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« Most Perceptive Presentation of My Thinking - Ever | Main | There Are No Development Short-Cuts, But You Can Compress the Costs - the Energy Example »
11:53AM

Resilient Families --> Resilient Employees --> Resilient Companies (That Earn Better)

HOW MANY TIMES HAVE YOU HEARD THE OLD CORPORATE BIT ABOUT HOW "OUR PEOPLE ARE OUR GREATEST STRENGTH"?  What executives really mean when they trot that out is that their human capital is highly resilient – a concept that encompasses company loyalty in a big way. Compared to brand, products, services, physical plant, company rules and procedures, etc., your employees are the one asset that can most rapidly adjust to truly disruptive change. Everything else takes time to reconfigure, relaunch, re-something, but your people can alter their behaviors at great speed – if properly incentivized to value the firm's survival and success above their own instinctive need to stick to what they know/are comfortable doing/etc. Their ability to successfully engage and surmount risks and emergencies is whatever gets you(r enterprise) through the night – however defined.

Nothing beats all hands on deck during an emergency. Historically, that all-hands-on-deck mantra favored males over females, unmarried employees over married ones, anybody over the handicapped, and racial uniformity. "Outliers" to that bias were instinctively viewed as potential liabilities – just not the types you could trust in a pinch.

I'd like to say we all know better now, but we know that's not yet true. Diversity issues remain hot-buttons across the political, social, and economic landscapes. In many instances, enterprise leaders may well espouse adherence to the principles only to be unaware of how badly they perform on these issues simply because they're not well measured, much less publicized. This is why the Obama Administration recently mandated that companies submit data on their salary practices, the goal being to root out inequality by gender, race and ethnicity.  Nanny-state interference to some, but what if we could show you that a more diverse workforce makes for a more resilient company, which, in turn, improves the bottom line?

Studies have been done on this subject, and they've consistently supported the notion that gender equality is a solid indicator of a firm's long-term success.

From Fortune:

On Monday, the Peterson Institute for International Economics and professional services firm EY released a study that reveals a significant correlation between women in leadership and company profitability.

The report found that companies with at least 30% female leaders had net profit margins up to 6 percentage points higher than companies with no women in the top ranks. Interestingly, it did not find any notable difference in the performance of female and male CEOs, and was unable to determine whether having female board members helped or hurt companies in any way.

That's the headline, but when you dig deeper, you find wider causality:

“There are two reasons why gender diversity at the top could matter,” Marcus Noland, EVP and director of studies at the Peterson Institute, wrote in an email to Fortune. “The first is that there is evidence that the presence of women contributes to functional or skill diversity among the leadership group enabling top management to more effectively monitor staff performance. The other is discrimination: If some firms discriminate against talented, hardworking, effective women, then they will be outperformed by rivals that don’t discriminate.”

It's not having women per se that is the issue; it's being a genuine meritocracy that looks past gender, and – by extension – race, ethnicity, and sexual orientation. If you limit your pool of applicants to the ones you find easiest to integrate and manage, you end up with a more brittle, less imaginative, and less resilient leadership and workforce. Life diversity is skill diversity, and skill diversity equals enterprise resilience – more types of hands on deck during crunch time.

But let's dig even deeper:

Another interesting finding: Paternity leave policies appear to be key to achieving gender parity in business. The ten countries with the greatest corporate gender balance—including countries in Scandinavia, Latvia, and Bulgaria—are not at the very top of the pack when it comes to government mandated maternity leave. However, there was a very strong correlation between countries with robust paternity leave policies and a strong gender balance in the workplace.

The report’s hypothesis is that offering paternity leave increases expectations that men will take on a share of child care responsibilities. “It stands to reason that policies that allow child care needs to be met but do not place the burden of care explicitly on women increase the chances that women can build the business acumen and professional contacts necessary to qualify for a corporate board,” reads the report.

That's a first-class bingo!

You set the standard that says, respect your families, care for loved ones, be strong at home, we'll cover you when needed and - guess what? Your people return the favor during those disasters, disruptions, crunch times, etc. And no, I'm not just talking standard nuclear families; I'm talking anyone with "family" of any sort.  Because the types of people who cast those interpersonal nets widely are deeply resilient by nature. They take on tough challenges, they stick by you when things go south, they don't flinch when the emergency siren goes off.

And when they do all those things - and you retain them, your enterprise makes more money.

 

 

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