‘Glass Cliff’ Phenomenon Affects Asian-American CEOs

‘Glass Cliff’ Phenomenon Affects Asian-American CEOs

An analysis published recently in the Journal of Applied Psychology finds that US companies are nearly two-and-a-half times more likely to appoint an Asian-American CEO when they are in decline than when they are succeeding. This suggests that Asian-Americans are often put in “glass cliff” situations, appointed to precarious leadership roles that others don’t want to risk taking—and stereotypes of Asian-Americans may be driving this phenomenon. Jane C. Hu discusses the study’s findings at Quartz:

In their analysis, the researchers found that Asian-American leaders tapped to lead declining companies also faced a glass cliff, experiencing shorter tenures as leaders than white leaders in the same position. Even when Asian Americans were asked to lead companies that were not in decline, they were in charge for about half as long as white CEOs (3.25 years versus six years).

The researchers also ran a few online experiments to dig deeper into people’s perceptions of Asian-American leaders. In one study, participants read a fake article, either about a struggling company or a successful one. They were then asked to rate how important they thought certain behaviors were in a leader, like working weekends or forgoing a bonus. People who read the article about a struggling company were more likely to think that “Alex Wong” would make a better CEO than “Anthony Smith”; compared to the white candidate, the Asian-American leader seemed like a better match for participants’ idea of a selfless leader. In a different study, participants rated the CEO “Alex Wong” as more likely to be self-sacrificing, and in a third study, participants chose an Asian-American executive to lead a struggling company.

Asian-Americans occupy a unique place in the conversation about diversity and inclusion in the US: Unlike black or Hispanic Americans, they are not underrepresented in professional fields, but Asians still frequently report experiencing discrimination on the job and are markedly less likely than their white peers to be promoted into leadership positions. A landmark study on racial inequality in the US tech sector last year found that white men and women were twice as likely as Asians to become executives and held almost three times as many executive jobs, with Asian-American women particularly underrepresented in these roles.

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Diversity in Big-Company Leadership Shrinks as PepsiCo’s Indra Nooyi Prepares to Step Down

Diversity in Big-Company Leadership Shrinks as PepsiCo’s Indra Nooyi Prepares to Step Down

After 12 years at the helm of the multinational food and beverage conglomerate, PepsiCo CEO Indra Nooyi announced on Monday that she would retire from her position in October. Nooyi will be succeeded by Ramon Laguarta, the head of PepsiCo’s Europe and sub-Saharan Africa business, who has been with the company for 22 years. In an interview with the New York Times, the 62-year-old departing CEO said she was stepping down now in part to spend more time with her 86-year-old mother:

“You reach a point where you get tired,” Ms. Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.” Inside PepsiCo, Ms. Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Ms. Nooyi said, “probably not.”

“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Ms. Nooyi said.

Nooyi’s departure will leave just 24 women leading S&P 500 companies, according to the non-profit organization Catalyst, though that number will bounce back up to 25 again when Kathy Warden takes up her new post as CEO of Northrop Grumman next January. Other women have stepped down from CEO roles at big companies this year, however, including Denise Morrison of Campbell Soup and Irene Rosenfeld of the snack food maker Mondelez International, so the gender balance of this exclusive club is on a downward trend.

Nooyi has discussed her remarkable path to corporate leadership in a number of interviews, as well as why more women don’t make it to the top. In her view, the dearth of women in the C-suite has less to do with sexist conceptions of what leadership looks like and more to do with a pipeline problem, Vauhini Vara explains at the Atlantic, pointing to an interview she gave on the Freakonomics podcast earlier this year. That’s because the critical point in many professionals’ careers coincides with the time in their lives when they become parents and raise their children—a responsibility that still falls primarily on women:

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How Can Companies Make the CEO Pipeline More Inclusive?

How Can Companies Make the CEO Pipeline More Inclusive?

A recent analysis from the Pew Research Center took a closer look at the gender gaps in corporate leadership in the US, focusing on top-level executive positions and the roles from which senior leaders are most commonly promoted to them. Drew DeSilver wrote up the analysis late last month at Pew’s Fact Tank blog:

Women held only about 10% of the top executive positions (defined as chief executive officers, chief financial officers and the next three highest paid executives) at U.S. companies in 2016-17, according to a Pew Research Center analysis of federal securities filings by all companies in the benchmark Standard & Poor’s Composite 1500 stock index. And at the very top of the corporate ladder, just 5.1% of chief executives of S&P 1500 companies were women.

Nor do many women hold executive positions just below the CEO in the corporate hierarchy in terms of pay and position. Only 651 (11.5%) of the nearly 5,700 executives in this category, which includes such positions as chief operating officer (COO) and chief financial officer (CFO), were women. Although this group in general constitutes a significant pool of potential future CEO candidates, the women officers we identified tended to be in positions such as finance or legal that, previous research suggests, are less likely to lead to the CEO’s chair than other, more operations-focused roles.

That women are underrepresented among CEOs and other high-level executive positions is hardly breaking news. The most interesting finding from Pew’s analysis is that three-quarters of the CEOs studied had previously held leadership roles in operations: a function where women are significantly underrepresented. At the same time, the gains women have made in obtaining executive roles in finance, legal, and HR are not putting these women leaders on the CEO track.

This finding builds on other recent research showing that although women’s representation in management has increased dramatically over the past few decades, women are still segregated into leadership roles that are less production-focused, less highly compensated, and less likely to be career stepping stones toward the top of the pyramid. We see the same thing in boardrooms: Even as more women directors are appointed, they remain less likely than their male colleagues to achieve positions of influence on the board.

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Study Highlights Occupational Gender Segregation in Management Roles

Study Highlights Occupational Gender Segregation in Management Roles

Using date from the US Census and American Community Survey, William Scarborough, a PhD candidate in sociology at the University of Illinois at Chicago and a research assistant at the university’s Institute for Research on Race and Public Policy, investigated how American women’s representation in management changed between 1980 and 2010, as well as gender segregation and gender wage gaps among managerial roles. Writing at the Harvard Business Review, Scarborough explains that he found “progressive change in one measure coupled with backward tendencies in others”:

First, the good news. Women’s representation in management is higher than it’s ever been. Of the nearly 4.5 million new jobs in management created since 1980, women have obtained the majority of them.

Second, the not-so-good news. The rise in women’s representation in management has been accompanied by a large increase in the occupational gender segregation of managers. In 1980 not a single management occupation was majority women. By 2010, however, we find that some occupations are female-dominated while others are male-dominated. Female managers are concentrated in fields that emphasize people-centered caring skills, while men are concentrated in fields dealing with production-centered skills.

Third, the bad news. The occupations where female managers were concentrated by 2010 were also those with the largest gender wage gaps.

Scarborough’s research points in the same direction as other studies on gender parity in corporate leadership, showing that despite the progress women have made at breaking through the glass ceiling, this progress has not gone as far as many men believe it has, with women getting passed up for promotions and, when they do break through, often channeled into staff roles with lower earning potential and without a clear path to the C-suite. These challenges are doubly daunting for women of color.

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Several New Studies Tie Diversity to Innovation, Profitability

Several New Studies Tie Diversity to Innovation, Profitability

As more research explores the impact of diversity and inclusion on businesses outcomes, the bottom-line case for diversity and inclusion grows ever stronger. Three studies last month added to this growing body of evidence in favor of D&I, finding that gender parity and racial diversity, particularly in decision-making roles, has a meaningful impact on companies’ innovation, productivity, and profitability.

The first study comes from Richard Warr, a professor of finance at North Carolina State University, his colleague Roger Mayer, and Jing Zhao of Portland State University. The researchers’ headline finding is that companies that score well on indicators of diversity tend to be demonstrably more innovative, Fast Company’s Ben Schiller explained in a post highlighting the study last month:

The study looks at the performance of 3,000 publicly traded companies in the years 2001-2014 across nine measures of diversity. That includes whether firms have women and minority group CEOs, whether they promote women and people of color to “profit and loss responsibilities,” whether they have positive policies on gay and lesbian employees (say, offering benefits to domestic partners), and whether they have programs to hire disabled employees. …

The big takeaway: Companies that fulfill all nine positive diversity requirements announce an average of two extra products in any given year, which about doubles the average for a major company (those that tick fewer boxes are less innovative proportionally). Moreover, the researchers find that companies with pro-diversity policies were also more resilient in terms of innovation during the 2008 financial crisis.

The paper does not conclusively prove a causal relationship between diversity and innovation, Schiller notes—companies that invest in diversity may simply be investing intelligently in other areas that impact product development more directly—but combined with what we already know about how diverse teams are more likely to challenge their assumptions and biases, more likely to engage in productive debate, and able to access a wider range of perspectives, the correlation Warr and his co-authors uncovered looks suggestive.

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Stereotypes Hold Asian Americans Back in STEM Careers

Stereotypes Hold Asian Americans Back in STEM Careers

In discussions of diversity and inclusion, particularly in the tech sector, Asian Americans are often left out. Because their representation in the tech workforce is high relative to their presence in the US as a whole, tech sector diversity reports do not treat Asian Americans as underrepresented minorities, diversity initiatives don’t focus on recruiting them, and relatively little attention is paid to whether they are given opportunities for career advancement and leadership roles.

However, just because Asian Americans are well represented in science and technology professions, that doesn’t mean they don’t experience racial bias. Joan C. Williams, Marina Multhaup, and Rachel Korn, researchers at the Center for WorkLife Law at the University of California’s Hastings College of the Law, have been studying the impact of gender and racial bias in STEM professions for the past few years. “Our research,” they write at the Atlantic, “has found that Asian Americans, especially women, often face significant career hurdles tied to perceptions about ethnicity and race”:

For one approach, we developed a 10-minute survey that picks up major patterns of racial and gender bias. When we gave an early version to more than 3,000 American engineers, Asian American men and women were much more likely than white men to report that they had to prove themselves more than their colleagues. Most of the 3,000 respondents were women, which makes it hard to draw conclusions about Asian American men. But our data are clear that Asian American women, at least, face the same kind of “prove it again” bias that has been documented for decades in studies of women and black people. Despite being stereotyped as competent, Asian American women still report that they have to provide more evidence of competence than white men in order to be seen as equal.

“If you’re perfect, we might accept you. But if you’re not perfect, forget it,” summarized an Asian American woman in a 2014 study of science professors by our center, with contributions from Katherine W. Phillips of Columbia University and Erika V. Hall of Emory University. …

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5 Steps to Improve the Employee Experience for Racially and Ethnically Diverse Talent

5 Steps to Improve the Employee Experience for Racially and Ethnically Diverse Talent

The US is growing more ethnically and racially diverse. By 2040, non-white people are expected to make up a majority of the population. The best organizations are getting ahead of this trend by creating a workplace environment that supports diversity. These efforts are leading to better results for employees and the organization: Companies in the top quartile for racial and ethnic diversity have 35 percent higher financial returns than the national industry average, according to our research at CEB, now Gartner.

To increase racial and ethnic diversity throughout the organization and leadership team—and to realize the benefits of a diverse workforce—organizations must attract diverse employees and remove barriers to their career advancement. Taking these five steps can help you meet both of these goals:

  1. Highlight organizational stability in job postings. When considering new employment opportunities, racially and ethnically diverse candidates are 1.2 times as likely as other candidates to list organizational stability (i.e., the relative continuity of the organization over time, particularly as it relates to long-term roles) as a key factor in a new job search.
  2. Train managers for success. Racially and ethnically diverse candidates are 40 percent more likely than other candidates to consider switching jobs if the prospective organization promises more skilled direct managers and colleagues.
  3. Offer financial wellness benefits. Student debt reimbursement programs and family-related benefits, such as emergency or onsite daycare and parental leave, are among racially and ethnically diverse employees’ top benefits preferences.
  4. Create specific initiatives for all levels in the organization. Most senior leadership teams do not reflect the diversity seen at the frontline and lower management levels of the organization. Identify specific initiatives to strengthen the pipeline of diverse talent at each stage in the employee development cycle.
  5. Encourage networked management. Time spent coaching does not always translate to better performance outcomes. Our research shows that connecting employees with relevant formal and informal learning opportunities is the most effective way to improve their performance through coaching.

CEB Diversity and Inclusion Leadership Council members can access a range of additional resources to learn more about attracting and retaining diverse talent.

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