Tag Archives: McKinsey

Fiddled emissions whilst VW burns

VW 15921The VW share price is plummeting. Credibility of the many VW brands is affected. Perhaps their F1 ambitions have just gone up in smoke?

“We screwed up”, “we’ve been dishonest” and “we’re truly sorry” says their US CEO Michael Horn. But is that good enough?

Clearly the emissions scandal will run and run with lots of new whistleblowers adding to industry flames. VW Group testing software in the US appears to have been tinkered with resulting in certain diesel engines appearing to run cleaner than they really do – when tested by agencies appointed by manufacturers that is.

I’m relieved to read the SMMT (Society of Motor Manufacturers and Traders) saying this couldn’t happen in the UK because of the EU’s independent testing regime. Let’s hope they’re right.

VW BoardInterestingly the main VW Board is all male. And what has the likes of McKinsey been telling us for years? That women matter because we bring ethical values, a collaborative approach and environmental awareness to Board room decisions. In short, where gender balance exists organisations are healthier from the point of view of finance and efficiency. This isn’t rocket science guys but it’s clear you weren’t listening to the gender message when you should have been.

It looks to me that the VW Board could do with female Executive Board Directors to teach them business values and ethics. They were too busy studying the wrong metrics – now see how this negligence affects their beloved balance sheet…
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But an equally worrying issue is surely, if the likes of main Board Directors at VW can be THIS unethical, no wonder the global motor industry suffers the image it does. Because it seems to be TRUE of the very top?

Will any of those male Directors held to account be replaced by women?

Let’s hope so but I’m not holding my breath…

Finally let’s hope this is a scandal purely involving the VW Group… but let’s not forget the potential reach – their prestigious brands include VW, Audi, Seat, Skoda, Bentley, Bugatti, Lamborghini and Porsche.

How could this happen in such a family, unless high level individuals knew and condoned this… That’s shocking.

FOXY

@FOXYSteph

Does gender balance matter?

Gender balance in the UK motor industryGiven the choice I prefer to call a spade a spade but when you are talking about equality and gender differences in a business context ‘political correctness’ will often take the lead, even when the business case is clear. Take the new and increasingly used phrase ‘gender balance’ for example…

Don’t we all know that a business with a happy male and female workforce is a healthier one?

We are now told that it is a wealthier one too in terms of profits.

As you might expect, the EU has something to say about all this. In a move to influence businesses that aren’t employing enough women in senior roles (for economic reasons), MEPS are calling for an increase in female representation at management level. From a challenging 30% by 2015 to 40% by 2020. This is a welcome initiative says EU Justice Commissioner Viviane Reding.

The gender balance business case

Apparently ‘gender balance’ (ie where there is a fair balance of men and women) in top positions contributes to improved business performance, competitiveness and economic gains. A report by McKinsey found that gender-balanced companies have a 56% higher operating profit compared to male-only companies. This is supported by Ernst & Young research. They looked at the 290 largest publicly-listed companies and found that the earnings at companies with at least one woman on the board were significantly higher than in those that had no female board member.

It seems that a lack of women in top business jobs can therefore hamper a company’s performance, an industry in turn, then the country and now, we are told, Europe’s competitiveness and economic growth. Which is why several EU member states – notably Belgium, France, Italy, the Netherlands and Spain – have started to address the situation by adopting legislation that introduces gender quotas for company boards. And why others including Denmark, Finland, Greece, Austria and Slovenia, have adopted rules on gender balance for the boards of state-owned companies.

But who would want to be the token female to make up the quota? Much better to set targets and report (compare and contrast) on performance levels by industry I believe.

Gender balance in the UK

The UK government appointed Lord Davies to lead a review into the reasons why there aren’t more women on UK company boards. In 2011 he recommended that UK listed companies in the FTSE 100 should aim for a minimum of 25% female board members by 2015.

He suggested sensible targets for 2013 and 2015 to ensure that more talented women can get into the top jobs in UK companies.

On the basis of these recommendations the government is now encouraging all FTSE 350 companies to set out the percentage of women they aim to have on their boards in 2013 and by 2015.

Just for the record women now make up 14% of FTSE 100 directors, up from 12.5 % in 2010. There’s a long way to go.

Gender balance in the UK motor industry

The UK motor industry is a case in point. How wonderful it would be if Lord Davies’ recommendations would be adopted and exceeded here. Very few of the leading dealership groups have one let alone more than one female Executive Director on the Board and we certainly don’t want to see a spread of a few professional Non Executive Directors tolerated simply to tick the ‘gender balance’ token book at Board level. NEDs may have the right experience and may say the right thing but, regardless of gender, they cannot ‘feel’ a Group culture in the way that employees can, nor can they influence it from within.

Interestingly when I speak to leading motor group CEOs they invariably tell me they are a female friendly business, usually justifying this because they employ female managers. When I then talk to these female managers (in strict confidence) very few agree that the business is genuinely female friendly. I am left to deduce that these (always feisty) females have got where they are because they are not just the best ‘man’ for the job but also because they have been prepared to fight to prove it throughout their careers. Which few women are, given a more female friendly industry choice…
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The solution may be the ‘coming soon’ Female Friendly Approved website and service. We will be offering consultancy advice, a holistic FEMALE FRIENDLY audit, training programme and an accreditation programme for motor industry groups that genuinely want to
+ recruit and retain more females
+ deliver female friendly service levels for their customers in future (and delighting men in the process).

Providing the industry and its individual businesses have a strategic commitment to getting service levels right for female staff and customers in future, the necessary steps to change an all-male business culture can then begin in earnest. This will involve a training programme which should start at the very top of each and every organisation, recognising that not all women want to compete with men on male terms.

The opportunity cost for the motor industry is a high one at present. It is losing the best qualified (female) talent to other more female friendly industries simply because of its male-oriented culture and image. This is illustrated by Cranfield School of Management’s recent research findings that many more women than men report they have dealt with gender-based barriers by leaving employers or changing careers.

There is an urgent need to address the lacklustre male-dominated image of the motor industry so that it is seen to welcome women as employees for their natural talents; not just to promote the determined few who are willing to outbloke men and become too like them (in my opinion) as they move on up the ladder.

FOXY