Glass Ceiling fallacy
Cold world no blanket
On October 3, 2018 Indira Nooyi officially stepped down from her post as CEO of Pepsico. This is after she stewarded the company to s boosted revenue total of over 80 percent during her 12 year tenure.
When my daughter comes of age, I will probably tell her about Nooyi. Although she wasn't my favorite CEO, she was in my top 10. I'll tell her that at the time there were only 24 other CEO women in the S&P 500. I'll tell her how this sugar pedaling company actually turned to create healthy products under her tenure. I'll also tell her how she attracted many shareholders, some of them big hedge funds, who tried to strong arm her into making strategic decisions that really didn't fall in line with her vision, so she didn't make them. I'll mention her 20 hour work day regimen. And although she had a storied career, she ultimately stepped down to be with her family.
What my daughter will probably notice is that although she is a person of color, Nooyi is Indian. As a matter of fact she was one of 4 Indian CEO females at the time. And outside of that, there was no other race represented in the CEO position other than white women in the S&P. So if you were a white women you had 5 times more likelihood than that of an Indian woman to become an S&P calibur CEO. And Black or Hispanic women had absolutely no odds in their favor off achieving such heights.
It'll be at this point that my daughter might wonder why there were no Black or Hispanic female CEOs in the S&P at the time. I'll probably mention a few buzz words like glass ceilings and intersectionality. I might even lament the fact that some don't have a model to ignite their ambition and they don't see themselves having CEO genes and probably a plethora of other reasons. After that I'll probably give her the data; because the truth of the matter is that the problem was twofold at the time.
Firstly, CEO positions require a deep understanding of the most crucial part to every business: the financials. With this understanding, learning how to impact the bottom line is essential. Generally, females fulfill roles ancillary to this such as marketing, human resources, or even serving as general counsel. These are all seen as non-revenue generating positions. Women in COO or CFO positions only account for roughly 12% of these executive roles. Those positions generally become prime CEO candidates.
Secondly, I'll get to what is certainly the most important factor: non diverse boards. The fact of the matter is that leadership is chosen from the decisions of the board. Regardless of performance, tenure or internal reputation there's a select group of people that one must impress. These direct group of people have both fiduciary and reputational responsibilities. Just last year, the very final company in S&P appointed a female to their board, which brought us to our first moment in history that every company in the S&P had a female board member. Goldman Sachs a few weeks ago pledged that they would not underwrite any IPOs of companies that did not have at least one female board member. I'll mention that we've progressed.
My daughter will probably ask why does the S&P need diversity anyway? I mean it is the S&P. It hasn't failed to deliver value to America over the last 50 years. And she'd be right. I'd tell her the point of diversity, in my eyes, isn't delivering value but actually delivering opportunity. If you know a bus has a destination called prosperity, everyone should have the opportunity to get on that bus. They may not all make it on, but at least they've attempted. The attempt is what we all deserve. In business, attempts are generally granted. What continued attempts do is create gravitational pull towards equity. Equity then creates the fodder for ambition to the women and men of that country. Unchained ambition pushes societies forward.
By this time my daughter will probably be a bit encouraged because the optics look like a trend in the right direction. And I think I would have done my job at that point. The whole point of her inquisitiveness is that the status quo shouldn't discourage her ambition. There may be diversity tokens on every board, but all individuals need is a token as a source for inspiration.
This is why I urge you all to join a board and urge your significant others to do the same. Whether it be your high school, your college, church, mosque, the local hospital or a non profit. All of these organizations fall short of achieving the goals of diversity and inclusion merely because unconsciously, they themselves are bias to their own kind. This is a fact. It's termed the similarity-attraction paradigm. But there's nothing wrong with this paradigm if every group is represented on a board. Bias holds no value in a room full of diverse people with equal voting rights.
So often when selecting we choose through our most bias tool that we have: our intuition. Every new problem that we face, we use previous problems we've had to solve them. This is exactly why the concept of mental models can perpetuate a deleterious cycle. The real way someone gains insight is through first hand mental model destruction. How else will my daughter or your daughter truly see themselves fit to have the top role of one of the companies that have given America its value? So once you're on the board, allow your intuition to be challenged.
I truly ask you to consider this. There can never be too many conscious leaders, be it male or female, inviting the conversation for progress. My daughter will thank you.