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Targets with teeth: Robert Wood on a cultural shift for increasing female participation

August 16, 2017
Business strategy

Robert Wood is a professor and AGSM fellow at UNSW Business School and director of research at the Centre for Ethical Leadership. His research areas include problem solving and learning, unconscious bias, cognitive functions, leadership and diversity. Wood spoke to Julian Lorkin for BusinessThink.

An edited transcript of the conversation follows.

BusinessThink: What’s the current state of play for increasing female participation in the labour force?

Robert Wood: If you look across the world, there’s a variety of responses. If we take Australia, what we have here is a lot of targets. Many organisations, the major banks and many of the major Fortune 500 participants from Australia, will have targets for females and gender, and other minorities at different levels.

Quotas are a slightly different question. Some countries have them. They’re mainly being targeted at the board level but of course other countries have neither quotas nor targets but they have reporting requirements. And the idea with reporting requirements, it’s like any feedback – if you get feedback, then you might set yourself a target, and particularly if you add into that social comparisons. So, if you get feedback that you have 20% but everybody else in the industry has 25%, you’re more likely to set yourself a target of 25% if you believe there are benefits in doing so.

BusinessThink: We’re talking about targets and quotas in the same sentence, but they’re very different things aren’t they?

Wood: Well, you’re right. Let’s first talk about the difference between targets and quotas. In some ways they come together. So, a quota typically is one that carries sanctions, so if you don’t meet it then you get some form of punishment, or if you do meet it you may get a reward. But also quotas tend to be undifferentiated. So, for example, in Norway, the idea that all boards had to have 40% of women was an undifferentiated target.

Targets can be aspirational, but in many organisations they all have targets around profits, loss, participation, engagement scores, and those targets will often carry some sort of reward or sanction, so their bonus may be contingent on it. So, they start to look a lot like quotas in that. And, what we’ve discovered is that targets with teeth – that is, targets where there’s something attached to them – will make a difference.

And so they’re like quotas but it turns out the terminology is absolutely critical. You mention quotas and people feel it’s regulation, it’s imposition. So the semantics of it are quite negative and quite compelling and they often lead people to reject it. Whereas if you start talking about targets, or targets with teeth, this is something that the industry’s used to. It’s used to it in terms of quality, costs, safety. Many of these areas previously weren’t thought about as areas where you would have targets but now they do. And so many of our alumni will work in heavy industry, they’ll have safety targets, and bonuses may be contingent upon those targets. Diversity is becoming the same.

BusinessThink: I understand you’ve also looked at what’s happening in parliaments. Some of the Scandinavian countries have set targets, or indeed quotas, depending on the country. You’ve looked at 190 countries. What’s the result there?

Wood: Well, it’s interesting. Quotas are widely used around the world in terms of female representation in parliamentary offices. Parliament is an interesting example because you would have to argue that selection for parliament is not merit-based; it’s based on politics and popularity and representativeness.

'The decision was made that female representation would decrease the warlike nature of the government; and apparently, it has worked'

– ROBERT WOOD

And it turns out that studies of women when they are in parliament show they are very representative; they attend more; they are more community-oriented. So in the sense of their representational role they do a much better job than their male counterparts. Now, that may be due to freshness, it may be due to that they’re new to the role, any number of things, right?

But what we do know is that in many countries, once you start setting quotas for [female] representation, it leads to an interesting set of results. Overall, it leads to an increase in the number of women in parliaments. And that varies. Once again, it comes to the level of sanction in place. If you don’t put up a female, or if a female’s not nominated or elected, does that mean you lose the seat? I mean, that’s extreme and it only happens in one or two countries. Often, it’s the case that you have to put women on the list, but then in some countries the parties will then put women at the bottom of the list. So [you would know that] in Australia or many countries, if you’re going for an election of the Senate and you’re at the bottom of the list, you’re much less likely to be elected.

So the impact of quotas really depends upon how they’re implemented. They can be sort of manipulated so that they don’t lead to the increase. But overall they do. And this is going to surprise a lot of people – the country with the largest female representation in the world is Rwanda. And that was done post the war in Rwanda. The decision was made that female representation would decrease the warlike nature of the government; and apparently, it has worked. I mean, that’s a gross statement because we don’t have hard evidence around this, but certainly the war has dissipated quite a bit in Rwanda, though it’s still a very strongly torn society.

But this idea of what the quotas do in this case, or the targets with teeth, however we do it, they create a sort of mindset that says, “OK. Well, look, first of all, people just will reject it and say it’s ridiculous, its lack of merit and all that.” But then they’ll start to say, “OK. Well, look, how are we going to do this?” And I think [that’s] the critical question – and maybe I can give you an example. The University of Melbourne advertised a position of professor of mathematics; only females could apply. Pretty radical, right? And that’s because there are a lot of good female mathematicians out there but they’re under-represented at the University of Melbourne.

And so there were two reactions I observed among my colleagues. Some said, “Well, look, this is the end of the world as we know it. We might as well just go out on to the street, grab somebody and have them come in and teach advanced calculus.” Others said, “Well, no. What it means is we have to do something differently. We have to look harder and look in different places.” And that’s often what happens. When people start to set targets or quotas, people need new strategies. They need to look in different places. And so, if you’re an institutional bank and you only recruit from within institutional banks, it’s very difficult to find women. But if you go into retail banks and you find them, but then people say, “Oh, well, they have the wrong attitude”, you say, “Well, can’t we teach them? Not everybody in a retail bank has the same attitude.”

'When people start to set targets or quotas, people need new strategies. They need to look in different places'

– ROBERT WOOD

BusinessThink: Well, doesn’t it really put our finger on the issue of just changing the mindset, particularly when it comes to recruiting? I know that you’ve looked a lot at unconscious bias when recruiting. First, let’s define what unconscious bias is before trying to work out what to do about it.

Wood: Well, first of all, most of our daily behaviour and thought is driven by unconscious knowledge. It’s stored in our long-term memory. You and I are talking now, we’re not thinking about the words we’re using, right? Sometimes we pause and go back and forth but mostly, that’s the form of expertise, intuition, whatever you want to call it. It’s our unconscious knowledge. It’s mainly how we operate – we drive a car, we talk, we calculate balance sheets, we solve technical problems, we negotiate things.

But then, when we need to do something differently, that requires adaptive thinking. And the problem is, when we get into adaptive thinking, the world is a bit different. Then we may be stuck on our unconscious knowledge and we redefine the problem. And so what happens with bias is we tend to respond in the same way without recognising the differences, or we don’t fully utilise the information in the system.

[For example], I have a set of assumptions buried in my unconscious about people with an English accent and I respond to you assuming that you’re typical of that. Whereas what we know is, among English men and women – or men, women, blacks, whites – there’s a distribution. Everybody is unique in one way or another. And so, assuming that you’re just the typical person, even if we’re assuming the typical is accurate, it may be inaccurate, right? But it’s just wrong in most cases, and so … people make assumptions like, “Oh, women are more emotional than men”. And, I mean, the evidence is to the contrary, but even if it were true, not every woman is going to be more emotional than every man.

BusinessThink: So what do we do about unconscious bias? I’ve heard some controversial suggestions – [such as] that it should be mandatory to remove name, age, sex, everything that’s personal, out of somebody’s CV when they’re applying for a job so it’s purely down to the résumé of their experience. Would that help or is it down to educating leaders about the biases?

Wood: Well, I think it’s both. Look, I think it’s sort of interesting. We’re running a large research project with the Victorian government called Recruit Smarter. It turns out that ... removing identification from CVs is actually a much more complex process than people think. You can’t do it in an interview. And people often tell the classic story, which I think is a good one, that in, I think 1983, a lot of symphony orchestras in the US went to blind selection, and the way they did it was to have people audition behind a gauze curtain. And that led to a … I think in five years they went from 7% female representation to 23%.

So the question is not totally solved by blind selection or blind audition. It is about leadership, it’s about culture. I’ve seen a lot of organisations where they increase the number of women or minorities and then [those candidates] land in an environment that’s inhospitable. And then they leave, and when they leave people say, “Well, that just proves they didn’t belong here”. So it sets off a cycle of self-justification. You really need to think about the whole culture.

And this is what they did with, for example, safety. It’s sort of interesting, [that] one of the most common forms of bias is illustrated by how people react to novel ideas. So if you say to somebody, and I’ve done this many times in Australia – I’ve spoken to boards and executive committees and said, “Look, let’s consider quotas”. And immediately people start saying, “Oh, we’re a merit-based organisation.” And the question then becomes, “Well, you have either merit or quotas”. And my point would be: OK, I understand that, but how do we work [it] so we have both merit and quotas, or we have diversity and quotas?

And a lot of great insights have come from people understanding things are not either/or, they’re and. So, how do we have both safety and productivity? How do we have quality and productivity? These were not ideas that were widely held 30 years ago. Now everybody believes they’re part of the same process. I believe eventually people will say, “Diversity and productivity are part of the same process”. And it’s the and, not the either/or, that we need to think about.

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