Workspace

Rebuilding Business

We need to tune into the rising forces reshaping the workforce and marketplace.

May / June 2009 By Alison Maitland

I recently came across some rare upbeat words about the global crisis, uttered by Lord Karan Bilimoria, an Indian-born British entrepreneur who founded the successful Cobra Beer business. “Crisis is often critical to innovation,” Bilimoria told his audience at University College London’s center for entrepreneurship. “A crisis provides an urgent sense of focus to mobilize resources and break down barriers which normally stand in the way of innovation.”

The disaster we’re experiencing is also an opportunity. This crisis—which has brought the global economy to the brink, destroyed livelihoods, and paralyzed even healthy businesses—has to be a turning point. There can be no return to the failings of governance, the reward packages that encouraged risk-taking for short-term gain, and the overweening CEOs who lost control at the wheel and drove us headlong into a massive pile-up.

Similar things have been said before, most recently after the dotcom bubble burst, and after the scandals at Enron and WorldCom. This crisis is of a different order of magnitude. Most companies have been damaged, and tainted, by the excesses of the banking sector. Trust in U.S. business has plunged to its lowest level since Edelman, the PR firm, launched its trust “barometer” a decade ago.

The climb back up is going to be long, steep, and painful, and the landscape will look very different. Businesses in countries such as the United Kingdom, France, and Germany have also experienced steep falls in trust, along with strong demand for government intervention in the free market. As a journalist, I must acknowledge that public trust in the media has also taken a hammering because news organizations failed to predict the crisis.

Survival is clearly top of the agenda, but wise executives will use the crisis to plan how to emerge stronger, in terms of performance and reputation. This will mean questioning the way things have been done up to now. It will mean dismantling old structures and silos that impede communication and innovation. It will mean tuning into the powerful demographic, social, and economic forces that are reshaping the workforce and marketplace.

These changes are what I’ll be writing about in this column each issue. It’s called “Workspace” because it’s about the world of work and how we can make it better. I’ll be discussing how gender balance in companies can improve performance and governance, how to shape working practices that are more productive and healthier for society, what leadership qualities are needed for twenty-first-century challenges, and why corporate responsibility is more relevant than ever.

Business From All Sides
Even before the crisis, evidence was mounting that companies with more women leaders have better financial performance on average than those with few or none. But the crisis has highlighted other aspects of gender balance that are highly relevant—notably, women’s tendency to be more risk-aware and to take a longer-term view than men.

To build a more sustainable capitalist system, we need gender balance in our leadership ranks. We need outsiders—people who aren’t part of a cozy coterie—to be heard on boards, challenging and probing executives’ decisions in the interests of the company’s long-term success.

Why are we hearing so few women’s voices in the debate on the way out of crisis? Women’s voices were barely audible at the gloomy World Economic Forum in Davos this year, and I count just five women among the fifty people whom the Financial Times recently identified as “framing a way forward.” They included German Chancellor Angela Merkel, PepsiCo CEO Indra Nooyi, and Mary Shapiro, who chairs the Securities and Exchange Commission.

The five are exceptional women. What about all the others out there? We need wise new voices as well as wise old ones, and women’s as well as men’s. To paraphrase the words of one progressive CEO, organizations with few or no women at the top are like stroke victims paralyzed down one side—they see only one side of the world.

It’s increasingly clear that the role men play—as leaders, co-workers, partners, and parents—is crucial to women’s advancement into leadership. We need women to fulfill their potential at work. That means men adapting at work and, also, sharing responsibilities on the home front. There are signs of a big shift in attitudes, particularly among younger men who want a better balance of work and family life, and I’ll be tracking this trend.

I’ll also be looking at ways that diversity can help companies survive and thrive, if they harness it to drive innovation and improve their product design and marketing. An example of why this matters: A recent survey by advertising firm Saatchi & Saatchi found that U.K. consumer-electronics companies missed out on £600 million in a single year by failing to connect with female customers.

From my experience as a “mature” woman, I’m very much aware that most advertising fails to hit the mark. A few campaigns do click, though, like Unilever’s Dove advertisements using real older women as models. I’m not a fan of Dove products, but I loved these ads. I particularly appreciated their research finding that 87 percent of women aged 50 to 64 felt they were too young to be classified as “old.”

Preconceptions about other segments of our changing population also need to be challenged. Companies need to be thinking now about how to manage the “multi-generational workforce,” as people retire later and we have three or even four generations working alongside each other in increasingly flat organizations. Some sectors, such as oil and gas, are already hard hit by the retirement of a generation of skilled engineers and are seeking ways to hold onto their mature workers for longer. Others have yet to acknowledge that the aging workforce matters.

Working Smarter
One of the solutions to all these demographic and social shifts is flexible working. I prefer to call it “smart working,” because it has benefits for business as well as for individuals.

The advantages of giving people more control and choice over how they deliver their work—much assisted by technological advances—are increasingly well documented. So I was surprised to come across, last October, Francis Fukuyama complaining in Newsweek that “in continental Europe, workers are still treated to long vacations, short working weeks, job guarantees and a host of other benefits that weaken their productivity and will not be financially sustainable.”

This is a bizarre statement. I know that working hours remain one of the great divides between the United States and Europe. That does not mean the American way is superior. Most Americans I’ve encountered living in Europe love the healthier hours and holidays—and there’s growing evidence that flexible working boosts productivity. As we build a more sustainable system, we need to think hard about how to make working practices more efficient so we can dump the damaging long-hours culture.

The Rebirth of CSR
I’ve talked about building strong foundations for the recovery. We also need to think about what level of growth we’re aiming for. It can’t be the dizzying and, ultimately, unrealistic growth of the past. Beyond this immediate crisis is a greater long-term one: that of climate change. Sustainable growth is essential.

We each have our part to play in trying to protect future generations from the potentially devastating impact of climate change. But companies have a bigger role as large-scale consumers of energy and emitters of greenhouse gases. Three years ago, I interviewed George David, then CEO of United Technologies, which makes elevators, air-conditioners, and aircraft engines. I was staggered to discover that the global use of this single company’s products contributed 2 percent of annual greenhouse-gas emissions.

Fortunately, David took issue with President Bush’s wait-and-see policy on global warming, and wisely invested in energy-conserving technology. He saw sustainable consumption as one of the most pressing challenges he faced as CEO.

The same approach is needed to help us out of the crisis of capitalism. Governments and taxpayers around the world have been forced to intervene, first to save wayward financial institutions and then to prop up industries hit by the shockwaves. Companies will be able to regain lost trust only by cooperating as partners with governments and society. Corporate responsibility is not about to disappear—indeed, it is more necessary than ever.

I’d like to hear your feedback, and I hope we’ll have some interesting times
together.

Alison Maitland Alison Maitland is co-author of Why Women Mean Business: Understanding the Emergence of Our Next Economic Revolution, a former longtime writer and editor for the Financial Times, director of The Conference Board’s European Council for Diversity in Business, and a senior visiting fellow in the Faculty of Management at Cass Business School, London. She can be reached via alisonmaitland.com.