will the glass ceiling become a performance ceiling?€¦ · will the glass ceiling become a...

Will the glass ceiling become a performance ceiling? Consumer products and retail companies know they need new ideas and new thinking to thrive amid ongoing sector disruption. Slow progress on boardroom diversity revealed in EY’s new global survey threatens to block their progress.

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CPR diversity survey report 2


In a time of monumental change for the consumer products and retail sectors (CPR), diversity of thinking is seen as a critical survival factor. Will companies make the bold moves needed to adapt, when just 16% of seats on the executive boards of the world’s top 200 CPR companies are occupied by women?

EY’s new research highlights a worrying disconnect between the make-up of executive teams and need for more diverse thinking and teams. This is especially true in a sector where power is increasingly shifting to the shopper and women globally continue to account for the majority of purchases.

CPR companies are struggling to keep pace with the changing shopper. The omni-channel revolution is shifting control away from companies to consumers, who want to shop whenever, wherever and however they like, expect tailored and personalized connections with brands, and have limited brand loyalty. If CPR companies want to remain relevant, they can’t rely on having just one or two women at senior leadership level.

Diverse thinking and experience, driven by a mix of genders, ethnicities, ages and backgrounds is key to adapting successfully to the changes disrupting the sector.

Introduction

“ Brands no longer have all the power: consumers are in the driving seat now. Having diverse teams helps to crack these disruptive challenges.”

Kristina Rogers EY Global Consumer Products and Retail Sector Leader

The five disconnects

We identified five disconnects that are holding businesses back from achieving gender diversity on their boards:

1. The reality disconnect: Business leaders assume the issue is nearly solved, despite little progress within their own companies.

2. The data disconnect: Companies don’t effectively measure how well women are progressing through the workforce and into senior leadership.

3. The pipeline disconnect: Organizations aren’t creating pipelines for future female leaders.

4. The perception and perspective disconnect: Men and women don’t see the issue the same way.

5. The progress disconnect: Different sectors agree on the value of diversity, but are making uneven progress towards gender parity.

Agree that diversity of thought and experience is critical to

handling this disruption

98% Yet only 16% of seats on the executive boards of world’s top 200 consumer products

and retail companies are women

16%this is time of monumental change for the sector

97%

CPR diversity survey report


Think gender parity is nearly solved? Think again.

About half of those we surveyed, across all sectors, believe their board has already achieved gender parity (defined as 30%-40% women), or that it will do so in the next 10 years. But this thinking is disconnected from reality. According to the World Economic Forum’s 2015 report, gender parity is 117 years away. Alarmingly, this has increased 37 years from WEF’s 2014 report, which put the timeline at 81 years. Progress towards gender parity is slipping away, rather than accelerating.

Despite almost universal agreement within the CPR sector on the value of diversity, only 12% expect to see a significant increase in female leadership within the sector over the next

five years. In a separate survey done across sectors, 27% of respondents in the banking and capital markets sector predict a significant increase. Despite the different survey population sizes, the difference is still significant.

Given the rapid pace of disruption and the general agreement that diversity can help organizations thrive in these turbulent times, what do CPR companies need to do to achieve gender parity faster?

For the board

Ask

• Given the proven benefits of gender diversity, how well is your organization positioned to reap these rewards?

• How is a lack of diverse leadership impacting your ability to innovate?

• What is your plan to achieve gender parity in your leadership team?

• Is this strategy grounded on concrete steps or just good intentions and wishful thinking?

Act

• Take a critical view of where you are now and where you need to be

• Align your vision of the future with pathways to get there

• Don’t assume gender parity will take care of itself. Implement key enablers of gender parity — from increased and more inclusive networking opportunities to formal training, sponsorship and mentoring programs

Business leaders assume gender inequality has nearly disappeared, despite little progress within their own companies.


Think organizations are measuring their gender progress?

Think again.

If CPR firms are serious about changing the status quo, they need reliable metrics so they can assess how far they have to go and monitor how close they are to delivering equal chances to their women employees. And yet almost half omit this critical mechanism. A mere 52% of those surveyed say they use formal measures to assess progress in improving diversity of leadership.

Those organizations that do measure gender progress are primarily counting how many women have reached senior leadership positions. But measurement of the pipeline of future leaders is almost entirely lacking. Few CPR companies have metrics in place to follow women as they move along their career path to see where and why outstanding talent leave the business or fall off the leadership track.

Equally worrying is the fact that, in the cross sector survey, 79% of respondents recognize that gender diversity boosts business performance, while only 4% of CPR companies we spoke to are measuring the impact of gender diversity on financial performance. If the business adage is true, that if you can’t measure it you can’t manage it, why do companies think their gender programs are successful?

For the board

Ask

• What specific goals do you have regarding gender parity?

• How are you measuring your progress towards these goals?

• If you aren’t measuring progress against a set goal, how do you know when you’ve achieved it?

• How do you know what’s working and what’s not, as you strive for greater gender diversity?

• What are you telling your shareholders about your progress towards gender parity?

• Is your business going to achieve its top priorities without greater gender parity?

Act

• Set your company a concrete target regarding gender parity

• Measure the progress towards this target by using clear metrics to count the numbers of women at all levels and in all areas of your business

• Use this data to identify obstacles and enablers to female career advancement

• Be more transparent and accountable about gender diversity — this is an increasingly important issue to stakeholders

• Use this data to improve efforts to achieve gender parity throughout the organization

Companies don’t effectively measure progress towards achieving gender diversity in leadership.

Use formal measures to assess progress in diversity

of leadership

Recognize that diversity boosts business

performance

Measuring the impact of gender diversity on financial

performance

52% 79% 4%


Think that companies that are good at recruiting women are also good at promoting them? Think again.

In the cross sector survey, 55% of our respondents say they need to do more to attract, retain and promote women to leadership positions. In our CPR sector the proportion is much higher, at 84%. But there is clearly a disconnect between these good intentions and actions on the ground. Fewer than one fifth (18%) of cross-sector respondents have structured, formal programs to identify and develop women for leadership.

“ CPR companies need to develop a more flexible approach to career pathways. They should bring in the smartest people from different backgrounds — these individuals can master the basics quickly and are likely to bring something new to the role. An inclusive culture is key to retention — it’s a bad investment to recruit someone and then lose them during those times when critical life events converge with career pain points. It makes much more sense to keep people in the talent pool through flexible working, proper mentoring and support.”

Kristina Rogers EY Global Consumer Products and Retail Sector Leader

“ There needs to be a formalized process for developing women. It’s not happening organically — this industry is still an ‘old boys’ club’.”

Female senior executive, consumer products and retail, Canada

For the board

Ask

• What is your plan to attract and recruit the most outstanding female talent?

• Once you’ve recruited the best women, what is your plan to retain, develop and promote them to senior leadership positions?

• Are you assigning women to Profit and Loss and strategic roles so they get the experience they need to progress to senior leadership positions?

• Do you know — if, why and when — your leaders of tomorrow are leaving today?

Act

• Determine what your company must do to become an employer of choice for women

• Implement formal programs to identify potential female leaders and develop these women in a way that makes sense to them

• Ask your female employees how you could improve the senior leadership pipeline

Across all sectors respondents saying need to do more to attract, retain

and promote

CPR is much higher

84%Only 18% have structural

formal program to identify and develop women

18%55%

Companies aren’t creating pipelines for future female leaders.


Think men and women see the problem the same way? Think again.

“ I think we need to do some deep, granular analysis of where unconscious gender bias plays into decisions to hire or promote women into senior leadership roles. There also needs to be a willingness to take a risk where the female candidate may not have the precise background for a role but does have the competencies to do the job.”

Female senior executive, consumer products and retail, UK

When it comes to the barriers holding women back, we uncovered a noticeable difference in opinion between the sexes. While 27% of female respondents in the CPR sector believe there is an organizational bias against women within their company, only 10% of male respondents feel the same way. And almost a quarter of women say there is a lack of mentors, compared with only one in ten male executives.

The question of ensuring there are enough female candidates for senior leadership positions also reveals a fault line. Only 11% of women believe there is a lack of female candidates, whereas 40% of their male counterparts say this is a problem. If men believe the problem has been solved, how can women continue asking for more or better solutions?

For the board

Ask

• Are men and women in your organization aligned on their perceptions of the barriers and accelerators to gender parity? How can you bring these perceptions closer together?

• Have you asked the women in your organization what would enable their career progression?

• How are you using this feedback to overcome barriers to career progression?

• Are you embedding a diverse and inclusive corporate culture that embraces all views and is free of conscious and unconscious bias?

Act

• Create opportunities for open dialogue between men and women about challenges and potential solutions

• Make a greater effort to understand this challenge from those who have lived it

• Take an active role and support the pipeline of female talent. Advise and sponsor women and encourage all executives — male and female — to do the same

• Decide what actions you will take now that will contribute to a more inclusive — and successful — organization. Commit to making gender diversity your legacy

11% 10%40% 27%

Female candidates for senior leadership position

Organizational bias within companies

Men and women have different views on the gender diversity gap and how to solve it.


Think leadership teams are diverse? Think again.

In every sector, almost all respondents believe diversity of thought and experience will be the key to navigating the challenges of disruptive innovation. But sectors differ when asked if they think their own leadership teams are sufficiently diverse in thought and leadership: 69% of senior executives in CPR believe they could do more to bring greater diversity to their leadership teams. Compare this to the cross sector survey results where 63% of executives in banking and capital markets and insurance, and 38% in automotive believe they can improve diversity.

We found further differences in perceptions, actions and progress across sectors. For example, only 45% of insurance respondents in the cross sector survey say they are effective at promoting women to leadership positions, compared to 50% in CPR.

Although there is clearly a long way to go before gender parity is achieved, our survey did identify numerous instances where positive intentions on diversity and inclusiveness were backed up by effective programs and good practice.

“ Make diversity a priority. When hiring externally, we always have a woman on the shortlist. Internally, we encourage leaders to identify women during succession planning to ensure that diversity is considered.”

Male senior executive consumer products and retail, Brazil

For the senior management team:

Ask

• Is your sector adopting best practice for gender parity?

• How does your sector compare to others on gender diversity?

• What examples can you apply from sectors that are more gender diverse than yours?

Act

• Take a holistic, cross-sector view of what’s possible and how to achieve it

• Adopt the best practices for achieving gender parity, no matter where they originated

• Consider how you and your organization can play an active role in improving your industry’s gender diversity

63% 63%38%69%

Senior Executives believe they could do more to bring greater diversity to leadership

CPR Banking and capital markets

Insurance Automotive

Different sectors agree on the value of diversity, but are making uneven progress towards gender parity.


“ Women would improve their chances if they were better at showing their good results. They need to communicate their individual successes.”

Male senior executive consumer products and retail, Finland

“ Look for more team management styles to make sure you have all areas covered. Ensure you have diversity, regardless of gender.”

Female senior executive consumer products and retail, Netherlands

Actions that men can take to support female colleagues:

• Become a mentor and share your experience and knowledge with female colleagues

• Become a sponsor to help female colleagues navigate their career paths, endorse them within your networks

• Consider whether your team has sufficient diversity of thought and experience to avoid “groupthink” and develop innovative solutions

• Facilitate that networking and social opportunities involve activities and environments that make everyone feel welcome and comfortable

• Create a culture of diversity and inclusiveness that encourages both men and women to excel

• Consider critically where unconscious bias impacts your decisions about who to work with, who to hire and how to network and collaborate

Actions that women can take to advance their careers:

• Take charge of the next phase of your career, spread the word about what you want, seek guidance and have a plan

• Seek mentors to provide advice and guidance, and sponsors to endorse you across wider networks

• Consider focused networking to build relationships and connections beyond your existing networks

• If board service is on your horizon, start thinking about it today: understand what it takes to serve on a board and how your skills and experience can be enhanced to prepare for this role. Consider board-readiness training

How can individuals help to accelerate change?

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How EY’s Global Consumer Products Sector can help your business Consumer products companies are operating in a brand-new order, a challenging environment of spiraling complexity and unprecedented change. Demand is shifting to rapid-growth markets, costs are rising, consumer behavior and expectations are evolving, and stakeholders are becoming more demanding. To succeed, companies now need to be leaner and more agile, with a relentless focus on execution. Our Global Consumer Products Sector enables our worldwide network of more than 17,500 sector-focused assurance, tax, transaction and advisory professionals to share powerful insights and deep sector knowledge with businesses like yours. This intelligence, combined with our technical experience, can assist you in making more informed, strategic choices and help you execute better and faster.

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