In war as in sports, 'organization' is often the decisive factor that wins the day. Especially when competitors have similar resources and equally well-trained team members, then how we organize ourselves and deploy our resources determines success.
The current economic crisis is not just financial; it is just as much a cultural crisis. The social contract has been broken in many countries. A small homogenous elite has lost touch with its role to lead and generate sustainable growth for all. It is time to recharge our culture and with a more dynamic leadership model. One creative way would be to promote women in the business world in a more comprehensive and professional way.
For example, women played a decisive role in creating a new corporate culture for the largest corporate owner in Sweden, a portfolio controlling more than 25 per cent of the corporate sector -- the Swedish state portfolio. On the back of consecutive deregulations and a rising globalization, the financial crisis in the 1990's exposed the flaws of state capitalism in Sweden. The portfolio had been a protected part of society and managed by a small elite of people that had lost sight of a common purpose. The financial statements laid bare the fact the model was in desperate need of radical change.
Apart from increased transparency and improved capital structure, the tools used to achieve this transformation were, evaluating and recruiting the relevant professionals able to execute the fundamental restructuring of each company. More than 85 per cent of the Non-Executive Board members and 75 per cent of the CEOs in the portfolio were replaced over a three-year period, in total several hundred people. One important factor that made this this vast cultural transformation of the leadership, from self-serving elite to dynamic group focused on serving the company, possible was that almost 30 per cent of these new leaders were women.
The objective was clearly to regain the trust in the management of this vast portfolio by improving the performance of the portfolio empowering the only institution that, by law, is responsible and accountable for the development of the corporation -- the Board. A board is not a democratic institution that requires equal representation. Every person that is nominated to a board must not only be able to add value to the leadership of the company, but also enhance the dynamics of the board as a team.
The Board is a team of people working together, not unlike a football team or a symphony orchestra. Although the captain of the team, the conductor of the orchestra and the chairman of the corporation are incredibly important, it is their ability to inspire a concerted effort that creates the best results.
In the corporate world the aim is to create value. Creating value is based on three fundamental strategies; operational, capital structure and business development. With each member being able to contribute along at least one of these strategies and the capacity to share and debate issues from a wealth of knowledge and experience, the board is a competitive advantage when developing an ailing corporation.
Resilient group dynamics relies on both intellectual and psychological integrity prevailing in order for a board to be effective and not reduced to a rubber stamp. Trust in the nomination process being based on merit is essential, in order to ensure potential board members feel comfortable relying on each other as they are collectively accountable for the company. Given the relevant professional background, the personal background, outlook and social network are decisive for the relations that determine performance as a group.
Women are not a minority and do not deserve to be included for some misplaced democratic reasons, or based on a quota. Naturally, in some countries it may take time to grow a substantial base of female professionals that can gain the relevant experience. Acquiring such experience may warrant not only a wide range of social changes in order to combine work with family in a reasonable way, but most of all a change in attitude. Sweden was fortunate to have an education system, culture and business sector that has fostered generations of women in business.
The result in Sweden was overwhelming. The portfolio outperformed the stock market for more than one and a half year. Not a small part was attributable to women, as their professional contribution did not only matter as individuals, but more importantly changed the culture of each team as a whole and thereby the entire portfolio.
The aim in the corporate world is clear -- to improve the long-term value of the corporation. Including more women in the leadership of business is a creative and strategic step towards sustainable growth.