued -- first by themselves and then by the boards who ask them to join in the development of a new venture. That is when they become "ready to serve" on a corporate board of directors.