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Showing Revision 7 created 11/18/2017 by Brian Greene.

  1. Fifteen years ago,
  2. I thought that the diversity stuff
    was not something I had to worry about.
  3. It was something an older
    generation had to fight for.
  4. In my university,
    we were 50-50, male-female,
  5. and we women often had better grades.
  6. So while not everything was perfect,
  7. diversity and leadership decisions
  8. was something that would happen
    naturally over time, right?
  9. Well, not quite.

  10. While moving up the ladder
    working as a management consultant
  11. across Europe and the US,
  12. I started to realize how often
    I was the only woman in the room
  13. and how homogenous leadership still is.
  14. Many leaders I met
  15. saw diversity as something to comply with
    out of political correctness,
  16. or, best case, the right thing to do,
  17. but not as a business priority.
  18. They just did not have a reason to believe
  19. that diversity would help them achieve
    their most immediate, pressing goals:
  20. hitting the numbers,
    delivering the new product,
  21. the real goals they are measured by.
  22. My personal experience
    working with diverse teams

  23. had been that while they require
    a little bit more effort at the beginning,
  24. they did bring fresher,
    more creative ideas.
  25. So I wanted to know:
  26. Are diverse organizations
    really more innovative,
  27. and can diversity be more
    than something to comply with?
  28. Can it be a real competitive advantage?
  29. So to find out, we set up a study
    with the Technical University of Munich.

  30. We surveyed 171 companies
    in Germany, Austria and Switzerland,
  31. and as we speak, we're expanding the study
  32. to 1,600 companies
  33. in five additional countries
    around the world.
  34. We asked those companies
    basically two things:
  35. how innovative they are
    and how diverse they are.
  36. To measure the first one,

  37. we asked them about innovation revenue.
  38. Innovation revenue is the share
    of revenues they've made
  39. from new products and services
    in the last three years,
  40. meaning we did not ask them
    how many creative ideas they have,
  41. but rather if these ideas
    translate into products and services
  42. that really make the company
    more successful today and tomorrow.
  43. To measure diversity,
    we looked at six different factors:
  44. country of origin,
    age and gender, amongst others.
  45. While preparing to go in the field
    with those questions,

  46. I sat down with my team
  47. and we discussed what
    we would expect as a result.
  48. To put it mildly, we were not optimistic.
  49. The most skeptical person on the team
    thought, or saw a real possibility,
  50. that we would find nothing at all.
  51. Most of the team
    was rather on the cautious side,
  52. so we landed all together at "only if,"
  53. meaning that we might find
    some kind of link
  54. between innovation and diversity,
  55. but not across the board --
  56. rather only if certain criteria are met,
  57. for example leadership style,
    very open leadership style
  58. that allowed people to speak up freely
    and safely and contribute.
  59. A couple of months later,
    the data came in,

  60. and the results convinced
    the most skeptical amongst us.
  61. The answer was a clear yes,
  62. no ifs, no buts.
  63. The data in our sample showed
  64. that more diverse companies
    are simply more innovative, period.
  65. Now, a fair question to ask
    is the chicken or the egg question,

  66. meaning, are companies
    really more innovative
  67. because they have
    a more diverse leadership,
  68. or the other way around?
  69. Which way is it?
  70. Now, we do not know how much
    is correlation versus causation,
  71. but what we do know is that clearly,
  72. in our sample, companies
    that are more diverse
  73. are more innovative,
  74. and that companies
    that are more innovative
  75. have more diverse leadership, too.
  76. So it's fair to assume
    that it works both ways,
  77. diversity driving innovation
    and innovation driving diversity.
  78. Now, once we published the results,

  79. we were surprised
    about the reactions in the media.
  80. We got quite some attention.
  81. And it went from quite factual,
  82. like "Higher Female Share
    Boosts Innovation"
  83. to a little bit more sensationalist.
  84. (Laughter)

  85. As you can see,

  86. "Stay-at-home Women Cost Trillions,"
  87. and, my personal favorite,
  88. "Housewives Kill Innovation."
  89. Well, there's no such thing
    as bad publicity, right?
  90. (Laughter)

  91. On the back of that coverage,

  92. we started to get calls
    from senior executives
  93. wanting to understand more,
  94. especially -- surprise, surprise --
    about gender diversity.
  95. I tend to open up
    those discussions by asking,
  96. "Well, what do you think of the situation
    in your organization today?"
  97. And a frequent reaction to that is,
  98. "Well, we're not yet there,
    but we're not that bad."
  99. One executive told me, for example,
  100. "Oh, we're not that bad.
  101. We have one member
    in our board who is a woman."
  102. (Laughter)

  103. And you laugh --

  104. (Applause)

  105. Now, you laugh, but he had a point
    in being proud about it,

  106. because in Germany,
  107. if you have a company
  108. and it has one member
    on the board who is a woman,
  109. you are part of a select group of 30
  110. out of the 100 largest
    publicly listed companies.
  111. The other 70 companies
    have an all-male board,
  112. and not even one of these hundred
    largest publicly listed companies
  113. have, as of today, a female CEO.
  114. But here's the critically
    important insight.
  115. Those few female board members alone,
  116. they won't make a difference.
  117. Our data shows that for gender diversity
    to have an impact on innovation,
  118. you need to have more
    than 20 percent women in leadership.
  119. Let's have a look at the numbers.
  120. As you can see, we divided
    the sample into three groups,
  121. and the results are quite dramatic.
  122. Only in the group where you have
    more than 20 percent women in leadership,
  123. only then you see a clear jump
    in innovation revenue
  124. to above-average levels.
  125. So experience and data
    shows that you do need critical mass
  126. to move the needle,
  127. and companies like Alibaba,
    JP Morgan or Apple
  128. have as of today
    already achieved that threshold.
  129. Another reaction I got quite a lot was,

  130. "Well, it will get solved over time."
  131. And I have all the sympathy in the world
    for that point of view,
  132. because I used to think like that, too.
  133. Now, let's have a look here again
    and look at the numbers,
  134. taking Germany as an example.
  135. Let me first give you the good news.
  136. So the share of women
    who are college graduates
  137. and have at least 10 years
    of professional experience
  138. has grown nicely over the last 20 years,
  139. which means the pool
    in which to fish for female leaders
  140. has increased over time,
  141. and that's great.
  142. Now, according to my old theory,
  143. the share of women in leadership
  144. would have grown
    more or less in parallel, right?
  145. Now, let's have a look
    at what happened in reality.
  146. It's not even close,
  147. which means I was so wrong
  148. and which means that my generation,
  149. your generation,
  150. the best-educated
    female generation in history,
  151. we have just not made it.
  152. We have failed to achieve leadership
    in significant numbers.
  153. Education just did not
    translate into leadership.
  154. Now, that was a painful realization for me

  155. and made me realize,
  156. if we want to change this,
  157. we need to engage,
    and we need to do better.
  158. Now, what to do?
  159. Achieving more than 20 percent
    women in leadership
  160. seems like a daunting task to many,
  161. understandably, given the track record.
  162. But it's doable,
  163. and there are many companies today
    that are making progress there
  164. and doing it successfully.
  165. Let's take SAP, the software
    company, as an example.
  166. They had, in 2011,
    19 percent women in leadership,
  167. yet they decided to do better,
  168. and they did what you do
    in any other area of business
  169. where you want to improve.
  170. They set themselves a measurable target.
  171. So they set themselves a target
    of 25 percent for 2017,
  172. which they have just achieved.
  173. The goals made them think more creatively
    about developing leaders
  174. and tapping new recruiting pools.
  175. They now even set a target of 30 percent
    women in leadership for 2022.
  176. So experience shows it's doable,

  177. and at the end of the day,
  178. it all boils down to two decisions
    that are taken every day
  179. in every organization by many of us:
  180. who to hire and who
    to develop and promote.
  181. Now, nothing against women's programs,
  182. networks, mentoring, trainings.
  183. All is good.
  184. But it is these two decisions
  185. that at the end of the day
    send the most powerful change signal
  186. in any organization.
  187. Now, I never set out
    to be a diversity advocate.

  188. I am a business advisor.
  189. But now my goal is
    to change the face of leadership,
  190. to make it more diverse --
  191. and not so that leaders can check a box
  192. and feel like they have
    complied with something
  193. or they have been politically correct.
  194. But because they understand,
  195. they understand that diversity
    is making their organization
  196. more innovative, better.
  197. And by embracing diversity,
    by embracing diverse talent,
  198. we are providing
    true opportunity for everyone.
  199. Thank you. Thank you so much.

  200. (Applause)