All In: Hiring Women Executives
Shortly after Hubert Joly became Best Buy’s chief executive officer in 2012, he hired Sharon McCollam to serve as his chief administrative officer and chief financial officer.
It was an early indication that Joly wanted experienced women on his executive team, one that would need to lead a turnaround of the electronics retailer. Among the executive ranks at Best Buy—vice president and above—32 percent are women. Since Joly took the helm, he’s been unequivocal about his interest in increasing the diversity of the company’s leadership.
“I’ve been here for 15 years,” says Corie Barry, Best Buy’s senior vice president of domestic finance. “It is the first time we’ve had a leader in that echelon say something [about gender balance]. It really struck me because it was very out loud, very overt, very clear.”
There’s a compelling financial rationale for hiring women leaders. Greater gender diversity on boards and management teams is “empirically associated with higher returns on equity, higher price/book valuations and superior stock price performance,” according to a 2014 Credit Suisse study.
Joly is among a growing number of CEOs who are emphasizing the business imperative to build leadership teams that reflect diverse customer bases. Baker Tilly, an accounting and professional services firm with a major presence in Minneapolis, also has a CEO who is pursuing numerous strategies to increase the number of women leaders.
In 2014, Baker Tilly CEO Tim Christen used the phrase “gender dividend” in a report to employees, and the term is gaining currency in the U.S. “The gender dividend should translate into higher revenue, growth into new markets, and the attraction and retention of critical talent needed to compete in a changing global market,” Christen says in the report.
Yet many corporations are still struggling to recruit and retain qualified women for their top executive levels.
In Minnesota, women hold about one-fifth of key executive positions at the 100 largest publicly traded companies. St. Catherine University has been tracking the numbers, and little progress has been made in the seven years that the annual survey has been conducted.
Twin Cities Business examined why more women are not scaling the corporate ladder. Experts and individual company leaders say it will take comprehensive approaches to help businesses and qualified women gain traction in diversifying top corporate ranks. Successful strategies require CEO buy-in, but they also must include a range of approaches that include women’s networks and executive sponsorships of mid-level women.
So how can companies get better results?
At the Faegre Baker Daniels law firm, which greatly ramped up its diversity programs several years ago, efforts to expand the number of women in leadership are ongoing. In February 2014, the 13-office firm announced the lawyers who would serve in leadership positions for 2014-15. Four out of 15 management board members—almost 27 percent—were women. Among the 16 practice-group leaders named, six, or 37.5 percent, were women.
Faegre has been named among the 50 “best law firms for women” by Working Mother Media and Flex-Time Lawyers LLC, but the firm is not declaring victory on the gender diversity issue and assuming the challenge has been addressed.
Instead, Faegre says that it has embedded diversity and inclusion throughout the firm’s policies, practices and programs, and that progress on diversity “requires continuous effort, focus and action.” For example, its Women’s Forum for Achievement programs regularly offer women options for networking, professional development and the creation of business opportunities.
For CEOs committed to fostering diversity, it’s critical to recognize when the timing is right to fill a job with a highly qualified woman. A year ago, 21 percent of Donaldson Co.’s corporate officers were women, which is higher than at many industrial businesses. Donaldson makes filtration systems and had net sales of $2.5 billion in fiscal 2014.
In May, when a male general counsel was getting ready to retire, CEO Bill Cook promoted Amy Becker to the position. She joined Donaldson in 1998, and had been the company’s assistant general counsel since 2001. “Amy’s leadership in developing our legal strategy for establishing and defending our technology assets has been a key part of our strategic growth plans,” Cook said in a company statement.
U.S. women have been earning a majority of the college degrees awarded for decades, so they are entering the talent pipeline. They also hold 51.4 percent of management and professional jobs in the United States.
So why do their numbers at the top of American corporations remain small? Teresa Daly, CEO of the executive talent firm Navigate Forward, says those numbers won’t budge much unless corporations take an “integrated approach” to increasing the portion of women in leadership roles.
A few years ago, Daly says a defense contractor hired her Minneapolis-based firm to develop ways to help the company attract and retain women executives. As part of her research, Daly says her firm interviewed several executive women at Minnesota-based companies. She also did an in-depth examination of the culture of the defense contractor and reviewed numerous studies on this gender leadership topic.
Boosting the ranks of corporate women officers will require changes that are two-fold, Daly says, involving what’s going on within the companies as well as the actions the women are taking. “Just doing a mentorship program or just writing [gender balance] into a values statement was not enough,” Daly says.
“The executive levels of the company need to be truly committed to gender balance,” Daly says. They need to “take ownership of it,” allocate human resources and dollars to support it and “walk the talk themselves.”
The Faegre law firm is taking many steps to build a culture of inclusion. When businesses do this, Daly says, it translates into gender-balanced teams and hiring strategies as well as investments in programs that build awareness.
Companies need to “invest intentionally and purposefully in developing women as leaders,” she says. This means development that focuses on building “enterprise leaders” who learn and know the business. It also includes mentoring programs, peer groups and giving women the opportunity to rotate into jobs where they gain valuable business experience. Donaldson has had success by rotating men and women into key positions so they can learn about many dimensions of the business.
Finally, companies need to hold themselves and their people accountable for gender balance practices and strategies, Daly says. If women can hold business line positions, where they have authority to allocate resources to generate revenue, and are given profit-and-loss responsibility, she says, “what you end up with is women who can really and truly run the business.”
Before higher percentages of women can secure top executive jobs, Daly says, many women will need to alter their workplace behavior. In many cases, she explains, women are not functioning at work or framing their work in the same way as men.
“Women think that if they just work hard that they’ll get ahead,” she says. “Men know they need to work hard, but they’ll ask for what they want. A man will hitch his wagon to a mentor or sponsor. Women aren’t as likely to do that.”
She advises women to develop plans and strategies for networking and their career progression. Many men see networking “as part of their job,” she says. Many women see that “as taking them away from their job.”
Best Buy’s culture
Best Buy’s Barry is a key operative in the business revolution unfolding in the corporation’s headquarters in Richfield. As a finance executive, she’s playing an important role in the Renew Blue strategy to transform the electronics retailer and help bolster the company’s bottom line.
Despite all of her finance responsibilities, Barry volunteered to serve as executive co-sponsor of the Best Buy Women’s Employee Network (WEN). For the past four years, the portion of female executives at Best Buy has ranged from 30 to 32 percent. That level of gender diversity is higher than at many other big companies.
But Barry and many other women at Best Buy argue that the Women’s Employee Network is needed to offer support, sponsorships and other strategies that help women succeed in the workplace. WEN was launched in August. Initially, Barry says, “our goal is to just help people feel like they have a network here and can be engaged.” For a woman who wants to accelerate her career advancement, she explains, the network can help get them involved with “the right committees or people that might help you do that.”
WEN is among several business employee networks at Best Buy, which include various affinity groups by race and ethnicity. About 4,000 people work at corporate headquarters, out of a total workforce of roughly 140,000.
WEN benefits individual women. But a commitment to gender diversity also allows Best Buy to be more responsive to its customers and retain top talent, says Susan Bass Roberts, Best Buy’s senior director of community relations/diversity and inclusion. “We see the world is changing and so we are trying to stay ahead of that, and we are building a culture of diversity and inclusion,” she says.
Barry and Bass Roberts are doing what they can to ensure there are more women like CFO McCollam in the female talent pool. Women employees frequently ask Barry: “Can I be successful at Best Buy and have children?” That’s among the challenges that WEN is expected to address, so women can find better ways to juggle family and career demands.
Barry acknowledges that the past three years at Best Buy have been both exciting and tumultuous. The executive team has been slashing costs and redeploying resources. Many employees who were Best Buy veterans at various levels of the company have seen their jobs eliminated.
“We are nearing a billion dollars of cost takeout as a method to help us free up resources,” Barry says, and some savings are being targeted to areas that should lead to business growth. That “massive amount of transformation,” she says, has opened the doors to leaders with “different backgrounds of thought and diversity.”
In her area of finance, Barry says, all of the changes have created opportunities for women with finance expertise to take on new responsibilities. Yet, she adds, “for those of us who’ve weathered the storm, it’s not easy. Creating networks of people that help you feel connected and feel like somebody has your back” is important.
Best Buy has not set numerical goals for hiring women for various leadership levels, but Bass Roberts says that’s something that may be on the horizon.
For now, Barry says that Bass Roberts’ team is a built-in accountability mechanism for the company. “You do have so many people with such big day jobs,” Barry says, so it’s exceptionally important for Bass Roberts’ diversity and inclusion team to have time to keep track of the metrics on women leaders and continually push for better results.
On a national basis, Baker Tilly established the Growth and Retention of Women program in 2007. In the Minneapolis office, the number of women officers hasn’t increased in a six-year period. However, women in the Twin Cities are making gains at the manager, senior manager and director level. Best Buy Employee Diversity
Best Buy CEO Hubert Joly is focused on increasing the diversity of the company’s workforce and leadership. Currently, nearly one-third of Best Buy executives are women.
Unblocking the talent pipeline
In 2014, St. Catherine’s business professor Sarah Rand co-wrote a paper entitled, “Unblocking the Corporate Talent Pipeline.” Specifically, she examined the role that women’s networks play in helping women advance in corporate settings.
She acknowledges that top executives need to be held accountable for achieving results for gender diversity. She also concludes that chief executives must fund strategies to develop women leaders. But effectively leveraging women’s networks can be problematic.
In many cases, Rand says, “leaders in organizations don’t have a sense of what women’s networks should be doing, how they can measure the value and structure them to have an impact on women’s career success and advancement.”
She doesn’t want to leave success to chance. Company executives and women’s network leaders should partner to agree upon and clearly communicate the types of activities and development programs that are most likely to yield results, Rand says. She also advocates benchmarks for measuring the impact of a women’s network in a corporation.
“The first step in creating change is to identify advancing women as a strategic business priority,” Rand says. “This includes setting targets to significantly increase the number of women in leadership roles.”
Maplewood-based 3M Co. is a corporation Rand cites as making a strong commitment to increasing the number of women in leadership roles. 3M has assigned a key executive to develop talent within the company and recruit talented women for 3M’s candidate pools, Rand says.
She contrasts 3M’s actions with what she’s seen in many businesses. “From my experience, many of the efforts to advance women in organizations are grass-roots, along with the support of human resources representatives who are often balancing multiple responsibilities,” Rand says. She questions the value of a bottom-up approach that lacks resources and executive clout.
There is no one-size-fits-all solution for expanding women’s representation in corporate jobs, Rand says. Dating back to the 1980s, she says, many companies were developing mentoring programs. While that strategy provided a “psychosocial support,” she explains, where senior women told younger employees to believe in their talents, it didn’t produce dramatic progress.
While it has been difficult for women to reach more than 20 percent of top executive positions in Minnesota corporations, the same leaky pipeline issue exists in government. The 19th Amendment granting women the right to vote was ratified in 1920. Ninety-five years later, women hold 20 percent of the seats in the U.S. Senate. Women have high voter and workforce participation rates, but they remain small minorities in the top political and corporate positions.
It can be particularly challenging for a woman with young children to be a U.S. senator or a corporate executive because of the time demands of the job. Best Buy’s Barry has an 8-year-old son and a 4-year-old daughter. To manage her family’s parenting responsibilities, she says that her husband does work for an advertising firm from home. Barry is not alone. Many couples have made similar choices because at least one parent needs flexibility to pick up kids from a daycare center or drive them to school. Daily parenting duties conflict with corporate travel and long business workdays.
At the Baker Tilly accounting firm in downtown Minneapolis, employees’ children get sick just as they do in every family. But partners Karen Angell and Rachel Polson say people no longer assume that a sick child is only a mother’s challenge.
Back in 1995, Angell became the firm’s first female partner among all of its U.S. offices. In the 20 ensuing years, she says there’s greater awareness that virtually every employee needs some flexibility to care for a child or aging parent.
Polson, who became a partner in 2007, has two sons, ages 11 and 13. When they were younger, Polson had a flexible schedule that permitted her to work 40 hours a week over four days, and she took Fridays off. She had that schedule for five years, and shared child care pick-ups and drop-offs with her husband, an electrician.
“I still stayed on my [career] track,” Polson says.
But Baker Tilly was worried that a lot of women were getting derailed, so the firm established a national program in 2007 called GROW, short for Growth and Retention of Women. The initiative was born as a women’s professional network in Minneapolis, then was expanded to the entire firm.
GROW has support from the company’s CEO and each year it publishes a report to highlight the coordinated effort to expand opportunities for women. The report also discloses how many women are in various leadership roles. In 2014, the percentage of women who were partners across the United States was 20 percent. It was 20.7 percent in the Minneapolis office.
“Although the primary focus of GROW is to improve the growth and retention of women at Baker Tilly, this is not a women’s-only issue,” wrote CEO Christen in the annual report. “We are a business for which success significantly depends on development of our people, and attracting and retaining the best and brightest that our profession has to offer. Roughly 50 percent of the people we hire are women, yet the percentage of women leaders is significantly less, which could be impacting our ability to reach our full potential as a firm.”
In its 2014 GROW report to employees, Baker Tilly spotlighted research by the American Institute of CPAs that shows 60.9 percent of all accountants and auditors in the United States are women, yet women occupy less than 20 percent of the partner positions in CPA firms in the U.S.
Angell says she wouldn’t be where she is today if she hadn’t had male mentors along the way. But she and Polson say there is a need for the GROW program to support a women-friendly culture and create opportunities for qualified women to position them for top leadership.
In 2007, Baker Tilly enhanced its maternity, paternity and adoption leave policies. Between 2008 and 2010, it expanded professional networking and development, as well as standardized its flexible work arrangements policy across the firm. By 2011, it had published the GROW leadership development guide, which the firm says “provides a process to identify high-performing women and specific learning and development paths.” In 2014, a GROW leadership event was held that involved the firm’s board of partners, management committee and partners. GROW is designed to benefit the firm and employees who choose to remain with Baker Tilly.
All of these efforts are moving more women through the leadership pipeline. In 2008, the Minneapolis office did not have any women directors, and now five of the 12 directors are women. That job title is one step below the partner position. Women also have been making progress in Minneapolis in the senior manager ranks, with 41.2 percent of those jobs held by women in 2008 and 54.2 percent of those positions occupied by women in 2014.
The six women partners in Minneapolis are serving as role models for younger women in the firm, which makes Angell optimistic that women will continue to take on more leadership roles. Younger women can conclude, Angell says, “Look at what Rachel and Karen are doing. I can do that, too.”
Liz Fedor is the Trending editor of Twin Cities Business.