A Good Time to be a Girl

Chapter 2

New leadership required

We can’t solve problems with the same kind of thinking we used when we created them.

ALBERT EINSTEIN

While my career had been progressing well at Newton, the opportunity to become chief executive just seven years after joining was unexpected – most of all by me. The takeover of the firm by Mellon Bank, an American company, had been long planned and took several years to complete. It seemed probable that some members of the management team might decide to move on. As part of the four-strong Investment Strategy group, I was a potential candidate for the role of chief investment officer (CIO). I was keen to get the job if it became available – I loved making the big strategic investment calls, enjoyed life at Newton and got on well with my colleagues. I was feeling restricted by my existing role: at the time, one piece of US economic data was driving bond markets around the world – the employment figures released the first Friday of each month. My whole working life revolved around this data point. In particular, one long weekend sticks in my memory. My husband and I had taken our children to visit their grandparents and instead of enjoying our family time I was glued to the news. The data was much stronger than anticipated, my positioning was all wrong and I felt distraught, helpless and rubbish at my job. This was obviously an overreaction, and as Richard and I discussed my loss of perspective, it was clear that I needed a new, broader challenge.

So I was delighted when Mellon’s UK-based chief offered me the CIO role, which offered the opportunity to lead a talented team, as well as to expand my horizons. My new boss told me that he would fill the other vacancy himself, adding the Newton CEO position to his responsibilities. Next morning, one of my colleagues stopped by my desk and quietly mentioned that the other senior investors had met and unfortunately they didn’t want me to become the CIO. Taken aback, having thought I had their support, I asked if they would meet me to explain why. As we went into the room, I mentally ran through my options, realising that I would probably have to leave, given what seemed (to me) to be a vote of no confidence.

It turned out that my colleagues thought, reasonably, that it was important for the CIO to have an equities background since most of the firm’s assets were invested in the stock market. The conversation turned to my leadership skills, and there it was clear that I did have a following. Before I knew it, the suggestion was being made that I become the chief executive officer instead.

My first reaction was a sense of relief. I loved working at Newton and didn’t want to leave. I also knew this meant that it was in relation to the specific role that my ability was in doubt rather than an objection to me as a person. At the same time, I was disoriented by what had just happened. We all left the room and I ducked into an adjacent one and gathered my thoughts. I called my husband and told him ‘I’m not going to be the CIO any more, I’m going to be the CEO.’ ‘What does that entail?’ he asked and I answered, truthfully, ‘I have no idea.’ What I did know was that I believed in what Newton had to offer our clients, in the team and the process, that I could lead and that this was an unusual, perhaps once-in-a-lifetime opportunity.

It was never articulated in these precise terms but I believe one reason why colleagues were prepared to back me as CEO was because of my collaborative style of leadership. We obviously faced a number of challenges immediately following the takeover, and my first task was to rebuild confidence. Where there was a problem, it was my job to come up with a solution. While I certainly didn’t have all the answers and frequently needed the input of colleagues, I had a clear sense of what we were trying to achieve.

I’ve often reflected on that bizarre day. I was only 35 and had no business experience or management training. The firm managed some £20 billion of assets. I had no real idea of how challenging the next few years would be – but also how fulfilling it would be to eventually come out the other side, when we had – together – achieved real progress as a company. I realise now that the decision to say yes rather than what might have seemed a more sensible no to the CEO role, was, in fact, the making of my career. A moment of disruption was my great opportunity.

That experience, particularly in those early years, taught me the importance of focusing on long-term goals, rather than on all the steps we can’t see clearly in the moment but know we need to take to get there. A bridge will often open up when we get stranded, as long as we don’t get distracted or lose sight of that end goal. My six daughters have heard me tell them to ‘leap before you look’ so many times that they now chant it whenever one sister is dithering, but all too often I have seen women (more than men) focus more on what might go wrong than on the prospect of success. We’ll return to this in Chapter 7 – it is vital to recognise and counteract this tendency to hold ourselves back if we’re to be able to capitalise on the opportunities ahead of us right now.

As a novice CEO (and frankly also when experienced) I made many mistakes. Just one day into my new role, I took a call from a tabloid newspaper. I had never had any media training and this was long before companies had ‘corporate communications’ teams. The journalist asked sensible questions about my vision for Newton, which I answered tentatively. She then probed into my family life. Here I felt on firmer footing and happily obliged with some candid information and thoughts on combining family and career. The next morning everyone was very quiet in the office and when I asked if all was OK, a copy of the paper was handed across. There was a rather sensational story on page three entitled ‘Billion Dollar Babe’, describing me as ‘the pinstripes’ pinup’. Richard correctly pointed out that those descriptions were wholly inaccurate (my comment at the end that ‘five [children] is plenty’ has also come back to haunt me), but I felt embarrassed and frivolous for contributing to the piece. After that experience, I didn’t talk to the press for several years and only agreed to do interviews again when I wanted to draw attention to the issue of women in the workplace.

I can see now that in the broader scheme of things that silly newspaper article was not a big deal, but at the time everything felt magnified. The whole experience of my early days as a CEO was a very steep learning curve, with many moments of self-doubt before I emerged on the other side, older, wiser and just possibly better at my job than if I had taken a more conventional route to get there, if only because I had to learn so quickly.

Happily, I did make a few good calls in those early days. One was to shut out the siren voices telling me to reinvent Newton, to develop new strategies that weren’t core to our strengths. I had already learned – in life as well as at work – that we cannot always please everyone and that it’s a mistake even to try. In business, the key is to offer something of value to some people; in life, to know what matters to you, a framework for the myriad decisions each of us needs to take. At that moment at Newton, it was more important than ever to focus on what we did best, to ensure our clients were being well served and that they had confidence in us to continue performing. We were not static, however, the marketplace was changing around us so we consciously evolved our investment services rather than sticking rigidly to what had worked in the past. As author, analyst and former trader Nassim Nicholas Taleb puts it, we were ‘antifragile’, seeking opportunity from change. At the same time, I needed to nurture the culture that had been so central to the business since it was founded. I was merely (and just about) first amongst equals, carrying the ultimate responsibility but in no way superior to my talented colleagues.

Different situations require different leadership styles and while my approach may not be the right one for every scenario or every company, it worked well for Newton at the time. There had been a dislocation, and a collaborative approach enabled our employees, the firm’s key asset, to contribute to the vision of our future.

This all happened a long time ago; now we can see a much more widespread desire for ‘alternative’ forms of political and business leadership. The command-and-control approach that has prevailed for very many years, where a narrow elite tells other people what to do, is rapidly ineffective in a networked world. There is much less deference to those in official leadership roles; leaders need to merit their authority. So the role is less about sitting at the top of a pyramid and giving orders, more about positioning oneself at the centre of influence. I felt this acutely as Newton’s new CEO: one minute I was one of many fund managers, the next I was officially the boss, but not in a position to instruct my colleagues. Instead, my role was to lead by influencing them, having first listened to what was on their minds, then to form a plan that took account of their views (or explain why I was going in a different direction), and bring them with me. This was partly the result of the circumstances of my appointment but it’s also a feature of active investment management firms, since talented investors often see themselves as self-employable. The CEO is more akin to the conductor of an orchestra than a prima donna. This leadership model is becoming the reality for many other industries, and in politics too.

Many people see the shock events of 2016 – most notably Brexit and the election of President Trump – as setbacks for diversity. Of course, at the time no one asked voters to indicate the reasons why they voted the way they did, and all sorts of interpretations can be offered. In my view, while the specific reasons vary, the fact that in both the UK and the US many people voted against the establishment is key. The shocks themselves demonstrate how power is changing in a way that should be good news for democracy and equality. People will no longer be told what to do by leaders who don’t connect with them. The problem is, if this isn’t recognised and addressed, the protests morph into extremism.

I was flying back from a business trip in Denver on the evening of the UK’s EU referendum in June 2016. As we landed, everyone checked their phones for the result and an American lady tapped me on the shoulder; ‘It was Remain, right?’ ‘No actually, Leave won,’ I replied. She looked perplexed and exclaimed, genuinely shocked, ‘But we sent the President!’ She couldn’t see that this might have been a counterproductive move: the Americans ‘sent the President’; the British government dropped Remain leaflets on doorsteps, and people voted the exact opposite. In the US presidential election, it wasn’t enough of a change that Hillary Clinton was the first female nominee; she was also perceived as part of the establishment, as likely to maintain the status quo. Donald Trump’s comments make many of us wince, but during the election campaign, he reached out to those voters who were certainly not living the ‘American dream’, who had not participated in economic or income growth, who felt that no one was listening or cared – and he connected with them.

We have seen the desire for change many times before, of course, but technology makes it much more likely to be fulfilled. We now have an (almost) level playing field in our access to vast amounts of instant information. Anyone with a network and something interesting to say can influence others through social media, without any formal authority. And anything and everything is discoverable, exposing the humanity of leaders. There needs to be consistency in what they say and do, or their authority is undermined, potentially catastrophically. We keep seeing examples across many sectors and in policy-making circles too, where gaps between talk and action precipitate the downfall of those at the top.

This is a profound shift. Centuries-old, patriarchal power structures are being very rapidly replaced by more diffuse, shared and democratic influence. Different skills are needed to lead now, skills that, as we shall see, tend to favour women’s ways of working and behaving.

Not everyone recognises this yet. While there is an emerging realisation that being ‘in charge’ is not what it used to be, there is still only a vague appreciation of the wide-ranging ramifications. Much carries on as before, in big ways and small: I am frequently asked by executive search firms for my recommendations for ‘diverse’ board directors and am repeatedly disappointed by the ‘old school’ lists they show me. There is still a game of musical chairs at the top – and this is a mistake. In the US, around 80% of the fifty largest public companies are connected to each other through one or more shared board members; in the UK, the tendency is to ‘recycle’ FTSE-100 chairmen, making that prized role still very much a male bastion.

The wheels of change may be turning very slowly at the top but the broader power shift is not a short-lived surge in populism. Unless we put the technological genie back in the bottle, it is irreversible and means leaders, companies and policy-makers need quite different ways of thinking and skill sets to be relevant, successful and genuinely powerful. We talk blithely of ‘disruption’ in business – when revenue streams built over decades can be grabbed by start-ups over a matter of months, if not weeks – but few seem to have grasped that this extends to power structures too.

The far-reaching impacts of this power shift can be compared with the wide-ranging (and often breathtakingly fast) impact of the internet on many traditional businesses. The retail sector is an obvious example. Even the most traditional, ‘heritage’ retailers are forced to address the vast challenge of online shopping opportunities. A few firms have been the disrupters, others have embraced the change, a third group is plodding along, trying to catch up with shifts that have already happened. In the UK, a number of long-established high street brands have gone into receivership; others struggle to redefine their business. A walk down any British high street – now usually a string of coffee shops, restaurants, hairdressers, nail bars and dentists, alongside a few specialist stores – shows how dramatically our shopping habits have changed even over the past few years.

In 2006, nine retailers dominated the US market; Amazon accounted for just 4% of the group’s total market value. By 2016, Amazon was 55% of the total. With over 750 million mobile users – more than four times all of its competitors combined – it has, in the words of John Koetsier, ‘won retail’, reinventing how we buy and receive products. Amazon achieved this amazing feat by creating a personal (yet automated) connection with their customers, tracking their history and searches to understand their needs – and delivering great service. For retailers – and so many other sectors now – a digital strategy is not peripheral to the main event: it is the main event. Companies are all technology businesses now.

The irony is that to formulate (and continuously evolve) the right digital strategy, businesses need the right human minds – and that means the right combination of minds. It’s not a question of digital or human, but digital plus human.

Companies therefore need to take the optimisation of their talent seriously. The impact of getting it right or wrong may not be immediate, but any company that drags its feet in developing its collective human intelligence will be less likely to succeed than smarter competitors and increasingly disconnected from its customers. Astute companies are already working hard to develop the right ecosystems, where their diverse talent helps create an intelligent working environment and strong customer engagement.

Out of this arise exciting opportunities for equality, but we could too easily squander them by failing to see that today’s destabilising changes offer the moment for a leap forward in the quest for gender and other equalities. A continuation of the past would not have got us to where we want to be – even if, superficially, it might seem more benign. Whatever you think of Brexit and President Trump, these votes show that there is an urgent desire for new ways of thinking and new leadership. I think it has been a huge mistake for the establishment on both sides of the Atlantic to dig in their heels, to be dismissive of those who voted for Trump or for Britain to leave the EU, or to try to undermine other ‘protests’ (in Spain and Catalonia, Italy, Hungary, Poland … the list will continue to grow). Instead, we should be devoting all our energies to creating a constructive way forward. To those who say that’s a naïve hope, I challenge back: by talking and listening to each other, we soon see points of human connection, similar hopes and fears alongside our differences of opinion. The common ground includes a desire for security; fulfilling work that can enable us to prosper; friendship and love; a sense of belonging; a good future for our children. With strongly empathetic, inclusive leadership, we could move forward together.

My experience in helping to solve a much narrower, simpler problem, the under-representation of women on UK corporate boards, showed me (just as the chance to be Newton’s CEO had done) how dislocations can create rare moments of opportunity to seize. Today, if we tap into our own, feminine brand of power, women can contribute much-needed new thinking to solve our problems – and become more powerful in the process. I was definitely on the outside of the real power base when it came to making changes in the boardroom, but was able to become effective by being empathetic and constructive in my approach. I reached out, rather than fought. Girl power, if you like, but not as we may have thought of it before. This is not about adopting the trappings of male power, but about redefining power, changing rather than mimicking the power structures that we have been largely excluded from in the past. Many decades ago, Simone de Beauvoir argued, ‘The point is not for women simply to take the power out of men’s hands, since that wouldn’t change anything about the world. It’s a question precisely of destroying that notion of power.’

It’s been a long wait, but this is our moment to show the strength of feminine power.

Chapter 3

The 30% Club: the strength of feminine power

When you start to develop your powers of

empathy and imagination, the whole world opens up

to you.

SUSAN SARANDON

Having been appointed in rather unorthodox and dramatic fashion to be Newton’s chief executive, I focused on delivering the results that were proof that I was up to the job. Achieving strong results – both investment and financial performance – requires the right team, and with Newton’s motto that ‘No one has a monopoly on great ideas’, my colleagues and I made a deliberate effort to develop diversity of thought and perspective. Just as on a football pitch, the best investment teams are not necessarily groups of the most highly qualified individuals; the interaction between team members plays a vital role.

In common with the rest of the fund management industry, although Newton had a strong meritocracy there were relatively few senior women. I wanted to do something to specifically address this. Young women – both at Newton and in other firms – were often approaching me to ask my advice, usually about combining career and family life, and I was happy to talk one-to-one. It seemed an obvious next step to try to help on a bigger scale. With the encouragement of my Boston-based boss, Ron O’Hanley, I launched a women’s initiative for our parent company’s European businesses in 2005.

This initiative – like most other companies’ gender diversity efforts at the time – centred on networking events, often a talk from a high profile woman. The feedback was always ‘how inspiring’ but in fact no one seemed inspired to actually do anything differently. Over the next few years, we saw little change in the representation of women at senior levels – and no real evidence that this was likely to change any time soon.

Discouraged, I was about to give up when I was invited to give one of those talks myself at Goldman Sachs, as part of their 2009 Diversity Week. Afterwards Goldman hosted a discussion for 15 men and women from different organisations, and everyone shared what they were doing to encourage their female talent. As I listened, I discovered that I was far from alone: everyone was struggling, no matter how hard and how long they had been trying. So much effort, yet so little to show for it. It seemed pretty clear that we must all be doing something wrong.

One of the attendees was Baroness Mary Goudie, a Labour peer. We agreed that we wanted to ‘do something’ to break the deadlock. The approach needed a complete rethink.

Of course, it’s usually much easier to identify a problem than to come up with the solution. There was no reason to believe that the objective of having many more women in senior roles was simply unattainable: there were plenty of ambitious women, plenty of companies keen to see them progress. As I searched for a way forward, I read widely to see whether any companies or countries had managed to achieve better results. I also researched organisational behaviour more generally, and the theories about differences in the ways men and women typically work. The more I thought about it, the more obvious it seemed that most of us were rushing to try to motivate people from under-represented groups without really understanding what was on their minds, or how our diversity efforts would fit in with the rest of their experiences at work.