People in social groups have three basic needs:

• Belonging (to the tribe/group)
• Beliefs (what the group thinks)
• Escape/Salvation (achieve something, saved from ordinariness of life)

The bouncers can’t easily access the club-goers beliefs, and the club-goers just want to belong; they might not even know the value of what they believe in, but still want to join because celebrities or other people they admire go. The ritual of dressing up to go to a night club (or, say, an event like Henley Royal Regatta) is a residual tribal belief, and certain rituals are associated with certain networks. Facebook is another modern example — people are encouraged to join and socialise with their friends, and belong to a group. Their friends have similar beliefs, and often they are using Facebook as an escape (I think most wouldn’t call using it achieving something, however).

Here is a model of these beliefs (click to enlarge):

In the end it all comes back to these three basic needs.

Engagement has three main factors. The first is intent: what does a manager really intend to do with engagement that he or she wishes to proceed with? I’ve seen many managers with the intent that this corporation should do well, but privately their drive has more to do with their personal ambition. I’ve seen many managers who intend to get an open conversation, but personally find it very difficult to raise uncomfortable issues (which is the whole purpose of engagement). Psychological conflicts of intent are the first issue to examine.

The second issue to examine is the reality of context. What does it take, in each context (and by context I mean a specific country unit, team or office) to get a level of engagement with a broader issue (such as achieving corporate goals) when in fact the experience of those people in that context is that they are permanently suspicious of the corporate centre? Often people have good reason to be suspicious–the corporate centre might decide to cuts costs on percentage basis across the board, without looking at the particular attributes of each different department or divisional unit within the organisation. And so context, next to intent, is going to be a prime factor in engagement effectiveness.

The final issue is skill. Busy managers want to be something of a role model to build a harmonious relationship with their direct reports. But how can they do this when in fact one of the manager’s roles is to constantly judge performance? Managers are held accountable for that judgement of performance, which means they are probably going to give back a considerable amount of negative feedback on people’s performances, and that’s the very thing that managers (and direct reports) fear. It takes skill to be a good boss.

Engagement is a problem; it’s not a dirty secret — good engagement is a demanding challenge. It requires unique skills, and often management needs to rise to the occasion. I think the reason that so many people view engagement (or the lack of it) as a negative is that they’ve not appreciated just how clever and subtle management need to be in order to enter into high-quality engagement. Once that appreciation is there, I don’t think you will see people using words like ‘dirty, little, secret’ to describe engagement–instead you’ll get ‘challenge, demanding, and highly capable.’

You can listen to the clip on the BBC site here. Nada and I discussed this topic in further detail in our book Intimacy.

Download audio file (aknkwomenbusiness.mp3)

Prompted by this article by Gil Corkendale on the inequality of wages for women in the City of London, I believe that it continues to be nonsense that women are being paid less than men. The current economic climate exacerbates my concern that inequalities will continue to exist—the need for cost reduction is so high that women will continue to be casualties like anyone else. There’s clearly a lack of diversity being shown in imaginative remuneration packages for women, and other minority groups are suffering the same fate.

But why have women continuously been paid less than men? It’s easy to say it’s legacy, history, and the way it’s always been. But I’m beginning to detect a qualitative difference, rather than a quantitative difference, in the type of work being done that’s influencing the discrepancy between men’s and women’s wages. For job roles with a discretionary component (i.e. jobs that aren’t manual or repetitive, structured labor), how long and how hard one works influences how much money he or she is paid.

In our studies of top teams and boards, Nada and I have found that people with ‘hard-edged’ qualities (like excellent negotiating skills, pure resilience to survive, drive to get the contract/task/objective/deal achieved, willingness to make sacrifices to accomplish goals) have an advantage over people who lack these qualities in certain types of discretionary jobs.

The error of salary comparison studies in the past has been to compare across job title–jobs with the same title can be quite unique at different firms. If we began to examine that extra cutting edge for discretionary leadership, that extra stamina for discretionary action, we might find that males or females in these roles who perform well keep their jobs, and those who don’t aren’t paid less–they’re made redundant. Hence there is a reason for differences of remuneration.

An additional issue is that the pipeline of women going into senior-level jobs narrows considerably once women get to lower-middle or middle-middle level management–a whole lot drop out. It’s unclear whether this is due to family reasons or sociopolitical reasons, but there are just fewer women available for the senior level, and from there even fewer get to top jobs.

Says Nada:

Traditional networks and perceptions have to be taken into account—at top level of the financial sector, the networks that predominate are still WASP/male, and wheeler-dealers are traditionally male. Women have only been making deals (where the money is) in the past 20 years; traditionally they were just lower-level clerks. Women compete, but without access to the high-level networks, even when they get to the same level—Managing Director for example—a man in the job probably brings in more money than a woman.

Historically, women might not have had the wheeling and dealing expertise that men have had, but their lack of network access doesn’t mean that they lack networking skill. They simply don’t have quality networks to plug in to.

While men are traditionally motivated by a high salary in choosing a career, women aren’t only motivated by a high salary—they might also consider their work-life balance, the social benefit the job provides or the intrinsic pleasure the job gives them. It’s a certain kind of female who is attracted to high paying banking-type jobs. One way to ‘equalize’ the banking profession would be to institute salary caps. This could equalize pay and might see women into the tops of institutions, but it also might discourage some males with desirable, applicable skills from going into banking.

For our book Elephant Hunters, Andrew and I spoke to many women working in banking. We found that they tended to be single and without children. They didn’t take maternity leave, and many had regrets. When they did have children, they had supportive partners or parents who could take care of the children. Of course there are exceptions—women who seem able to do it—but for many women, by the time they reach the mid-manager level, they decide to leave the industry, whether to have children or to change their career path.

However, the research that we have conducted–which spans 12,500 top teams and well over 2,000 boards–suggests that there is no difference in operational or strategic performance between male and female managers. In fact, gender emerged as the least predicted demographic concerning effectiveness of performance.  It should be noted that similar findings applied to education, sector, religion, geographical location and personal background.

Interestingly, only age drew significant positive correlation with leadership and managerial performance. Those managers that responded best to challenges of diversity and strategic complexity were the older ones. Age, coupled with experience, produced leaders who could control their ego and get the best out of others.

Therefore, how do our research results explain (or not) Michel Ferrary’s perspective that a higher percentage of women managers equates with improved performance?  Well, a cursory look at the companies quoted in his article–Hermes, Sodexo and Danone–shows that these are are companies envied for their outstanding performance.  These are the companies that integrate corporate strategy with operational efficiency and with CSR and talent leadership.  These are the companies that attract highly capable men and women and genuinely give the most demanding jobs to the most capable of leaders.

The issue is not so much differences in performance between males and females–it’s more that of attracting and retaining high quality talent.  It is not so much that the high performing company has more women managers–it is far more important that top talent has been retained and developed.

Perhaps analysis of these companies can give some sort of clue as to why so many women drop out of management at middle management levels.  Perhaps answering this question will induce many other companies to take on a more sensitive diversity perspective which will facilitate the development of talent irrespective of gender, race, age and religion.

John Quelch of the Harvard Business School (over lunch with Kellaway) suggested that the increase has to do with desire for risk. Says Kellaway:

[Quelch] said that, in a recession, people wanted hugs. This struck me as a pretty feeble explanation. Surely there are easier ways of getting hugs than putting one’s marriage on the line? Hugging one’s children or – if one is desperate – even one’s spouse might seem easier and safer.

He said that this was just the point: that the risk was the lure. That bankers are suffering from a risk deficit: their working lives have been derisked compulsorily and this could be a way of compensating by adding risk to their private lives.

Andrew and I have explored similar topics in our books The Elephant Hunters (about the behaviour of bankers) and Intimacy (about workplace relationships). We found a desire for excitement could be the impetus for an affair. Said an economist when asked why he’d committed adultery repeatedly:

Why indeed! Well, I am hard working. I am ambitious. I do want to get on, so most of my time is spent at work. That does not leave much time for anything else. Second, I need to feel close to people at work, otherwise the place is boring. I like people, which means I am urged to get to know others, and for me to work well, I need to get to like people. In that sense, I suspect, I am not that unusual. Most people continue working in their place because they get on with people. I suppose the difference between me and them is, I am not as inhibited as them. I express myself that extra step.

Will this recession motivate more people, employed or not, to “express themselves” outside of their marriages? We may need to conduct a new study…

In my book Essence of Leadership, I identified 5 reasons for continual tensions in organizations:

• Differences between subordinates and bosses (the boss is accountable for a subordinate’s behaviour and contribution).
• Differences between the operating businesses and the group centre (i.e. the centre is focused on a broad range of interests while business units are more concerned with the timely and efficient delivery of services or products).
• Differences between internally and externally-focused people (people with different stakeholders and protocols may not always see eye-to-eye).
• Differences between people who are more sales-oriented as opposed to service-oriented (the tension between getting the sale and provide good service).
• Differences between organizations that have introduced empowerment as opposed to being more controlling.

From an interview with the author in Computer World:

“They talk about demeaning and condescending attitudes, lots of off-color jokes, sexual innuendo, arrogance; colleagues, particularly in the tech culture, who genuinely think women don’t have what it takes—who see them as genetically inferior. It’s hard to take as a steady stream. It’s predatory and demeaning. It’s distressing to find this kind of data in 2008.”

Clearly the technology companies highlighted in this sector have not established codes of conduct highlighting which behaviours and attitudes will not be tolerated at work. Studies in the past at Cranfield have shown few differences between males and females who hold senior roles. These women shouldn’t feel the need to drop out of their jobs just as they could be taking on more important management roles.

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