What is holding women back in the workplace? And how can those restraints be broken? Vikram Malhotra, chairman of the Americas at McKinsey & Co., told the Women in the Economy conference what insights into those questions his company discovered in its latest research. The Wall Street Journal's Alan Murray then discussed those findings with Harvard University economics professor Claudia Goldin; Saadia Zahidi, director of the Women Leaders and Gender Parity Program at the World Economic Forum; and Nancy Carter, head of research at Catalyst Inc. Here are edited excerpts of Malhotra's address and the discussion that followed.
Why aren't there more women in senior positions, even with the best efforts of corporations?
The reason is very simple. Our corporate talent pipeline is leaky, and it is blocked. Qualified women enter the work force in sufficient numbers, but they begin to drop off at the very first sorting of talent, when they're eligible for their very first management positions. And it only gets worse after that.
There is a silver lining, a leverage point—middle-management women. They have enormously high aspirations. They're accumulating new skills and gaining expertise in how business works. And they are growing more confident and more ambitious day by day.
They really want to move to the next level, as much as men do. We must capture their minds and hearts before their ambitions turn sour. And we know that their ambitions do turn sour before those of men down the road.
So what is discouraging and holding back such highly qualified, highly motivated women? First, the familiar structural barriers. They include a lack of women role models, exclusion from informal networks where connections are made, and the absence of sponsorship. Second, there are lifestyle issues -- concern about the 24/7 executive lifestyle and travel requirements.
The third barrier is the entrenched beliefs held by both men and women throughout management: "Everybody knows you can't put a woman in that particular slot." Or, "That job could never be done part time." Or, "If you promote a woman and she goes out on leave, we won't make our numbers.
A fourth barrier is individual mind-sets. As women age, their desire to move to the next level dissipates faster than men's.
What can we do about this? It starts with a compelling story for change—the business case. It requires management at every tier and employees of all levels to connect with the case for change and understand how they can each contribute to it.
Second, it requires refining the organizational processes and other mechanisms to reinforce the change. Third, we must build the capabilities that enable the desired behavior. For example, both men and women can learn how to be much more effective sponsors than they are today. Finally, it requires leaders all the way down to the front line.
Alan Murray: Saadia, does your research show at all how much of this is either lifestyle choices or individual mind-sets versus structural problems or institutional mind-sets?
They are rational choices given the structural environment. So there is a need for changing some of the structure.
Organizations and countries often want to change and are now starting to buy into the business case, but don't necessarily know how to. They tend to go through a long internal process of learning, when that learning could happen so much faster if there was greater sharing across organizations and across countries. So one thing we're trying to do is create a repository of best practices.
It's important to recognize that there are different ways of building the business case. We've talked about the financial business case. Did the financial performance of the company improve by having women on the board or in senior leadership positions? There's a good deal of research that will show that yes, when you have greater representation of women on those boards, the company improves.
But there's also a marketing business case. What kinds of products are you producing? What kinds of services are you giving? What kind of consumers do you have? Does the representation of men and women in senior executive positions mirror what the market is?
We also can talk about a societal business case. By and large if you have women who are represented, that's going to better the community.
AM: Claudia, you talked about lifestyle. Can you elaborate on that a little bit? What are the lifestyle choices that people make?
There was a time when there were really quite obvious barriers. Women, when they got married, were dismissed from positions. So we don't have those barriers today. We have other barriers—the intersection between what women would like and what they're being offered by occupations, firms, corporations, sectors, institutions, whatever.
For example—M.D.s. Thirty-six percent of all female pediatricians of all ages work part time. That is how they have a profession that they're proud of, that's fulfilling, that is their identity, and they can also mesh it with this thing called life. There's a lot more meshing of family and profession.
AM: But to the extent, Saadia, that it's lifestyle decisions causing women to drop out of the pipeline, then we'll never deal with the problem that Nancy and Vik talked about—are women willing to pay the price in terms of long hours and lifestyle sacrifices that it takes to get to the very top.
SZ: Take Switzerland as an example. Most child-care facilities close at 3:00 p.m. and most schools are not open on Wednesdays. And it's still traditionally mothers who have to be the primary caregiver.
Now within that government-created context, if you then choose to go for child care, that's going to cost about $5,000 per month. Couple that with a very traditional joint taxation system for the husband and wife, and it simply becomes not worthwhile to make that choice.
And so it becomes almost impossible for companies to really try to fight against that system. And so one of the pieces of research we're trying to do is what is that government-created environment? What's happening in terms of child care, what's happening in terms of taxation, what's happening in terms of paternity leave?
And then the second thing is within that context, what are companies doing? And the first area is setting targets across the entire company structure. The second is you have to be creating and developing that female pool at all levels.
Third would be training and incentivizing managers. Making this a part of your bonus and other incentive structures. The fourth is promoting that work-life balance and ensuring that that's not seen as just a women's space. The fifth is sending the right signals through communication and leadership.
And finally, what can you do beyond the office? What can be done through supply and distribution chains? What can be done through advertising? What can be done through communities that companies are active in?
AM: If you had to point to one thing that you had the power to change in this area, what would it be?
NC: Set goals for diversity and inclusion at every level of the organization and hold people accountable for achieving those goals.
CG: We have to realize that life is a lot longer than it used to be. So just because you take some time out does not mean your potential over your life cycle is going to be that much lower.
SZ: I think I'd have to agree very much with Nancy's point on target setting, but coupled with transparency. You can look at it as naming and shaming, but it works.
This story originally appeared on WSJ.com.