Gender diversity is the durian of low hanging fruit in the shipping industry, argues KD Adamson from Futurenautics.
What if I told you that there was something you could do, which required no increase in capex or opex, and which could enable your company to outperform its competitors by up to 26% over the next six years. Interested? Good. Well here it is. Put me on your board.
Actually it doesn’t have to be me, although I’d like to think I’d be an excellent choice. It just has to be someone with two X chromosomes, or—as they are more commonly referred to—women.
According to a six-year study of 2,360 companies by the Credit Suisse Institute those with women on their boards outperformed those without by up to 26%. So if you haven’t got a woman on your board, get one. And if you’ve got a couple, get a couple more.
It isn’t just Credit Suisse which has been racking up hard data about the impact of gender diversity on financial performance. McKinsey has been tracking this for quite a few years now and its findings are incontrovertible. Gender diversity is closely correlated with profitability and value creation.
This kind of data—the kind that goes far beyond bland stats about the percentages of women in the workforce and their pay levels—is absolutely critical. It’s critical because we now know that it isn’t enough to have women in your workforce, they have to be in the right kind of roles to really drive improvements in profitability.
Executive teams of financially outperforming companies have more women in so-called line roles— typically revenue generating and where the bulk of the strategic and operational decisions are made—as opposed to staff roles. That means that filling more posts in HR, marketing, procurement and legal with women is not going to improve your bottom line. But putting them in senior executive positions absolutely is.
McKinsey found that top-quartile companies on executive-level gender diversity worldwide had a 21% likelihood of outperforming their fourth-quartile industry peers on EBIT margin, and a 27% likelihood of outperforming fourth-quartile peers on longer-term value creation, as measured using an economic-profit (EP) margin.
So in an industry where margins are wafer-thin, and companies are investing wholesale in order to shave percentage points off operating costs, you’d expect its leaders to be all over this like a cheap suit. Fruit doesn’t come much more low-hanging, and yet everyone seems to be avoiding it like the plague.
If you’ve travelled in Southeast Asia you’ll be acquainted with the durian, the so-called ‘King of Fruits’ which has the distinction of being the only fruit banned in certain hotels and on public transportation. Its fruit is delicious, but its odour is not. That has been variously described as “Pig-sh*t, turpentine and onions, garnished with a gym sock,” and “Eating sweet raspberry blancmange in a lavatory.”
I’ve come to the conclusion that gender diversity is the durian of low hanging fruit in the shipping industry. It tastes really great, if you can just get past the smell of it.
I suspect that for many of you reading this the kind of solid data about the business case for gender diversity I’ve just outlined will come as a surprise. You may well have assumed that it was just another rather tiresome CSR measure.
That’s largely because the reluctance of shipping to hold its nose and grab this particular durian means that its data—or rather the lack of it—doesn’t smell too good. If you don’t measure it you can’t manage it, and when it comes to gender diversity shipping can’t even be bothered to measure it.
It’s 2018, the era of big data, analytics and evidence-based decision making, yet shipping is still doing the equivalent of licking its finger and holding it in the air, counting the relative lengths of the queues for the gents and ladies’ lavatories at industry conferences, and relying on anecdote and indignation to drive the narrative around gender diversity.
Evidence of how dysfunctional that narrative really is came on Twitter this week when a shipping journalist had the temerity to question why a WISTA conference had several panels with more men than women on the stage.
It was a measured and reasonable intervention, but the response on Twitter was depressingly predictable. “What’s your point?” the WISTA twitter feed demanded of the journalist. And it’s a good question, because I think the point is actually a rather fundamental one.
Should the role of WISTA be to stage conferences which don’t focus on gender diversity but have a broad and inclusive shipping agenda? And if that’s the case, why should the gender complement of the panels be an issue? As the sensible Lena Gothberg tweeted, surely the quality of the speakers is the important thing.
But hold on. If WISTA isn’t there to make the case for gender diversity, to reshape the agenda by undertaking the research, analysing the data, putting the talented women on its stage and engaging the senior male leaders who need to be convinced by the commercial case for gender diversity, what is it there for?
In an era where networking, sharing insights and information and accessing intelligence can be done globally at the press of a button, lots of membership organisations are having to reassess the value they really bring. The danger is that you end up being not much more than a drinking club, and—though I am a huge fan of drinking—it takes more than that to justify companies paying membership dues for their staff in an industry where money is currently tighter than a mackerel’s backside.
The reality is that gender diversity could be boosting the bottom lines of shipping and maritime companies right now, and somebody needs to start making the solid business case to take to their leaders. It’s a discussion that we got into on stage at APM earlier this year when I chaired a panel of senior shipping women including WISTA regional representatives.
If you spend your time trying to understand what the future’s going to look like, as I do, it’s clear just how vital this is. As automation increases occupations which place a premium on interpersonal skills will see major growth, and women excel in the one skill AI doesn’t have—EQ or emotional intelligence.
Women consistently outperform men in all EQ measures. So continuing to encourage women to go to sea in roles which are likely to be automated instead of embedding them into executive positions ashore isn’t just short-sighted, it could be utterly disastrous.
As part of the exchanges WISTA tweeted that ‘diversity is not women’s responsibility’, which I’m afraid I have to disagree with. It’s everyone’s responsibility. So if that’s really the attitude within WISTA then the industry may have to look elsewhere for the leadership, data and action it needs.
In the final analysis what this comes down to is not gender, but agenda. Shipping needs a positive commercial agenda around gender diversity which frames the debate properly and focuses on helping shipping businesses—the vast majority of which are SMEs without big corporate structures behind them—to make commercial and competitive value out of employing women in their organisations.
We need to give shipping leaders a solid reason to make a fast grab for this durian. And that’s going to take more than just causing a stink on twitter.