Episode 55 - Why Organizations Need to Tap into The Power of Executive Masterminds
Hey Rebels! Welcome back to the podcast. I just returned from Miami from a business conference with other executive coaches and leadership development experts, and it was A-MA-ZING. We got to geek out on data and stats in our industry and share how we can better support our clients in our work.
So while I was there, it got me thinking that I don't often talk about the full scope of my work. I LOVE supporting professional women in midlife, fearlessly navigating or reinventing their careers, and gaining unstoppable confidence in the process. I also love when I get the chance to work within organizations committed to creating cultures of trust, safety, and inclusive leadership for their clients and stakeholders and the women and women of color within those organizations because it's at that intersection of authentic trust, sustainable accountability, and inclusive leadership that organizations can unlock innovation and drive creativity that always yields greater productivity and profit.
I've mentioned that I was a labor and employment attorney and organizational leader and consultant, but I've not talked about how over those ten years as an attorney, I've coached, trained, and developed emerging and existing leaders. As a leader and consultant, I developed policies and practices to advance professional and diversity development, instituted cultural change, coached executives, supported high-functioning teams, and trained first-time leaders and existing leaders, positioning them to lead their departments, teams, and organizations, and build a culture of inclusivity and support. I did that work for 20 years before I moved into academic teaching and leadership and launched my own business, which is turning nine years old this year. But even while I do a LOT of 1:1 work and coaching, my team continues to do organizational consulting for small non-profits and large for-profit corporate systems.
So, with that, I thought I'd do a few episodes for leaders within those organizations who are committed to co-creating authentic trust, inclusive leadership, and sustainable accountability to unlock the hidden in-plain-sight innovation within their organizations.
Today, on the podcast, I want to start with why despite modest gains in representation over the last eight years, women, especially women of color, are still dramatically underrepresented in corporate America, particularly in senior leadership positions. According to McKinsey's Women in the Workplace 2022 Report, one of the critical problems is the stage of the pipeline caused by a "broken rung" that remains unfixed. Specifically, there are too few women to promote to senior leadership positions. And secondly, the "great breakup" means female leaders leaving their companies at the highest rate we've ever seen and at a much higher rate than male leaders.
This pipeline challenge further exacerbates the gender equality gap, as well as the gender pay gap, and is stifling innovation in organizations worldwide. Another contributor is the dismal record of hiring diverse vendors to come in and support organizational initiatives, specifically minority, disability, and LGBTQIA vendors. For example, I've seen data on corporate spending on suppliers and vendors that show that out of $5-10 million spent, less than 1% is spent on women-owned businesses and 0% on minority, minority, and women-owned, disability, or LGBTQIA businesses. When seeking support from vendors that can't bring innovation in their services, you find services that do more of the same instead of disrupting the pattern to bring fresh, creative, or new approaches to long-standing issues.
Now you may have also recognized this problem in your organization, and if so, you should consider these your "check engine light" warnings that signal you need to make some drastic changes.
First, 45% to 55% (depending on the industry) of the workforce is eligible for retirement. If even 1% of your senior leaders retire, do you have a sufficient talent pipeline to step into their place?
Second, in the past, companies could quickly go to market to find their needed talent, but that's no longer as easy as it once was. If you have yet to develop your talent internally with institutional knowledge, you will struggle to stay at the top of your game.
Finally, managers and other leaders play an essential role in shaping women's work experiences, yet relatively few companies adequately train managers to meet these new demands. And even though research shows that companies worldwide are committed to spending $364 billion on training and development, 68% of these organizations say that up to 20% of their leadership is missing, particularly female leadership, which has severely impacted their bottom line.
Now most companies are using the same options to solve this growing problem. Things like one-off or one-and-done training, a heavy focus on recruitment and hiring measures with little to any focus on retention or organizational readiness, or trying to build mentorship or sponsorship programs without equipping understanding of how to create a successful mentorship or sponsorship program are often attempted but don't work. My company works with organizations to facilitate leadership development programs that change behavior and have a sustainable impact, co-create inclusive cultures that position organizations to retain their women leaders and leaders of color, and equip managers and leaders on how to successfully manage in a VUCA (volatile, uncertain, complex, and ambiguous) environment.
Most leaders would turn to internal HR and L&D teams to help with these issues, but honestly, those teams are usually stretched thin and, more importantly, don't have the objective outside perspective needed to deliver the desired results.
Many have already turned to large global consulting companies, but the downside is that while they have big names, they deploy staff with relatively inexperienced folks right out of college because they can bill them at a relatively lower rate. Also, have you thought about why you're still yielding the same results after all the hours and millions already spent? We keep approaching the issue with the same old solutions instead of looking for innovative approaches to disrupt the status quo and create a pattern disruption in the system to yield new results.
A better solution would be to work with a highly experienced boutique firm, such as ours, where you're not paying for overhead but instead paying for expertise and impact. That's typically why our clients hire us. Because we're better, faster, agile, and leaner, and they know each of our team members carries 10-25 years or more of experience and are ready to get in there to customize solutions that will work.
Of course, organizations must be prepared to spend anywhere from $100,000-300,000 for a 12-24 month engagement to effect lasting change and deliver results. Of course, it would be great if a one-off training worked or simply identifying a few people to serve as sponsors or mentors (without any training or support) was as effective as most organizations hope they would be, but what we've learned is that organizations making this type of time and money investment, as I said, $100k - $300k and on average 18 months, make significant changes to solve their problems.
While it's wise to bring in a minority, women, or disability-certified businesses (and Carol Parker Walsh Consulting holds all three certifications), organizations may still try to solve the issue on their own, which can create additional costs and costs time-consuming problems.
For example, this work can only be done with a significant amount of cognitive and interpersonal work. Still, some organizations believe their leaders won't respond to this type of work or will leave. But the real risk is how long will these "glass bowl" leaders stay and block the desired change and bottom line results desired.
Or how many millions of dollars are companies prepared to lose due to a damaged reputation in the marketplace because they just made the "worst place to work" list for women or due to massive recruitment efforts followed by substantial attrition rates?
One organization we've worked with got it right. They decided to utilize executive masterminds specifically for women and diverse emerging leaders. They coupled that with coaching and support for the senior and executive leaders on properly supporting the mastermind participants resulting in 50% reduced attribution and a 27% increase in career mobility.
And because we co-created the solution from the beginning, another client saw a 300% increase in the executive academic leadership of color and a 22% retention rate by implementing a cohort-based support program and a series of leadership change programs.
That's the power of mastermind programs within organizations. Taking what seems to be a simple program that creates a robust legacy system that saves money, implements lasting and sustainable change, and creates a pipeline that works and remains filled, not because of quotas or demands, but because they've created a system that works is a powerful solution. All organizations need to examine their succession plan and leadership pipeline with an eye toward the long-term impact of losing women at all leadership levels, including women in your organization at risk of leaving.
If too many organizations sleep on implementing these proven solutions, particularly while in the midst of the "Great Breakup," as McKinsey reported, It can have a significant impact on your company's reputation if publicity is bad and comments on social media reveal bad practices or simply no action at all towards gender inequality, which makes it rather difficult to attract good talent in the future. Gartner revealed that every year an organization waits or fails to address these equity issues (which includes pay gaps), it costs them, on average, $439K annually. Not to mention and decrease in productivity due to disengaged or disenfranchised employees.
And the cost of replacing those female leaders, as highlighted by Gallup, can range from one-half to two times the employee's annual salary, and that's a conservative estimate. A 100-person organization with an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million annually. Now imagine the cost of a large-scale organization with salaries in the $100K to $300K range.
Yes, there's a considerable risk of getting things wrong when organizations continue to use the same efforts and resist changing the status quo, but doing nothing isn't the answer. Instead, the question organizations need to ask is, which of these risks is better for them?
Executive masterminds are just one of the solutions we deliver as a company. We use them because they affect change, increase engagement, and provide the nuanced support women and women of color leaders need. In addition, with higher retention and promotion rates, organizations can unlock innovation and, according to DDI research, are 12 times more likely to be among the top 20% of financially successful companies.
We're hosting an executive roundtable for senior leaders and executives on April 5th at 10 am PST to discuss this current issue and how it's impacted their organizations. This is an invitation-only event, but if you feel your leader needs to attend, email our team at [email protected]
I know this episode was a bit different than what you've listened to, but I hope it's been helpful. If nothing else, send a link to this episode to the leadership in your organization so they can understand the powerful executive masterminds and how it can be a game changer in their organization.
See you next time. And until then, break free from the status quo, disrupt deeply embedded patterns, seek innovation, and have an amazingly rebellious week!