Women represent more than half of the retail workforce, yet less than 3 percent make it to the C-suite. Furthermore, among the board members at S&P 500 retail companies, only 20 percent of these members are women.
My team and I at Pinsight undertook research to discover some of the causes of this lack of diversity, not only in retail, but in a wide range of industries. Based on data collected from 328 managers and 129 organizations that together employ more than 500,000 people, we found that unconscious bias (i.e., stereotypes that people don’t know they have) against women and minorities creates a self-perpetuating cycle when it comes to who is promoted. We’ve outlined our findings in our report, Repairing the Broken Rung: Overcoming Bias in the Leadership Pipeline.
Our research reveals that lack of diversity occurs because a large majority of organizations utilize internal practices that center on the judgment of managers to identify future leaders. Unfortunately, though, despite hours of training and everyone’s best intentions, unconscious bias significantly influences managers’ perceptions of who has leadership potential. This bias is then reflected in disproportionately more men than women being identified as “high potentials.”
Organizations invest significantly more in developing their high-potential employees, on average $4,000 per year. Since women and racial minorities are less likely to be in this select group, they’re less likely to benefit from special training and resources designed to prepare them for a promotion faster. As a result, they’re denied access to executive coaching, networking opportunities with senior executives, and high-visibility projects that strategically position their equally capable nonminority colleagues for a promotion. Without these resources and special attention, women and racial minorities often end up being left out and passed over for promotion.
What Can Be Done
We’ve identified five steps that organizations can take to ensure fairness in selection and development of future leaders. Start with obtaining data about your current practices and understand if you’re at risk for unintentional discrimination. Roll out bias training across the organization, but understand that it’s only meant to increase awareness of the issue but not solve it — you cannot train bias out of people. Apply rigor to your existing processes for identifying future leaders; review and improve the practices that are in place as well as how they’re executed. Formulate a set of criteria that have been scientifically validated to predict success in leadership roles, and insist that managers use these during the nomination process. Introduce blind auditions to provide managers with more objective data about employees’ readiness and potential.
We recommend a five-step solution for breaking this cycle that includes:
- Get the data. Start by obtaining data about your current practices for identifying high-potential employees, emerging leaders, and succession pools. Monitor the balance in these programs with the same rigor you apply to hiring decisions. Calculate adverse impact against any protected group periodically, after talent review cycles or managerial ratings. Review industry trends and best practices as well as legal cases to ensure that you’re aware of risks and trends in this space.
- Roll out bias training for all. Bias training is a good starting point, but understand that it’s meant to increase awareness of the issue, not solve it. You can’t train bias out of people. All humans use biases to save time and energy when making decisions. Training can increase awareness of what biases exist; how they can affect organizational decision making; and where to look for them in talent reviews, high-potential selection, and succession decisions. Because most people are reluctant to see their own biases, use data from your organization as evidence that even your managers show bias.
- Turn up the rigor. Apply rigor to your existing processes for identifying high-potential employees and successors across the entire leadership pipeline, from frontline managers all the way to senior executive roles. Examine not just how those decisions are made, but exactly how the processes are executed. Do managers write down names and submit them in a sealed envelope, or is there a transparent assessment in place? Are nomination criteria clearly defined? Do you have a validated list of the characteristics and attributes needed for employees to access high-potential programs?
- Identify selection criteria. Formulate the criteria for high-potential and successor selection based on science, and insist that managers use these during the nomination process. What characteristics best predict success in leadership roles at your company? Educate managers on the criteria and what potential performance looks like for future leaders. Use the criteria in the nomination and selection process, and ask managers to provide evidence that their candidates meet the criteria. Communicate the criteria to all employees to reinforce a culture of fair and consistent standards in selection to high-potential programs and succession plans.
- Introduce blind auditions. Help managers make better decisions by giving them more objective data about employees’ readiness and future potential. Similar to our case study, you can set up a simulation of a leadership role and invite trained assessors who have no prior relationship to the candidates to observe their performance. Seeing all employees in the same standardized situation and using a validated set of criteria, you’ll arrive at a more objective evaluation of their leadership potential and readiness.
Women in Retail Leadership Circle members can access the full report, Repairing the Broken Rung: Overcoming Bias in the Leadership Pipeline, here.