0:00:01.640,0:00:02.896
Fifteen years ago,

0:00:02.920,0:00:07.760
I thought that the diversity stuff[br]was not something I had to worry about.

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It was something an older[br]generation had to fight for.

0:00:12.960,0:00:16.656
In my university,[br]we were 50-50, male-female,

0:00:16.680,0:00:19.456
and we women often had better grades.

0:00:19.480,0:00:22.856
So while not everything was perfect,

0:00:22.880,0:00:24.896
diversity and leadership decisions

0:00:24.920,0:00:29.000
was something that would happen[br]naturally over time, right?

0:00:30.640,0:00:32.400
Well, not quite.

0:00:33.160,0:00:36.056
While moving up the ladder[br]working as a management consultant

0:00:36.080,0:00:38.136
across Europe and the US,

0:00:38.160,0:00:42.736
I started to realize how often[br]I was the only woman in the room

0:00:42.760,0:00:46.280
and how homogenous leadership still is.

0:00:47.520,0:00:49.336
Many leaders I met

0:00:49.360,0:00:54.176
saw diversity as something to comply with[br]out of political correctness,

0:00:54.200,0:00:56.840
or, best case, the right thing to do,

0:00:57.680,0:00:59.680
but not as a business priority.

0:01:00.320,0:01:02.656
They just did not have a reason to believe

0:01:02.680,0:01:07.656
that diversity would help them achieve[br]their most immediate, pressing goals:

0:01:07.680,0:01:10.736
hitting the numbers,[br]delivering the new product,

0:01:10.760,0:01:13.040
the real goals they are measured by.

0:01:14.440,0:01:17.856
My personal experience[br]working with diverse teams

0:01:17.880,0:01:21.976
had been that while they require[br]a little bit more effort at the beginning,

0:01:22.000,0:01:25.200
they did bring fresher,[br]more creative ideas.

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So I wanted to know:

0:01:28.040,0:01:31.856
Are diverse organizations[br]really more innovative,

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and can diversity be more[br]than something to comply with?

0:01:36.320,0:01:38.680
Can it be a real competitive advantage?

0:01:40.360,0:01:44.640
So to find out, we set up a study[br]with the Technical University of Munich.

0:01:45.400,0:01:50.576
We surveyed 171 companies[br]in Germany, Austria and Switzerland,

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and as we speak, we're expanding the study

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to 1,600 companies

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in five additional countries[br]around the world.

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We asked those companies[br]basically two things:

0:02:02.680,0:02:05.720
how innovative they are[br]and how diverse they are.

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To measure the first one,

0:02:08.360,0:02:11.080
we asked them about innovation revenue.

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Innovation revenue is the share[br]of revenues they've made

0:02:14.680,0:02:17.696
from new products and services[br]in the last three years,

0:02:17.720,0:02:20.976
meaning we did not ask them[br]how many creative ideas they have,

0:02:21.000,0:02:24.816
but rather if these ideas[br]translate into products and services

0:02:24.840,0:02:28.240
that really make the company[br]more successful today and tomorrow.

0:02:29.760,0:02:34.296
To measure diversity,[br]we looked at six different factors:

0:02:34.320,0:02:37.880
country of origin,[br]age and gender, amongst others.

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While preparing to go in the field[br]with those questions,

0:02:42.280,0:02:44.536
I sat down with my team

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and we discussed what[br]we would expect as a result.

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To put it mildly, we were not optimistic.

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The most skeptical person on the team[br]thought, or saw a real possibility,

0:02:56.560,0:02:58.960
that we would find nothing at all.

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Most of the team[br]was rather on the cautious side,

0:03:02.680,0:03:06.576
so we landed all together at "only if,"

0:03:06.600,0:03:08.696
meaning that we might find[br]some kind of link

0:03:08.720,0:03:11.256
between innovation and diversity,

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but not across the board --

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rather only if certain criteria are met,

0:03:15.880,0:03:19.936
for example leadership style,[br]very open leadership style

0:03:19.960,0:03:24.120
that allowed people to speak up freely[br]and safely and contribute.

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A couple of months later,[br]the data came in,

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and the results convinced[br]the most skeptical amongst us.

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The answer was a clear yes,

0:03:36.440,0:03:38.200
no ifs, no buts.

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The data in our sample showed

0:03:41.000,0:03:45.480
that more diverse companies[br]are simply more innovative, period.

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Now, a fair question to ask[br]is the chicken or the egg question,

0:03:52.160,0:03:55.576
meaning, are companies[br]really more innovative

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because they have[br]a more diverse leadership,

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or the other way around?

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Which way is it?

0:04:01.280,0:04:05.040
Now, we do not know how much[br]is correlation versus causation,

0:04:05.880,0:04:08.856
but what we do know is that clearly,

0:04:08.880,0:04:12.056
in our sample, companies[br]that are more diverse

0:04:12.080,0:04:13.576
are more innovative,

0:04:13.600,0:04:15.896
and that companies[br]that are more innovative

0:04:15.920,0:04:17.760
have more diverse leadership, too.

0:04:18.279,0:04:21.016
So it's fair to assume[br]that it works both ways,

0:04:21.040,0:04:24.920
diversity driving innovation[br]and innovation driving diversity.

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Now, once we published the results,

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we were surprised[br]about the reactions in the media.

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We got quite some attention.

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And it went from quite factual,

0:04:40.200,0:04:44.456
like "Higher Female Share[br]Boosts Innovation"

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to a little bit more sensationalist.

0:04:48.000,0:04:49.936
(Laughter)

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As you can see,

0:04:51.200,0:04:54.296
"Stay-at-home Women Cost Trillions,"

0:04:54.320,0:04:56.256
and, my personal favorite,

0:04:56.280,0:04:58.656
"Housewives Kill Innovation."

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Well, there's no such thing[br]as bad publicity, right?

0:05:01.720,0:05:04.056
(Laughter)

0:05:04.080,0:05:06.056
On the back of that coverage,

0:05:06.080,0:05:09.536
we started to get calls[br]from senior executives

0:05:09.560,0:05:11.256
wanting to understand more,

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especially -- surprise, surprise --[br]about gender diversity.

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I tend to open up[br]those discussions by asking,

0:05:19.800,0:05:23.936
"Well, what do you think of the situation[br]in your organization today?"

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And a frequent reaction to that is,

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"Well, we're not yet there,[br]but we're not that bad."

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One executive told me, for example,

0:05:33.440,0:05:34.976
"Oh, we're not that bad.

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We have one member[br]in our board who is a woman."

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(Laughter)

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And you laugh --

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(Applause)

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Now, you laugh, but he had a point[br]in being proud about it,

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because in Germany,

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if you have a company

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and it has one member[br]on the board who is a woman,

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you are part of a select group of 30

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out of the 100 largest[br]publicly listed companies.

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The other 70 companies[br]have an all-male board,

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and not even one of these hundred[br]largest publicly listed companies

0:06:12.320,0:06:16.000
have, as of today, a female CEO.

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But here's the critically[br]important insight.

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Those few female board members alone,

0:06:24.240,0:06:26.136
they won't make a difference.

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Our data shows that for gender diversity[br]to have an impact on innovation,

0:06:31.200,0:06:34.920
you need to have more[br]than 20 percent women in leadership.

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Let's have a look at the numbers.

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As you can see, we divided[br]the sample into three groups,

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and the results are quite dramatic.

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Only in the group where you have[br]more than 20 percent women in leadership,

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only then you see a clear jump[br]in innovation revenue

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to above-average levels.

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So experience and data[br]shows that you do need critical mass

0:07:01.520,0:07:03.016
to move the needle,

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and companies like Alibaba,[br]JP Morgan or Apple

0:07:06.400,0:07:09.760
have as of today[br]already achieved that threshold.

0:07:12.480,0:07:14.880
Another reaction I got quite a lot was,

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"Well, it will get solved over time."

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And I have all the sympathy in the world[br]for that point of view,

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because I used to think like that, too.

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Now, let's have a look here again[br]and look at the numbers,

0:07:29.920,0:07:32.056
taking Germany as an example.

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Let me first give you the good news.

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So the share of women[br]who are college graduates

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and have at least 10 years[br]of professional experience

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has grown nicely over the last 20 years,

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which means the pool[br]in which to fish for female leaders

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has increased over time,

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and that's great.

0:07:51.600,0:07:53.440
Now, according to my old theory,

0:07:54.880,0:07:56.456
the share of women in leadership

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would have grown[br]more or less in parallel, right?

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Now, let's have a look[br]at what happened in reality.

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It's not even close,

0:08:07.360,0:08:10.576
which means I was so wrong

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and which means that my generation,

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your generation,

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the best-educated[br]female generation in history,

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we have just not made it.

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We have failed to achieve leadership[br]in significant numbers.

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Education just did not[br]translate into leadership.

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Now, that was a painful realization for me

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and made me realize,

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if we want to change this,

0:08:38.320,0:08:40.679
we need to engage,[br]and we need to do better.

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Now, what to do?

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Achieving more than 20 percent[br]women in leadership

0:08:48.880,0:08:51.256
seems like a daunting task to many,

0:08:51.280,0:08:53.760
understandably, given the track record.

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But it's doable,

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and there are many companies today[br]that are making progress there

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and doing it successfully.

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Let's take SAP, the software[br]company, as an example.

0:09:04.720,0:09:09.376
They had, in 2011,[br]19 percent women in leadership,

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yet they decided to do better,

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and they did what you do[br]in any other area of business

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where you want to improve.

0:09:16.040,0:09:18.520
They set themselves a measurable target.

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So they set themselves a target[br]of 25 percent for 2017,

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which they have just achieved.

0:09:27.120,0:09:30.536
The goals made them think more creatively[br]about developing leaders

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and tapping new recruiting pools.

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They now even set a target of 30 percent[br]women in leadership for 2022.

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So experience shows it's doable,

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and at the end of the day,

0:09:42.960,0:09:47.096
it all boils down to two decisions[br]that are taken every day

0:09:47.120,0:09:49.880
in every organization by many of us:

0:09:51.640,0:09:55.040
who to hire and who[br]to develop and promote.

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Now, nothing against women's programs,

0:09:58.600,0:10:00.936
networks, mentoring, trainings.

0:10:00.960,0:10:02.160
All is good.

0:10:03.320,0:10:05.256
But it is these two decisions

0:10:05.280,0:10:09.296
that at the end of the day[br]send the most powerful change signal

0:10:09.320,0:10:10.840
in any organization.

0:10:13.040,0:10:16.096
Now, I never set out[br]to be a diversity advocate.

0:10:16.120,0:10:17.840
I am a business advisor.

0:10:18.720,0:10:23.696
But now my goal is[br]to change the face of leadership,

0:10:23.720,0:10:25.160
to make it more diverse --

0:10:26.080,0:10:28.576
and not so that leaders can check a box

0:10:28.600,0:10:31.576
and feel like they have[br]complied with something

0:10:31.600,0:10:34.136
or they have been politically correct.

0:10:34.160,0:10:35.856
But because they understand,

0:10:35.880,0:10:39.376
they understand that diversity[br]is making their organization

0:10:39.400,0:10:40.800
more innovative, better.

0:10:41.680,0:10:45.536
And by embracing diversity,[br]by embracing diverse talent,

0:10:45.560,0:10:47.880
we are providing[br]true opportunity for everyone.

0:10:48.520,0:10:50.176
Thank you. Thank you so much.

0:10:50.200,0:10:52.840
(Applause)