Women Matter:

Making the Breakthrough

Presentation for Highways Agency/ WTS

18th of September 2012

CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Getting more women to the top of organizations is a hot topic

SOURCE: Press search McKinsey & Company | 1

McKinsey has been researching the topic of gender diversity for many
years and has by now global coverage

SOURCE: McKinsey McKinsey & Company | 2

Our Women Matter reports give fact based answers to the Why? and How?
questions for more women at the top of organizations

2007 2008 2009 2010 2012

Positive link Positive impact Importance of Defining the key Helping
between a of female female elements of an companies to
company’s leadership leadership effective realize the final
performance styles on behaviors in the diversity breakthrough
and proportion of organizational post-crisis strategy
women in its health world
governing body

SOURCE: McKinsey & Company – Women Matter research McKinsey & Company | 3
McKinsey & Company | 4
In our 1st Women Matter report we found that companies with more than 30%
women at the top of their organisation have better financial performance
Percent, EU companies 2007-09

Average return on equity Average EBIT margin

13.7 +41% 13.9 +53%

9.7 9.1

No women at Top quartile No women at Top quartile

executive level for female executive level for female
representation representation
at executive at executive
level level
Correlation does
not imply causality

SOURCE: McKinsey & Company – Women Matter research McKinsey & Company | 5
In our 2nd report we looked at the impact of female leadership on
organizational health

DIRECTION

COORDINATION
ACCOUNTABILITY AND CONTROL

EXTERNAL LEADERSHIP
ORIENTATION INNOVATION
TEAM

CAPABILITIES MOTIVATION

WORK
ENVIRONMENT
AND VALUES

SOURCE: McKinsey & Company – Women Matter research McKinsey & Company | 6
We found that leadership behaviours more frequently applied by
women improve organizational health

Leadership behaviors… … improve organizational performance

DIRECTION
People development
Inspiration
Efficient
Expectations and rewards communication
Women
ACCOUNTABILITY COORDINATION
apply more AND CONTROL
Role model Expectations
and slightly and rewards Control and
corrective action
more
Inspiration EXTERNAL LEADERSHIP TEAM
ORIENTATION Role model INNOVATION
Individualistic Intellectual
People
Participative decision making decision making
development
stimulation

CAPABILITIES MOTIVATION
Women and Intellectual stimulation
People Inspiration
men apply development
equally Efficient communication WORK ENVIRONMENT
AND VALUES
People
Individualistic decision making development
Men apply
Participative
more decision making
Control and corrective action

SOURCE: McKinsey & Company – Women Matter research McKinsey & Company | 7
Great news… since we know from extensive research that healthy
companies are more profitable companies
Likelihood that OHI quartile has above-median financial performance, %

68
48
EBITDA margin 31 2.2x

62
Growth in 52
enterprise value/ 31 2.0x
book value

53 58
Growth in net 38 1.5x
income/sales

Bottom Mid¹ Top

1 Comprised of 2nd and 3rd quartiles

SOURCE: McKinsey Organisational Health Index data mining effort McKinsey & Company | 8
In 2010 we wanted to find out how companies can really make this happen:
Having a balanced diversity eco-system is key

Gender diversity on top of the strategic agenda

CEO commitment
CEO and executive team's explicit support for gender diversity programs

Developing women as leaders …

Networks and
Mentoring
role models

Training and
coaching

… supported by collective enablers

Gender diversity HR processes Infrastructure
indicators and policies

SOURCE: McKinsey & Company – Women Matter research McKinsey & Company | 9
McKinsey & Company | 10
Despite all attention for diversity, progress made Evolution since 2007
(Percentage points)
in European countries is slow
Executive committees Corporate boards
Country Percentage of total, 2011 Percentage of total, 2011

Sweden 21 8 25 1

Norway 15 3 35 3

United Kingdom 11 8 16 4

Belgium 11 4 11 5

Netherlands 8 3 19 12

France 8 4 20 12

Czech Rep 8 0 10 -2

Italy 6 1 5 2

Germany 3 2 16 5

European average 10 6 17 5

EU announced draft proposal for companies to have 40% of women in their Boards by the end of 2019

SOURCE: McKinsey proprietary database, 2011 McKinsey & Company | 11

Getting more women to the top is driven at societal,
governmental, company and individual level

1 2
▪ Tax ▪ Cultural Historical
▪ Legislation (e.g. quota) factors (e.g. war
▪ Infrastructure (e.g. day history, political
Government
care facilities) situation)
▪ Socio – Economic
factors (e.g. labor
intensity, salary levels)

Norms, Values
and Beliefs

3 4
▪ ‘Eco-system’ ▪ Mindsets and
Company Women behaviors
▪ Management
commitment ▪ Perception
▪ Development programs
▪ Collective enablers

SOURCE: McKinsey Women Matter 2012 McKinsey & Company | 12

For our Women Matter 2012 report we benchmarked European companies
on the types and effectiveness of their diversity policies

▪ Woman Matter 5 study has benchmarked companies’ diversity policies on a

country level and within their European sector

▪ 235 organizations in 7 European countries participated: France, the UK,

Germany, Belgium, Czech Republic, Italy and the Netherlands

▪ We collected data in 4 different ways

A B C D
Interviews Quantitative On line Online women
data company survey
Qualitative assessment
survey
2. Commitment to gender diversity Quantitative assessment
Qualitative assessment
Your rating
Women metrics
1 2
3. Women 3
development 4
programs N/A
2007 2008 2009 2010
1 Place on the
st rategic
Not on strategic
agenda
On strategic Qualitative assessment
A top- 10 priority A top-3 priority on
Your rating
agenda but not on s tr ategic strategic agenda
Quantitative assessment
1 Women representation
agenda in top 10 1 3.agenda
Women 2 development
3 programs
4 5 N/A Women metrics
Not in plac e Limited Your S ufficient
rating Sufficient scope Com prehensive • Share of women in total headcount (%)
geographical or sc ope; limited and scope; intense Women rep resen tation 2007 2008 2009 2010
2 Management Not committed to V isibly committed Visibly committed 1
functional Visibly committed
comm 2
unication; 3
com munication; and effective4 5 N/A – Overall … … … …
commitment gender diversity but no specific with ac tions to limited
scope; with actions to 5 Co nversio n rate (percentage of a population promoted W/ M W/ M W/ M W/M
Not inlow women
place Limitedaverage wom en communication;
Sufficient S uffic ient scope Comprehensiv e – N-3 to CEO in leadership positions … level … … …
to gender action to foster foster gender foster gender
communication; participationgeographic
participation high womenand during the year to the next significant up)
diversity gender diversity div er sity, lowbut wom
no en diversity and al or scope; lim ited sc ope; intense
participationc om munication; and effec tive – N-2 to CEO in leadership positions … of men
…promoted
… …
communication
functional
of communication of scope; lim ited
participation
communication • Share of women promoted / share
and low women average wom en c om munication;
4 Tailored results res ults – N-1 to CEO in leadership positions …
– T o N-3 level in leadership positions … … … …/… …/… …/… …/…
mentoring communication; participation participation high wom en
programs w ith low wom en par ticipation – T o N-2 level in leadership positions …/… …/… …/… …/…
partic ipation – CEO … … … …
• Group CE O internal mentors
• Mentoring pr ogram 1 Networking
For men and S pecific to Spec ific to Does not ex ist – T o N-1 level in leadership positions …/… …/… …/… …/…
(further defined – B oard of Directors … … … …
as N level) wom en
events/programs wom en present and
future wom en 6 Gender differences: job satisfactio n (answering ‘satisfied’
dedicated t o
• Group CE O women leaders 2 Recruiting to ‘very satisf ied in internal surveys)
N-1 lev el • Personaliz ed Exists wom en networ kDoes not
• Internal exist
Ex ists Does not exis t
management identification of needs • Share of women applicants (% of total applicants) … … … …
• Internal wom en networ k Ex ists Does not exis t – Women vs. men overall …/… …/… …/… …/…
team for potential future • Share of of fers to women (% of–total offers) … … … …
women leaders specifically for present Women vs. men in a “high-potential program” …/… …/… …/… …/…
• Group CE O • Matc h between m entors and future
Inform al leaders Forum s to Formal
N-2 lev el and m entorees • Multi-com pany net- facilitate m entor-
Ex ists assigning
Does not of at
exis • Share of women new hires (% of total new
– Women vs.hires)
men in senior … …(defined
management …as N-3… …/… …/… …/… …/…
management working initiativ e for m entoree m entor to each to the CEO or above positions)
m eeting m entoree – Overall … … … …
team pr esent and future women
• Mentor for potential Yes 7 Gender
– N-3 to the CEO and above differences:
in leadership participation
positions … in flexible
… programs
… …
2 Women leadership No
3 Clear No genderfutur e women
Quantitative
leaders is Quantitative
skill building Quantitative
quantitative diversity targets targets
CE O lev el N-2 orforabove targets for
programs
targets for • Share of women who turned down a recruiting
• Share offermen using…
of women and flex-time…programs:
… part …
targets for • Cr oss-c om
for leadership leadership
pany wom en leaders hip
Exists leaderDoes
ship not exist vs. share of men (% of of fers made)
women positions mentoring positions but no • positions,
Personalized
action positions, actionEx ists Does not exis t time, reduced work week, maternity leaves, etc.
representation action identification
but no of needs
5 Program to plan plan, plan, and – Overall …/… …/… …/… …/…
in leadership increase share of for potential
company widefuturecompanywide 3 Gender di fference: salary (average FTE salary for women
positions women in the high- women leadersof communication of
communication divided by t he average for men) – Women vs. men in a “high-potential program” …/… …/… …/… …/…
potential pool • results res ults
Com prehensive tr aining Ex ists Does not exis t – Women vs. men in senior management (defined as N-3 …/… …/… …/… …/…
pr ogram dedicated to • Overall …
to the CEO or above positions) … … …
• Age and tenur e criteria pr Exists
esent and future Does not exist
to enter the high-
women leaders • N-2 and N-3 to the CEO in leadership positions … … … …
potential pool 8 Gender differences: geograp hic mobility
4 Consist ency Company c ulture Company
• Measure culture • Company
to neutralize Exists cultur
Financing e Company
part of Doesculture
Ex
notists
exist Not
Doesapplicable
not exis t
of company creates strong does not activ ely comprises an ac tively fosters • N-1 t o the CE O in leadership positions … … … …
the impact of maternity ex ecutive training and
culture with bias for male foster gender
leav e on the criteria implicit
further education forgender div ersity • Share of women and men in mobility programs (%)
gender leadership div ersity
• Target share of women preferenc
pr Exists e forfuture
esent and Does not exist 4 Share of women in high-potential programs (%)
diversity in the high-potential gender – Women vs. men overall …/… …/… …/… …/…
womendiversity
leaders
objective pool • Share of women in high-potential pool vs. men in “high-potential
– Women … program”
… … … …/… …/… …/… …/…
• Quota of women in the 3 Women
Exists coaching Does not exist
high-potential pool sessions with • Share of women in mentoring programs
– Women vs. men in senior … …(defined
management …as N-3… …/… …/… …/… …/…
• Managers responsible external
Exists coaches Does not exist to the CEO or above positions)
for detecting of wom en • Share of women in succession-planning pools for senior … … … …
and m en pool entrants 9 Attrition
management (for N-3 or above rates (%)
positions)
6• Personalized Ex ists Does not exis t
• Inclusion of an HR identification
Exists of needs Does not exist – F or women vs. men in “high-potential program” …/… …/… …/… …/…
contact in final decision for potential future
– Women vs.3 men in senior management (defined as N-3 …/… …/… …/… …/…
on pool entrants women leaders
• Financing for coaching 9 Ex ists Does not exis t to the CEO or above positions)
sessions with an
ex ternal coach
8 4

▪ Our participants received an individual feedback report with its key challenges as
well as a recommendation on the most impactful measures to address these

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 13

Women are underrepresented at all Odds of advancement for
… men over those for women
hierarchical levels, not only at top management
Number of companies = 1301

CEO 2
5.0x

Seats on executive
9
committee
1.7x
Senior management
14
and vice president
1.8x
Middle management 22
2.1x

Total company 37

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 14

Each sector has its own challenges
Number of companies = 1301

Media, telecom- Transport,

munications, logistics, Energy and basic
technology Financial services Consumer goods tourism materials

CEO 0 0 7 9 0

Seats on executive
9 9 11 10 11
committee

Senior management
17 13 18 15 15
and vice president

Middle management 20 22 30 19 16

Total company 34 49 50 27 25

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 15

On the positive side…The number of companies that sees gender diversity
as a top strategic priority has doubled since 2010
Percentage of respondents, number of companies = 235

Among top 3 items

8 12
on strategic agenda
Among top 10 items
20
on strategic agenda
1.9X
41
On the strategic
36
agenda, but not in top 10

33
Not on the
33
strategic agenda

Don’t know 14
3 0
20101 2011

1 The 2010 figures are from the Women Matter 2010 survey. There were 1,560 respondents to this survey

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 16

But…. Although some companies are making progress with diversity,
most companies still have a long way to go
Number of companies = 1231
Percentage of women at executive committee and senior
management/vice president level
45
Operating Making
with a progress
40
diversity with
advantage diversity
35 N=6 N = 20
5% 16%
30

25 25%

20 20% (top quartile)

15
13% (average)
Limited 10 N = 16 N = 81 Investing in
diversity 13% 66% diversity,
practices 5 but no
impact yet
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Number of measures

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data for women at these 2 levels

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 17

Why are so few companies successful?

Many measures are not implemented in the most

What’s on paper is effective way in terms of visible actions, frequent
not the same as what communication, participation levels
happens in practice

Commitment at the Focus over the last few years has been on getting
top does not top management involved, but middle
necessarily cascade management has been largely overlooked
to middle
management

Not knowing the exact challenges (the facts) and

not involving ‘the target audience’ themselves has
Lack of focus resulted in ineffective programs. Measures too
scattered, not the right ones…

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 18

 Well implemented
There is a gap between the measures in place and those
Fairly well implemented
that are ‘well implemented’ In place
Percent, number of companies = 235

CEO commitment 41 92

Management Targets for women's representation 24 51

commitment in top positions
Consistency of company culture 22 88
with diversity objectives

15 58
Networking programs/events
Women’s
development Leadership skill building programs 13 47
programs
Mentoring programs/events 16 69

Indicators 18 56

Collective HR processes and policies 25 60

enablers
Infrastructure, e.g., child care 14 43
facilities

1 Measures were rated on a scale of 1 - 5, with the exception of management commitment measures, which were rated on a scale of 1 - 4.

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 19

While CEO commitment remains high and visible, it does not cascade to
lower management levels
Percent, number of companies = 235

100 100 100

Not in place 8 11
20
In place 22
32
Fairly well 39
29
implemented
32
28
Well implemented 41
25
13
CEOs Senior managers Middle managers
and vice
presidents

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 20

Men’s and women have differing views on gender diversity issues
Percentage of respondents who “strongly agreed”; number of respondents = 1,7681 Women
Men

64
Do you believe that gender diversity is an 40
important driver of company performance?

Do you believe top management is committed to 27

gender diversity? 13

65
Does the evaluation system in your company 30
treat men and women equally?

1 Web survey participants. Some 35% of the respondents were female

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 21

McKinsey & Company | 22
What do we recommend companies to REALLY make this happen?

1 More visible senior management commitment

2 Target initiatives at your particular challenges

3 Address mindsets

SOURCE: McKinsey Women Matter 2012 report McKinsey & Company | 23

We believe that implementing a successful diversity
strategy is similar to a transformational change journey

▪ Track progress
Advance How do you keep
moving forward? Build capacity for
continuous
improvement
How do you
A ct manage
the journey? ▪ Implementation plan
▪ Engage the organization

▪ Committed senior leaders

▪ Balanced diversity ‘eco-
system’ with clear
A What do you need to do to
rchitect address these challenges?
prioritization and focus What are the
▪ Interventions to create ▪ Analyze the numbers

A
specific challenges
lasting change ▪ Evaluate the effectiveness
for your
of existing policies
ssess organization? ▪ Deep understanding of
mindsets

A What are your ambitions

spire in terms of diversity?
▪ Convincing business case
▪ Clear aspiration
▪ Targets at a granular level

SOURCE: Scott Keller and Colin Price, Beyond Performance, 2011 McKinsey & Company | 24
McKinsey & Company | 25