The Promise of Future Leadership Highly Talented Employees in the Pipeline Limited Hot Jobs Stall Women s Careers This summary is based on the Catalyst report Good Intentions, Imperfect Execution? Women Get Fewer of the Hot Jobs Needed to Advance. In this era of big data, there is a tremendous amount of information available to inform business decisions and corporate practices. The resulting data-driven, evidence-based management approach has shaped a variety of functional areas, but many organizations have not yet applied it to their strategic talent management. Could a closer look at the numbers help companies refresh their talent management strategy to ensure that future leaders are prepared to address increasingly complex business issues? Yes with the appropriate metrics and data, talent management leaders can find the most effective strategies for intentionally and equitably developing their high-potential employees. A Leaky Pipeline Catalyst s annual Census reports show that the representation of women in the senior ranks has been virtually unchanged for years, despite considerable organizational investment in talent management systems. Women s underrepresentation in leadership roles is a signal that talent management processes may not be working as intended, and that there are leaks in the pipeline. 1 Other evidence for the leaky pipeline comes from Catalyst s longitudinal research, which has followed the careers of high-potential men and women MBA graduates from top business schools around the world with four surveys since 2008 to gather information on their career experiences. We have found that women lag men with respect to level and pay from their very first jobs post-mba, indicating that leaks in the talent pipeline of high-potential employees form at the very beginning. 2 Because leadership development begins early in careers, could inequality in development opportunities explain the gender gap that also emerges so early? To answer this, our most recent research analyzed responses from 1,660 high potentials about the myriad ways they are developed to become future leaders, 3 including formal development programs and the on-thejob experiences that build skills and demonstrate competency. Based on this data, we have determined which experiences predict advancement, and where organizations may unwittingly be creating leaks in their pipeline. 4 We shared our findings with senior leaders from organizations around the world to get their insights and learn what their organizations are doing to more strategically develop their pipeline of diverse talent. Cathleen Benko, Vice Chairman & Managing Principal, Brand, Deloitte LLP, says, We need to shift our thinking and our language from leadership as a position to leadership as a competency. It s not something you aspire to, it s something you continually build skills in from very early in your career.
Who Gets Developed? Who Gets Advanced? Board Chair In the 70/20/10 model, scholars contend that 70% Board of development happens on the job, 20% happens Chair through critical relationships, and only 10% occurs through formal training programs. 5 Our current research on leadership development supports Board this model. We found that big roles more than formal Chair programs were the game changers when it comes to career advancement. High potentials got ahead further and faster when they worked on highly visible projects, held mission-critical roles, and took international assignments. 6 But not all of these opportunities are created equal, and it s important to distinguish between two possible objectives and outcomes: development and advancement. Some experiences are meant to develop new skills in an employee, while others are designed to position the employee to take on bigger assignments or roles. For example, mentors offer development support in the form of advice and guidance but sponsors open the doors to advancement and actively advocate on the behalf of high potentials. When high potentials are developed, they might be perceived as having the necessary potential to perform in more advanced roles; in other cases, it might be seen as necessary to first accumulate more proof of performance before they are ready to move to the next level. Among the high potentials whose careers we have been following, men got more of the gamechanging experiences that ultimately predicted advancement than women did. The projects men reported working on had budgets that were more than twice that of women s projects and more than three times as many employees staffed to them. In addition, about one third of men reported getting C-Suite visibility to a very great extent while working on projects compared to only one quarter of women. And men felt their projects involved a higher level of risk to their companies than did women..24 x 2 w/.08 width between.24 x 2 w/.08 width between Men also had greater access to mission-critical roles than women. More men than women held positions involving:.24 x 2 w/.08 width between Profit and loss responsibility 46% 56% Management of direct reports 70% 77% Budget responsibility of greater than $10 million 22% 30% Men Women Finally, among those who had worked in at least one multinational company post-mba, men also received more international experiences than women. More men worked on global teams requiring extensive travel without relocation (88% of men, 77% of women). More More men worked men on worked global teams on requiring global extensive teams travel without requiring relocation (88% extensive of men, 77% travel of women). without relocation 77% 88% More men had international relocations (28% of men, 17% of women). More men had international relocations More men had international relocations (28% of men, 17% of women). 17% 28% Men Women 2 Limited Hot Jobs Stall Women s Careers
Imperfect Execution Hampers Equitable Development Get an international assignment (23% of men, 14% of women). Get an However, international missed assignment opportunities (23% of men, are 14% also of women). evident in the outcomes. After development programs, Get men an international were more assignment likely than (23% women of men, to: 14% of women). These data suggest imperfect execution of Get an international assignment talent development initiatives. Despite significant investments made in these initiatives, the equitable 23% allocation of critical assignments has been overlooked. Is this because those accountable for 14% diversity goals are directing their efforts elsewhere? Receive profit and loss responsibility (13% of men, 7% of women). Herminia Ibarra, Cora Chaired Professor of Receive 0 profit and loss responsibility (13% of 100men, 7% of women). Leadership and Learning at INSEAD, has shown that Receive profit and loss responsibility diversity initiatives tend to focus on programmatic Receive profit and loss responsibility (13% of men, 7% of women). elements and not the allocation of assignments 13% which the 70/20/10 model suggests is the true driver of advancement. 7 7% Imperfect execution doesn t mean that formal leadership programs don t play an important role in developing high potentials. We found that these programs can provide high-potential women and men alike with access to the career-changing experiences that can get them ahead. Within 18 months of participating in leadership development programs, 43% were given a cross-functional assignment, 39% received a high-visibility assignment, 30% received a stretch assignment, and 30% saw their number of direct reports increase. When studying high potentials experiences in formal leadership development programs, we Have their Have budget their oversight budget increased oversight by 20% or increased found additional evidence of imperfect execution. Have more their (22% by 20% budget of men, or oversight 15% more of women). increased by 20% or Women entered leadership development programs more (22% of men, 15% of women). earlier in their careers and remained in them longer. Have their budget 22% oversight increased by 20% or More women than men had a formal leadership more (22% of men, 15% of women). development program opportunity by the end of 15% their first year post-mba, while more men than women participated in programs two to four years Receive 0 a promotion within a year (51% of men, 100 37% post-mba. And more women attended programs Receive of women). Receive a promotion within a year a promotion within a year (51% of men, 37% lasting a year or longer, while more men were in of women). programs lasting less than six months. 51% Receive a promotion within a year (51% of men, 37% of women). Why are women funneled into development 37% programs earlier in their careers, and why do they remain in these programs longer? Is there a sense that women need more development, while men Men Women are more likely to be seen as ready sooner to secure There was one outcome that women were more the next big role? likely than men to receive being assigned a mentor (47% of women, 39% of men). This supports our past findings that women feel mentored to death, receiving endless development without subsequent advancement opportunities. 8 Those findings also showed that having more mentors didn t lead to advancement; rather, having senior mentors who are in a position to provide sponsorship did. In another earlier report in our series on high potentials, we also found some evidence that men are paid for potential while women are rewarded for proven performance: men had greater pay 3 Limited Hot Jobs Stall Women s Careers
increases when they changed employers, while women s salaries grew more when they remained with the same company. 9 Could the potential versus performance distinction be responsible in part for imperfect execution? Is participating in a strategically timed development program sufficient for men to be seen as ready? Organizations need to clarify their goals for development programs to ensure that outcomes align with objectives and that talent is developed equitably. Rather than developing high potentials for the sake of ticking a box, companies should do so intentionally and strategically. Is the goal simply the development of skills, or is it advancement? If the goal is advancement, what signals that someone is ready for the next level demonstrated potential or proven performance? Organizational clarity on these questions could help ensure more effective and equitable execution of leadership development initiatives. Keys to More Effective Execution For more effective execution of talent management practices, organizations need to ensure they have sufficient information on which to base decisions, that leaders are held accountable for progress toward goals, and that employees see the big picture. By gathering more data, holding leaders accountable for the success or failure of initiatives, and helping employees have line of sight so they can see the implications of their actions on broader organizational objectives, organizations can firmly establish themselves as an employer of choice for top talent. While Catalyst has been making these recommendations for years, we have seen leading companies establish increasingly innovative practices to tackle these ongoing challenges and reinvigorate their talent management initiatives. Gather Information Despite the availability of big data, misinformation persists. Conventional wisdom might suggest that our finding that women were less likely than men to have international assignments is due to women s resistance to relocate, particularly if they have a family. We did, in fact, find that men were more willing to relocate than were women (56% of men, 39% of women). However, when we looked only at the women and men who were most willing to relocate, we found that 35% of men had an international assignment compared to 26% of women. And it s not that women were turning assignments down; rather, more women than men were never offered the opportunity. Are managers making assumptions about what women want? To avoid this, companies need systematic ways to gather information about their high potentials their aspirations, interest in big projects, willingness to travel or relocate, and desire for cross-functional experience. KPMG established formal processes for information sharing across the firm, leveling the playing field for all staff. In KPMG LLP s 2009 Catalyst Award-winning approach, mentors and leadership encourage employees to explore career growth opportunities such as rotations, functional/office transfers, and global opportunities. 10 Through KPMG s performance management system, leaders can search for employees by skill, specialty, language, and interest in relocation or cross-functional opportunities. Employees also have access to Employee Career Architecture, a set of online resources that removes ambiguity and secrecy around careers paths, skills, and the experiences needed for advancement. In many cases, high-potential employees might need guidance about the next big roles they should be seeking if they want to advance to leadership roles. Indra K. Nooyi, Chairman and CEO, PepsiCo, Inc., speaking at the 2008 Catalyst Awards Conference, described a time when she was guided toward the next big step she needed to take in her 4 Limited Hot Jobs Stall Women s Careers
Questions for Leaders Which career experiences have the greatest impact on advancement in your workplace? Is the list the same for women and men? Do you track the representation of women at each level? What about women s representation in mission-critical roles? ** Are metrics available to determine women s representation in mission-critical roles within the same level at your organization, addressing the notion that not all roles at the same level are created equal? Is there a sense that women need more development, while men are more likely to be seen as ready sooner to secure the next big role? career. 11 She recounted the story of a day, a decade earlier, when the then-president of PepsiCo walked into her office and said he wanted her to take on a project in another part of the business. If he s asking me to do this job there s got to be a reason, she concluded at the time. She realized he was telling her that to advance she needed the sort of experience that she could only get from that role. She reflected that while it might feel like someone overseeing your career is pushing you into areas you never thought you could go, once you get there, it s a great step up the corporate ladder. But it might not be enough to leave it up to individual managers. As high potentials are informed about the opportunities they should be considering, employers need to ensure that career paths are carefully, strategically, and equitably managed so that equal opportunities are made available to high-potential women and men alike. It s so important to conduct internal research to uncover where unintentional bias may creep into the system, says Ann-Marie Campbell, President Southern Division, The Home Depot, Inc. Asking questions of your high potentials can illuminate the factors that need to be addressed to ensure fairness in talent management processes. When gathering and analyzing data in an effort to measure progress toward gender parity goals, it s important to make comparisons over time. If you take a snapshot of your pipeline of talent at any point in time you may see consistent gender representation across roles, says Robert Pease, President & CEO, Motiva Enterprises LLC. But he cautions that without more comprehensive information, that simplistic approach could be misleading. When you map the current with the past, you may find that men are moving up through the pipeline into key roles while women are staying in the pipeline without advancing. His advice: Digging deeper going beyond the superficial numbers can help you uncover where and why progress has stalled. Without data, you can t determine where the leaks in the pipeline are thwarting progress. Does your HR team have the skills and resources required to leverage big data that can inform strategic decisions? 5 Limited Hot Jobs Stall Women s Careers
Hold People Accountable Once information has been gathered and analyzed, companies can use the evidence to determine the experiences that matter for their future leaders for example, the highly visible projects, mission-critical roles, and international assignments that predicted advancement in our global study. Questions for Leaders Whose responsibility is it to ensure that high-potential employees know about critical opportunities? To what extent could your organization offer on-the-job projects, roles, international experiences, or formal programs in more deliberate, strategic, and intentional ways to prepare high potentials for the next level? If managers or employees felt that leadership development was being executed imperfectly, to whom could they turn to raise that concern? Who is responsible for ensuring that these assignments are allocated in strategic, intentional, and equitable ways? If accountability falls to HR, do they have the influence needed to steer high potentials toward key assignments? If individual managers are accountable, how are they motivated to make decisions that support organizational diversity goals? And what oversight is in place to ensure individuals can really see the big picture? Part of the problem is that companies may allow peoplemanagement decisions to be made at lower levels than is advisable if you want to ensure consistency and fairness, cautions Benito Cachinero-Sanchez, Senior Vice President, Human Resources, DuPont. Where we see very few women promoted to supervisory roles, we need to determine whether decisions are made at a very local level... Many small decisions build up, so you need someone at a higher level with accountability to step in and make some of those decisions. At Deutsche Bank, cohort consistency is an important part of the lexicon. When looking down the pipeline and considering the gender balance, if you re not promoting up in proportion to what s below, it is flagged, explains Eileen Taylor, Global Head of Diversity, Deutsche Bank. As the adage goes, what gets measured gets done. When people know they will be held personally accountable for not meeting specific goals, they are more likely to work toward them. The bank also holds senior leaders accountable in very specific and visible ways. Deutsche Bank s Accomplished Top Leaders Advancement Strategy (ATLAS) provides high-potential women with heightened visibility and contact with influential Deutsche Bank leaders who champion them to lead the firm and advocate for them to fill senior-most positions. Key information about participants such as rates of retention, number of meetings with sponsors, and promotion data is sent to the firm s Group Executive Committee (GEC) for review at its regular meetings. The GEC, in turn, is accountable to Deutsche Bank s CEO for ATLAS women s progress. 12 6 Limited Hot Jobs Stall Women s Careers
Help People See the Big Picture Managers must be able to see the long-term benefits of developing future leaders for the organization, even if it means letting some of their talented employees move to other teams. Questions for Leaders How is the business case for gender diversity communicated in your organization? What is the response to resistance? Which development opportunities formal programs, projects, missioncritical roles, or international assignments are intended primarily to develop skills and which are designed to lead to advancement? How do high potentials career development plans incorporate varied experiences and reflect these different development and advancement outcomes? At McDonald s, a globally managed talent system ensures that no one can prevent their high potentials from getting experiences in other divisions or countries if that development would benefit the broader organization. Everyone from across the company puts their people in a shared pool, and when employees are in this pool, they can be considered for all available roles, Jan Fields, President, McDonald s USA, decribes. This helps ensure everyone gets to know our high-potentials from around the world and has gotten people focused on promoting a diverse pipeline. 13 Humana, one of the United States largest Medicare providers and a top health insurer, sent a clear message that the status quo wasn t enough. In goal-setting, Humana wanted to strive higher than simply matching or slightly exceeding its peers with respect to the representation of women in leadership roles. It set aside the alltoo-tempting benchmark approach and instead focused on the bigpicture goal of developing a strong pipeline of talent. 14 7 Limited Hot Jobs Stall Women s Careers
Case in Point: Scotiabank15 Scotiabank s 2007 Catalyst Award-winning initiative was based on a sophisticated threepronged approach transparency, accountability, and actionable programs backed by rigorous research. As its first step in establishing and communicating the big-picture vision, the HR Employment Relationships team began work in Canada on the business case for change so they could communicate in terms that resonated with business leaders. They also examined the climate for women at the bank and found that women were less satisfied than men and that they were underrepresented at senior levels. These findings implied that Scotiabank was neither maximizing every employee s contribution nor benefiting from diversity in decision-making a key element of Scotiabank s employer of choice mandate. Gather Information In response to research suggesting that women often didn t know how to navigate the bank s advancement system, Scotiabank adopted a completely transparent career advancement process. Employees can now self-evaluate, gauge where they are on the career continuum, and determine what steps need to be taken in order to develop the requisite skills and experiences to be promoted to the next level. Hold People Accountable Senior Scotiabank executives are held accountable for carefully managing the career paths of their top talent and a combination of transparency, rigorous accountability mechanisms, and programmatic elements is woven into the strategy. For example, the Human Investment Committee (HIC), composed of the President and CEO and his direct reports, leads quarterly discussions on major people policies and programs, including leadership development. The HIC meets monthly to discuss senior-level appointments, open or upcoming vacancies in senior-level positions, potential candidates, and other people-planning issues. Transparency, ensuring a broad candidate pool, and conducting objective evaluations of candidates are three fundamental principles aligned with this work. Additionally, the SVP of Top Talent position was created to ensure that the bank identifies and develops top talent. This senior executive mentors high-potential women and men, coaches their managers on the development of their employees, and contributes to the management of the career paths of the top 100 employees. Help People See the Big Picture To clarify and communicate the role individual employees play in meeting business objectives for increasing the representation of women in leadership, all employees in the bank have access to overall bank numbers and progress to goal. 8 Limited Hot Jobs Stall Women s Careers
Endnotes 1. Nancy M. Carter and Christine Silva, Pipeline s Broken Promise (Catalyst, 2010). 2. Carter and Silva. 3. For more information on methodology, please see Catalyst, The Promise of Future Leadership: A Research Program on Highly Talented Employees in the Pipeline Methodology. 4. Christine Silva, Nancy M. Carter, and Anna Beninger, Good Intentions, Imperfect Execution? Women Get Fewer of the Hot Jobs Needed to Advance (Catalyst, 2012). 5. See, for example, Lombardo, M. M., Eichinger, R. W. (2000). The Career Architect Development Planner. 3rd Ed. Minneapolis, MN: Lominger Limited. 6. Christine Silva, Nancy M. Carter, and Anna Beninger, Good Intentions, Imperfect Execution? Women Get Fewer of the Hot Jobs Needed to Advance (Catalyst, 2012). 7. Herminia Ibarra, To Close the Gender Gap, Focus on Assignments. Harvard Business Review blog, May 22, 2012. 8. Herminia Ibarra, Nancy M. Carter, and Christine Silva, Why Men Still Get More Promotions Than Women. Harvard Business Review, September 2010. 9. Nancy M. Carter and Christine Silva, The Myth of the Ideal Worker: Does Doing All the Right Things Really Get Women Ahead? (Catalyst, 2011). 10. Catalyst. D&I Practices: 2009 Catalyst Award Winner KPMG LLP Great Place to Build a Career. New York: Catalyst, 2009. 11. Full remarks can be found at Catalyst, 2008 Catalyst Awards Conference. 12. Catalyst. D&I Practices: Deutsche Bank Accomplished Top Leaders Advancement Strategy (ATLAS). New York: Catalyst, 2011. 13. Description can be found in Nancy M. Carter and Christine Silva, Mentoring: Necessary But Insufficient for Advancement (Catalyst, 2010). 14. Catalyst. D&I Practices: Humana, Inc. Building High Potential Talent With the Women in Leadership Program. New York: Catalyst, 2010. 15. Catalyst. D&I Practices: 2007 Catalyst Award Winner Scotiabank Unlocking Potential, Delivering Results: The Advancement of Women (AoW) Initiative. New York: Catalyst, 2007. www.catalyst.org 2013 Catalyst 9 Limited Hot Jobs Stall Women s Careers