0:00:01.895,0:00:05.970
Fifteen years ago, I thought[br]that the diversity stuff

0:00:05.970,0:00:08.718
was not something I had to worry about.

0:00:08.718,0:00:13.190
It was something an older[br]generation had to fight for.

0:00:13.190,0:00:16.916
In my university,[br]we were 50-50, male-female,

0:00:16.916,0:00:19.996
and we women had often better grades.

0:00:19.996,0:00:23.210
So while not everything was perfect,

0:00:23.210,0:00:25.764
diversity and leadership decisions

0:00:25.764,0:00:27.920
was something that would happen naturally

0:00:27.920,0:00:30.935
over time, right?

0:00:30.935,0:00:33.420
Well, not quite.

0:00:33.420,0:00:36.253
While moving up the ladder[br]working as a management consultant

0:00:36.253,0:00:38.348
across Europe and the US,

0:00:38.348,0:00:40.553
I started to realize how often

0:00:40.553,0:00:43.147
I was the only woman in the room

0:00:43.147,0:00:47.694
and how homogenous leadership still is.

0:00:47.694,0:00:49.706
Many leaders I met

0:00:49.706,0:00:54.802
saw diversity as something to comply with[br]out of political correctness,

0:00:54.802,0:00:57.980
or, best case, the right thing to do,

0:00:57.980,0:01:00.551
but not as a business priority.

0:01:00.551,0:01:02.886
They just did not have a reason to believe

0:01:02.886,0:01:07.998
that diversity would help them achieve[br]their most immediate, pressing goals:

0:01:07.998,0:01:10.991
hitting the numbers,[br]delivering the new product,

0:01:10.991,0:01:14.741
the real goals they are measured by.

0:01:14.741,0:01:18.147
My personal experience[br]working with diverse teams

0:01:18.147,0:01:22.054
had been that while they require[br]a little bit more effort at the beginning,

0:01:22.054,0:01:26.313
they did bring fresher,[br]more creative ideas.

0:01:26.313,0:01:28.275
So I wanted to know:

0:01:28.275,0:01:31.850
are diverse organizations[br]really more innovative,

0:01:31.850,0:01:36.573
and can diversity be more[br]than something to comply with?

0:01:36.573,0:01:39.296
Can it be a real competitive advantage?

0:01:40.607,0:01:45.669
So to find out, we set up a study[br]with the Technical University of Munich.

0:01:45.669,0:01:48.619
We surveyed 171 companies

0:01:48.619,0:01:50.828
in Germany, Austria, and Switzerland,

0:01:50.828,0:01:53.869
and as we speak, we're expanding the study

0:01:53.869,0:01:56.663
to 1,600 companies

0:01:56.663,0:02:00.035
in five additional countries[br]around the world.

0:02:00.035,0:02:03.082
We asked those companies[br]basically two things:

0:02:03.082,0:02:07.095
how innovative they are,[br]and how diverse they are.

0:02:07.095,0:02:08.560
To measure the first one,

0:02:08.560,0:02:12.202
we asked them about innovation revenue.

0:02:12.202,0:02:14.419
Innovation revenue is the share[br]of revenues they've made

0:02:14.419,0:02:17.943
from new products and services[br]in the last three years,

0:02:17.943,0:02:21.278
meaning we did not ask them[br]how many creative ideas they have,

0:02:21.278,0:02:24.998
but rather if these ideas[br]translate into products and services

0:02:24.998,0:02:29.226
that really make the company[br]more successful today and tomorrow.

0:02:29.226,0:02:34.559
To measure diversity, we looked[br]at six different factors:

0:02:34.559,0:02:39.615
country of origin, age[br]and gender, amongst others.

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

0:02:42.751,0:02:44.808
I sat down with my team

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

0:02:49.274,0:02:52.892
To put it mildly, we were not optimistic.

0:02:52.892,0:02:55.262
The most skeptic on the team thought,

0:02:55.262,0:02:56.780
or saw a real possibility,

0:02:56.780,0:02:59.352
that we would find nothing at all.

0:03:00.665,0:03:02.970
Most of the team was rather[br]on the cautious side,

0:03:02.970,0:03:06.892
so we landed all together at only if,

0:03:06.892,0:03:08.893
meaning that we might find[br]some kind of link

0:03:08.893,0:03:11.470
between innovation and diversity,

0:03:11.470,0:03:13.209
but not across the board,

0:03:13.209,0:03:16.417
rather only if certain criteria are met,

0:03:16.417,0:03:18.930
for example leadership style,

0:03:18.930,0:03:21.751
very open leadership style[br]that allowed people

0:03:21.751,0:03:25.693
to speak up freely and safely[br]and contribute.

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

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

0:03:34.900,0:03:37.316
The answer was a clear yes,

0:03:37.316,0:03:39.122
no ifs, no buts.

0:03:39.122,0:03:41.300
The data in our sample showed

0:03:41.300,0:03:47.403
that more diverse companies[br]are simply more innovative, period.

0:03:47.403,0:03:52.409
Now, a fair question to ask[br]is the chicken or the egg question,

0:03:52.409,0:03:55.849
meaning, are companies[br]really more innovative

0:03:55.849,0:03:58.553
because they have[br]a more diverse leadership,

0:03:58.553,0:04:01.590
or the other way around? Which way is it?

0:04:01.590,0:04:06.128
Now, we do not know how much[br]is correlation versus causation,

0:04:06.128,0:04:09.138
but what we do know is that clearly,

0:04:09.138,0:04:12.346
in our sample, companies[br]that are more diverse

0:04:12.346,0:04:14.028
are more innovative,

0:04:14.028,0:04:16.775
and that companies[br]that are more innovative

0:04:16.775,0:04:18.503
have a more diverse leadership too.

0:04:18.503,0:04:21.126
So it's fair to assume[br]that it works both ways,

0:04:21.126,0:04:23.319
diversity driving innovation

0:04:23.319,0:04:27.667
and innovation driving diversity.

0:04:27.667,0:04:30.652
Now, once we published the results,

0:04:30.652,0:04:32.754
we were surprised

0:04:32.754,0:04:34.918
about the reactions in the media.

0:04:34.918,0:04:37.955
we got quite some attention,

0:04:37.955,0:04:40.550
and it went from quite factual,

0:04:40.550,0:04:44.553
like "Higher Female Share[br]Boost Innovation"

0:04:44.553,0:04:47.877
to a little bit more sensationalist.

0:04:47.877,0:04:50.173
(Laughter)

0:04:50.173,0:04:51.790
As you can see,

0:04:51.790,0:04:54.599
"Stay-at-home Women Cost Trillions,"

0:04:54.599,0:04:56.598
and, my personal favorite,

0:04:56.598,0:04:58.991
"Housewives Kill Innovation."

0:04:58.991,0:05:02.117
Well, there's no such thing[br]as bad publicity, right?

0:05:02.117,0:05:04.392
(Laughter)

0:05:04.392,0:05:06.457
On the back of that coverage,

0:05:06.457,0:05:09.818
we started to get calls[br]from senior executives

0:05:09.818,0:05:11.635
wanting to understand more,

0:05:11.635,0:05:15.960
especially, surprise surprise,[br]about gender diversity.

0:05:15.960,0:05:20.035
I tend to open up[br]those discussions by asking,

0:05:20.035,0:05:24.251
"Well, what do you think of the situation[br]in your organization today?"

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And a frequent reaction to that is,

0:05:27.185,0:05:31.533
"Well, we're not yet there,[br]but we're not that bad."

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One executive told me, for example,

0:05:33.695,0:05:35.156
"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 --

0:05:40.787,0:05:43.320
(Applause)

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

0:05:50.435,0:05:52.010
because in Germany,

0:05:52.010,0:05:56.317
if you have a company and it has[br]one member on the board

0:05:56.317,0:05:57.723
who is a woman,

0:05:57.723,0:05:59.715
you are part of a select group of 30

0:05:59.715,0:06:03.398
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

0:06:12.430,0:06:17.099
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,

0:06:24.370,0:06:26.535
they won't make a difference.

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

0:06:31.465,0:06:35.733
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.

0:06:45.566,0:06:50.291
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

0:06:55.066,0:06:57.763
to above-average levels.

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

0:07:01.723,0:07:03.385
to move the needle,

0:07:03.385,0:07:06.661
and companies like Alibaba,[br]JP Morgan, or Apple

0:07:06.661,0:07:12.234
has of today already[br]achieved that threshold.

0:07:12.234,0:07:15.896
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,

0:07:23.752,0:07:26.920
because I used to think like that too.

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Now, let's have a look here again,

0:07:30.267,0:07:31.513
and look at the numbers,

0:07:31.513,0:07:32.423
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

0:07:40.648,0:07:44.289
has grown nicely over the last 20 years,

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

0:07:47.951,0:07:50.280
has increased over time,

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and that's great.

0:07:51.879,0:07:55.126
Now, according to my old theory,

0:07:55.126,0:07:57.577
the share of women in leadership[br]would have grown

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more or less in parallel, right?

0:08:00.219,0:08:03.701
Now, let's have a look[br]at what happened in reality.

0:08:03.701,0:08:06.337
It's not even close,

0:08:06.337,0:08:10.863
which means I was so wrong,

0:08:10.863,0:08:13.815
and which means that my generation,

0:08:13.815,0:08:15.911
your generation,

0:08:15.911,0:08:20.803
the best-educated[br]female generation in history,

0:08:20.803,0:08:22.393
we have just not made it.

0:08:22.393,0:08:24.897
We have failed to achieve leadership[br]in significant numbers.

0:08:24.897,0:08:29.734
Education just did not[br]translate into leadership.

0:08:30.775,0:08:34.290
Now, that was a painful realization for me

0:08:34.290,0:08:36.654
and made me realize,

0:08:36.654,0:08:38.723
if we want to change this,

0:08:38.723,0:08:42.394
we need to engage[br]and we need to do better.

0:08:42.394,0:08:45.689
Now, what to do?

0:08:45.689,0:08:49.292
Achieving more than 20 percent[br]women in leadership

0:08:49.292,0:08:51.996
seems like a daunting task to many,

0:08:51.996,0:08:54.937
understandably given the track record.

0:08:54.937,0:08:56.933
But it's doable,

0:08:56.933,0:09:00.260
and there are many companies today[br]that are making progress there

0:09:00.260,0:09:01.558
and doing it successfully.

0:09:01.558,0:09:05.027
Let's take SAP, the software[br]company, as an example.

0:09:05.027,0:09:09.875
They had, in 2011, 19 percent[br]women in leadership,

0:09:09.875,0:09:11.593
yet they decided to do better,

0:09:11.593,0:09:14.723
and they did what you do[br]in any other area of business

0:09:14.723,0:09:16.282
where you want to improve.

0:09:16.282,0:09:19.921
They set themselves a measurable target.

0:09:19.921,0:09:24.610
So they set themselves a target[br]of 25 percent for 2017,

0:09:24.610,0:09:27.394
which they just have achieved.

0:09:27.394,0:09:30.731
The goals made them think more creatively[br]about developing leaders

0:09:30.731,0:09:33.442
and tapping new recruiting pools.

0:09:33.442,0:09:38.819
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,

0:09:41.265,0:09:42.921
and at the end of the day,

0:09:42.921,0:09:47.389
it all boils down to two decisions[br]that are taken every day

0:09:47.389,0:09:49.322
in every organization by many of us:

0:09:49.322,0:09:56.406
who to hire, and who[br]to develop and promote?

0:09:56.406,0:09:59.783
Now, nothing against women's programs,

0:09:59.783,0:10:01.307
networks, mentoring, trainings.

0:10:01.307,0:10:03.502
All is good.

0:10:03.502,0:10:05.886
But it is these two decisions

0:10:05.886,0:10:07.254
that at the end of the day

0:10:07.254,0:10:09.590
send the most powerful chain signal

0:10:09.590,0:10:13.330
in any organization.

0:10:13.330,0:10:16.575
Now, I never set out to be[br]a diversity advocate.

0:10:16.575,0:10:18.994
I am a business advisor.

0:10:18.994,0:10:24.057
But now, now my goal[br]is to change the face of leadership,

0:10:24.057,0:10:26.394
to make it more diverse,

0:10:26.394,0:10:28.931
and not so that leaders can check a box

0:10:28.931,0:10:31.980
and feel like they have[br]complied with something

0:10:31.980,0:10:34.560
or they have been politically correct,

0:10:34.560,0:10:36.492
but because they understand,

0:10:36.492,0:10:40.526
they understand that diversity[br]is making their organization

0:10:40.526,0:10:42.060
more innovative, better,

0:10:42.060,0:10:45.763
and by embracing diversity,[br]by embracing diverse talent,

0:10:45.763,0:10:48.749
we are providing[br]true opportunity for everyone.

0:10:48.749,0:10:49.951
Thank you.

0:10:49.951,0:10:51.249
Thank you so much.

0:10:51.249,0:10:52.817
(Applause)