Get Smart: Use Gender Intelligent Thinking
A friend told me that if he sees one more email with the words gender diversity in the subject line he is going to hit delete.
One of the reasons for his burnout is that so many articles focus only on the problem and not on the solution. My goal is that this post makes it past his filter!
There are companies out there that do “get it.” Not only do they use gender intelligent thinking in the workplace, they also use it to sell to their target customer: the financially confident woman. She is already big business, and will only become bigger in the future. By sharing the stories of these companies, we discover needed solutions, we reshape our business strategies, we sell more, and we make more money.
How does gender intelligent thinking lead to business success?
A diverse group will ask different questions when analyzing investment opportunities and making critical business decisions. Often, these points do not occur to non-diverse teams.
In 2016, I interviewed Michel Landel, CEO of Sodexo, at the Global Women’s Forum in Deauville, France. Sodexo is a $14.5 billion market cap food services and facilities management company. Landel was ranked number 67 on Harvard Business Review’s list of “The Best-Performing CEOs in the World” for 2015.
His secret? He surrounds himself with women.
Sodexo’s 2016 research report, “Gender-Balanced Teams Linked to Better Business Performance: A Sodexo Study” is a must read. This study analyzed key business performance indicators (KPIs) from 100 global entities and 50,000 managers in 80 countries — from C-Suite to site management. It looked at how gender balance affects both financial and non-financial performance.
The results clearly confirm that “the optimal balance corresponds to a male-female ratio between 40% and 60%, reinforcing that no one gender is better than the other. Rather, diversity is key to enhanced performance.”
What about gender intelligent thinking in the financial industry?
As of 2014, only 11% of senior venture capital employees globally were women. In private equity buyout firms, the number was a mere nine percent. This is according to work done by Preqin Research. Even in the more general world of finance, women represent less than one in five CFA charterholders globally as of 2016.
In portfolio management, a 2015 Morningstar study reported that mixed gender equity teams beat all male or all female teams over each of three-, five-, and 10-year periods.
“An Investor’s Guide to Gender Diversity,” a study recently published by Morgan Stanley, states that “A persuasive argument for diversity and equality can also be anchored to the bottom line, where ensuring that more women are working and leading in the workplace is simply good business, especially for investors who not only care about the ethics, but also want returns.”
Christine Lagarde, managing director, International Monetary Fund, asserts that adding women is critical. Using Canada as an example, she estimates that the impact of eliminating the current gap of 7% between male and female labor force participation would increase Canada’s mean real GDP by 4.5%.
Given that finance is arguably the most important sector in driving global economic growth, we must share positive stories to encourage change.
Kensington Capital Partners, for example, is a firm that is “doing it right.” Full disclosure: I was recently commissioned to write a research report titled, “Kensington Capital Partners: A Corporate Role Model for Diversity in the Financial Industry.”
The most often-cited reasons for the lack of female talent in finance are the long hours, the difficulty in balancing work and family life, and the general shortage of available qualified female candidates.
Kensington has over 50% female employees across all areas of the company, shattering these arguments and challenging the prevailing status quo in the industry.
Cambridge Associates, a global investment research firm, ranks Kensington’s most established fund of funds and private equity fund as top decile and top quartile performers, respectively, as measured by internal rate of return (IRR) since inception.
As noted previously, teams with different skill sets and viewpoints outperform their industry competitors. In the last three years, Kensington has nearly doubled in size in terms of assets under management.
Clearly, gender intelligent thinking is good business.
Your target customer should be the financially confident woman.
What does this woman look like? She is more financially literate than ever before. She is not just the caretaker of the money. Most of the time it’s her own earnings, and she expects to make even more — not only through her investments, but through her salary, her bonuses, her stock options, or the sale of her business.
Increasingly, women make the majority of buying decisions in an ever-expanding range of sectors. In fact, a whopping 80% of consumer goods purchasing decisions are in the hands of women.
Kimberly T. Morris, general manager and head of integrity and compliance at the Fédération Internationale de Football Association (FIFA TMS) in Zurich, stated:
“Women today have more power and more freedom. It seems that women in their late 20’s and early 30’s are getting married and having children later in life. They are more focused on building their own financial foundations independent of their spouses/partners. They are more savvy, expect to be paid commensurately with men, are increasingly financially literate, and are taking savings and investment into their own hands.”
According to global luxury brand expert Aude Baylet:
“Many brands get this new woman. Hermès is speaking to women directly: Generation Y and women are their targets, not men. Other luxury brands like Dolce & Gabbana — if you look at their communications and brand awareness they are aiming at women who are strong and successful.”
“Social media helps women have more opportunities to get exposure, and digital helps women have the same chance of success as men by leveling the playing field. Brands are investing in social media because they understand that women are as wealthy as men. They listen to the women — women are their main clients.”
Women are making more money, they are controlling more money, and they are making more of the financial decisions.
Why she buys: The customer experience
The corporate world and the financial industry need “gender intelligent” leaders in order to strategically position themselves. Why?
A diverse team will more accurately mirror a diverse customer base. And a diverse team will better understand what motivates each and every customer.
I recently hosted a fascinating focus group at Verity, a Toronto women’s club, on the topic of “How to Attract More Female Customers.” Here are a few key takeaways from some of the brilliant senior women leaders in attendance:
- Start by assuming that women are smart and astute customers. Too many firms think they are “educating” women when, in fact, they are patronizing them.
- “Women” is a very wide category. Don’t paint with too broad a brush, and consider segmenting them into sub-categories.
- Include women in the design and development phase of your product or service offering.
- Focus on saving women time. Saving money is important, but many successful women think that their time is just as valuable as their cash.
- Listen to women and understand their interests.
- Be relational, not transactional, in your business dealings with women.
Isn’t all of this common sense? Not really. Some more encouraging examples include:
The president of a global advertising agency talked about how critical it is that leaders actively reframe gender stereotypes. She gave the example of Unilever and the Dove campaign in which Unilever re-positioned a bath soap that had been around for decades. The message changed from artificial standards of beauty to one of self-esteem and empowerment. This type of clever advertising changes the way the world views women and how women view themselves.
What motivated Unilever’s leadership to make this change? The executive said:
“It started with a lot of research on attitudes. Research about how women feel, not just how they look. The genius of it was the insight, the ‘aha moment’ — that how women feel sometimes has very little to do with the product. The bottom line is that you still have to sell things. But great companies are changing the things they sell and the way that they sell them.”
The CFO of a technology company had a surprising experience when she ventured out to buy a new car just over a year ago:
“I was treated fantastically at the BMW dealership. I was treated with respect. There was no wasting of my time, no high pressure, and no condescension whatsoever. My salesman just said, ‘get in the car and try driving it.’ I ended up with a car that probably isn’t what your average woman buys. He up-sold me!”
A public relations executive added her own positive customer experience with BMW:
“I was eight months pregnant when I was shopping for my car, and this wasn’t part of our conversation. The salesman didn’t assume my need was for a ‘family’ car. His approach was very nuanced, and it was more about ‘who is this woman and what does she want?’ He really listened to me. Of course I bought a car from him.”
The biggest factor in attracting female customers involves building trust. To do that, leaders need to understand new forms of technology, customized communication, consumer behavior, and also, privacy.
Ann Cavoukian, executive director, Privacy and Big Data Institute, Ryerson University, observed:
“Developing relationships with customers that then lead to trusted business relationships is key. This will help you retain the customers you already have, and attract new ones. It is the same with big data and data analytics. Women are especially sensitive to privacy-related issues. Marketers need to understand that when they are dealing with women (and men). They have to respect their customers’ choices and abide by the decisions they make relating to the uses of their data. Once you are open and upfront with them — being transparent about the uses of their data, their trust will grow exponentially and consumer confidence will follow.”
So why is gender intelligent thinking attractive to the financially confident woman?
Martin Kent, senior VP, Kensington Capital Partners, has an interesting perspective:
“Let’s think about this. From a sales perspective, a lot of women control a lot of money. Whether they are high net worth individuals looking for a place to invest or whether they are entrepreneurs looking to sell their business, are you really going to continue to present an all-male front to win their business? So is diversity the reason that people invest with us? You can clearly see how diverse we are by looking at the faces on our website. The business of wealth management is about trust — this requires open, honest, face-to-face communication. And at the end of the day, you want to do business with people that you like and people that you trust.”
Would you like to attract more female customers? Get smart — do some gender intelligent thinking.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: iStockphoto.com/erhui1979