It’s all about what you do – from gender equality to strategic benefits

Most international surveys rank the Scandinavian countries among the very best in terms of women and men’s equality. At the World Economic Forum are all the Nordic countries among the top 10 and the independent NGO, Women Watch the small group of countries in northern Europe is also among the very best. So there is little doubt that there is something at the Scandinavian approach to gender equality, which rings true.

Although we are close to being world champions in the equality discipline it has not been something we have been particularly good at exploiting in a commercial sense. Instead we have resorted to toasts and speeches and we highlighting the individual women who have actually been able to beat their way through the glass ceiling.

In Denmark we have come up with initiatives such as charter for more women in management which is a set of principles like the Global Compact that is meant as tool for strategic gender equality development within originations or the torch campaign were individual companies communicate how they work with equality within their organization. While these initiatives are very fine they have the drawback that they simply perpetuate women and femininity as a handicap.

It is not because equality is not a real problem and that for many women means that being thirty is also de-facto means the end of their professional career in management. I just think that if we continue to regard the female gender as a handicap, we will never move beyond the challenges that both the country, but more specifically the individual companies are facing in terms of organizational development and continued competitiveness. A novel approach towards gender equality that has not exactly been dominant in the current debate neither here in Scandinavia nor to my knowledge anywhere else in the world.

Companies in charge know how to use sex

Men and women are in many ways different and in many cases, the direct opposites, like Mars and Venus, if I had to take a familiar example. Yet we are out unable to function without dealing each other’s good and sometimes bad sides.

Take, for example the trait of being entrepreneurial and the willingness to assume risk. Here is one of the traits that we perceive as being masculine and it is something we as a society appreciate. It turns out also that around. 2.5 times more men are entrepreneurs than women. Of course there are also female entrepreneurs and we are lucky to have them, yet it is a trait we usually put in connection with being a man.

As a counterweight to the enterprising men we see the risk averse women. The ability to understand and devise strategies to avoid risk is something we associate with feminine traits. It would be wrong to say that men can’t be risk averse but as we traditionally have favored the risk-taking in men and given credit to women who understand and is able to avoid risk it is the traits we see now as being most prominent. Remember that I do not judge if these traits are good or bad if they have come from the creation of stereotypes or if it is something in our genes, but only look at how people actual act.

There are many companies that have discovered that women are good in the role of risk monitors. Thus, more than 45% of audit committees in the Swedish OMX companies of women, which is in contrast to that is somewhere between 10 to 20% women on boards in general. It turns out also to companies with a gender-differentiated Board of Directors and generally cope better with the crisis at least the first one in 2008. These organizations have been able to respond quickly and consistently to market changes and have implemented the changes needed to make money in a difficult market. Examples include the Swedish Hennes & Mauritz (clothing and fashion), or the Danish firms Carlsberg (beer and soda) and D/S Norden (shipping), who all have women in both the Board and executive management. All three companies have fared well through the crisis and although it has been difficult, they have been able to exercise constant care in very troubled waters.

I’m not sure that these businesses have completely understood the significance that gender has had on their ability to adapt to its environment in an efficient manner, but in any event, it worked.

The patriarchal business is stalled

In contrast stand the less diversified firms, or said in another way, those who either did not want or have failed to attract other than male employees into their strategic management group. These companies have not been able to get rid of their risk as the market they operated in changed. This can obviously be due to many factors, but the interesting thing is that they generally perform worse than their more diversified counterparts. As a consequence of their inability to understand the organizational risks that they faced, they have not been able to show a sufficient earning capacity or have had direct losses. Both of which have been penalized by the stock markets to a degree where some of theses companies are valued less in terms of market price than the value it has according to its books.

An example of a company that has a high organizational risk seen with a gender perspective is firm Vestas. Time after time, Vestas has disappointed the market mainly because they have not had a good feel for what their stakeholders wanted to know and therefore could not live up to expectations that primarily professional market analysts and portfolio managers had. As a consequence, we have seen share prices today are at the bottom even when compared to its tangible value. As I have blogged about Vestas before there is no doubt that they have a good product, excellent production and are market leaders so there is no reason why there share price should not be much higher than it is today.

Two typical strategic moves that male-dominated companies have been using are first, to try to save themselves out of trouble by cutting costs; secondly to dismiss its leaders. It is not because this is a particularly patriarchal features that organizations use in times of recession, but the strategies only aims to reduce costs and simultaneously makes them unable to think further ahead, the whole exercise ends up in an actual fight for survival. To use an analogy it is like beating the body into submission and when that does not bring results we cut of the head. Not that some companies do have a lot of fat which can be trimmed but if there is no strategic thinking behind the cost reduction it will mount to little less than the ultimate loss of the business.

Everything else being equal, companies that have come through the crisis by adapting to and cultivating new markets perform better than those who are just coming through to save and reduce their organizations as the only means of maintaining a solid balance sheet.

The Scandinavian competitive advantage

Both here in Denmark but also in particular the rest of the countries were gender equality is high we have a resource that is not only unique but also virtually impossible to copy. By using our human resources to its full potential, we can provide competitive advantages in both the short and long term that will enable companies to navigate more safely and with less risk on the global market.

Universities and business schools produce far more women than male candidates. If business continues to let this resource remain unused and under utilized, we must compete on parameters where do not have many chances such as production costs and human and labour rights areas were we are unable or unwilling to compete.

Today there are already well-developed tools that can contribute to positive gender development in private and public organisations. The question is whether the HR departments, executives and board members are willing and have the courage to embark on an organizational debate about strategic consequences that extend far beyond the words and cheers and speeches in for example Charter for more women in leadership, Torch and other kinds of woman leader priced which reduces the debates to centre around gender quotas or not.

As individual and members of organisations we have to come to terms with the fact that women and men bring different approaches, viewpoints and perspectives to organizational development. And that these differences can be utilised strategically by organisations that know how. Through an understanding the differences that gender contribute with, we will be able to attract and retain skilled employees and thus be able to reap the benefits found in the fact organisations consist of people that think and behave differently. Female and male employees contribute, for better and for worse, to the development of companies and that the sexless organisation does not exist and that it is better to work to exploit these differences rather than ignoring them.

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10 things you need to know about doing business in Scandinavia.

The three monarchies that compose Scandinavia ...

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Ten things you need to know about doing business in Scandinavia.

How do you do business in societies that apparently lacks nothing and has a social system, which takes care of, all the citizens needs? Here is a short guide from an insider.

  1. The Scandinavian countries are Sweden, Norway, Denmark, Finland, Iceland and Greenland (at least in my definition). Some business consultants will make you believe that it also concludes Germany, Poland, Russia and the Baltics but this is simply not true. The Scandinavian countries are more then a geographical locality, which also includes culture (we share the same Viking heritage), language (Scandinavians can talk to each other at least at a basic level and people from Norway, Sweden and Denmark can understand each others language). This is an important factor when doing business because if you are able to penetrate one Scandinavian country you stand a better chance to gain access to the rest. While there are cultural differences there are more similarities. One of the things that bind Scandinavians together is the passport union which means that one can travel between the countries without a passport just normal ID. But also the fact that our nations have been at war with each other numerous times for the past 1000 years also plays a big part in our common heritage.
  2. As you might have heard is Scandinavians some of the most taxed people in the world and they apparently would not like it any other way. In general is the ceiling for tax around 60% for high-income groups, while the majority pays from 40 to 50 % tax. This should be seen in combination that Scandinavians have a wide range of possibilities in getting reductions on the tax bill, such as in relation to loan interest rates, if you have to commute long distances or for traveling. In return you get free education, free healthcare, close to no crime and a fairly good working social support system. The tax on business is in the middle of spectrum in Europe so not higher or lower then the European average. This means that the relative economic and social distance from the very rich and the very poor is one of the lowest in the world.
  3. Scandinavians are well educated so if you are looking for a place that will give you a workforce that have a fairly high educational level Scandinavia is a good place to start. In general about 6% of the population have a bachelor or masters degree or higher which is significant more than other parts of the world. The most educated people in Scandinavia are the Finns and Icelanders. Of the total GDP is about 3% going to research and development with the highest investments found in Sweden with 3,8 % and lowest in Norway with 1,6% this is a bit more then the EU average of 1,9%. If you are in a male dominated business you might appeal to the female side in our recruitment system, as about 60% of the population with a higher degree is a women.
  4. A flexible employee system is one of the trademarks of Scandinavia, while there are differences from country to country there is one common approach, which is foreigners to comprehend and understand. The relationship between employer and employee is not governed by the state but is rather controlled and agreed upon by annual, biannual or longer serving agreements. This means that if your employees want something they will tell you and ask for an agreement either through their union or as individuals. On the other hand if you need to fire people of you can go and negotiate directly with the employees and do not have to go through courts or any other third part. Actually is it so that the state help you in the process so that the impact on society will by minimized as much as possible. People will have a one-month termination period in most contracts but it is not uncommon that local agreements are prescribing a three-month period, which also ends any commitment you might have with him or her. In some cases like theft or if the employee does not follow your legal order you can fire people on the spot and does not have to ask anybody (e.g. union or state etc. the union might ask about your motives and argue their case but you will have the right as a leader to make such a judgement) for permission. One might note that the union and safety rep. have some legal protection, which protects them to a larger extend than “normal” employees. This does not mean you can do what you want as you can expect that people will question your motives and if necessary have some sort of legal or ombudsman settlement of the case.
  5. Setting up a business a business in Scandinavia is very easy. I’m not quite sure about the procedure in Finland or Norway, but in the countries I do know about it takes about an afternoon to get started and be done with all the paperwork. There are normally no fees if you start a one-person company while there might be some restrictions if you have a shareholding business etc. There is a host of possibilities for getting advice and guidance through a series of governmental sponsored consulting companies. The state will provide some of the funding if you want to create a star-up company or you might want to join one of the many entrepreneurial clubs and associations, which exist in most major cities.
  6. Euro or no Euro is one thing that is being debated throughout Scandinavia from time to time. Finland is the only country that has adopted the Euro as currency and the rest have adopted different solutions. Denmark have adopted a fixed price policy on the euro which means that when the Euro goes up the Danish Kronor also goes up and visa versa. The same policy goes for Norway while Sweden have chosen to have their currency float which means that it fluxuates quite a lot especially in time of economic turmoil. If one measure the performance of a economy in terms of unemployment then it would seem that the best option is to outside the Euro but invest heavily in currency stability as both Denmark and Norway is doing quite well in terms of employment rates.
  7. It is quite easy to get around Scandinavia there is a well-established logistics system which encompasses all types of transport from bicycles to airplanes. The public transport system is quite complex and not overly expensive while it has been under some competition from low budget flights.
  8. Scandinavia is green not only due to the COP15 meeting but there is a long tradition for recycling and finding environmental solutions to energy problems. In Iceland they utilise the hot water from volcanoes which covers around 75% of their energy needs in Norway which is a oil producer 44% comes from water energy and in Denmark around 18% comes from wind energy. This also means that a large proportion of research resources and knowledge is directed against some form of Green or CSR related activities. In Denmark there is a CSR legislation that requires the biggest companies to implement a CSR policy and monitor progress.
  9. A short power distance means that your future employees will question all your orders, they might carry them out but they would like to know why. Geert Hofstede defined power distance as ‘the extent to which the less powerful member of institutions and organisations within a country expect and accept that power is distributed unequally’. Scandinavians like to think of themselves as much more intelligent than their boss so they will as and keep asking until they get an answer that satisfy them. If you are unable to provide an adequate answer they will present alternatives to your ‘proposal’, which they think is better. You should not think that this is a sign of disloyalty or an attempt to undermine your authority rather it is a sign of confidence in your leadership that your employees participate and improves the decision-making process. If you are unable to have your leadership put into question almost on a daily basis you have not much of a chance in Scandinavian business so be prepared to argue your case, but remember that it is a sign of confidence they they go to you and not somebody else. I have met quite a few none-Scandinavian managers who have a some funny tales to tell about power distance so see it as a opportunity to keep you head cold and your mind warm.
  10. That the justice system is based on thinking people might be strange to put up as a point but it is one of the hallmarks of the Scandinavian justice system that people are free but also accountable for their actions. So do not expect to get sued if your product is used in a highly inappropriate way.

Scandinavian work on CSR is reduced to how well you present your sustainability report

Ones the Scandinavian countries were among the very best performers with field of creating initiatives for how business and society could work together for a greater good. But now it is more about how you present your activities than it is about what the company is actually doing that matters.

I would love if I could say I live in a region were we have some of the best socially conscious companies in the world, but if I did so I would properly be lying to myself. What I see is that it’s all about presentation and squeezing all the advertising and PR blood out of every bit of activity that even have the smallest scent of social impact.

A few examples can be found in the partnership between IBIS (A NGO) and Toms (A chocolate producer). They have found each other over the child-labour issue and have partnered up to create programs that will educate farmers and their children in Africa. This is all well and I it is very well that a company tries to do something about the very problems it self is causing. But the issue I have is that it has become a marketing machine, which tries to inflate a relative small project (about 15000 people is effected by the program) into a commutative platform, which almost seems to proclaim that they are eradicating child-labour in Ghana all together.

Another example can be found around the leading company in Denmark Novo Nordisk (A medico company producing insulin) that have been leading within transparency and stakeholder engagement. But now seems to be preoccupied with their own reporting and creating so-called ‘shared value’ rather than engaging in activities that really integrate social and environmental concerns in the business operations. There is no doubt that Novo Nordisk have fantastic reporting and does a lot to promote a sustainable agenda, but in my mind they have taken the ‘eye of the ball’ and forgot what really matters is what you do not what you say about it.

Actually was the former chair of Novo Nordisk quite critical of the current CSR climate when he said that “Danish companies are not global leader in corporate responsibility. If we look at the various indices, which rates companies according to their efforts on CSR issues – such as the Dow Jones Sustainability or Sustainable Asset Management (SAM) – so there is no index, where Denmark was leading. There are four, five Danish companies, which occasionally are high, but it does not justify to-call ourselves leaders. Denmark is an average performer, despite the fact that our self-understanding in this area is very high.”

While the indexes should not be seen as a measurement in it self I think he is quite right when he points to the Danish self-understanding as being ethical and socially conscious.

So when Ingrid Schullström CSR manger for H&M in Sweden claims that “I think we are traditionally very Scandinavian in being fairly modest that we’d rather do things first and talk about it later”.

She says that while H&M has been active in this area for as long as 12 years, she feels customers do not “know enough about what we actually are and have been doing”, and identifies the communication of its CSR activities as “an area where we should maybe improve” she is actually kicking in a open door. CSR activities in Scandinavia have become a Communicative exercise rather than an activity that companies and organisations engage in for reasons of ethics and morals.

When I from time to time meet business leaders and professionals, and talk about there company they often refer to themselves as the ‘good girl in the class’. Implying that there specific company is better than the average and that they have a clean record on social, governance and environmental issues. But when I ask how they know this it is often because they have not bothered to ask some very straight forward questions about their own performance and not least the impact of their operations. When I for example ask about corruption they often refer to the Scandinavian way of thinking as being free from the idea of corruption. The just by being from this part of the world make the company somehow free from dishonesty, fraud and bribery like some kind of force field. Even when confronted with overwhelming evidence to the contrary we seem unable to change this worldview. In relation with the food-for-oil program scandal in Iraq they’re where several Scandinavian companies involved including Novo Nordisk who was heavily fined we do not change our self-perception.

They will rather boost their communication with half-truths and semi-investigated activities than really actively engage in social responsible activities. And when we invite for seminars, talking about The Scandinavian CSR model, we pat each other on the shoulder about how good we are and how stupid everyone else is acting when they do see us as the center of the universe.

So lets challenge our-self and the image we have created and start dealing with the real issues that we have in front of us and not dwell in what we ones were really good at, creating real sustained social change.

Are the biggest necessarily the best?

Flags of the Nordic countries - from left: Fin...

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I have done a small survey of the top ten employers in Scandinavia (Denmark, Sweden, Norway and Finland) to look for evidence that these companies are also engaging in CSR activities. My question was if the nordic companies subscribe to the UN Global Compact and if so what CSR system do they use for reporting?

 

Company

Country

Number Employees

Member of Global Compact

Using a normative reporting tool like GRI, ISO26000, Etc.

Comments

1.

ISS Holding A/S

Denmark

482.531

Yes

None

Cleaning and Facilities services

 

2.

 

Sweden

236.713

No

None

Security

Securitas AB

3.

Nokia OY

Finland

123.171

Yes

GRI

Telecommunication

4.

A.P. Møller – Mærsk A/S

Denmark

115.386

Yes

GRI

Transportation and Retail

5.

Volvo, AB

Denmark

94.250

Yes

GRI

Automobile

6.

Ericsson

Sweden

91.825

Yes

GRI

Telecommunication

7.

H & M Hennes & Mauritz AB

Sweden

59.440

Yes

GRI

Textile retail

8.

Helse Sør Øst RHF

Norway

54.979

No

None

Governmental Health institution

9.

Skanska AB

Sweden

51.645

Yes

None

Building and Construction

10.

Electrolux, AB

Sweden

51.544

Yes

GRI

Electronics

 

It does seem like that the big companies have a tendency to use Global Reporting Initiative (GRI) as their preferred reporting platform. The ISO26000 haven’t found its way into the large corporations at this point but it’s still early days for the standard and I would not expect anything solid until next year.

Another interesting finding is that companies that have products that are relative close to the consumers like clothing, mobile phones or cars are more likely to have implemented a normative reporting system. On the other hand are companies and organisations like ISS and Securitas that does provide a service but who are not perceived as being close to the end consumer not as likely to have adopted a system which would is perceived as communicating transparency.