Can Women Save the Economy?
As we look for silver linings in this global recession, maybe we should switch lenses—and look for a pink lining instead. Evidence is emerging that women could be the key to getting us out of this crisis. Indeed, if there’d been more of us around at the higher echelons of finance, the world might not have charged so headlong into this slump in the first place.
Women, it turns out, are no longer P.C. nods to corporate diversity; we are the hottest business commodity around, in this economic environment, as much as any other. And this new recognition of corporate clout is giving us power beyond our feminist dreams.
Look at these numbers. In our new book, Womenomics, we call them pink profits.
Companies that employ more women make more money. A two-decade-long survey by Pepperdine University of 215 Fortune 500 companies found that by every measure of profitability—equity, revenue, and assets—companies with the best record for promoting women outperform the competition. Indeed, those companies with the very best record beat the average by up to 116 percent.
The University of California at Davis has drawn similar conclusions. It recently found that companies with women in senior management have “stronger relationships with customers and shareholders and more diverse and profitable business.”
This pattern holds even, and maybe especially, right now. A study of the French stock exchange last year shows that the more women there were in a company’s management, the less its share price fell in that bad year. In fact, the only large French company whose share price actually rose last year was Hermès, which also has the second largest feminized management team of any company on the CAC 40.
So, what’s going on?
Well, companies are finding that women’s management styles are not only different, but good for business. It’s now pretty clear that Mars and Venus have muscled their way into the boardroom, too. When it comes to business styles, women are more open and inclusive than men. We tend to encourage broader participation in meetings and like to foster consensus. We nurture subordinates more effectively and prefer conciliation over confrontation, empathy over ego. We are also more cautious, more risk averse. We take a longer term view of decision making than men.
It’s those last qualities which seem to stand up to this particular economic climate. The theory behind the French stock exchange figures is that in this environment, investors prefer more cautious management.
Add to those pink profits and feminine traits the fact that we women are better educated (we earn 57 percent of all undergraduate degrees in America and 58 percent of all graduate degrees) and better at spending (we now buy more than half of all cars in America and are responsible for 83 percent of all consumer purchases) and you begin to see the wave of power driving womenomics.
With a talent shortage looming, companies need us as never before. They know it and we should, too, because it is the key to revolutionizing the workplace to fit our particular female needs.
This is the other side of the Womenomics equation. We can take that power and use it to live and work the way we’ve always really wanted.
In 2003 Harvard Business School released a study confirming what we all suspected: Professional women were leaving the workplace in greater numbers than they were joining it, for the first time ever. Faced with the agonizing clash between 60-hour a week jobs and the desire to be good mothers, women were deciding they couldn’t do it all. In the battle of kids vs. career, kids usually won.
If well-educated, professional women are going to stay in the workplace, and God knows, the economy really needs them, then the workplace simply has to change. Our feminist forebears bust a gut to get us here, and we are eternally grateful. They bought into the career ladder, with their heads down and their own needs shelved. They were simply grateful to be at the boardroom table—they certainly didn’t think they could redesign that table to suit their own needs.
But now we can. Those same companies need us so badly that we are in a position to ask for what we want. And what we want is quite simply time.
If well-educated, professional women are going to stay in the workplace, and God knows, the economy really needs them, then the workplace simply has to change.
According to research by the Families and Work Institute, the number of women prepared to trade status and money for time is growing an astonishingly fast rate. In 1992, 57 percent of all college-educated women said they wanted to move to jobs with more responsibility. By 2002 that number had fallen to 36 percent. By 2007 it was down again; only 28 percent of us wanted more responsibility. That’s a 30-point drop in 25 years! The linear corporate ladder doesn’t get us where we want to be. Our careers need to be waves where we can dial up and down, according to the changing demands of our lives.
Often, but by no means always, spurred on by the demands of motherhood, women are negotiating for different work models. We have spoken to women all across America in industries as diverse as law, finance, engineering, and communications who are using their skills and clout to create flexible, balanced, and saner work lives.
But here’s where the revolution really starts and we believe it heralds the biggest workforce shift since World War II first ushered women into the workplace in such large numbers. Many of the women we talked to are negotiating these four-day weeks, work from home, part time, flex time, alternative schedules on their own during hushed conversations with their bosses. But some work for companies who are embracing this change from top to bottom and from woman to man.
Companies like Capital One, Sun Microsystems, Best Buy, and Deloitte and Touche realize that flexibility is no longer a favor to be handed out like candy at a children’s birthday party, it is a sound business strategy. It starts with desperately needed talent retention—companies can’t afford to loose those valuable women, remember. But it soon becomes a profitable exercise in itself.
When Best Buy threw out the clock and allowed employees to work to their own schedules, when and where they wanted, measuring their performance purely on results, not hours in the street, it found that productivity increased by a stunning 40 percent. Technology allowed its workers to work wherever they wanted, whenever they wanted, so long as they met the bottom line. Employees, male and female, were so thrilled to be treated like adults that they returned the compliment in commitment and performance.
Women are improving the performance of corporate America. Womenomics is improving the lives of those women.
Claire Shipman is the senior national correspondent for ABC News' Good Morning America and a regular on This Week with George Stephanopoulos . Previously, Shipman was the White House correspondent for NBC news and a reporter for CNN in Moscow , where she earned multiple awards for her coverage of the demise of the Soviet Union. She currently lives in Washington, D.C., with her husband and two children.
Katty Kay is the Washington correspondent and anchor for BBC World News America . She is also a contributor on Meet the Press , The Charlie Rose Show , and The Chris Matthews Show , as well as a regular guest host for Diane Rehm on NPR. Kay grew up in the Middle East and now lives in Washington, D.C., with her husband and four children.