In this guest article for the” Top 25 Women” initiative, Jutta Menzenbach of Boyden, an executive search firm, writes about the importance of diversity in the automotive industry to drive economic success.
This article has been translated; it originally appeared in Automobilwoche.
In today's rapidly changing automotive industry, it is even more important to encourage and support diversity. Diverse teams made up of talent from different industries, nationalities, ages and genders complement each other with different perspectives, working styles and problem-solving techniques. This enables them to generate valuable solutions and new ideas. Diverse teams drive technological progress, innovation and the pace of change that keeps industry competitive.
But diversity is not an end in itself. The mere presence of diversity in terms of gender, culture or mindset does not necessarily promise a positive effect. In fact, it can have a negative effect if unconscious biases guide behaviour and team members to perceive being 'different' as a threat to their own (group) identity.
Managers play a crucial role in establishing a 'we' culture or a 'we' feeling. As multipliers, they play a key role in shaping a company's working culture. The environment in which diverse teams interact is therefore critical.
An inclusive culture that promotes respectful and trusting interaction is the foundation and therefore the first important step. It emphasizes what unites rather than what divides. Embedding an inclusive culture - a 'WE culture' - is therefore a prerequisite for the success of diversity: it requires leaders who are open to new possibilities, to innovative and creative solutions. Only an environment that values different experiences, opinions and perspectives as enriching and is open to new opportunities can benefit from diversity. Managers have an important role to play in fostering a 'we' culture or a 'we' feeling, because as multipliers they play a key role in shaping a company's working culture.
The more variety, the more success
A 2018 McKinsey study entitled 'Delivering Through Diversity' shows that companies with high levels of diversity are more likely to have above-average profitability. This correlation is particularly strong when it comes to the proportion of women in top management (executive board and up to two levels below). According to the report, companies with a high proportion of female executives are 21 per cent more likely to achieve above-average business success.
The AllBright Foundation's latest report, 'Lonely at the top: companies get women on their boards, but usually only one', published in September 2009, shows that the 160 companies listed on the DAX, MDAX and SDAX are showing good momentum in increasing the proportion of women on their boards. For the first time, there are now fewer companies with all-male boards (66) than companies with women on their boards (94). However, the barometer also shows that 71 companies have only one woman on their board. At 17.4%, the proportion of women on boards is still rather low.
Lone warrior: The ONE woman on the board
Many companies have set a new standard: there must be a woman on every board.
And, many leave it at that. Studies show that gender-diverse boards impact business performance, but only above a certain threshold. PwC's 18th Annual Survey (2015) cites the Journal of Business Ethics (2013) for a figure of around one third. US companies lead the way internationally, with 32.6% of top teams being women.
The UK is second at 29.5%, followed by France (27.9%) and Sweden (27.2%). Diversity and inclusion are key to business success. Companies that embrace diversity are already at an advantage. They stand out from the competition in terms of profitability, productivity, innovation and reputation.
When it comes to filling board positions in the automotive industry, it is clear that the majority of top female managers are recruited externally. But this should only be part of the solution. If we want to see more women on boards, there should also be parity in the internal development and promotion of female talent all the way to management level. After all, the goal is not 'just one woman' on the board, but a good, balanced mix - in other words, diversity!
The author Jutta Menzenbach is a Managing Partner at the international executive search firm Boyden and supported Automobilwoche with the Top 25 Women initiative.
