Why Women Can Save Europe German Chancellor Angela Merkel is without question the most powerful leader in Europe. International Monetary Fund Managing Director Christine Lagarde is one of the most influential figures in the entire global economy. The British still revere (or, in some cases, revile) their enduring Iron Lady, former prime minister Margaret Thatcher. And the Finns had a woman president for so long, Tarja Halonen from 2000 to 2012, that some youngsters in Helsinki were surprised to learn last year that a man could hold the job. Europe has gotten quite accustomed to women leaders in government, and as an idea, but not in business. Illustration by Justin Gabbard That, however, is where they are needed most. Europe is in deep trouble, its economy treading water for the moment, but always threatening to plunge into the abyss of recession and pull much of the rest of the world in after it. Women potentially could come to the rescue if there were more of them, not only in the workforce - where their numbers are high, but their salaries often aren't - but in top management. They're needed in the executive suites and on the boards where they've traditionally been absent - and where, despite a lot of hot debate and well-intentioned hype, they're still amazingly rare. On average, 10 percent of the top officers of a European corporation are women, but in many European countries that figure declines dramatically. In Sweden the figure is 21 percent, for instance, while in Germany, just 3 percent. In the United States it's 14 percent; in Japan, a pitiful 1 percent. Bringing women into senior management is first a matter of exploiting an existing and much-needed pool of talent: 60 percent of Europe's university graduates are female. "We are an aging society," European Commission Vice President Viviane Reding told the annual women's forum in Deauville, France, last fall. We do not have the right to leave that talent idle. When Reding asked business schools to come up with a list of women qualified to sit on European corporate boards, they found, as someone once said, binders full of women: 8,000 of them. Yet resistance to putting them on boards continues throughout Europe. (Paradoxically, many of the countries where few women rise to the top of the workforce are also those with very low birthrates and rapidly aging populations. "These countries are very concerned now that they won't have enough workers to pay for aging societies," says Monika Queisser of the Organization for Economic Cooperation and Development [OECD]. They are really worried. And when faced with the choice of letting women work or getting migrants in, the less bad option for them is to let women work. But that backhanded reasoning is hardly enough to bring change.) Women are needed to help corporations deal with an increasingly unpredictable business environment. "We strongly believe that the more uncertain the world is, the more diverse you need the management to be," says Agnès Audier of the Boston Consulting Group. This diversity can come from different nationalities or simply different styles, but one of the most obvious ways to assure it is through different genders. And women are needed to help the bottom line. McKinsey & Co. consultants have shown a very strong correlation between the presence of women in the executive suite, a company's positive sense of its own organizational performance, and its financial performance. Indeed, in one of its most recent studies, McKinsey found that most of the clients surveyed said the kind of management they wanted and needed in the crisis is the kind generally associated with women: shared decision making, adroit use of expectation and rewards, intellectual stimulation. Yet what many businesses have been getting since the crunch came is an increase in the my-way-or-the-highway management often associated with male bosses. Reding's fight to establish Europe-wide quotas for women on corporate boards, a relatively simple task on its face, was eviscerated by the end of last year. The figure of 40 percent was adopted as the European standard, but each country is left to decide whether that will be enforced. "I have been in politics since 1979, and I have never seen a fight like that," said Reding. In the last couple of years the vast majority of companies in Europe have been taking all kinds of initiatives. They "have yet to see the results of what they are doing," says Sandrine ­Devillard, the global leader of the McKinsey Women Initiative. The agonizingly slow pace of change for women in the workplace is not limited to Europe, certainly, but with unemployment levels at record highs, the crisis there has taken on a chronic urgency. If bringing more women into the executive suite and onto corporate boards can help, why isn't that happening faster? Is it simply, as Reding put it, "the old boys" network, which doesn't want to be disturbed by women coming in." Of course it's more complicated than that. And Devillard's extensive research for McKinsey, and her own rather unusual story, suggests why. Devillard, 43, started working for McKinsey almost two decades ago. She was the only child of doting French parents and had spent a large part of her young life in the deserts of Niger, where her father worked for a French firm as a chemical engineer. She remembers riding out into the Sahara and learning to train stallions - a skill she still practices as a "horse whisperer" in France. Well-off, well educated, pretty, and energetic, she took an internship at McKinsey in Paris, then stayed on to begin working her way up the corporate ladder of a company with 102 offices worldwide. For years, she says, she never had to think about her gender. It wasn't an issue for her bosses or for her. "I was blessed to be part of a corporation where it was not a topic at all," she says over a takeout lunch, from exclusive caterer Dalloyau, in McKinsey's elegant quarters on the Champs-Élysées. And then, when I started trying to have my first child, I realized I'm a woman. It was tough. It took me ages. I was super stressed. At one point, I had to have bed rest. And that gave her a lot of time to, as she puts it, "look at my belly button" and think. "We do not have the right to leave that talent idle," says Reding. Nicolas Tavernier/REA-Redux "I had the feeling I had been going extremely fast on a highway, not knowing where I was going," says Devillard, and she just didn't want to do that anymore. "I wanted to enjoy the journey," she says. When she returned to her job, she proposed that she work only 60 percent of the time at her assignment consulting with retail and consumer-goods companies. McKinsey agreed. Right there, her experience diverged from that of most women, as she has learned. And she was also suddenly and acutely aware of how little female company there was in the corporation. "You know, we are not a lot of women," she mentioned to the office manager one day. "Yes," he said. What are you going to do about it? And that was the beginning of her concerted effort to help define the role that women could play and should play in successful businesses, starting with McKinsey. By 2005 Devillard had been voted a partner in the firm. (She remembers the year as having been between babies "No. 2 and No. And in Miami at her first partners meeting, she approached the then-managing director, Ian Davis, with the idea of conducting methodical surveys on women in the wider corporate world. Davis, a tall Englishman with a manner reminiscent of comedian John Cleese, said, more or less, "My goodness, a wonderful idea ... Ah! What if we find out they have a negative impact? Devillard said they'd cross that bridge when they came to it. She says now that she expected to find that there was no real correlation. What the first Women Matter studies demonstrated, how­ever, was that, yes, ­women ­really did matter, especially if they were part of the executive committee. There were precious few examples - fewer even than on corporate boards. "The numbers were very low," says Devillard. But one of McKinsey's basic products is the internal survey of a corporation's management performance, which is usually closely tied to its financial performance. And when examples were found where three or more of the chief officers in the firm were women, it turned out the ratings were consistently high. To figure out why this was, McKinsey partnered with social psychologist Alice Eagly and widened the survey to look at management styles, which were broken down into nine categories. Women equaled or surpassed men in six of them, starting with their ability to create a team atmosphere, define expectations clearly, reward achievement, and act as role models. Men tended to stand out for their inclination to take decisions alone, then have others execute them, and for monitoring performance and taking corrective action when errors occurred. The surveys also documented the multiple barriers facing women on their path to "the C suite" (as in CEO, CFO, COO, etc.). "There are barriers from the society, the environment, barriers within the corporations, barriers within men, and barriers within women themselves," says Devillard. There are lots of barriers within women themselves. They are less likely to buy into the idea that they should be available to work "any time, anywhere" with no inclination, or no chance, to take a break in their careers or decline to move to another city or country. Many are frustrated by the need to "master male codes" - become one of the guys - to get to the top. The sense of cumulative barriers tends to lower ambitions so that more than a third of women may opt out of their careers at some point, and most of those who want to go back to work full time fail to do so. After the global financial and economic crisis hit Europe in 2008, the situation of women in the corporate world suddenly became a hot topic, with politicians like Reding pushing for quotas and reports by McKinsey and other consultancies suddenly getting a wide audience. "But when you look at actions, still, nothing had changed," says Devillard. And resistance to the facts presented in the reports remains. When middle managers were asked if they believe it is true, as extensive research has shown, that leadership teams with significant numbers of women increase profitability, only half said yes, and 20 percent said, flatly, no. "Those are mindsets that are not ready to move," says Devillard. Center Stage: Lagarde and Merkel flanked by World Bank President Robert Zoellick (left) and OECD Secretary General Angel Gurria. Xinhua / eyevine / eyevine / Redux The potential solutions are well known, starting, as it happens, with the men at the top. The CEO has to be clearly committed to bringing qualified women into senior management. Without the backing of Davis, Devillard's projects would never have gotten off the ground. But for the majority of European corporations, actually giving women a bigger role in management still is not dealt with as a strategic priority. Then there's the question of how women are evaluated. "It's not about making it easier for women," says Devillard. It's not, Oh, the poor darlings, they have difficulties; let's lower the bar for them. It's not that. It's a question of whether the system is skewed to make advancement harder for women. If, for instance, leadership styles associated with men are valued over leadership styles often associated with women, that makes it harder for the women to advance. And is the prize worth the price? "To reach the C suite has to do, really a lot, with the will of the woman," says Devillard. The research we have done in the United States shows some women just don't want to do it. Fewer than 50 percent said, "I aspire to go to the C suite."" They say they are happy where they are, or they don't think they have the right skill set, or they don't want to deal with all the sharp elbows as they move up the narrower and narrower rungs of the corporate ladder. "Companies say they bring people up and then they lose them," says the OECD's Queisser. In that process, the European economy as a whole is losing out.