Peter Drucker was a consultant-educator-scholar-author who published thirty-nine books, including two novels, an autobiography, and thirty-six management treatises. He taught in the Claremont Graduate School, a constituent college of California’s Claremont Colleges. Despite lacking an affiliation with Harvard, the Wharton School, or Yale, from faraway California, Drucker became known as the “founder of modern management.”1 He was a “true polymath” who was “the world’s best known business ‘guru.’”2
Drucker, who died in 2005, explained the difference between himself and other management consultants and economists. While attending a lecture by John Maynard Keynes at Cambridge, he recalled, “I suddenly realized that . . . all the brilliant economics students in the room were interested in the behavior of commodities while I was interested in the behavior of people.”3 Drucker applied quantification techniques to measure the behavior of leaders and senior persons within an organization. In one of his famous early books, The Practice of Management, Drucker introduced and expanded on what he termed “management by objectives.”4 In Drucker’s lexicon, “You manage what you measure” mutated into statements such as “What gets measured gets improved.”5
A later Drucker book, Managing for Results, had a similar thesis.6 Shortly before he died, Drucker hosted a Forbes writer at his home for a wide-ranging discussion. He repeated many times one of his mantras, that a business leader must have “yardsticks.” “Effective leaders check their performance. . . . [They] check their performance against goals.”7 A good corporate leader must be “mission driven.”
An astute reader can easily foresee the direction in which the discussion is headed. An information technology company sincerely interested in making progress in hiring and promoting women must set goals and periodically measure progress toward those goals, in detail. “What gets measured gets improved.”8 “You manage what you measure.” Former Catalyst CEO Irene Lang is quite passionate about it:
Starting now, set consecutive targets for achieving gender parity on your board within nine to fifteen years. . . . If a board sets parity as a business objective, it can achieve parity by 2030. . . . And if it doesn’t have a specific objective, progress will be elusive and likely unachievable.9
Organizations can implement those exhortations, and do so on a much wider front, by setting goals and tracing progress of women into and through middle management and then on to the lower and middle rungs of senior management.
A relevant object lesson can be found in the experiences of large multinational accounting firms and their earlier lack of progress in hiring women, promoting them, and accepting them into partnership, and how those firms, or some of them, righted the ship.
Every treatment of this subject must begin with the tale of Ann Hopkins. Ms. Hopkins rose to the level of project leader at accounting giant Price Waterhouse (PW, now Pricewaterhousecoopers, or PWC). She labored in the firm’s Office of Governmental Services in Washington, D.C., where she “played a key role in PW’s successful effort to win a multi-million dollar consulting contract with the Department of State.” Her superiors viewed her as a “highly competent project leader who worked long hours, pushed vigorously to meet deadlines, and demanded much from the multidisciplinary staffs with which she worked.”10 But partners’ comment sheets also criticized her interpersonal skills, one partner suggesting that Hopkins was “overbearing and abrasive”:
One partner described her as “macho”; another suggested that “she overcompensated for being a woman”; a third advised her “to take a course in charm school.” Several partners criticized her use of profanity. Another suggested that those partners objected . . . only “because it’s a lady using foul language.” Another supporter explained that Hopkins “had matured from a tough-talking somewhat masculine hard-nosed manager to an authoritative, formidable, but more appealing partnership candidate.”11
Of course, many of those behaviors would have gone unmentioned in a male’s evaluation sheets; indeed, PW’s partners (662 of 665 of whom were male at the time) would have praised male accountants for certain of those characteristics.
The PW Policy Board voted not to approve Ms. Hopkins’s application for partnership, even though she had billed more hours and brought in more business than any other candidate, male or female, for partnership. Ms. Hopkins was the only female of eighty-eight senior PW managers to apply for partnership that particular year.12 The board of directors (managing partners) decided, though, that her application was not an “up or out” event for Hopkins. The board voted to hold her candidacy over with the possibility that it might reconsider the matter the following year.
Afterward, a PW partner took Hopkins aside, telling her “to walk more femininely, talk more femininely, dress more femininely, wear makeup, have [your] hair styled, and wear jewelry.”13 In other words, with a woman, outstanding results did not matter: appearances did. Ultimately, though, PW made the decision not to re-propose Ann Hopkins for partnership. She sued under Title VII of the Civil Rights Act of 1964. It took Ms. Hopkins seven years and five levels of judicial decision making, with rulings by two trial courts, two appellate court panels, and finally the Supreme Court, the protracted nature of the defense infected with the lawyer-like zeal to defend PW “to its last dime.” In the end, in 1990 the Court of Appeals took the exceptional step not only of awarding Ms. Hopkins money damages but also of affirming the trial court’s order that PW admit Ms. Hopkins to partnership.
Each court along the way had agreed that “sexual stereotyping,” not merits, “thoroughly infected the decision making process among Price Waterhouse’s partners” when it came to considering a woman for promotion. Nonetheless, Ms. Hopkins and her attorney faced seven years of technical, nitpicking arguments by PW and its lawyers.
Some good did come from the case (aside from that for Ann Hopkins). PW’s actions and the judicial gauntlet Ms. Hopkins had to run galvanized the accounting industry to do something about the industry’s role in relegating women accountants to an inferior status. As one could have guessed (they were accounting firms, after all), a principal plank of the accounting firms’ platform was taking to heart what Peter Drucker taught so many times: rigorous measurement of the hiring and promotion, at all junctures, of women accountants within firms.
In 1993 Deloitte Touche, one of the Big Four international accounting firms, which employs more than sixty-five thousand people worldwide, inaugurated its Women’s Initiative, after noting that only 7 percent of its partners, principals, and directors were female (still better than information technology firms, but poor nonetheless). The initiative included other components centered on the firm’s dedication to ameliorate work/life barriers such as childbearing and child-rearing that put women at a disadvantage from nearly the start of their careers. For instance, the program provided that “all Deloitte employees, including senior managers, can choose to ‘dial up’ or ‘dial down’ their careers, depending upon life’s circumstances.”14 Thus began Deloitte’s use of career customization, as the previous chapter describes.
The firm tracked women’s progress not only at the partnership stage but at other junctures as well, including progress toward manager, promotion to manager, progress toward senior manager, promotion to senior manager, director, and so on. The program, which included tracking and counseling as central components, produced results: Deloitte advanced from 7 percent of women directors and partners in 1993 to 23 percent in 2010.15 In varying degrees, other Big Four firms have followed Deloitte’s lead.16 They have met with success.17
In 2010 the American Woman’s Society of Certified Public Accountants (AWSCPA) kicked off a similar program (MOVE) for midsize and smaller accounting firms. The forty-seven CPA firms participating in MOVE collectively moved from 17 percent women partners in 2010 to 22 percent in 2015.18
The accounting profession’s progress has not been without naysayers. Forbes contributor Peter Reilly noted that while “public accounting got off to a good start,” the profession as a whole had plateaued. He wondered whether a once retracted glass ceiling once again was extending itself. While 40 percent of the college and university accounting graduates are women and 60 percent of those passing the tough CPA exam are female, only 20 percent of the partners are female.19 These recent numbers do give one pause, wondering whether measurement as a management tool has limits. That is not to say that companies serious about the issue should not institute rigorous regimes of tracking and management of female hiring and promotion.
In terms of promoting women executives, Deloitte & Touche again led the way. In 2015 the firm’s partners elected a woman partner (Cathy Engelbert) as chief executive officer of the U.S. Deloitte, “making her the first woman to lead any of the country’s big professional services firms.”20
Once upon a time, the corporation’s CEO staffed the board of directors. The CEO’s spouse, the joke went, played a leading part in choosing which of the CEO’s golfing partners would receive board of director status. To remove the specter of CEO influence over the selection process, from an early point, good governance blueprints and governance engineers invented the board nomination committee.21 Specifically, the committee, comprising outside (non-management—no CEOs) directors, would identify candidates and recommend their nomination. The committee may identify candidates for senior management positions as well.
The nomination committee construct has worked tolerably well. Partly as a result, many corporations have broadened the committee’s functions, renaming it the “governance and nominating committee” or simply the “governance committee.” The SEC has enhanced the committee’s role. For example, the SEC requires publicly held companies to disclose the process the company uses to identify and nominate candidates for the board. The SEC also requires companies periodically to disclose to shareholders the entirety of the nomination committee’s charter.22
With that prelude out of the way, the recommendation is that corporations include on the governance committee a director, or directors, dedicated to or particularly interested in the advancement of women in the organization. “Every public corporation should put a woman on the Governance and Nominating Committee. . . . Those women directors would take it as part of their mission to increase . . . diversity” on the board and among senior managers.23 Further, the board and senior management would be informed, in no uncertain terms, that the director’s role included overseeing cultivation for and promotion of women for senior-level management positions. Most often, the director would be female, thus tending to assure a longer-term interest in the specific role.
Directors should assure themselves that the woman director on the governance or nomination committee is neither a “queen bee” nor an “iron maiden.”24 A queen bee director or senior executive relishes being the only woman on a board or at a high level within the corporation. She may take covert steps to see that things remain that way. Queen bee directors obviously would be unfit for the nominating or governance committee role.
The iron maiden is a bit different. She takes steps to disguise and even repress her femininity. In an earlier era, she might resort to wearing masculine-style suits and severe hairstyles. One “wardrobe engineer” determined that for women “the best route to the top was [the] ‘uniform’; different variations of the same [masculine-like] look every day.” For women clients, he recommended a “feminine fedora,” “shoulder length hair,” and “a scarf tied around the neck somewhat like a necktie.”25 The iron maiden is a shade or two beyond what wags of that time termed “shoulder pad” feminism. At the 1985 fall fashion show in Paris, “designers were featuring clothes with shoulders so massive that the models appeared to have emerged from locker rooms rather than dressing rooms.” “Shoulders forever” became a motto.26 Needless to say, an iron maiden director may not fit well with the governance committee role, but her appearance may only be an appearance that should not necessarily disqualify her.
These are more intrusive devices recommended from time to time. Indeed, another element of the Deloitte Women’s Initiative is the appointment of a national managing director for retention and advancement of women—in other words, a diversity officer.27 Moreover, Deloitte went that one better, appointing women managers division-by-division directors of “diversity and inclusion” programs.28
Beyond charging diversity officers with maintenance of records as to recruitment, hiring, and promotion, corporations and senior managers would task diversity officers with analyzing acts and practices within the organization that constitute subtle and not-so-subtle forms of discrimination. Diversity officers would then recommend how the company and its managers might rearrange the conduct of the corporation’s business to eliminate forms of second-generation discrimination. Conceivably, an organization might form a subcommittee of its board nominating or governance committee to undertake some of those functions and to underline the emphasis the company wishes to place on hiring and advancement of women.
On the other side of the ledger, though, the Sarbanes-Oxley and Dodd-Frank legislative enactments add a myriad of other responsibilities such as audit and compensation committee functions placed upon directors’ heads. It may not be in furtherance of good governance to add significantly to directors’ burdens, especially as to those demanding hands-on management versus oversight. Under the U.S. scheme of corporate governance, of course, directors still are part-time functionaries. They can undertake only so many responsibilities.
Chapter 10, which examines the British Davies Committee and its pledge program, and chapter 12, which examines the Australian Institute of Company Directors mentoring and sponsorship program, express reservations about the ability to transplant similar programs to the United States. Those British and Australian programs assign an important role to the corporate board chair in conducting, overseeing, and evaluating the progress of the programs to increase female representation on boards of directors.
By contrast, in the United States, the board chair position has considerably less status and heft. In the United States, the second most common phenomenon is to regard the board chair position largely as a ceremonial or honorary one, frequently awarded to the ex-CEO, whom the board of directors has kicked upstairs for a few additional years’ service prior to complete retirement. The most common phenomenon, though, by far, is for the CEO also to wear the board chair hat. The question is whether two-fisted, extremely busy CEOs can give the requisite attention to their role in such programs, especially if the programs are extended to increasing women among the ranks of senior executives. Despite the best of intentions, as their plates fill up and fires flame that must be extinguished, corporate CEOs may not be able to give programs the attention they require.
The principal question then is not “yes” or “no.” You manage what you measure. Today, the principal questions are, Who measures? Who manages?