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Developing reward and recognition systems for the diverse individuals that make up successful groups could boost access to fair credit, writes Eugenie Hunsicker
I have been involved in diversity initiatives in the sciences for decades. During this time, there have been tremendous efforts in many areas, with particular improvements in policies relating to returning from maternity leave and flexible working. An Athena Swan initiative to celebrate the advancement of gender equality in higher education institutions has also put pressure on departments to consider carefully how all aspects of the work environment should be improved for gender equity.
But progression of women to the top academic ranks has remained stubbornly and depressingly low. In my home discipline of mathematics, the proportion of the professoriate who are women has increased in the UK from 6% in 2011 to 11% in 2016 – a large proportional increase, but overall, still nowhere near parity.
In a recent conversation about gender diversity in UK universities, one colleague mentioned that, at her university, they had analysed how long it would take the institution to reach gender parity among the professoriate based on continuing with current practices. They discovered that due to having far fewer female academic applicants, a slower rate of female promotion, and greater female turnover, the answer was ‘never’.
Surely, significant change is an imperative within higher education. Similar stories emerge from business, with the proportion of (white) women managers in US companies with more than 100 employees remaining constant at 29% since 2000, according to a 2016 Harvard Business Review article.
Within academia, promotion has traditionally been based on an individual’s ability to secure funding for, and publish, research. When we look at these factors, we see right away why women are still struggling to reach the highest levels at the same rate as men: they neither publish as much nor obtain research funding in the same quantities as male counterparts (according to an Elsevier report on research performance through the lens of gender, and analysis of data from the UK’s Engineering and Physical Sciences Research Council, respectively).
On average, women simply don’t measure up in the standard metrics. Some of this is likely to be due to unequal burdens in areas other than research – an issue that universities can – and should – continue to address. But, even given equal research time, as a woman in science, it’s hard not to feel that the deck is stacked against you subtly in ways that individual universities cannot change.
This is the frustrated mindset I found myself in a year ago when a colleague pointed me to the ‘No heroes’ blog by the London School of Economics philosopher, Liam Kofi Bright. The blog starts: ‘I am opposed to meritocracy,’ which, at first, was a shock to me. After all, surely meritocracy is the right system. But a few hours reading the papers cited there opened my eyes, and meritocracy has become my rant of the year.
Meritocracy
The term ‘meritocracy’ was coined by sociologist, Michael Young, in his satirical 1958 book, The Rise of the Meritocracy. In a 2001 column for the Guardian, he describes his horror at the current use of the word as a positive. He writes: ‘It is good sense to appoint individual people to jobs on their merit. It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room in it for others… It is hard indeed in a society that makes so much of merit to be judged as having none. No underclass has ever been left as morally naked as that.’
These ideas were taken up again in an article by the author, philosopher and former management consultant, Matthew Stewart, in a 2018 article for The Atlantic, which echoes Young’s ideas: ‘The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children.’
Specifically, the problem with merit as a means of judging individuals is not in its generic usage, but rather when ‘merit’ becomes hardened into a particular set of criteria, the design and award of which are controlled by those who are deemed to already have it, and which are then used to limit inclusion in the new meritocracy.
Bias
Both Young and Stewart are primarily concerned here with meritocracy as a means of reinforcing class division. But social class is not the only line along which privilege is divided, and reward systems focused on merit have been shown to convey benefit or disadvantage along the lines of gender and race.
In their groundbreaking 2010 paper, ‘The Paradox of Meritocracy in Organisations’, MIT Sloan Management Professor, Emilio Castilla, and Indiana University Sociology Professor, Stephen Bernard, investigated ‘whether gender and racial inequality persists in spite of management’s efforts to promote meritocracy or even because of such meritocratic efforts’.
They carried out a study in which individuals in managerial positions were asked to make decisions about bonus pay for various employee profiles. They manipulated the gender of the employees in these profiles, as well as whether the company’s core values emphasised meritocracy in evaluations and compensation. They found that, when primed with ‘non-meritocratic’ company values, men and women were given equal bonuses, on average – $399.66 USD for men and $401.66 USD for women. However, when primed with ‘meritocratic’ company values, men were given an average bonus of $420.10 USD, compared to women’s $374.02 USD.
Castilla and Bernard point to two possible explanations for this phenomenon. One is that, in contexts in which people are primed to believe that they are unbiased, fair or objective, studies have found that they are more likely to behave in biased ways. For instance, when individuals have been given the opportunity to disagree with sexist statements, and therefore establish their credentials as unbiased individuals, they are more likely, subsequently, to choose a male candidate over a female one.
The second explanation relates to the idea that when people feel more objective, they become more confident that their beliefs are valid, as demonstrated in a 2007 paper co-authored by INSEAD’s Eric Luis Uhlmann
(then at Northwestern University’s Kellogg School of Management) and Stanford GSB’s Geoffrey Cohen (then at the University of Colorado, Boulder).
Blind orchestra auditions and their effect on the proportions of women hired is a well-known example in work on bias and diversity (see box on page 32). Iris Bohnet from the Harvard Kennedy School has pointed out, in an interview for the Harvard Business Review, that moves towards blind auditions met with resistance from orchestra directors: ‘Note that this [change in proportion of women] didn’t result from changing mindsets. In fact, some of the most famous orchestra directors at the time were convinced that they didn’t need curtains because they, of all people, certainly focused on the quality of the music and not whether somebody looked the part. The evidence told a different story.’
Lauren Rivera, Professor at Northwestern University’s Kellogg School of Management, has investigated another mechanism through which an emphasis on merit can in fact result in biased decisions, described in the 2015 book, Pedigree. In a study in which she observed discussions in a firm after the first round of interviews, she found that different demographic groups were subjected to greater scrutiny with regards to different aspects of merit.
For example, the mathematical skills of women, together with those defined as ‘black’, were much more often questioned than those defined as ‘Indian’ or ‘white men’. Among candidates who made minor mistakes in mathematics, women were rejected for not having the right skills, while men were given a pass, with interviewers assuming they were having an ‘off’ day.
The same effect is reflected in academia. In a 2017 study of publications in economics, University of Liverpool Lecturer, Erin Hengel, found that, in measures of readability, papers by women in economics journals score 1-6% better than those authored by men, and that the readability of papers by women increases over their careers, while that of those authored by men does not.
Furthermore, by comparing pre-released versions of papers with published versions, she determined that peer review is directly responsible for about half of this difference. With the additional burden of scrutiny placed on women authors, their lower publication rate can be seen as a result of bias demonstrated by the ‘guardians’ of publishing – referees already among the subject elite – in their judgement of the merit of works submitted.
The success of groups
Recently, there has been considerable work on the benefits of diversity to the success of organisations. The 2015 McKinsey report, Diversity Matters, found that companies in the top quartile for gender diversity were 15% more likely than companies in the bottom quartile to have financial returns above the national median in their industry, and that companies in the top quartile for racial and ethnic diversity were 35% more likely.
In academia, the majority of published work is collaborative, and studies have shown that in some areas, co-authored papers are more likely to be published in top journals and more likely to be cited. Interestingly, studies by Anita Wooley of Carnegie Mellon University’s Tepper School of Business have shown that the success of groups is not very strongly correlated to individual measures of intelligence (which are correlated to individual success). Wooley and her colleagues found that group success was better predicted by such measures as social sensitivity, turn-taking and the proportion of women in the group.
However, as is pointed out by the University of Arizona’s Justin Bruner (then at the Australian National University) and Cailin O’Connor, a Professor at the University of California, Irvine, in their 2015 paper, ‘Power, Bargaining and Collaboration’, although success comes from the work of groups, rewards for successful work, such as promotion and raises, accrue to individuals.Their paper demonstrated a model to show how the hierarchical structure of academia can, in particular, lead to the disadvantage of underrepresented groups in bargaining for the credit for group success. Indeed, most individuals viewed by society as exceptionally successful, such as Bill Gates, are seen this way in large part due to society crediting them with the success that is, in fact, the work of a large group. History is rife with examples of individuals, such as Rosalind Franklin (DNA) and Katherine Johnson (Apollo programme) whose critical contribution to group successes have been credited to others who were in a better social position to claim them.
This suggests one way forward that addresses the difficulties we experience due to a focus on meritocracy (which generally focuses on individuals and on particular characteristics, such as educational success, which are known to be socially linked). That way is to work on developing reward and recognition systems for the diverse individuals that make up successful groups.
This would involve broad awareness of everyone who contributes to a group and the formulation of reward and recognition systems that provide fairer access to credit for its less prestigious members. This is a difficult challenge, but one that promises both a more equitable treatment of all who contribute, and increased success through the ability to attract and retain more diverse teams to meet the complex challenges that modern society poses.
Eugenie Hunsicker is a data scientist at Loughborough University, where she is also the Director for Equality and Diversity in the School of Science.
She is involved with equality, diversity and inclusion work at a national level, as the Chair of the Women in Mathematics Committee of the London Mathematical Society, Deputy Chair of the Athena Forum and a member of the steering group of the Women in Data Science and Statistics special interest group at the Royal Statistical Society.
Leadership begins with you – and you will not succeed as a leader unless you have some sense of who you are. Your colleagues – potential followers – have a simple but basic need: they want to be led by a person, not by a corporate apparatchik, say Rob Goffee and Gareth Jones
It is unlikely that you will be able to inspire, arouse, excite, or motivate people unless you can show them who you are, what you stand for, and what you can and cannot do.
To be yourself, you must know yourself and show yourself— enough. Put another way, you must be sufficiently self-aware and also prepared to self-declare.
Comfort with origins is one aspect of people who combine self-awareness with the ability to disclose. Whatever the complexities of the cultural variation, we have been consistently struck by the ways in which effective leaders can articulate the relationship between where they came from and who they are.
For example, Patti Cazzato, a senior executive working with retailing giant Gap at the time we met, is from rural Kansas. In her job she has to deal with sophisticated, urban New York designers. Patti told us that when she began these working relationships, she felt slightly overawed by the encounters—as if she were still wearing Kansas dust on her clothes. She felt gauche and inhibited among her new colleagues. It took a trip back to her roots for her to rediscover herself and bring her own authenticity back into her leadership: to be herself in the new context.
As individuals move through life, they experience mobility—social and geographical, within and between organizations, across and up and down hierarchies. And this experience of mobility can disrupt an individual’s sense of self.
Our observation of effective leaders is that as well as being comfortable with their origins, they are also at ease with mobility. They take themselves with them to new contexts. They adapt, of course, but they retain their authenticity in the new situation.
If comfort with origins and ease with mobility help with authenticity, how can aspiring leaders grow these capabilities? What follows is a list of pragmatic suggestions.
Seek out new experiences and new contexts
This can involve changes as small as seeking to lead outside your function or as large as seeking to lead in an entirely different context. We interviewed a tough CFO who worked in a drug rehab unit on a one-month sabbatical. He reported that it forced him to reexamine his own leadership behaviours and to reconnect with his fundamental values. One critical characteristic here is that his hierarchical position as CFO meant nothing in the new context. There was just him and those he sought to lead and help. A corollary of this is that to develop self-knowledge, you should avoid comfort zones and routines. Developing self-knowledge requires active experimentation. Routines, in and of themselves, inhibit this experimentation drive.
Get honest feedback
Effective leaders seek out sources of straight feedback. We have had very good results from carefully collected workplace feedback (including 360degree feedback). But there is also a role for coaches who can give an external perspective. But perhaps the best feedback comes from honest colleagues and those who know us best: our family and friends.
Explore biography
Many of the leaders we have both interviewed and observed have had a deep and intimate knowledge of the contexts that made them what they are. Explore these; talk to others who may share the same experiences. Self-knowledge grows from coming to terms with the events that make us what we are.
Return to roots
Patti Cazzato’s trip back to Texas reinforced the sense of self. Spend time with people who know you without the trappings of organizational power.
Find a third place.
The American writer Ray Oldenburg has put forward the convincing argument that after work and family, we all need a third place: somewhere we can make associations and develop a sense of self, freed from the obligations of work and family roles.
Not all of these will work for everyone; try to find techniques that help you. But if you cannot develop a refined awareness of what works for you, then your abilities as a leader will be limited. After all, knowing yourself, being yourself, and disclosing yourself are vital ingredients of effective leadership.
Reprinted by permission of Harvard Business Review Press. Excerpted from Why Should Anyone Be Led by You?: What It Takes to be an Authentic Leader by Rob Goffee and Gareth Jones.
Rob Goffee is Professor of Organizational Behaviour at London Business School
Gareth Jones has alternated between academic and corporate roles, teaching at LBS too, and also the University of East Anglia, Henley, INSEAD, and currently, IE Business School, in Madrid. He has held senior HR roles at Polygram and the BBC.
Sustainability in business has become a vital selling point, but companies remain value-maximising entities, writes Audencia Business School’s Iordanis Kalaitzoglou
In response to spiralling scientific evidence for climate change, increasing numbers of countries are introducing environmental legislation. Global political will in this area appears higher than ever, as evidenced by the 2015 UN Climate Change Conference (COP21), 2016’s Article 173 of the French Energy Transition Law, and the European Commission’s action plan on sustainable finance. There has also been 2019’s election of Ursula von der Leyen, who put environmental action high on her agenda as President of the European Commission and successor to Jean-Claude Juncker.
However, empirical evidence suggests that much environmental legislation is either overly ambitious or inadequate, meaning that the vast majority of countries do not meet their environmental targets. The usual explanation for this is that environmental action is not cost effective. Yet this is inconsistent with the fact that, over the long term, energy generation from renewable sources will become stable and economically viable. For example, around 75% of coal production in the US is now more costly in generating energy than solar panels and wind turbines, according to a study for Energy Innovation, a San Francisco-based firm that analyses clean energy and climate policies.
Wish lists rather than concrete plans
Unfortunately, the political will to disengage from fossil fuels does not seem to be strong in the US, while other countries, such as Brazil and Turkey, prioritise economic objectives over environmental goals.
This leaves global energy summits seeming more like an exercise in creating wish lists than opportunities to formulate concrete action plans. In fact, evidence shows that very few countries address their environmental impact adequately, with the result that global greenhouse gas emissions are reaching ever-increasing heights. Several reports stress that we are the last generation that can act on preventing climate change. They also suggest that unless significant action is taken now, the ensuing crisis will lead to worldwide social, political and financial turmoil on a level not seen since the Second World War. Even so, the setting of high targets while carrying on with ‘business as usual’ seems to be rooted in some strong macroeconomic trends.
Environmental corporate incentives
The warning signs are already here. July 2019 was the hottest month ever recorded on Earth. Even if we put this fact aside and look at the issue from a simple business standpoint, the growing sense of urgency around climate change is creating a strong demand for more ethical entrepreneurship and for products that address environmental concerns. In other words, sustainability has become a selling point as well as being necessary for human survival. Companies therefore have a strong incentive to show that they are in line with their stakeholders’ environmental concerns.
A significant number of companies are beginning to cater more overtly to the ever-increasing demands of their stakeholders, to present a greener profile to their customers and suppliers, and to society in general. This shift in public demand means environmentally friendly activities have become commercially valuable. An environmentally friendly social profile has become so popular that there are now agencies that evaluate firms’ environmental performance and financial entities that focus exclusively on green firms.
But if environmental friendliness is so high on so many companies’ agendas, why are so many companies, and countries as a whole, still not aligned with officially recommended environmental targets? Are these companies’ actions simply inefficient, or are there other factors holding things back?
Most likely, it is both.
Financial corporate incentives
Companies are value-maximising entities. The primary objective of management is to increase the wealth of shareholders because they are hired by, and answerable, to them. Over the past few decades, it has become generally understood that value maximisation is an holistic approach that doesn’t just include financial objectives, but encompasses anything that can affect the profile of a company. In that spirit, companies are inclined to offer what their stakeholders request in the best possible way. If an environmental profile is in demand, it is advantageous for a company to adopt it.
Yet, sacrificing consumption power in favour of the environment does not resonate unconditionally with consumers. As the ‘gilets jaunes’ protests in France, or US coal and oil protectionism measures designed to save jobs, have shown, this tends to influence government actions.
A sharp shift towards a zero-carbon economy would require a drastic shift in consumption habits. For example, energy generation from renewable sources, although abundant at times, is not stable and might result in periods of low energy generation. This might require electricity consumption (industrial and retail) to be adjusted, but current demand for electricity is completely inflexible at a global level.
Similarly, green products might require higher production costs, which would make them more expensive. Energy-intensive industries and price-sensitive consumers are then more likely to prioritise financial needs over environmental ones.
Companies therefore often face a trade-off between being environmentally friendly and price competitive. These two things are not necessarily aligned, so companies choose to optimise, rather than specialise. The criterion they optimise is their value-maximisation objective. This is somewhat sensible from an economic point of view, since it is more realistic to adopt new measures gradually, rather than to induce a shock. It is also the spirit of EU policies, in which promoted incentives focus on becoming smarter rather than better. This equates to a period of transition, during which individual firms and national economies are expected to move gradually towards a zero-carbon state.
Companies’ incremental adjustments are looking to find the right balance between environmental friendliness and value maximisation. This is why their current actions might seem inefficient: the macroeconomic trends driving these actions do not yet support a full environmental engagement.
Window dressing vs. lobbying
The economics of energy transition create both financial and environmental incentives, so different firms should be expected to pursue different strategies, according to their energy profiles.
For example, it would be much more difficult for an energy-intensive firm, or a fossil fuel company, to change its business model drastically in order to be more environmentally friendly, because this would involve significant investment and cost.
However, since a company’s profile is often improved if it makes this change, or at least gives the impression that it is doing so, businesses might take less conventional actions to preserve or increase their value in this way. There are two types of corporate activity that are observed frequently in this arena: ‘window dressing’ and lobbying.
The private sector is well known for trying to bend political will towards its financial incentives by lobbying decision makers. But, when it comes to environmentally sensitive issues, these actions are often met with firm public opposition. The consumer base, especially in mature economies, is becoming more environmentally sensitive and lobbying activities that are perceived to have a negative environmental impact can also have a negative impact on the companies involved.
Companies have been very active in trying to improve their public profile with respect to their environmental impact, but most continue to lobby at the same rate.
In some cases, as in the examples of the big five fossil fuel companies (BP, Shell, ExxonMobil, Chevron and Total), PR campaigns are designed to show that attempts to reduce environmental impact are being made, while spending continues out of the public eye on current – and not so environmentally friendly – activities and/or lobbying.
Again, a drastic shift in stakeholders’ consumer behaviour would help reduce the impact of lobbying, either by supplying a financial objective for these firms, or through changes to the political agenda and reforms to the relevant legislation.
Is it all that bad?
Greater environmental awareness and a demand for more sustainable products create the foundations for a potential shift in corporate actions.
Although the demand for environmental friendliness among stakeholders may be best described as ‘lukewarm’, with an electoral base that leads governments to pursue a very slow shift of resources and priorities towards environmental policies, there is significant progress that partially mitigates the impact of the rigid demand for energy.
The most encouraging progress has perhaps come with the realisation, among stakeholders, that to promote more environmentally responsible policies, they must mobilise the aggregated demand towards more responsible consumption. This can be done by quantifying their arguments so that people can understand and compare the relative costs – while also making use of social media platforms to nudge people to amend their spending habits.
Shifts in aggregated demand would force companies to innovate and offer
more environmentally friendly products, with the support of governments. While current levels of change are insufficient, there have been notable developments. In the finance industry, for example, terms such as ‘climate change risk’, ‘social cost of carbon’, and ‘carbon price’ have entered the vocabulary, and green financial products have emerged. As little as 10 years ago, this would have sounded far-fetched.
The public and private sectors both serve a social purpose and are supposed to meet the needs of their stakeholders in the best possible way. Consequently, if the social groups they serve amend their attitudes at an aggregated level, it is in the best interests of both the public and private sectors to follow. In other words, if everyone played the same game, everyone would win. However, considering the demographic composition of the electoral basis, this should not be expected to happen any time soon.
Iordanis Kalaitzoglou is a Finance Professor at Audencia Business School, France.
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