Will businesses reach gender diversity in your lifetime?

Perhaps a more pointed question is – do you care?

I do. I care because diversity can help businesses to deal with one of the biggest challenges confronting us: disruption. These days no boardroom conversation is complete without a discussion of how industries are being reshaped by technological disruption. At heart, disruption is about people — whether start-ups or groups within established companies — thinking about customers’ needs in an entirely new way, enabled by technology.

So what does gender diversity have to do with disruption? It can boost innovation. In my experience, innovation comes from the power of different ideas from diverse groups of people who are supported by an inclusive culture. And while there’s more to diversity than gender, it’s part of the equation.

I also care because there are links between gender diversity and improved business performance. The benefits of more women in the boardroom have been well-documented. Most recently, a report from the Peterson Institute for International Economics found that 30% female representation on boards added up to six percentage points to a company’s net margin

So this means that the largest companies across key industries are all actively making headway on gender diversity?

Think again.

More transparency and rigor needed

In a report EY, released today, Navigating disruption without gender diversity? Think again., we found that 69% of industry leaders believe gender parity is in reach within 25 years, although only 13% expect to see an increase in women in their boards in five years’ time. This exposes a reality disconnect. How can gender parity happen without businesses embracing it?

Businesses need to be more transparent and accountable about gender diversity —an increasingly important issue for stakeholders.

Asking better questions

I believe accelerating gender diversity is in every business’s interests. It starts with asking questions, such as:

• How is a lack of diverse leadership affecting your ability to innovate?
• What is your plan to achieve gender parity in your leadership team?
• Is this strategy grounded on concrete steps — or just good intentions and wishful thinking?
• How do you know what’s working — and what’s not — as you strive for greater gender diversity?

Companies can and should set concrete gender parity targets. Only then can they measure progress towards targets with clear metrics of women at all levels and in all areas of the business.

We are also finding that it’s important to use this data to identify obstacles and enablers to women’s career advancement.

How measurement can help align perceptions

As management expert Peter Drucker famously said, “What gets measured gets managed.” Yet when it comes to gender, most businesses we surveyed are missing this critical step:

• Only 18% of the companies we surveyed have structured programs to identify and develop women in their organizations.
• Just 32% measure women applying for top positions.
• Only 25% measure whether there’s a gender pay gap.
• A mere 2% measure the impact of gender diversity on business performance.

The majority of participants who use gender metrics are simply counting the number of female employees on the leadership team. What about women’s progress through the business? Or understanding when and why they leave? What about developing a future pipeline of female leaders?

What happens when you don’t measure?

Our research found surprising differences in how men and women see the issue of gender inequality. When we asked about barriers, 43% of men cited a shortage of female candidates. In contrast, only 7% of women chose it as a top obstacle.

The two factors women listed as top barriers were an unsupportive culture (28%) and organizational bias (28%). The next was conflicts with raising a family (24%) — something nearly twice as many men (44%) listed as a top barrier for women.

We also asked executives if they had evidence of the impact of diversity on financial and non-financial performance. Again, there were strong gender gaps, with women averaging about twenty percentage points higher than men. This was true except in one instance: those who measured and had evidence of the impact of gender diversity on performance, responses between men and women were identical.

This sends a clear message about why measurement matters: ask people for their perceptions and you’ll get biased answers and disagreement. Give people evidence on which to base their opinions, and you’ll be much closer to agreement.

Our own journey

At EY, we are on our own journey towards gender parity. We are passionate about helping our clients drive performance while creating inclusive cultures that reward the best and brightest and challenge unconscious bias. We are also turning that gaze inward and trying to improve our own practices and efforts.

We recognize that we have some way to go. EY’s global board is 28% women. Half of the college graduates we hire are women but only 19% of our partners are female. We’re making a concerted effort to improve that — last year 31% of our new partners were women — but we know we have much more work to do, and we’re committed to doing it.

Ultimately, gender parity is a journey that we are all on together. In our report we outline steps men and women can take to advance gender parity, to ensure that qualified, talented women get the opportunities they deserve.

Learn more about EY’s research into gender parity across industries at www.ey.com/womeninindustry.

Follow me on Twitter at @AlisonKayEY.