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Promoting Diversity…Literally

Pinar Kip | State Street Corporation

August 08,2017

I have to admit -

I was pleasantly surprised to see this recent article in Fortune1 that included an anecdote I thought only reverberated within the walls of State Street.

In his first years as CEO, ­Hooley noticed that in the annual promotion process, his top deputies—mostly white men—were putting forth a slate of candidates also dominated by white men.

In 2013, he sent them back to the drawing board. The list of candidates was "something like 90:10, men to women," Hooley recalls. "I say, 'Come back with a list that's  50:50, or 60:40.’'"The managers did so, and the new slate went through the company's standardized scoring process. "Of the females that didn’'t make the first list, guess where they were in the final stack ranking?" Hooley says. All in the top third.

This exact situation often lays heavy on my mind when organizations talk about diversity. Too often, I feel we look at hiring statistics as our best metric for diversity success, when in reality it's much more valuable to look at the promotion statistics. We need to ask ourselves, "How far do women get within an organization, and how long does it take them to get there?"

A new report2 by LeanIn.org and McKinsey & Co found that for every 100 women promoted, 130 men are promoted. That means that the higher up the corporate ladder you go, the fewer women you tend to see. And this statistic is even worse for women of color

And, if a woman does make it to a more senior level, the path to CEO is often cut short. According to the report, at the Senior Vice President  level, women hold only 20 percent of line roles (roles that run a "profit and loss" statement, or P&L). Since the vast majority of CEOs come from line positions, this significantly lowers their chance of getting the top job. The report found that in 2015, 90 percent  of new CEOs were promoted or hired from line roles, and 100 percent of them were men.

So what is keeping women trapped in middle management roles for longer than their male counterparts? It's a multitude of factors.

First, women have less access to senior leaders. LeanIn.org and McKinsey & Co. found that women are three times more likely to rely on a network that is predominately female. But because more men hold senior-level positions, women therefore don’t have access to the senior leaders who could open doors to the C-suite.

Secondly, a particular kind of bias, known as second-generation bias,3 is a powerful force to overcome. Second-generation bias in the workplace is really quite simple. It just means that we hire and promote people who look like us. In many companies, the person doing the promoting is a man. It’s a closed loop: men get promoted, then more men get promoted because men are doing the promoting. Second-generation bias is tricky because so many people want to deny that gender (or race) influences success. Most women are unaware of having personally been victims of gender discrimination and often deny it, even though they see that women in general experience it.

But why aren't female candidates who actually outshine their male colleagues included in the first pass? Shouldn't great talent shine through no matter what? We like to tell ourselves that, but qualifications actually don’t matter as much as we’d like to think. In fact, a study4 by Northwestern University's Kellogg School of Management found that hiring managers don't always choose the most qualified applicants. Instead, they hire people they can relate to and want to spend time with. This is the opposite of what a business needs to succeed – diversity of thought and experiences only enhance a team and bring greater value to the entire organization.

It's important to note that not all managers fall into this habit, and those that do may not even be aware of it. But these embedded stereotypes and organizational practices create yet another wall for women to climb if they want to advance in their company. Only if we acknowledge this bias, discuss the uncomfortable facts and account for it can we ensure that highly qualified female candidates are really considered the first time around, just as they deserve.

1. Kurtz, A. (2017, May 23). State Street Takes On Wall Street's Gender Gap. Retrieved August 02, 2017, from http://fortune.com/2017/05/23/state-street-women-gender-diversity-finance/

2. In corporate America, women fall behind early and continue to lose ground with every step. (n.d.). Retrieved August 02, 2017, from https://womenintheworkplace.com/

3. Herminia IbarraRobin J. ElyDeborah M. Kolb, Ignatius, A., & Review, H. B. (2016, August 01). Women Rising: The Unseen Barriers. Retrieved August 02, 2017, from https://hbr.org/2013/09/women-rising-the-unseen-barriers

4. Adams, S. (2012, December 10). Employers Hire Potential Drinking Buddies Ahead Of Top Candidates. Retrieved August 02, 2017, from https://www.forbes.com/sites/susanadams/2012/12/03/employers-hire-potential-drinking-buddies-ahead-of-top-candidates/#280873b41a43

CORP-3141

Topics: Diversity


Pinar Kip | State Street Corporation

Pinar Kip leads Global Strategic Operations at State Street. She also serves as the Global Design Lead for State Street Beacon. Lately she has been listening to a lot of Frank Sinatra and has been inspired to take up ballroom dancing as a result.