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Copyright, © 2005, eePulse, Inc.
Bringing Life to the DiversityBusiness Case
Through the Voice of All Employees
Dr. Theresa M. Welbourne
President and CEO, eePulse, Inc.
Executive Education, Ross School of Business, University of Michigan
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Copyright, © 2005, eePulse, Inc.
Agenda
• Introduction to Data and Dialogue Driven Leadership™
• Research and Theory: The case of women in business
• Data and Dialogue Tools: Simple way to bring life to the diversity business case
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Copyright, © 2005, eePulse, Inc.
Scientific Researchand
eePulse Proprietary Technology Led to Discovery:
Data and Dialogue
Driven Leadership™
Which is our “lens” for diversity
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Copyright, © 2005, eePulse, Inc.
Research
• 18 years of study on what predicts long-term firm and individual performance
• Over 100 firms and hundreds of thousands of employees in research
• Includes weekly and monthly data collection in firms such as Citigroup, Washington Mutual Bank, GM, Toyota, British Telecom, InterFirst, Amazon.com, and more
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Copyright, © 2005, eePulse, Inc.
Simple Process That Works
• eePulse tracks employee energy as frequently as weekly (trends and variance hold predictive power)
• Comments gathered; give employees “voice” via technology
• Managers receive results instantly
• Managers take action on key problems and new opportunities; employees feel valued; someone listened
“Always look for the simplesolution”
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Copyright, © 2005, eePulse, Inc.
Results
• $17m ROI in 10 month project
• Reduce turnover by 26% in 6 months
• Stock price increase for new CEO in 6 months
• Change management initiatives accelerated
• Merger success
Diversity is at the heart of the solution ... but we may define it differently
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Copyright, © 2005, eePulse, Inc.
Our bias:
Performance Bias
and
Science Lens
Theory
and
Empirical Data
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Copyright, © 2005, eePulse, Inc.
SummaryResearch and Theory
What we know:
Lack of diverse ideascan destroy
organizations
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Copyright, © 2005, eePulse, Inc.
Economic Theory
• Agency theory perspective– Organization suffers when information not
in hands of owner • Information asymmetry problem
– Management can solve problem and increase performance
• By giving employees VOICE
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Copyright, © 2005, eePulse, Inc.
Empirical Study on Firm Performance
• Initial public offering (IPO) research:
– What predicts long-term firm performance?
– IPOs = the “fruit flies” of management
IPOs are going through change; today almost every firm we work with also is going through change. They are large, small, and global organizations.
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Copyright, © 2005, eePulse, Inc.
Women in Top Management of IPO Companies (By Year)
0
27
37 37
43
0
5
10
15
20
25
30
35
40
45
50
1988 1993 1996 1998 1999
Year
% F
irm
s w
ith W
om
en
Why Study Women in IPOs?
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Copyright, © 2005, eePulse, Inc.
Is there an effect?
• Regression analysis for 1993 data
• Controlled for “other” factors
• Having women on top team had positive and significant effect on initial IPO price, stock price growth, Tobin’s Q growth (market/book), and growth in EPS– Study conducted with data that went out both 3
and 5 years after the IPO
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Copyright, © 2005, eePulse, Inc.
Some additional facts
• Distribution of 93 sample– 1% of firms had 50% or more
women on their top teams– 9% between 20% and 49%– 17% reported 8% to 19%– 73% had no women
• Tobin’s Q for firms with women was 6.70, without women = 2.21
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Copyright, © 2005, eePulse, Inc.
Additional research
• Replicated findings for 1996, 1998, and 1999
• 1999 – Women as CEOs started to show up– 505 firms went IPO– 217 had women in their teams– 25 had women CEOs
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Copyright, © 2005, eePulse, Inc.
Diversity
• Diversity of ideas
• Diversity of thought
• Brought in by diversity of people ... in this case women
• Next, more on women in business – but from a “within firm” perspective
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Copyright, © 2005, eePulse, Inc.
Energy
• Research shows energy is key to success
• But .. energy is something that is optimized – not maximized
• Energy fluctuates considerably
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Copyright, © 2005, eePulse, Inc.
Sample ResultsWith Zone Status
Purple = My energy pulse for femalesYellow = Perception of others energy
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Copyright, © 2005, eePulse, Inc.
eePulse DataCompany Data
Blue line = men; yellow line = women; purpose = all company
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Copyright, © 2005, eePulse, Inc.
Across Clients
• We find that female scores on energy are “below their zone”
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Copyright, © 2005, eePulse, Inc.
The “Below Zone” Phenomenon
• Being busy NOT = in the zone
• Stacking work NOT = prioritizing
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Copyright, © 2005, eePulse, Inc.
Other data points
• Percentage of time interacted with manager in the last week – highest choice was 3 to 5 times
– Men = 40%– Women = 26%
• Percentage of time you want to interact with your manager
– Men = 37%– Women = 22%
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Copyright, © 2005, eePulse, Inc.
Catalyst / eePulse Study (April, 2005)
FEMALE/MALE MANAGERS Leader Behavior
55.5
66.5
77.5
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Plannin
g
Supporting
Proble
m S
olvin
g
Rewardin
g
Team
Build
ing
Network
ing
Monito
ring
Consulti
ng
Inte
llect
ually
Stim
ulatin
g
Men
torin
g
Model
ing
Delegatin
g
Insp
iring
Influ
enci
ng Upwar
d
Female
Male
Women are “showing up” at work
We know that, in IPOs at least, there is a positive impact when women are on the management teams.
But, what does the within-company data and stereotype data say about the female experience at work?
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Copyright, © 2005, eePulse, Inc.
Diverse People Not Enough
Diverse people cannot help performance IF these “diverse” employees will not or cannot share what they know
• Will not = environment poor; manager problems; burnout
• Cannot = no time; no opportunity; no power
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Copyright, © 2005, eePulse, Inc.
What eePulse team has learned• Not safe to speak up “out there”• Managers do not listen equally
• Data and Dialogue Tools can help managers learn to listen
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Copyright, © 2005, eePulse, Inc.
Diverse Idea and Opinion Process
Cannot Be Program of the Month
If you want success – or to sustain energy, you need to give all employees voice and then take action on data.
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Copyright, © 2005, eePulse, Inc.
Diversity via Data and Dialogue Driven Leadership
• Diversity is part of day-to-day practice
• Diverse opinions and ideas are gathered all the time
• When diverse ideas and options are ABOUT THE BUSINESS and drive performance; business case is not an issue
Language of Diversity Changed to
Language of Business