Copyright, © 2005, eePulse, Inc. 1 Bringing Life to the Diversity Business Case Through the Voice of All Employees Dr. Theresa M. Welbourne President and

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Copyright, © 2005, eePulse, Inc.

Bringing Life to the DiversityBusiness Case

Through the Voice of All Employees

Dr. Theresa M. Welbourne

President and CEO, eePulse, Inc.

Executive Education, Ross School of Business, University of Michigan

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Agenda

• Introduction to Data and Dialogue Driven Leadership™

• Research and Theory: The case of women in business

• Data and Dialogue Tools: Simple way to bring life to the diversity business case

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Scientific Researchand

eePulse Proprietary Technology Led to Discovery:

Data and Dialogue

Driven Leadership™

Which is our “lens” for diversity

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Research

• 18 years of study on what predicts long-term firm and individual performance

• Over 100 firms and hundreds of thousands of employees in research

• Includes weekly and monthly data collection in firms such as Citigroup, Washington Mutual Bank, GM, Toyota, British Telecom, InterFirst, Amazon.com, and more

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Simple Process That Works

• eePulse tracks employee energy as frequently as weekly (trends and variance hold predictive power)

• Comments gathered; give employees “voice” via technology

• Managers receive results instantly

• Managers take action on key problems and new opportunities; employees feel valued; someone listened

“Always look for the simplesolution”

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Results

• $17m ROI in 10 month project

• Reduce turnover by 26% in 6 months

• Stock price increase for new CEO in 6 months

• Change management initiatives accelerated

• Merger success

Diversity is at the heart of the solution ... but we may define it differently

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Define Diversity

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Our bias:

Performance Bias

and

Science Lens

Theory

and

Empirical Data

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SummaryResearch and Theory

What we know:

Lack of diverse ideascan destroy

organizations

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Economic Theory

• Agency theory perspective– Organization suffers when information not

in hands of owner • Information asymmetry problem

– Management can solve problem and increase performance

• By giving employees VOICE

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Empirical Study on Firm Performance

• Initial public offering (IPO) research:

– What predicts long-term firm performance?

– IPOs = the “fruit flies” of management

IPOs are going through change; today almost every firm we work with also is going through change. They are large, small, and global organizations.

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Women in Top Management of IPO Companies (By Year)

0

27

37 37

43

0

5

10

15

20

25

30

35

40

45

50

1988 1993 1996 1998 1999

Year

% F

irm

s w

ith W

om

en

Why Study Women in IPOs?

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Is there an effect?

• Regression analysis for 1993 data

• Controlled for “other” factors

• Having women on top team had positive and significant effect on initial IPO price, stock price growth, Tobin’s Q growth (market/book), and growth in EPS– Study conducted with data that went out both 3

and 5 years after the IPO

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Some additional facts

• Distribution of 93 sample– 1% of firms had 50% or more

women on their top teams– 9% between 20% and 49%– 17% reported 8% to 19%– 73% had no women

• Tobin’s Q for firms with women was 6.70, without women = 2.21

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Additional research

• Replicated findings for 1996, 1998, and 1999

• 1999 – Women as CEOs started to show up– 505 firms went IPO– 217 had women in their teams– 25 had women CEOs

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Diversity

• Diversity of ideas

• Diversity of thought

• Brought in by diversity of people ... in this case women

• Next, more on women in business – but from a “within firm” perspective

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Energy

• Research shows energy is key to success

• But .. energy is something that is optimized – not maximized

• Energy fluctuates considerably

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Energy Trended

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Sample ResultsWith Zone Status

Purple = My energy pulse for femalesYellow = Perception of others energy

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eePulse DataCompany Data

Blue line = men; yellow line = women; purpose = all company

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Across Clients

• We find that female scores on energy are “below their zone”

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The “Below Zone” Phenomenon

• Being busy NOT = in the zone

• Stacking work NOT = prioritizing

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Other data points

• Percentage of time interacted with manager in the last week – highest choice was 3 to 5 times

– Men = 40%– Women = 26%

• Percentage of time you want to interact with your manager

– Men = 37%– Women = 22%

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Catalyst / eePulse Study (April, 2005)

FEMALE/MALE MANAGERS Leader Behavior

55.5

66.5

77.5

8

Plannin

g

Supporting

Proble

m S

olvin

g

Rewardin

g

Team

Build

ing

Network

ing

Monito

ring

Consulti

ng

Inte

llect

ually

Stim

ulatin

g

Men

torin

g

Model

ing

Delegatin

g

Insp

iring

Influ

enci

ng Upwar

d

Female

Male

Women are “showing up” at work

We know that, in IPOs at least, there is a positive impact when women are on the management teams.

But, what does the within-company data and stereotype data say about the female experience at work?

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Diverse People Not Enough

Diverse people cannot help performance IF these “diverse” employees will not or cannot share what they know

• Will not = environment poor; manager problems; burnout

• Cannot = no time; no opportunity; no power

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What eePulse team has learned• Not safe to speak up “out there”• Managers do not listen equally

• Data and Dialogue Tools can help managers learn to listen

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Diverse Idea and Opinion Process

Cannot Be Program of the Month

If you want success – or to sustain energy, you need to give all employees voice and then take action on data.

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Diversity via Data and Dialogue Driven Leadership

• Diversity is part of day-to-day practice

• Diverse opinions and ideas are gathered all the time

• When diverse ideas and options are ABOUT THE BUSINESS and drive performance; business case is not an issue

Language of Diversity Changed to

Language of Business

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Dialogue?

Insights?

Questions?

Documents

Copyright, © 2005, eePulse, Inc. 1 Bringing Life to the Diversity Business Case Through the Voice of All Employees Dr. Theresa M. Welbourne President and