September 9, 2004

Excerpts: Everything You Need to Know About Strategy - Part V

By: 800-CEO-READ @ 3:47 PM – Filed under: Management & Workplace Culture

3. Is your Board of Directors as cool as your product offerings ... and does it have 50 percent (or at least one-third) Women Members?
The bottleneck is at the top of the bottle, strategy guru Gary Hamel reminds us. Where, he asks rhetorically, are you likely to find people with the least diversity of experience, the largest investment in the past, and the greatest reverence for industrial dogma? His answer, obvious to anyone except the incumbents: At the Top.
I can only say, Amen! And add: The Board ought to bear at least some, slight resemblance to the market we serve/aim to serve. In general, Boards do no such thing!
For example, Ive been studying for eight years womens impact on buying decisions, consumer and commercial. Its enormousincluding over 50 percent of consumer electronics purchases. So why was I recently introduced to the just-appointed first woman board member at ... Sony?
Im not urging quotas, but I am saying that, for instance, Deborah Tannens book title, You Just Dont Understand, perfectly captures the communications-understanding gap between the sexes. In fact, if it had been my book the title would have been, You Just Cant Understand. If you were to examine a set of representative board bios, and use my measure, youd have to assume that the firms market was limited to V-OWGs (Very Old White Guys).
Gender. Race. Age. You name it, and the board composition is an embarrassment. No, I take that back. Scratch embarrassment. Substitute: Stupid. As in, economically stupid. (Were talking profit maximization here, not social justice.)
The womens market is enormous. The Hispanic market is by far the fastest growing in the U.S. (Find me an Hispanic board member!) Youth are often trendsetters, especially as the new technologies increasingly come into play anywhere and everywhere. (Find me a board member under 35!)
But let me go back to my chief hobbyhorse ... Women. Ill be blunt: I see no excuse, save an open acknowledgment of stupidity, for less than one-third of board members being female.
(And Id like that number to be-approach 50 percent, frankly.) Hint: I think (know!) this is an issue of the utmost strategic importance. To go to the animating spirit of this essay, Who the hell cares what the strategy of the enterprise is ... if the Engine of Governance (Board) is completely, maliciously misaligned with the market served?