WEBVTT

00:00:01.640 --> 00:00:02.896
Fifteen years ago,

00:00:02.920 --> 00:00:07.760
I thought that the diversity stuff
was not something I had to worry about.

00:00:08.480 --> 00:00:11.720
It was something an older
generation had to fight for.

00:00:12.960 --> 00:00:16.656
In my university,
we were 50-50, male-female,

00:00:16.680 --> 00:00:19.456
and we women had often better grades.

00:00:19.480 --> 00:00:22.856
So while not everything was perfect,

00:00:22.880 --> 00:00:24.896
diversity and leadership decisions

00:00:24.920 --> 00:00:29.000
was something that would happen
naturally over time, right?

NOTE Paragraph

00:00:30.640 --> 00:00:32.400
Well, not quite.

00:00:33.160 --> 00:00:36.056
While moving up the ladder
working as a management consultant

00:00:36.080 --> 00:00:38.136
across Europe and the US,

00:00:38.160 --> 00:00:42.736
I started to realize how often
I was the only woman in the room

00:00:42.760 --> 00:00:46.280
and how homogenous leadership still is.

00:00:47.520 --> 00:00:49.336
Many leaders I met

00:00:49.360 --> 00:00:54.176
saw diversity as something to comply with
out of political correctness,

00:00:54.200 --> 00:00:56.840
or, best case, the right thing to do,

00:00:57.680 --> 00:00:59.680
but not as a business priority.

00:01:00.320 --> 00:01:02.656
They just did not have a reason to believe

00:01:02.680 --> 00:01:07.656
that diversity would help them achieve
their most immediate, pressing goals:

00:01:07.680 --> 00:01:10.736
hitting the numbers,
delivering the new product,

00:01:10.760 --> 00:01:13.040
the real goals they are measured by.

NOTE Paragraph

00:01:14.440 --> 00:01:17.856
My personal experience
working with diverse teams

00:01:17.880 --> 00:01:21.976
had been that while they require
a little bit more effort at the beginning,

00:01:22.000 --> 00:01:25.200
they did bring fresher,
more creative ideas.

00:01:25.880 --> 00:01:28.016
So I wanted to know:

00:01:28.040 --> 00:01:31.856
are diverse organizations
really more innovative

00:01:31.880 --> 00:01:35.720
and can diversity be more
than something to comply with?

00:01:36.320 --> 00:01:38.680
Can it be a real competitive advantage?

NOTE Paragraph

00:01:40.360 --> 00:01:44.640
So to find out, we set up a study
with the Technical University of Munich.

00:01:45.400 --> 00:01:50.576
We surveyed 171 companies
in Germany, Austria and Switzerland,

00:01:50.600 --> 00:01:53.536
and as we speak, we're expanding the study

00:01:53.560 --> 00:01:56.376
to 1,600 companies

00:01:56.400 --> 00:01:58.880
in five additional countries
around the world.

00:01:59.760 --> 00:02:02.656
We asked those companies
basically two things:

00:02:02.680 --> 00:02:05.720
how innovative they are
and how diverse they are.

NOTE Paragraph

00:02:06.840 --> 00:02:08.336
To measure the first one,

00:02:08.360 --> 00:02:11.080
we asked them about innovation revenue.

00:02:12.000 --> 00:02:14.656
Innovation revenue is the share
of revenues they've made

00:02:14.680 --> 00:02:17.696
from new products and services
in the last three years,

00:02:17.720 --> 00:02:20.976
meaning we did not ask them
how many creative ideas they have,

00:02:21.000 --> 00:02:24.816
but rather if these ideas
translate into products and services

00:02:24.840 --> 00:02:28.240
that really make the company
more successful today and tomorrow.

00:02:29.760 --> 00:02:34.296
To measure diversity,
we looked at six different factors:

00:02:34.320 --> 00:02:37.880
country of origin,
age and gender, amongst others.

NOTE Paragraph

00:02:39.320 --> 00:02:42.256
While preparing to go in the field
with those questions,

00:02:42.280 --> 00:02:44.536
I sat down with my team

00:02:44.560 --> 00:02:47.840
and we discussed what
we would expect as a result.

00:02:49.640 --> 00:02:51.760
To put it mildly, we were not optimistic.

00:02:53.000 --> 00:02:56.536
The most skeptical person on the team
thought, or saw a real possibility,

00:02:56.560 --> 00:02:58.960
that we would find nothing at all.

00:03:00.360 --> 00:03:02.656
Most of the team
was rather on the cautious side,

00:03:02.680 --> 00:03:06.576
so we landed all together at "only if,"

00:03:06.600 --> 00:03:08.696
meaning that we might find
some kind of link

00:03:08.720 --> 00:03:11.256
between innovation and diversity,

00:03:11.280 --> 00:03:12.936
but not across the board,

00:03:12.960 --> 00:03:15.856
rather only if certain criteria are met,

00:03:15.880 --> 00:03:19.936
for example leadership style,
very open leadership style

00:03:19.960 --> 00:03:24.120
that allowed people to speak up freely
and safely and contribute.

NOTE Paragraph

00:03:26.240 --> 00:03:28.280
A couple of months later, the data came in

00:03:29.520 --> 00:03:33.840
and the results convinced
the most skeptical amongst us.

00:03:34.560 --> 00:03:36.416
The answer was a clear yes,

00:03:36.440 --> 00:03:38.200
no ifs, no buts.

00:03:38.840 --> 00:03:40.976
The data in our sample showed

00:03:41.000 --> 00:03:45.480
that more diverse companies
are simply more innovative, period.

NOTE Paragraph

00:03:47.120 --> 00:03:52.136
Now, a fair question to ask
is the chicken or the egg question,

00:03:52.160 --> 00:03:55.576
meaning, are companies
really more innovative

00:03:55.600 --> 00:03:58.256
because they have
a more diverse leadership,

00:03:58.280 --> 00:03:59.536
or the other way around?

00:03:59.560 --> 00:04:00.760
Which way is it?

00:04:01.280 --> 00:04:05.040
Now, we do not know how much
is correlation versus causation,

00:04:05.880 --> 00:04:08.856
but what we do know is that clearly,

00:04:08.880 --> 00:04:12.056
in our sample, companies
that are more diverse

00:04:12.080 --> 00:04:13.576
are more innovative,

00:04:13.600 --> 00:04:15.896
and that companies
that are more innovative

00:04:15.920 --> 00:04:17.760
have a more diverse leadership too.

00:04:18.279 --> 00:04:21.016
So it's fair to assume
that it works both ways,

00:04:21.040 --> 00:04:24.920
diversity driving innovation
and innovation driving diversity.

NOTE Paragraph

00:04:27.360 --> 00:04:30.136
Now, once we published the results,

00:04:30.160 --> 00:04:34.736
we were surprised
about the reactions in the media.

00:04:34.760 --> 00:04:37.656
We got quite some attention

00:04:37.680 --> 00:04:40.176
and it went from quite factual,

00:04:40.200 --> 00:04:44.456
like "Higher Female Share
Boosts Innovation"

00:04:44.480 --> 00:04:47.976
to a little bit more sensationalist.

NOTE Paragraph

00:04:48.000 --> 00:04:49.936
(Laughter)

NOTE Paragraph

00:04:49.960 --> 00:04:51.176
As you can see,

00:04:51.200 --> 00:04:54.296
"Stay-at-home Women Cost Trillions,"

00:04:54.320 --> 00:04:56.256
and, my personal favorite,

00:04:56.280 --> 00:04:58.656
"Housewives Kill Innovation."

00:04:58.680 --> 00:05:01.696
Well, there's no such thing
as bad publicity, right?

NOTE Paragraph

00:05:01.720 --> 00:05:04.056
(Laughter)

NOTE Paragraph

00:05:04.080 --> 00:05:06.056
On the back of that coverage,

00:05:06.080 --> 00:05:09.536
we started to get calls
from senior executives

00:05:09.560 --> 00:05:11.256
wanting to understand more,

00:05:11.280 --> 00:05:14.840
especially -- surprise, surprise --
about gender diversity.

00:05:15.680 --> 00:05:19.776
I tend to open up
those discussions by asking,

00:05:19.800 --> 00:05:23.936
"Well, what do you think of the situation
in your organization today?"

00:05:23.960 --> 00:05:26.520
And a frequent reaction to that is,

00:05:27.480 --> 00:05:30.520
"Well, we're not yet there,
but we're not that bad."

00:05:31.240 --> 00:05:33.416
One executive told me, for example,

00:05:33.440 --> 00:05:34.976
"Oh, we're not that bad.

00:05:35.000 --> 00:05:37.736
We have one member
in our board who is a woman."

NOTE Paragraph

00:05:37.760 --> 00:05:39.096
(Laughter)

NOTE Paragraph

00:05:39.120 --> 00:05:40.336
And you laugh --

NOTE Paragraph

00:05:40.360 --> 00:05:43.320
(Applause)

NOTE Paragraph

00:05:46.760 --> 00:05:50.136
Now, you laugh, but he had a point
in being proud about it,

00:05:50.160 --> 00:05:51.496
because in Germany,

00:05:51.520 --> 00:05:54.496
if you have a company

00:05:54.520 --> 00:05:57.096
and it has one member
on the board who is a woman,

00:05:57.120 --> 00:05:59.536
you are part of a select group of 30

00:05:59.560 --> 00:06:03.216
out of the 100 largest
publicly listed companies.

00:06:03.240 --> 00:06:08.456
The other 70 companies
have an all-male board,

00:06:08.480 --> 00:06:12.296
and not even one of these hundred
largest publicly listed companies

00:06:12.320 --> 00:06:16.000
have, as of today, a female CEO.

00:06:17.080 --> 00:06:19.320
But here's the critically
important insight.

00:06:20.240 --> 00:06:24.216
Those few female board members alone,

00:06:24.240 --> 00:06:26.136
they won't make a difference.

00:06:26.160 --> 00:06:30.280
Our data shows that for gender diversity
to have an impact on innovation,

00:06:31.200 --> 00:06:34.920
you need to have more
than 20 percent women in leadership.

00:06:35.480 --> 00:06:37.080
Let's have a look at the numbers.

00:06:38.600 --> 00:06:42.296
As you can see, we divided
the sample into three groups

00:06:42.320 --> 00:06:45.216
and the results are quite dramatic.

00:06:45.240 --> 00:06:49.936
Only in the group where you have
more than 20 percent women in leadership,

00:06:49.960 --> 00:06:53.840
only then you see a clear jump
in innovation revenue

00:06:54.840 --> 00:06:56.816
to above-average levels.

00:06:56.840 --> 00:07:01.496
So experience and data
shows that you do need critical mass

00:07:01.520 --> 00:07:03.016
to move the needle,

00:07:03.040 --> 00:07:06.376
and companies like Alibaba,
JP Morgan, or Apple

00:07:06.400 --> 00:07:09.760
have as of today
already achieved that threshold.

NOTE Paragraph

00:07:12.480 --> 00:07:14.880
Another reaction I got quite a lot was,

00:07:16.520 --> 00:07:19.400
"Well, it will get solved over time."

00:07:20.200 --> 00:07:23.456
And I have all the sympathy in the world
for that point of view,

00:07:23.480 --> 00:07:25.400
because I used to think like that too.

00:07:26.600 --> 00:07:29.896
Now, let's have a look here again
and look at the numbers,

00:07:29.920 --> 00:07:32.056
taking Germany as an example.

00:07:32.080 --> 00:07:34.296
Let me first give you the good news.

00:07:34.320 --> 00:07:37.136
So the share of women
who are college graduates

00:07:37.160 --> 00:07:40.576
and have at least 10 years
of professional experience

00:07:40.600 --> 00:07:43.896
has grown nicely over the last 20 years,

00:07:43.920 --> 00:07:47.696
which means the pool
in which to fish for female leaders

00:07:47.720 --> 00:07:49.856
has increased over time,

00:07:49.880 --> 00:07:51.576
and that's great.

00:07:51.600 --> 00:07:53.440
Now, according to my old theory,

00:07:54.880 --> 00:07:56.456
the share of women in leadership

00:07:56.480 --> 00:07:58.800
would have grown
more or less in parallel, right?

00:07:59.840 --> 00:08:02.720
Now, let's have a look
at what happened in reality.

00:08:03.480 --> 00:08:05.040
It's not even close,

00:08:07.360 --> 00:08:10.576
which means I was so wrong

00:08:10.600 --> 00:08:13.376
and which means that my generation,

00:08:13.400 --> 00:08:14.600
your generation,

00:08:15.680 --> 00:08:19.200
the best-educated
female generation in history,

00:08:20.520 --> 00:08:21.936
we have just not made it.

00:08:21.960 --> 00:08:26.456
We have failed to achieve leadership
in significant numbers.

00:08:26.480 --> 00:08:29.400
Education just did not
translate into leadership.

NOTE Paragraph

00:08:30.720 --> 00:08:33.816
Now, that was a painful realization for me

00:08:33.840 --> 00:08:35.976
and made me realize,

00:08:36.000 --> 00:08:38.296
if we want to change this,

00:08:38.320 --> 00:08:40.679
we need to engage
and we need to do better.

00:08:42.200 --> 00:08:44.560
Now, what to do?

00:08:45.320 --> 00:08:48.856
Achieving more than 20 percent
women in leadership

00:08:48.880 --> 00:08:51.256
seems like a daunting task to many,

00:08:51.280 --> 00:08:53.760
understandably, given the track record.

00:08:55.080 --> 00:08:56.296
But it's doable

00:08:56.320 --> 00:08:59.576
and there are many companies today
that are making progress there

00:08:59.600 --> 00:09:01.216
and doing it successfully.

00:09:01.240 --> 00:09:04.696
Let's take SAP, the software
company, as an example.

00:09:04.720 --> 00:09:09.376
They had, in 2011,
19 percent women in leadership,

00:09:09.400 --> 00:09:11.256
yet they decided to do better

00:09:11.280 --> 00:09:14.456
and they did what you do
in any other area of business

00:09:14.480 --> 00:09:16.016
where you want to improve.

00:09:16.040 --> 00:09:18.520
They set themselves a measurable target.

00:09:19.440 --> 00:09:24.336
So they set themselves a target
of 25 percent for 2017,

00:09:24.360 --> 00:09:25.960
which they just have achieved.

00:09:27.120 --> 00:09:30.536
The goals made them think more creatively
about developing leaders

00:09:30.560 --> 00:09:33.016
and tapping new recruiting pools.

00:09:33.040 --> 00:09:37.400
They now even set a target of 30 percent
women in leadership for 2022.

NOTE Paragraph

00:09:38.480 --> 00:09:40.936
So experience shows it's doable,

00:09:40.960 --> 00:09:42.936
and at the end of the day,

00:09:42.960 --> 00:09:47.096
it all boils down to two decisions
that are taken every day

00:09:47.120 --> 00:09:49.880
in every organization by many of us:

00:09:51.640 --> 00:09:55.040
who to hire and who
to develop and promote?

00:09:56.000 --> 00:09:58.576
Now, nothing against women's programs,

00:09:58.600 --> 00:10:00.936
networks, mentoring, trainings.

00:10:00.960 --> 00:10:02.160
All is good.

00:10:03.320 --> 00:10:05.256
But it is these two decisions

00:10:05.280 --> 00:10:09.296
that at the end of the day
send the most powerful chain signal

00:10:09.320 --> 00:10:10.840
in any organization.

NOTE Paragraph

00:10:13.040 --> 00:10:16.096
Now, I never set out
to be a diversity advocate.

00:10:16.120 --> 00:10:17.840
I am a business advisor.

00:10:18.720 --> 00:10:23.696
But now my goal is
to change the face of leadership,

00:10:23.720 --> 00:10:25.160
to make it more diverse,

00:10:26.080 --> 00:10:28.576
and not so that leaders can check a box

00:10:28.600 --> 00:10:31.576
and feel like they have
complied with something

00:10:31.600 --> 00:10:34.136
or they have been politically correct,

00:10:34.160 --> 00:10:35.856
but because they understand,

00:10:35.880 --> 00:10:39.376
they understand that diversity
is making their organization

00:10:39.400 --> 00:10:40.800
more innovative, better.

00:10:41.680 --> 00:10:45.536
And by embracing diversity,
by embracing diverse talent,

00:10:45.560 --> 00:10:47.880
we are providing
true opportunity for everyone.

NOTE Paragraph

00:10:48.520 --> 00:10:50.176
Thank you. Thank you so much.

NOTE Paragraph

00:10:50.200 --> 00:10:52.840
(Applause)