Strategic Leadership

for Leaders in an Uncertain World

Academic spat about the role of women managers/leaders in the current economic climate and the real influence

It is interesting to watch academic spats spill into the quality daily press especially when they go against the grain. Here we have three female professors, each from a different top 5 European Business School, responding to a male professor of a less well-known European Business School.

Let me start by saying that I totally agree with the starting position of Profs Herminia Ibarra, Lynda Gratton and Martha Maznevski where they register

dismay at the quality of debate on the role of women in the financial crisis. Specifically, we question the basis for current speculation that the meltdown might have been averted had more women been running the business world.

What I am surprised by is the lack of quality in their own argument, as I will show below.

Compare the titles: Soapbox: why women managers shine followed by Claims that women are inherently more cautious are deeply troubling. Now, let us look at the arguments and supporting data.

Prof. Michel Ferrary is the first author and uses statistical comparisons, namely his research on the correlation between French company stock index and percentage of women managers in the respective companies. He finishes with two questions about the conclusions one could draw about performances of feminised companies in different conditions. In turn, the letter authors Profs Herminia Ibarra, Lynda Gratton and Martha Maznevski offer no data whatsoever yet finish with strong admonition that one must

beware of perpetuating unfounded stereotypes along the way.

More surprisingly, they choose to interpret the closing question from Prof Ferrary’s comment as

speculations (that) also come with dangerous implications

and follow by restating it to serve as a proof of their main point:

we are deeply troubled by claims that women are inherently more risk-averse or cautious or prudent than men, and that this essential nature somehow makes women more suited to leading in a downturn

So their whole argument hinges on whether one agrees that

Several gender studies have pointed out that women behave and manage differently from men. They tend to be more risk-averse and to focus more on a long-term perspective. A larger proportion of female managers appears to balance the risk-taking behaviour of their male colleagues.

This is an area where a lot of the research has been done yet the letter writers offer no data at all. They could have consulted Prof. Deborah Kolb short note Are Women Really Risk-Averse of March 9 in the Washington Post for research results.

The conclusion is best summarised by Ms Jackie Orme in End of the ‘ego driven’ leader who simply states

What we most need is a greater mix of personal qualities in our leaders.

As for the future importance and position of women leaders it is not the professors who decide. Ms Sarah Best has a telling example

The FT has already told us (March 11) that, of the 50 people in the world who have the position, skills and contacts to see us through the financial and economic crisis, just five are women. Women taking a leadership position? I’m not sure, it all sounds very risky to me.

At the same time (March 8th) Washington Post Leadership blog has asked its Distinguished Panel of 20 Experts (five of them are women) to address the similar question Testosterone and the Crash — you can read all answers there. With statistics that show that only 2% of Fortune 500 CEOs are women and that median bonus for men in largest USA companies is 3 times larger than for women it is clear that anything they had to say was just wishful thinking. May be the last word should be with Professor Warren Bennis:

Unfortunately, the explanations for the crash have little to nothing to do with DNA or brain circuitry but have everything to do with the serious design flaws of its system, a system run amok for a whole bunch of reasons and like all system problems are multi-determined: group think, greed, sloppy and lax regulation, and close to zero transparency. Those are the problems and they are deep and there’s no silver bullet like testosterone — or lack of it — that can solve them.

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March 14, 2009 Posted by | Business thinkers, diversity, Economics, Leadership, Letters | , , , , , , , , , , | Leave a comment

If you see what is required in good time why is it so difficult to open minds of opinion formers?

Those with the classical education know about the fate of Cassandra. For others suffice to say that by telling truth to power got her into deep trouble. This may not be so dangerous in our times, yet it is certainly not appreciated and most likely totally ignored.

Just follow the controversy brewing about Sir Gus O’Donnell’s comments reported in the Financial Times about the vacuum at the top of US Treasury civil service in times of real crisis. We can add to this the thoughtful follow up by Willem Buiter in his Maverecon blog post To the victor go the spoils: who answers the phone in the US Treasury? in the same paper who points out the costs The price of the US spoils system: the emasculation of US macroecononomic policy making. However, only two days earlier in the same paper two eminent USA professors have declared about the same situation that When a house is on fire, you put all your initial effort into putting it out.

Lets turn to the economic situation in UK. A day earlier in the same paper we have an article where Gillian Tett in Lost through destructive creation starts off with:

Six years ago, Ron den Braber was working at Royal Bank of Scotland in London when he became worried that the bank’s models were underestimating the risk of credit products. But when the Dutch statistical expert alerted his bosses to the problem, he faced so much disapproval that he eventually left.

“I started off saying things gently . . . but no one wanted to listen,” Mr den Braber recalls. The reason, he believes, lay in “groupthink . . . and pressure to get business done” – as well as a sheer lack of understanding about how the models worked.

Tales of that nature go some way to explaining how the west’s big banks brought themselves to their present plight and tipped the world into recession.

Now remember, this is the paper that has twice ignored the attempts by Norman Strauss to point out how these issues can be addressed at the fundamental level first in Q3 2008 and then in December 2008. Yet the Editors are willing to give space to the contributions like the most recent An unruly phenomenon in constant need of social control.

Let Cassandras have their say! Otherwise we will be indeed stuck with the closed circle of Future of Capitalism Top 50 leaders with no new face from another discipline, a young thinker or an old rebel among them framing the debate about all our futures!

PS I have just spotted a letter that fits some of the contrarian criteria Let a few uncomfortable truths appear on your pages, FT by Dr Roman Wolczuk. A case of synchronicity or?

March 12, 2009 Posted by | Civil Service Reform, Future of Capitalism, Government, Leadership, Letters, News, Politics, Strategy | , , , , , , , , | Leave a comment