Three ways business leaders can drive change and boost economic recovery

Parna Sarkar-Basu

February 20, 2022

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This article first appeared in Boston Business Journal

The benefits of gender diversity on the economy and businesses are well documented. The topic of supporting more women in tech comes and goes in waves. Currently, the wave is huge, and we need to ride it. Companies are desperate to hire more women and VCs are looking to fund more women-owned businesses. So, if you are a woman, especially a woman of color like me, let's step back and celebrate this win.

So, why am I penning this story? Despite all the positive advancements, women are still struggling to get support at work and have had to drop out in hordes during the pandemic. Now that the hybrid workplace is the norm, what should business leaders be doing more of to support women in the workforce? Granted, we've come a long way over the last few decades, yet we are at risk of losing the advancements women have made. Hence, I am writing this piece to share my thoughts on how business leaders can support this effort.

Remember the impact women have on businesses

Simply put, gender diversity impacts both profitability and value creation in a company. According to a McKinsey report, gender-diverse executive teams outperform their industry peers on EBIT margin by more than 20%. According to a report by Boston Consulting Group, companies with diverse management teams reported 19% higher innovation revenue and 45% of total revenue. In addition, gender-diverse teams with various backgrounds and races boost creativity and look at problems from various lenses.

Remember when airbags were first designed and deployed in cars? Many women died because the airbags were designed by men, for men. Fortunately for us, that issue has been fixed. (On a personal note, when I downsized from a minivan to a SUV, there was no place to put my purse, other than the passenger seat or the floor - really!)

My point is, whether you are looking to grow your business or designing a product, make sure you have diversity within the teams. Adding more women decision-makers to your leadership team will also positively impact the company's bottom line.

Here are three ways businesses can continue to drive change and boost the economy.

1. Use your position of power to make an impact
There are hundreds of people who are working hard to design programs to support women in tech and coach them on a range of topics - from improving soft skills to building their market credibility. On platforms like LinkedIn and Clubhouse alone, there are dozens of masterclasses and rooms on these topics. But to make a bigger impact, we need more leaders who can use their platform to drive change.

For example, Nasdaq CEO Adena Friedman mandated board diversity for its 3,000 companies that are listed on its exchange. She wants every company to have at least one woman on their board and "one person who identifies as either an underrepresented minority or LGBTQ." Goldman Sachs CEO David Solomon followed suit and declared his organization wouldn't help companies go public unless there is "at least one diverse member on the board." On the government side, Senator Hannah Beth Jackson launched a first-in-the-nation law requiring publicly traded companies in California to have at least one woman on their board of directors by 2019 and two or more after that.

If every business leader and public official could take a similar stand to boost diversity, the pace of change will be much faster and we'll have more women in positions of power.

2. Identify male allies who can drive change
In a world of approximately 50% men and 50% women, we need to collaborate with men. In the tech world, most CEOs are men. They also have the power to drive change if you can make diversity a business priority. According to a Deloitte survey, 38% of executives reported that the primary sponsor of the company's diversity and inclusion efforts is the CEO. As women leaders, why not identify issues and bring them to the CEO?

For example, Chief People Officer Cindy Robbins shared her concern about pay gaps at Salesforce with the CEO, Marc Benioff, during an executive meeting. According to Benioff, at first, he was perplexed to hear such an issue existed in this company but agreed to look into it and fix the problem. That's how Salesforce became one of the first tech companies to close the pay gap between men and women.

We need every founder and business leader to be open-minded and take employee concerns seriously. CEOs are the best accelerants and ambassadors to boost inclusivity - from creating a gender-balanced innovation team to diverse boards.

3. Continue to be empathetic and flexible
COVID-19 created havoc and disrupted lives, globally. In the U.S., nearly 3 million women have dropped out of the workforce since the start of the pandemic. As the primary caregiver, many mothers were struggling to juggle work, home and remote schooling, along with childcare and eldercare challenges.

I believe, companies could have addressed this issue efficiently if they had more women in executive positions - leaders who understand the challenges of working parents. At a recent conference, I heard Marianne Harrison, John Hancock's first female president and CEO, address the issue and what her company has been doing to support its employees during the pandemic. As a mother of four, Harrison wanted to give working parents a break and arranged for online summer camps for their children, along with virtual camp counselors. Once school started, they offered after-school programs which gave parents a chance to balance work and personal life. Let's continue to give professionals the flexibility they deserve and show empathy as they juggle various responsibilities - while getting the job done.

The bottom line is companies should consider diversity a business imperative. Business leaders must become advocates of change, and together, we can hire and empower more women professionals and plan for a faster economic recovery.

Opinions expressed by the author are not necessarily those of WITI.

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