EY Entrepreneurship

Which is the bigger issue for women leaders: the glass ceiling or the glass cliff?

David Venables — Tue, 10 Sep 2019 15:51:45 +0100

What do you need to innovate in the Transformative Age? You need diversity. You need men. And you need women. Gender equality is not only a fundamental human right but it is also linked to a country’s overall economic performance. Organizations where women hold nearly 30% of leadership positions could add up to 6% to their net margins.

Therefore it makes no business sense to overlook diversity as a part of a business strategy. In fact, doing so only diminishes opportunities for sustained economic growth, innovation and social progress.

So if women are critical for innovation and long-term growth, why are we still an estimated 202 years away from achieving gender parity in the workplace?

The uphill battle

Despite the gender gap narrowing slightly this past year according to the World Economic Forum’s Global Gender Gap Report 2018, women still face an uphill battle in leadership positions. And, it turns out, the higher women climb, the more biases, challenges and stereotypes they face.

Interestingly, though, when women are appointed to the top job, it’s usually at a time of a crisis – when an organization is grappling with a financial crisis or other challenges and may even be on the verge of collapse. This phenomenon was coined the ‘glass cliff’ by British academics Michelle Ryan and Alex Haslam who in 2004 published findings from an extensive study of FTSE 100 companies and found a tendency for women to be appointed leaders of failing organizations.

While more women are breaking through the glass ceiling, by accepting roles in troubled companies or challenging times in government, they often risk being held responsible for outcomes that were set in motion well ahead of their appointments.

Take a few notable examples:

Jóhanna Sigurdardóttir became Iceland’s first female prime minister and the world’s first openly gay head of government amidst economic and political fallout from the global financial crisis. She stabilized Iceland’s economy in a relatively short period of time.
Former Xerox CEO Anne Mulcahy, is often deemed a ‘glass-cliff’ success story. She took over as CEO in 2001 as Xerox was on the verge of a Chapter 11 bankruptcy and a year later, following an aggressive restructure, the company reported an operating profit.
It’s encouraging to see women being called upon to lead in times of crises – and succeed at the highest levels. But despite their success, they are still being fired – even after they’ve fixed the problem.

In fact, female CEOs are about 45% more likely than male CEOs to be dismissed from their own companies. And, strangely, while improved organizational performance may protect a male CEO against being fired, the same does not hold true for women. In other words, women face greater challenges when appointed to leadership positions and are provided fewer opportunities to establish their leadership capabilities.

Why AI could correct the gender imbalance right up to the boardroom

David Venables — Tue, 10 Sep 2019 15:48:31 +0100

Despite the efforts of governments and organizations, men still dominate boardrooms around the world. AI could be part of the solution – helping organizations to level the playing field and drive culture change.

It’s well documented that organizations with diverse workforces are more successful. As a result, organizations have moved beyond the ‘why’ – the economic imperative – to the ‘how’.
Unfortunately, the ‘how’ is where organizations are getting stuck. On the one hand, government quotas have brought results: all French, Italian and Norwegian companies had at least three women directors on their boards at the end of 2017. In 2018, the top 100 listed companies in Australia even managed to hit 30% without a quota.

On the other hand, only one in four board members in Fortune 100 companies were women in 2018. And FTSE 350 boards will need to appoint women to nearly half of all new available appointments if they’re to achieve the UK government’s target of one-third women by 2020.

More worryingly still, European quotas don’t seem to have increased the number of women in the pipeline: in Germany, France and the Netherlands, women hold just 10-20% of senior management jobs. This suggests that even where the numbers have changed for the better, behaviors and cultures haven’t.

What’s tech got to do with it?
The explosion in digital technologies, including AI, has added another dimension to the gender diversity debate: the notable absence of women in the tech sector.

While the number of women on boards has increased in the last 70 years, female representation in tech has gone the other way. As recently as the 1960s, women made up the biggest part of the workforce in computing; fast forward to 2019 and just 22% of AI professionals globally are female.

This problem starts in school, with girls’ interest in STEM dwindling as they get older. “Girls are discouraged from entering the industry from a young age and it’s harder to captivate them later,” says Sara Conejo Cervantes, an international speaker and campaigner for gender and AI. As a result, only 35% of STEM students in higher education globally are women. And of the women that take up tech jobs, many leave, citing a ‘toxic’ culture that discriminates against them.

All of this can make it difficult to find qualified women for board roles, and organizational cultures can mean internal candidates get overlooked.

In this context, it’s not surprising that women make up just 12.6% of board members in the UK’s top tech firms. Or that only one of the 24 total board members at three leading Chinese tech firms is a woman.

EY World Entrepreneur Of The Year 2017 winner highlights

Uschi Schreiber — Tue, 10 Sep 2019 08:46:45 +0100

Hear from EY World Entrepreneur Of The Year 2017™ country winners.

EY World Entrepreneur Of The Year 2017 highlights

Uschi Schreiber — Tue, 10 Sep 2019 08:43:28 +0100

Watch highlights from the EY World Entrepreneur Of The Year 2017™ Forum.

Could gender equality be the innovation boost utilities need?

Rabinder Buttar — Wed, 04 Sep 2019 15:44:00 +0100

Utilities are on a countdown to reinvention. Disruptive transformation — driven by renewable generation, digital technologies and changing consumer expectations — has turned the traditional industry model upside down and set the industry on a rapid path to three critical tipping points, when everything changes forever.

Amid this fundamental change, the ability to innovate will be critical. According to the Center for Talent Innovation, it is serial innovation that drives and sustains growth in today’s fiercely competitive global economy. But new research and interviews we’ve conducted with several leaders in power and utilities (P&U) suggest that utilities’ innovation strategies may be missing a critical ingredient — gender-equal leadership.

For P&U companies, the innovation paradox is a major focus of investment and strategy. Cyntressa Dickey, EY Americas Energy — People Advisory Services Leader, says that utilities need to rethink how to both access and deploy innovation if they are to compete in a new energy world. “As the P&U sector transforms, utilities are facing competition across the value chain from numerous new market entrants that see the potential to differentiate. These new competitors include large technology players, data or service aggregators and other energy companies.

“Combatting this threat and staying relevant in the future requires utilities to consider a new approach. Imagine if utilities could meet exponential disruption with exponential inclusion? Providing equitable opportunities to the right talent could further drive innovation and deliver value quicker to customers.”

But are utilities equipped to drive this innovation when a major roadblock stands in their way — a lack of gender equality?

The theme for 2019’s International Women’s Day is “more powerful together.” As utilities face an urgent need to transform and innovate to be ready for the tipping points that will change their sector forever, it’s a particularly timely call to action. Innovation that uncovers new paths to growth will only spring from high-performing, gender-diverse teams that maximize the power of different opinions, perspectives and cultural references.

Is today’s Chinese consumer the future consumer of everywhere?

Charles Hammond — Wed, 04 Sep 2019 15:39:00 +0100

Few countries in the world are embracing transformation as fast as China. The economic and social development I’ve seen over the last decade has been phenomenal. Between 2010 and 2016 Chinese GDP doubled to reach US$12.2t.1 Along the way, China has earned a reputation as a hot-house for digital innovation and experimentation. It is much easier for companies in China to try new ideas, to drop any that fail, and to scale those that work.

We’ve seen that mindset mirrored in the Chinese consumer. People in China love to try new products and services, and to play with new technologies. They will adopt with incredible speed those they like, and are happy to reshape their lives around them. This is another reason why the country is transforming — and will continue to do so.

The growth of the mobile payments market is just one example of the speed and enthusiasm with which China’s consumers adopt new behaviors. In 2012, they spent just US$32million via mobile.2 Within four years that figure had rocketed to US$1.83 trillion.3 As a result, China is fast becoming a cashless society, and is leading the way in m-commerce innovation. E-wallets account for a 58% share4 of the mobile payment market in China. That is the highest percentage globally and far beyond the 15% penetration5 achieved in the US.

Never a mistake always a lesson

Charles Hammond — Wed, 04 Sep 2019 15:29:00 +0100

We ask our 2017 UK finalists and judges what they've learned from past business mistakes.

Charles Hammond

Charles Hammond — Wed, 04 Sep 2019 15:24:01 +0100

CEO, Forth Ports 2018 Scotland Transformational Leader category winner

For CEOs, are the days of sidelining global challenges numbered?

David Venables — Wed, 04 Sep 2019 14:46:00 +0100

To date, most CEOs have chosen to remain on the sidelines of efforts to solve global challenges, even as markets around the world continue to be disrupted by a diverse slate of issues, including protectionist economic policies, technology backlashes and climate-driven natural disasters.

The EY CEO Imperative Study shows that CEOs can no longer rely on the old excuses for inaction on challenges such as these. Nor must they ask permission to be at the forefront of solutions—it’s an expectation and a new growth imperative.

Contrary to conventional wisdom, our survey of the CEOs, board directors and institutional investors of the world’s largest corporations finds that:

Institutional investors are not a brake to corporate action on global challenges. They endorse the corporate investments needed to make progress on these issues and will increasingly factor the corporate response to global challenges into their investment decisions.
Board directors also support engagement—even more than investors.
Global CEOs see more growth opportunities than risks in acting on global challenges.
The next ten years will see significant advances in the public-private partnerships, reporting standards and cross-industry collaboration needed to address global challenges.

These are the some of the key findings of the EY CEO Imperative Study, a survey of the CEOs, board directors and institutional investors from the world’s largest companies and firms. To understand the perspectives on the corporate role in addressing global challenges among these three key constituencies, EYQ conducted a global survey of:

CEOs and independent board directors of companies on the Forbes Global 2000 and the Forbes Largest Private Company lists
Institutional Investors—both asset owners and asset managers—with at least US$100b in assets under management

In this article, we explore the insights from the survey data showing that investors and board directors expect corporate action on global challenges to ensure long-term growth and seize new opportunities. EYQ data is enriched with personal points of view on these issues from global CEOs, investors and board directors gleaned through in-depth interviews. Finally, the study offers an action agenda for starting and accelerating your company’s engagement with global challenges.

Characteristics of a successful entrepreneur

Rabinder Buttar — Wed, 04 Sep 2019 14:39:03 +0100

In the first video of our ‘From one entrepreneur to another’ series, we ask our 2017 finalists and judges what characteristics make a successful entrepreneur.

Dr Rabinder Buttar

Rabinder Buttar — Wed, 04 Sep 2019 14:05:34 +0100

Chairman, CEO and Founder, Clintec International 2018 Scotland Scale Up category winner

Setting the pace or keeping up — is your board future-fit?

Rabinder Buttar — Wed, 04 Sep 2019 14:03:00 +0100

In a technology-enabled transformative age, businesses have moved outside of traditional capabilities and continue to explore new business models and ways of working, including in the boardroom. To keep pace, boards need to reshape and reimagine their roles in order to ensure they are future-fit.

In recent years, the average lifespan of the largest US public companies has been declining as a result of economic or technological disruption and in some cases, this is because they have missed opportunities to adapt and innovate.1 Similarly, a significant percentage of companies that made up the UK’s list of largest public companies in the 1980s have either been bought, declined or disappeared. The ones still around are those who have been able to adapt and shape the future.2

But is any of this new? Businesses have always operated in constantly evolving environments. So, what’s significant now?

The accelerating pace of change means that boards must continually evolve to embrace transformation and address effective performance now more than ever. Technological, geopolitical, demographic and environmental changes require boards to do the hard work needed to guide their companies to seize the upside of disruption, manage risk and optimize performance.

Dr. David Venables

David Venables — Wed, 04 Sep 2019 13:54:00 +0100

CEO, Synpromics 2018 Scotland Disruptor category winner