McKinsey Asia Week

CHECK AGAINST DELIVERY

It’s a great pleasure to be speaking here today.  Congratulations Dominic and Kevin and the conference leaders for giving priority to the issue of women’s leadership.

As Natalie mentioned, I have the immense privilege of being Australia’s Sex Discrimination Commissioner.

This role has taken me from 200 metres under the sea in a submarine to the United Nations in New York, to camping out with aboriginal women in Northern Australia, to the mountains and valleys of Afghanistan, the White House, the Pentagon, NATO and the World Bank ALL in the same year.

The tremendous privilege of this role – whether I am working to support corporate leaders, refugees, defence force personnel, women with disability, indigenous women – is that every day I meet inspiring individuals – individuals committed to creating a more equal world.

Before taking on my current role, I was a partner in a global law firm so I am well aware of the impact and influence of McKinsey.

Over the last 5 years, this awareness has developed into a strong bond. Your local Australian practice has invested many hours in pro-bono services in the Male Champions of Change – a strategy I will talk about later.  I have worked closely with wise leaders such as Angus Dawson, John Lydon, Natalie Davis, Michael Rennie and Deva Grant.  My head of secretariat Janet Menzies is a 9 year McKinsey veteran who is connected to the most wonderful network of McKinsey alumni – talent I regularly draw upon.

I know from my work in Australia, in the United Nations, in Washington and in African nations that McKinsey is a strong strategic partner in our quest to create a more gender equal world.  The Women Matter series makes a weighty contribution to our global knowledge. 

But I also imagine that the gap between the Firm’s contribution to progressing gender equality externally and the lack of gender balance internally, must at times feel uncomfortable.

We have limited time together, so I have taken the liberty of assuming that you agree with the thesis that the low representation of women in leadership is an issue in all our nations, is something we observe every day, and is something that needs to change. 

The data is clear and compelling. McKinsey has repeatedly made the link between shareholder returns and women’s representation in leadership.  This issue therefore is a significant economic and societal issue – it is not solely a women’s issue.

The fact is - I could spend my time with you either “enjoying the problem” or discussing solutions.  I’ve decided to do the latter.

So today I want to do three things:

1. talk briefly about the challenge of increasing the representation of women particularly at senior level.
2. describe the importance of leadership, particularly from MEN, in leading change
3. suggest a set of practical actions you can take to elevate the role of women – right here, right now.

Overall message:  Leaders must intentionally include



But first, what is the main message I will leave with you today.

You have just seen a video on unconcious bias – a video which shows that the way we do things can unintentionally exclude women. 

So if you take only one thing away from my presentation today, let it be this:

If you do not actively and intentionally INCLUDE women, the system will unintentionally EXCLUDE them. 

Our unconcious bias is one example of this unintentional exclusion. 

Let me start with the first of my three topics – why is this so hard?

Solving women’s under-representation is difficult and complex. Up until now much of the focus has been on ‘fixing women’ – by providing assertiveness training, mentoring and self branding strategies. I see this is what has been most comfortable for McKinsey – mentoring and supporting women – getting them to lean in – and this is important but it is by no means enough. 

Many nations have actively worked to remove formal discrimination. What is left is a form of indirect discrimination – practices and systems that on the face of it look gender neutral but actually reproduce disadvantage for one group, namely women.  I call this indirect discrimination gender asbestos – it’s harder to identify – it’s harder to combat – it’s built into the walls, the floors, the ceilings, the structures and practices of organisations – organisations like McKinsey.  No one policy will eliminate gender asbestos.  And like the impact of asbestos on humans - over time it may become terminal.

Its cure is courageous leadership. 

In most organisations the business case for diversity is well understood intellectually, but despite this and despite “program excellence” we continue to see little change in outcomes.   Why is this?

One reason is that whilst we understand the cognitive challenge, we have not embraced the case for change at an emotional level. By that I mean our gender schema - the deeply held beliefs we have about the role of men and women (our unconscious beliefs) – about who cares and who works – the thoughts we internalised at a very young age when we first placed our feet on the ground - those beliefs clash with the case for change.  This makes it difficult for us to accept a new model – a model where leadership is shared between men and women.

The second reason many initiatives fail is that they focus solely on engaging and changing women — from the way women network to the way women lead. Too many organisations look to women alone to change the organisational practices that maintain the status quo - an approach that fails to recognise the site of most organisational power.  Such power resides with men.

How many of your offices have the most senior male leaders or highest performers driving your women’s initiatives? Most likely you have talked yourself into thinking a well-intentioned engagement manager or junior partner is the right approach? Or that a woman needs to lead the women’s initiative?

Having explored the challenge lets now talk about my second topic – the importance of leadership, particularly from men.

Over the last 7 years I have become more and more convinced of one thing.

That to deliver equality for women we need to focus on men.  We need men taking the message of gender equality to other men.  It’s not about men speaking for women or saving women, in fact it has been women’s activism by and large that has delivered the progress we see today – the future is about men stepping up beside women, so that promoting gender equality and women’s leadership becomes everyone’s business.

Having come to this realisation about 3.5 yrs ago, I established the Male Champions of Change – a disruptive and sometimes controversial strategy - a strategy to engage powerful men.

How did this begin? I picked up the phone and rang Australia’s most powerful and influential men – men who lead Australia’s iconic companies (and McKinsey clients!) like Telstra, Commonwealth Bank and Woolworths – men who lead global organisations like Citibank and Goldman Sachs – men who hold the most senior roles in Government –– and I made a personal plea.  Would these men use their power and influence, their collective voice and wisdom to create change for women?

As Gordon Cairns, one of the male champions and a McKinsey Alumnus explains “Let’s not pretend that there aren't already established norms that advantage men. Men invented the system. Men largely run the system. Men need to change the system." And that's what the Male Champions of Change strategy is all about - men changing the system.

I remember our first get together - a room full of “A type” personalities and me – we came together to take ownership and commit to the difficult decisions that needed to be taken.

The discussions are serious, they are led by men, and action is taken.

In 2011, 2013 and 2014 with support of McKinsey, the group wrote to the CEO of every Australian listed company urging them step up on gender diversity. A new report will be out in March.

The Male Champions recognise that change starts with them. They have developed and published a model to examine whether they are living up to their own aspirations in championing women. Their model has four elements - what I say, what I do, what I prioritise and what I measure. For example, I say I’m interested in gender diversity but all I talk about are clients and cost. I say I want an inclusive culture but I schedule meetings at 7am. These are the behaviours where there is a disconnect between the leadership we think we are providing and our own leadership shadow.

The men have worked together to develop bold strategies such as the "All Roles Flex" initiative.  Rather than a female or male employee having to ask for and justify a flexible work arrangement, every role in the organisation is available in a flexible arrangement.  Where this is not possible it’s up to the manager to justify why it can’t achieved.  This changes the starting point of work. It’s bold and innovative and it is delivering.

They have adopted the panel pledge to ensure they do not speak at events where there are few women. And their supplier multiplier initiative ensures that tens of billions in annual spend is directed to those partners and suppliers who also care about gender equality – including professional services firms. 

In the last 12 months, despite being the busiest men in our country, they have spoken at over 75 major leadership events about gender equality in Australia, Washington, New York, Tokyo and Brazil to name but a few.

What practical actions can leaders, particularly men, take to increase the representation of women in leadership.



Increasing women’s representation is a challenge that yields to all the same management disciplines you employ to help clients increase sales, reduce cost, or improve safety.

Leaders who make progress have a visible commitment to change. They set targets, which crystallise intent. They invest energy and capital through planned intervention.  They learn about what interventions work and those that don’t.  They course correct.  Then, they start the cycle again. 

Basically, they make a decision to LEAD!  This is what the MCCs are doing.  They are not perfect nor are they necessarily male champions because of their achievements. They are male champions because they want to LEAD tangible action to create change. 

And, they don’t give up when it’s hard - just as the CEO who committed to his board to increase customer service quality doesn’t then front up at the next board meeting and say – “look I tried a few things, but the customers don’t seem to like us as much as I thought.  How about we go back to focusing on costs?”

But that’s what I see leaders do every day in this area, despite the fact that gender balance is correlated with increased capability. I can’t imagine McKinsey putting anything in the “too hard basket” but I would suggest that because of your exceptional ability to define and structure complex problems – to understand deep-rooted causes - you have a tendency to keep talking when what’s required is action.

For change to happen, you must disrupt the status quo. 

There are many actions I could talk about today, but I have decided to speak about just two.  The first action is sponsorship. 

1. Deliberately sponsor women over the next year:  the research is very clear that women are “over-mentored” and “under sponsored.” Mentoring is talking to a person. Sponsorship is talking about them in environments that deliver opportunities.

What the research tells us is that one of the most significant variables that explains the difference between men and women’s progression is that men have more powerful sponsors who advocate on their behalf, who fight for them to advance in their organisation, and work to get them the jobs that create the experiences that matter. 

Don’t get me wrong, women have lots of benevolent advice-givers.  But, when it comes to powerful sponsors willing to use their network to create opportunity, the research says that leaders disproportionately bestow that advocacy on their male colleagues.

Let me give you an example of how this has been done in the Australian Army. 

Lieutenant General David Morrison, Chief of the Australian Army realised that relying on his current talent pipeline to deliver increased numbers just wasn’t going to work. He needed innovation and sponsorship. So, what did he and his team do?  The Army called up every good woman who had left the force in the recent past, and asked them to return.  His team got creative to make the job more attractive than it had been when they left.  He made it possible for women to exert more control over their posting locations.  He was flexible on the length of service commitment.  They talked to the women about the level of sponsorship they were willing to provide, about their confidence that these women could successfully return and build a strong career. 

And the result?  The Army has had their best year ever in women’s recruitment, having almost doubled the number of women recruited.  At the same time through sponsorship, passing the 20% level in their officer staff college which is the entry for executive leadership. They now have the potential to create critical mass in a way that was never imagined.  It is critical mass that will create cultural change not the other way around.

Another example is from Macquarie Bank.  A high profile transaction was coming up in a couple of months that would require 2 months of unpredictable international travel.  The usual process would be to grab an “ideal worker” for the role – a person available 24 hours per day, with no visible caring responsibilities, and therefore likely male. 

However, in this case a senior male sponsor intervened. He saw himself as a sponsor of a talented woman who was well qualified for the work.  He asked why she wasn’t the natural choice.  He was told by his colleagues that it wouldn’t be fair to ask her, given she had children. 

“Well, shouldn’t we ask her first? And why wouldn’t we tell her how much we’d love to her to do this, and explain what impact it would have on her career” said her sponsor.

He insisted, despite strong pushback.  And guess what?  The woman jumped on it.  With enough notice, she worked with her partner to arrange care and negotiated to take 6 weeks off at the end of the work – an on/off arrangement that worked for both the family and the firm.

What this means for you:  So, next time you’re suggesting “someone ought to change this system or that process”, think about your role in change. Why not ask first “what changes can I make starting with my own behaviour that will move us in the right direction?”  You lead a Client Service Team but have few women.  What will you do differently?  Are there women that you are mentoring, but not sponsoring? When was the last time you checked your alumni list to see who might be willing to come back if you put together the right value proposition? What if your career depended on getting women into your CST - what risk would you take that you discard today?

Let me now describe a second action you can take – what I call 50/50, If Not, Why Not?

One of the most powerful thought experiments we asked our men to undertake was to ask the question – 50/50, If Not, Why Not?  When we ask this question it makes our commitment to achieving gender balance intentional.

For decisions all along the development pipeline from an incoming graduate, to a talent and development program, to speaking opportunities, to promotions, the MCCs asked themselves, what stands in the way, this time, of hitting gender balance. Every male champion making progress in this area has set a target for women’s progression. Targets are necessary to provide focus and force innovation. If a strategy is not delivering against the target, it is discarded quickly and new ones are adopted. Targets are not inconsistent with a merit-based environment.  Indeed it’s the exact opposite.  A target allows women’s merit to be exposed by making sure that both men and women are operating on a level playing field.

Let me give you an example of 50/50 If Not, Why Not.

At Goldman Sachs, strong questioning by Simon Rothery, the Managing Director forced a discussion about why their recruitment process was delivering only 25% women.  Investigation uncovered two things –first, they were consistently attracting fewer women because they were recruiting largely from traditionally male colleges and degree programs.  Second – the young associates, recently graduated from university were the ones screening the resumes.  It was no surprise then that the associates, who were of course 75% men, found themselves choosing candidates who looked just like them.  Simon decided that he needed to flip this process on its head.  Instead of the associates doing the screening, the Managing Directors, with more experience and a sense of the importance of gender balance, would do it.  The result, 3 years later, they have reached an average of 55% women recruits for the last two years. 

As one CEO recently told me “The people we choose to appoint – that’s actually one of the most controllable parts of the business I manage.”

They also decided to institute a program called the “Hot Seat” where each Country Manager is put in the “hot seat” and interrogated about his plans for increasing women in leadership.

Let me give you a final example of 50/50 If Not, Why Not.

Dr. Martin Parkinson, Head of the Treasury embarked on a journey to reshape his Department, one of the most male-dominated organisations in the country.  Along the way, one of the most disturbing findings was that when he compared the ratings of women and men, he found that after only 12 months, women were rated much lower than men on analytical skills, despite the fact that there was actually little opportunity for these to be tested during that time.  This was far from the proportional representation he expected.

What made this worse was many women were funnelled into “relationship” type roles early on.  This led to the women’s careers being hindered later, when they didn’t have the experiences the next stage of promotion demanded.  So, what did Martin do? 

He decided to upload all the gender data onto the intranet, and allowed his staff, whom some might consider analytical geeks, loose on the data.  A metric was developed to track performance rating by capability and gender, looking for actual and unconscious bias.  This metric served as an early warning system that problems might be developing.

Martin put in place a more careful assignment of work, to ensure that beliefs about men and women’s strengths didn’t cloud the development paths of equally talented men and women.  He was clear he wouldn’t stand for gender discrimination. 

What this means for you: As one of our MCC says “it’s like putting on a new pair of spectacles, and seeing the world differently” - Take a few weeks of your life thinking 50/50, If Not Why Not?  Start this week.  Reflect on whom you are sponsoring.  Who is leading the client presentations, the practice group discussions? Is it 50/50 men and women?  If it’s not, start asking 50/50 if not why not?

In the short time we have had together, I hope I have been able to give you a sense of how leaders just like you have found innovative solutions – and that I have inspired you to go out and find yours. 

I know sitting in this room are many who have been highly successful operating in a male dominated culture because it is the history of most high performing organisations – organisations like McKinsey whom I greatly admire. 

You might still be wondering why do things need to change?  I believe everyone is entitled to their own opinion but not their own facts – and the fact is that 50% of the talent of nations resides in women.  That’s why we need to change. 

One thing for certain is that progressing women’s leadership cannot sit on the shoulders of women alone.  If there is any organisation in the world that is capable of addressing this issue head on for itself and for its clients – it is McKinsey and Company. 

You are members of an elite group of problem-solvers – a group sometimes compared to the Jesuits and the US Marines for your rigorous mindset and disciplined approach.  You have changed culture in the world’s most important organisations.  You have consolidated and reshaped industries.  You have re-imagined economies. 

What’s to stop you once again thinking big for McKinsey - stepping up and taking the lead in creating a more gender equal organisation - a more gender equal future – a future that benefits not only you - but your nations, your economies, your sisters and your daughters.

The change – it starts with you.