New Ways to Break the Glass Ceiling

Why behavioural economics should become a tool for executive recruitment
By: 
Alan Morantz
A female executive checks her phone under a glass ceiling.

It has been 44 years since the term “glass ceiling” entered the management lexicon during a panel discussion about women’s aspirations. It was a metaphor for the times: women were blocked from leadership positions not by their shortcomings but by biases and Old Boys networks—cultural factors so quotidian and tightly woven into work life that they were as transparent as a glass ceiling.

After more than four decades of social change and executive recruitment, the metaphor still holds, though gains for women have been undeniable. Various global surveys estimate that roughly 25 per cent of executives in large firms are women. In the most recent Fortune 500, a record 41 women led some of the biggest American companies. In Canada, of the 100 largest firms, 41 have at least one woman in a top leadership role. Progress, if you can call it that.

We know a lot more about why the glass ceiling still exists but not much about how women can break through. Yes, biases persist. Qualities stereotypically held by women don’t match qualities stereotypically held by corporate and political leaders. Even before people open their mouths, their faces prompt gut-level gender stereotypes relating to dominance, competency and trustworthiness. One recent study found that women receive substantially lower ratings of their potential despite receiving higher ratings for their job performance, and that the gender gap in potential ratings grows as women advance in the organizational hierarchy.

Yet a considerable amount of lab-based research also reveals gender differences in attitudes toward risk, competition and negotiation. These gender differences may explain why some women avoid jobs that carry greater earnings risks or shy away from competition for high-profile promotions. There is also plenty of empirical evidence showing that women value job flexibility more than men; usually, the most senior positions have the least amount of flexibility and carry the most stress.

Time for a fresh approach

Despite this growing knowledge, there are few if any proven strategies that open the leadership pathway for women. Diversity programs have been underwhelming while training programs that prepare women for leadership have mixed results. More aggressive measures such as laws mandating a certain percentage of board seats be reserved for women have been tried by at least 10 countries over the past 20 years. A study of Norway’s experience showed that board quotas had little discernible impact on women in business.

What could hold promise is the application of behavioural economics to the hiring process. Behavioural economics melds economics and psychology to understand human behaviour and how people make decisions. Entire government units are now devoted to “nudge” people to behave in socially beneficial ways. Nicole Robitaille of Smith School of Business, for example, found that tweaking the wording in an organ donation form to put people in the position of someone needing a transplant could boost signups. Robitaille found that organizations can be nudged to pay their tax bills faster.

Surprisingly, behavioural economics has not gained a foothold in HR as it has in public policy and finance. But there are isolated examples that show promise. In a textile factory in China, for example, where workers ignored rules not to throw waste on the ground, researchers placed decals of golden coins—an omen for fortune and luck—in random spots on the floor, hoping workers would be motivated to keep the decals clean. The intervention reduced randomly discarded waste by 20 per cent.

Opting in or out?

How might nudging help to put women into leadership ranks? Many behavioural economic interventions rely on changing default options relating to opting in or out of an action. This could be used to increase the number of female candidates who otherwise would choose not to put their name forward for a leadership position. Instead of the usual opt-in process, in which candidates express an interest in an open position, an opt-out approach would include all qualified managers in the division or firm. Anyone not wanting to be considered would ask that their name be removed.

A recent experiment in Australia was the first to test whether this change in default option would increase the number of women pursuing a leadership position. There were several intriguing findings. First, the study revealed a significant gender gap in the willingness to enter the job competition when men and women had to opt in. Seventy-one per cent of the men expressed an interest in the job compared with only 41 per cent of the women. The gender gap existed even when the subjects knew they were top performers.

Second, the opt‐out default significantly increased the likelihood of women participating in the leadership selection process. The percentage of men who expressed an interest remained high at 74 per cent while 54 per cent of the women put their names in the race.

And third, when the researchers removed the competitiveness of the selection process from the experiment, the opt-in gender difference largely disappeared. Clearly, many of the women who had to opt in were turned off by the competitive process itself rather than the prospects of being hired for the leadership position.

Tweaking the hiring process

In the years ahead, these types of behavioural insights will hopefully make their way into recruitment and hiring practices. HR is not generally known as a centre of innovation or evidence-based thinking, but even simple tweaks can go some way to removing barriers to women moving up the ranks. Consider these three:

Watch how job postings are written. One study showed that job postings that contained words such as “competitive” or “dominant” reduced the number of female applicants.

Plan for diversity within hiring committees. Committees composed of diverse members can identify and challenge biased thinking and stereotypic images. For example, both women and men were found to act differently when there was a critical mass of women in the room.

Follow a “decision hygiene strategy”. In their new book, Noise: A Flaw in Human Judgment, Daniel Kahneman, Olivier Sibony and Cass Sunstein stress the need to use a large sample of judgments to make a decision rather than rely on biases and inconsistencies of individual judgments. Examples of their so-called decision hygiene strategy include creating guidelines for making decisions; hiring outside experts trained to spot biases; and getting multiple decision-makers to make judgments independently and then reconciling them after the fact.

One small step for womankind

Behaviour economics will not make the glass ceiling disappear overnight. It is designed to nudge individual decision-making, not to change society-wide biases. But nudges and process tweaks inspired by behavioural economics are welcome evidence-based innovations to a field that hasn’t offered women much fresh thinking on the leadership track since the shoulder pad craze of the 1980s. Given the chance, these types of interventions can offer incremental advances toward more representative senior leadership teams.

The importance of facts on the ground—in this case, more women in the C-suite—cannot be understated. Experience in India shows the value of having female role models in positions of power. In the 1990s, the Indian government mandated that, in a randomly chosen one-third of villages, a woman had to fill the position of village council leader. Seven years later, researchers studied the impact of that quota policy. They found that exposure to female leaders erased the prejudice of male villagers against women in positions of authority. In villages that had female leaders, parents’ aspirations for their teenage daughters and teenage girls’ aspirations for themselves were higher.

That’s the kind of feedback loop that can make the impossible seem possible.

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