Women Face Tough Road To Top Business Roles

By MICHAEL A. LINDENBERGER Washington Bureau (Dallas News)


A woman is mayor of Texas’ largest city, and two others are deans of two of its top law schools.

Women have led the University of North Texas, been mayors of Dallas and Fort Worth, served in the U.S. Senate and been governor.

But the 52 Fortune 500 companies with headquarters in Texas? Every one is led by a man.

“We are behind. That’s just a fact,” said Elissa Sangster, executive director of the Forte Foundation, an Austin-based consortium of leading companies and business schools that seeks to put more women in top-tier business careers.

“If you look at who are the CEOs and senior leaders at our Fortune 500 companies, we are lagging.”

Lagging, but far from alone. Only 24 of America’s 500 largest companies had female CEOs. And at all but a few of the nation’s top business schools, two of every three seats in the full-time MBA programs are filled by men.

At Texas’ most elite programs, the discrepancy is even greater than that.

Now even the Obama administration wants to know why. It’s holding a series of events across the country designed to talk about barriers to women’s advancement.

Recently, the White House gathered a gaggle of deans from the nation’s top business schools for a half-day conference.

For years, women have outperformed men in school. They are more likely to go to college — and to graduate. Yet they also routinely opt out of — or are deterred from — paths that would lead to the corner office.

The administration says it wants to know whether — and how — the top tiers of American business can be restructured so more women stay on track to elite leadership roles.

Thomas W. Gilligan, dean of the McCombs School of Business at the University of Texas at Austin, called the White House meeting “productive.”

But he said real change at top-tier corporations, banks and law firms won’t come easy, in part because many of those firms aren’t convinced that they should change.

The old business models — where newer employees pay dues by working extremely long hours — have been tremendously successful.

Businesses tend to be “very conservative when it comes to moving away from a business model that has worked for them,” Gilligan said.

“I think it’s a very hard problem to solve. It goes back to this belief in, a perception really, of the value in having a flexible workplace,” Gilligan said.

“But if it were that evident that providing flexible workspace was in the firms’ best interest, they would have jumped on this a long time ago.”

It’s not hard to understand why, said Kim Austin, career services manager at the Cox School of Business at Southern Methodist University in Dallas, where 22 percent of students in its flagship, full-time MBA program are women.

“Even here, in our small office, I try to be as flexible as I can for workers who need to take time off [say, for family issues], but sometimes it’s just not all that convenient,” Austin said. “I can only imagine what it would do to a major company, how disruptive it could be.”

Some firms have figured out how to keep women on the leadership track even when they take time off to raise children, but many others haven’t.

“Everyone is scratching their heads on it,” Austin said. “A lot of the companies we see now — well not a lot, but some — are being more open to flex scheduling, allowing women to ramp on and ramp off of the fast track.”

Molly McClung is one of the Cox MBA program’s top students, and Austin said she’s had plenty of job options as a result. McClung said she’s got the job she always wanted — a role with a major bank in private banking.

Between graduation from UT and coming back to Dallas for graduate school, she spent a couple years in New York, where what she saw about the work culture there convinced her that a job in investment banking on Wall Street was not for her.

“I knew what was required — the extremely long hours, the long face time in the office for several years to get started — and I decided that wouldn’t work for me.”

McClung still expects to work long hours — it’s a high-tempo bank with a Wall Street-influenced culture — but said her role in private banking should give her more balance.

That’s not uncommon among even women with top credentials at elite business schools, said Austin and Gilligan.

McClung said her classmates who are headed to Wall Street investment banks are ones who have already decided to place work ahead of family plans, something she wasn’t willing to do.

“All of them, now that I think about it, are men,” she said.

Opting out

That’s the cause for worry at the White House and elsewhere. If women routinely opt out of careers in investment banking and other fields because they believe they won’t allow them to also raise families, then the pool of potential top leaders will remain overwhelmingly male.

That hurts the companies, too, which research has shown make better decisions if leadership ranks include men and women.

“This isn’t just about the women,” said Judy Olian, dean of the Anderson School of Management at the University of California at Los Angeles, who also met with the White House.

“The White House is concerned, and I think rightly, about the nation’s competitiveness. What did Warren Buffett say? ‘The secret to my success was I only had to compete against 50 percent of the population.’”

Those worries have led some firms to make wholesale changes. Among Dallas-area law firms, women are far less likely to be promoted to partner. But at Jackson Walker, the numbers are very different.

An analysis by Brooks Igo in The Texas Lawbook this spring showed that about 40 percent of the firm’s promotions to partner went to women, by far the most in the area. That’s taken a firm-wide commitment, said Kathleen Lavalle, who leads its JW2 initiative that focuses on advancing women lawyers in the firm.

Employees, both men and women, are allowed to reduce their billable hours when family obligations call them away from the all-in work environment more common to corporate law firms, where dependence on billable hours is the lifeblood of profits.

Retta Miller, a partner who leads the firm’s litigation practice, said some women have been promoted to partner even while working reduced schedules. One key, she said, is to structure compensation fairly for lawyers who opt for reduced hours so other partners won’t feel disadvantaged.

And, when life outside of work changes and lawyers want to jump back in with both feet, the firm doesn’t penalize them for the reduced efforts in the past.

Such policies would help more than just law firms, says economist Nuria Chinchilla, founder of the International Center for Work and Family at the University of Navarra in Spain.

She’s developed a scale that scores workplaces for their Corporate Family Responsibility (CFR), and research over 15 years shows employees in more flexible working conditions perform better, she said.

When Gilligan, the UT dean, says companies are loath to move away from business models that have worked for them in the past, he’s exactly right, Chinchilla said — and that’s the problem.

“Their success reinforces their belief that they are doing the best,” she said. “They do not see the higher benefits they are not getting because of their lack of CFR, the lost profits.”

Jeffrey Pfeffer is Thomas D. Dee II professor of behavior at the Graduate School of Business at Stanford University and author of Power: Why Some People Have It and Others Don’t.

He said companies risk missing out on badly needed talent if they don’t change, because the nature of work itself is changing.

“The business culture should change,” Pfeffer said. “It is harmful not just to women, but to men as well — and is increasingly resisted by millennials who wonder why they should give their lives to companies who will repay them by laying them off at the drop of a hat.

“Child-rearing, as contrasted with child-bearing, is increasingly a shared responsibility, and men would like to see their children — other than on a screen-saver — as well,” he said.

“The idea that time equals productivity is out of date, and the best companies — on, for instance, Best Places to Work lists — already have more family-friendly cultures. And by the way, do better financially as well.”

Chinchilla said research shows Pfeffer is right. “We are in the transition from managing by tasks and presentism to managing by objectives and participated missions,” she said. “There is a lot of research that shows working smarter, not necessarily harder or longer, brings not only as much value to companies, but more.”

Creating value

Companies can make it easier for women, and men, too, to stay on the leadership track and also raise families, but it’s never going to be easy to do both, said Erika Karp, founder and CEO of Cornerstone Capital on Wall Street.

She worked at IBM previously and for 20 years at UBS Investment Bank, where she was head of global sector research.

“I have three little girls, and I can tell you there is no optimal time to have babies. Anytime you have them, you are going to think, ‘Argh. This is a hard time to do this.’ For my entire life, I was absolutely committed to having a career and absolutely committed to having a family,” Karp said. “I have no intention on compromising on either of those. But I don’t think that makes me all that different.”

To do both, she said, women have to win leverage within their firms. The fastest way to do that is to create value for clients and partners, she said.

“I really do think about this — what am I really good at? How do I add value? What do I do — on the days I am most productive, adding the most value to my firm and my clients, what have I been doing on those days? Well, I want to do more of that and less of everything else.”

Sheryl Sandberg, whose book Lean In has stirred debate within C-suites and business schools since its publication last year, also urges women to take more control of their own futures, even as society plays catch-up with changing notions of the workplace.

“Sit at the table,” she urged women in her 2010 TED Talk, since viewed more than 4 million times, on the absence of women in business leadership circles. That launched her book.

“Why does this matter? Boy, it matters a lot because no one gets to the corner office by sitting on the side, not at the table, and no one gets the promotion if they don’t think they deserve their success, or they don’t even understand their own success,” she said.

But even as Sandberg and others urge women to find ways to leverage their own positions within companies, Karp agreed that women often face barriers to advancement that could be removed — if companies only better understood how to do so.

“There are definitely roadblocks,” she said. “Sometimes the metrics [used to evaluate success in a firm] really get in the way. We have to ask, what are we trying to incentivize?”

For instance, firms often say collaboration is important, she said. But how many have structured their advancement metrics to reward that behavior?

“I believe the best ideas come from the most diverse perspectives. … Do we have enough clear measures and incentives to really drive collaboration? Or do we have people within an organization who are actually competing with each other?”

Business schools’ role

To sit at the table, women have to be prepared to lead. And in many of the most competitive companies, that often means graduating from elite full-time MBA programs, like the ones at Harvard, Stanford — and at UT and SMU.

In 2012, 240 of the Fortune 500 CEOs had MBAs — 63 of them from the same three schools, Harvard, Stanford and the University of Pennsylvania.

Many women simply opt out of the schools, long before they have a chance to opt out of the fields like investment banking.

Top MBA programs typically require applicants to have four to six years of work experience. That creates a problem of timing for women who also want to focus on having children in their late 20s or early 30s.

McClung, for instance, is 27 and one of the youngest in her class. Once she graduates, she’ll be expected to dive deep into the early stages of her post-MBA career. That’s one reason why the kind of face-time requirements associated with investment banking didn’t appeal to her.
But many others never even make it to a program like hers.

The White House is urging business schools to do more to change that. And like every top school, UT wants to attract as many women as it can each year to the premier MBA program, Gilligan said.

“We do everything we can,” he said. “On a good year, that means about 30 percent of our class are women. On a not-so-good year, we’re at something like 25 percent.”

Some have called on schools to reconsider the work requirements for applicants, but so far schools like UT and UCLA aren’t doing that.

Instead, deans at UT and UCLA and elsewhere are increasingly looking to offer other graduate programs that students can pursue right after earning their bachelor’s degrees, programs like masters in accounting or finance. They’re proving popular, Gilligan said.

And in the meantime, Karp, Chinchilla and others said that no matter how ambitious a woman is at work, raising a family will make demands on her time.

A key survival strategy is to do something men have always counted on: Find a partner who can step up his involvement at home when life gets out of balance at work. Because, Karp said, one thing her life as a mother on Wall Street has taught her is that there will be times when life is in balance with work, and times when it is not.

“I am very conscious of when I am in a work-life balance,” Karp said. “As a brand-new entrepreneur, I can tell you I am not in that balance right now. But I am striving for it, damn it.”

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