A Place At The Table

Dec. 21, 2004
Women, while still relatively rare in executive ranks, are becoming an increasingly strategic asset for global manufacturing companies. Some companies excel at attracting and keeping them, but slow-to-change attitudes mean many companies are losing out.

Consider these divergent experiences of Donna J. Demerling, a 30-year veteran of $3.8 billion bearing manufacturer The Timken Co., Canton, Ohio: Last year, when she was president of the company's global aerospace and super precision business, Demerling was visiting a client in Europe with a Timken salesman. The salesman introduced her to the client, an Italian helicopter manufacturer. "His first comment to me was, 'In Italy, we wouldn't have a woman running a business like this.' I think by the time I left there, he had some respect for my opinion and my position, but you don't naturally get it." A few months later, in January 2003, Timken promoted Demerling to senior vice president of supply-chain transformation, a crucial new position for the company, which added 10,000 to its workforce and gained potentially $1.2 billion in sales with the 2003 purchase of Torrington Co. Says Demerling: "It's an exciting opportunity for me. Plus my background has made it a good fit." So go the peak-and-valley moments of a female manufacturing executive in 2003. Certainly, as Demerling and other women executives who have worked their way up from plant floors and engineering desks will attest, women leaders are more accepted in manufacturing today than they were 30 years ago. But, they'll also quickly point out, as Demerling does: "I don't think this is completely off the table." "This" is the role that women play in U.S. manufacturing. It matters to global manufacturing companies for many reasons. Some of the most significant are: Talent. The ongoing challenges of finding and keeping talented employees will become even more crucial in the near future. IndustryWeek ("The Next Crisis: Too Few Workers") and several others, including the Washington, D.C.-based National Association of Manufacturers, have identified a nascent but burgeoning skilled workers shortage in manufacturing. Northrop Grumman Corp., for instance, is looking for 1,000 engineers for its Electronic Systems sector and is expecting many of these future employees to be women and minorities. Companies that have successfully recruited and retained talented women say it doesn't happen by just giving lip service to diversity. Work-life balance and other issues important to women must become strategic initiatives. Profitability. Research has shown that companies that espouse family-friendly policies that take into account the needs of working women have higher customer satisfaction ratings and higher market capitalization. This concept is demonstrated in companies such as General Mills Inc., which has increased share price by 35.48% in five years; compared with a 6.99% sector increase. Striving for balanced participation in all aspects of product development, production and marketing benefits companies because it encourages new ideas and reveals important market knowledge. "Women are the most powerful decision makers in terms of how money gets spent, and the customer base is more women than men," notes Laura Bierema, a former manufacturing executive who now conducts research on women executives and teaches at The University of Georgia. "It would really appeal to a company to have a more diverse [workforce]. Some have done a good job with this; some less well." Leadership. While most corporate executive positions still are held by men, that is changing. According to the Catalyst research and advocacy group, New York, the number of women corporate officers in the United States increased from 8.7% in 1995 to 15.7% in 2002. Ignoring the value and input of women in manufacturing could mean ignoring valuable future leaders. Bierema, for instance, was offered a significant executive position at the major auto parts manufacturer she worked for around the time she left for academia. She declined the offer, however, because she determined that the company's values mismatched her own. She's happy as a university professor, but says of manufacturing: "I could have had a really wonderful career." 'Everyone In Play' Global manufacturing companies are starting to feel a skilled-worker crunch, and those that make efforts to attract women will have competitive advantage. However, this won't happen without strategic effort. "If young female and minority engineers can look at Northrop Grumman and see the effort we put in and the fact that we value them, I think they'll choose Northrop Grumman, and that's extremely valuable to building our workforce," says F. Suzanne Jenniches, vice president and general manager of the newly created Government Systems Division. The company so values these groups as employees that it has made promotion of women and minorities at the director and vice president level a specific management goal tied to compensation. "Northrop Grumman sees a real bottom-line benefit to diversity," says Jenniches, a former science teacher who retrained as an engineer in the '70s before joining Northrop Grumman. One of the no-brainer ways companies can inherently foster atmospheres conducive to attracting and retaining women is to put them into positions that will influence policies and practices. "I used to be quiet in meetings, but not anymore because they just don't see it sometimes," says Demerling, referring to traditional manufacturing leaders. "For instance, health care is a big cost these days, and each year we have to decide how much we are going to charge our employees for health care. And my question always is, 'Has anybody calculated what this is going to cost a single mother of three?' That is not on their radar screen." It's on Demerling's radar screen because she worked her way up to Timken's executive ranks while raising children as a single mother."There was a time when I ran out of paycheck before I ran out of bills," she says. "I can appreciate that there are people in that situation. And there are people who work for The Timken Co. in that situation. And we need to be conscious of that, conscious how every decision we make affects our associates. So any time you have diversity in the room, you are going to have a competitive advantage in the long run." To long-time management consultant Ken McGuire, who runs the company The Management Excellence Action Coalition, the United States has a huge competitive advantage globally because of corporate efforts to create equality. "We're taking advantage of 100% of our population," McGuire says. "We've got everyone in play. And places that have all these hang ups are never going to be able to compete with an open, diverse culture like we've got. That doesn't mean we are always going to win in manufacturing, but that does mean that we certainly are going to have the best minds attracted to things that market forces move them to." More Women, Better Performance Research documents another bottom-line advantage to building companies that are attractive to women: higher market capitalization. Cornell University management professor Daniel Simon studied a group of 174 large U.S. consumer products and services companies that have been tracked annually since 1994 in the American Customer Satisfaction Index (ACSI). (Researchers at the University of Michigan Business School compile the ACSI). According to Working Mother magazine, Simon compared companies on the ACSI that also made the magazine's 100 Best Companies for Working Mothers list with ACSI companies that didn't make the magazine's list. Making the list increased customer satisfaction by between one and five points on the ACSI. Each point is worth 3.8% of a firm's value, according to the Michigan researchers, which means making the list increases market capitalization by at least $1 billion. (The average value of each firm on the list was $35 billion; the report was based on the annual list from 1994-2000.) If an additional billion in market cap isn't enough to convince manufacturers that having women in the executive ranks is good for business, consider the story that Greenville, S.C.-based Chris Klasing often tells to demonstrate the value of diverse teams. Klasing, a principal with JCK Associates Inc., was a member of the management committee of Amoco Oil Co. from mid-1989 until early 1993. At the time, Amoco was the leading gasoline marketer in the country. Pay-at-the-pump was a new technology in which Amoco had a substantial lead on its competitors, primarily Mobil. "The marketing department and the management committee felt we understood our customers very well and had them segmented into groups based on how they purchased gasoline. It was felt that pay-at-the-pump would appeal mainly to the 'convenience' segment of customers, who mainly valued getting in and out quickly. Marketing believed, and the all-male management committee endorsed, that we did not need to rush with pay-at-the-pump because we had other equally viable strategies to appeal to convenience customers." By the time Amoco finally rolled out pay-at-the-pump, it had frittered away most of its lead, and others quickly followed. "What was an enormous surprise to all of us was that its main attraction was to mothers who had children in their cars and did not like having to leave them to go and pay a clerk. They flocked to pay-at-the-pump locations. Had we only known how popular that would be among women, and what an edge it would have given us, I feel sure we would have rushed ahead with the technology, and probably would have been the only service stations appealing to those mothers for about a year. Unfortunately, we had no mothers in the groups that made the key decisions, and so did not have that viewpoint considered. And the competition caught up with us." In terms of the value of women managers, many will talk of women being more open to new ideas and better suited to teamwork, but others point out that such generalizations also have been used to hold back women. Nonetheless, it's common to hear phrases such as this one, which comes from McGuire: "When I have had experiences in U.S. companies when women were in positions running things -- whether they were running the whole site or just a portion of the site -- I found that women were much more willing to listen. They were not out there quickly defending what it was that they had learned [in the past]. They did not start out with conclusions that they were looking to reinforce. You had that with some of the men in manufacturing. If you don't have to live up to a legend that doesn't exist anyway, you are much more likely to listen to all of your options before making a decision." McGuire says women's presence in U.S. manufacturing from the '70s to today helped enable the spread of significant productivity advances such as teams. "There [are] a lot of invisible factors in working with people. And for some reason, teams always seemed to work better when women were in dominant positions. The teams were more holistic. [Women] are willing to let people develop as opposed to getting immediate results. They are looking for a systemic rather then systematic improvement, and they're usually not promoting heroes." University of Georgia's Bierema says women have been socialized to be team builders and power sharers, but their contribution to team-based efficiency movements is less about their socialization than that "those systems have more feminine traits in which men or women can support. But what we have in place are masculine systems that I don't really think work all that great." Directed Career Paths Women who entered manufacturing in the '70s and are in the executive office today didn't have the benefit of mentors, personal development plans and diversity initiatives. One of the key characteristics that motivated them was opportunity in leadership. That's still a key for many women in manufacturing, but companies need to be aware that career planning doesn't come naturally or easily for most women for a variety of reasons including socialization and dependent-care issues. "Women are much less deliberate career planners than men," Bierema says. "You talk to a lot of women in manufacturing and ask them how they got there, and they don't know how. They just sort of landed there." Purposeful career planning on the part of both companies and women employees can help grow tomorrow's leaders. Consider Cindy Hultine, plant manager for a General Mills plant outside of Atlanta. Hultine had worked in manufacturing at Quaker Oats, Avon and other large companies, but the first time she sat down with her boss at General Mills, she noticed a clear difference. "I had always just kind of gone with the flow. Someone would say, 'Do you want to do this job?' . . . 'Ok, I'll do that job.' . . . never with any dialogue about where it would get me or where it should get me," says Hultine, a mother of two. "And the first time I sat down with my supervisor to do the individual development process at General Mills, I gave him this stock, generic answer I had always given, and I remember him putting his pen down and saying, 'No. I asked you where you want to be in five years and then we're going to talk about how to get you there.' And I had to get serious and do a little bit of growing up and put some thought into things that no one had ever asked me to put thought into." Another way companies are fostering future women leaders is through networks and mentoring. Companies considered leaders in diversity generally have several networking or mentoring programs in place and tout their monumental value in opening doors for women. "I think we owe it to the people who helped us along the way to help others along the way," says Northrop Grumman's Jenniches, who is involved in mentoring inside and outside the company. "I think a big part of your career is helping other young employees." We've Come A Short Way Bierema's research, however, paints a bleaker picture of this practice and the atmosphere for women executives in manufacturing in general. In extensive interviews with women executives, she found that women like Jenniches -- highly aware of the need for opening the way for women and highly motivated to do something about it -- were the exception. Most women are highly aware of the situation but lack motivation to do anything. Bierema connects this to the need for executive women to repress their individualism in order to survive in the corporate world. She concedes there are some companies that foster truly great environments for women, but these are rare in relative terms, and most women leaders in manufacturing are not motivated to contribute to improvement. "A women who is having a great career is going to think that things have really advanced, and for many they have, but a lot of my research shows that women pay high prices for advancing in these kinds of environments," she says. "They have to deny their gender in many ways. They adopt behavior and mannerisms that perpetuate the male-dominated environment, so you ultimately have women in positions of power who won't change the system in my opinion. So many of them don't have the energy or incentive to help other women." In addition to Bierema's research, there is ample anecdotal evidence that women still aren't fully expected in industrial environments. The CEO Bierema formerly worked for, in fact, was well respected and often quoted in the press. But his behavior toward Bierema was so insulting to her that it drove her away. "When he found out I was getting my Ph.D., he had the audacity to ask me if it was in home economics," she says. "This was in front of a group of about 20 men. It took me about six months to even tell anybody about that. I was completely mortified that the CEO of the company I had chosen to work in said that to me. It wasn't really what I signed up for, and it wasn't what I felt the company was, but when the CEO says that. . ." Bierema says she is constantly running across such dichotomies in her work, particularly in interviews she has conducted with high-profile women executives. "I came across a lot of that, where they would say, 'I've never been treated any differently as a woman,' but in the next breath they'd tell you about being chased around their desk by their boss for a Christmas kiss or other times when they definitely didn't get a promotion because they were a woman or had children." One of the things that may be perpetuating such situations is that despite the increase in women executives, their numbers remain relatively few. "If you look at women in executive positions or on boards or on executive teams, it's very low," Bierema says. "It's usually in the single digits. And in manufacturing, it's usually even worse than in general because it's such a patriarchal environment. Manufacturing is very male dominated." Sherrie Ford, part-owner of a single-site manufacturing company in Georgia and a principal in Change Partners LLC, sighs when asked if things are changing for women in manufacturing. "I'm sad to say that almost 100% of our [consulting] clientele are white men in executive management," she says. "When you do see women in manufacturing [executive positions], you usually see them in HR." Ford, a regional president for the Association of Manufacturing Excellence (AME), experienced the persistent male dominance of manufacturing personally earlier this year when visiting a cement mine in Indiana. She asked to be shown to the restroom and was told there wasn't one for women. "I thought most of these issues were put to rest two decades ago." Nonetheless, Ford does see hopeful signs. Last year, at the request of its members who were losing valuable talent, AME held a management seminar on attracting and keeping women. And, when she talks to younger men entering manufacturing, she has the sense that they see the development of diverse workplaces as a standard part of doing business. "They would look around and say, 'Where are the women?' They would notice that something is wrong."

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