Women in Leadership - An experiment at Ericsson
By Katryn Wright, Guusje Lindemann and James Elfer
MoreThanNow have partnered with Ericsson for the last 4 years to pioneer a behavioural approach to diversity and inclusion. You can read about that collaboration alongside academics from Harvard Business School and Exeter University here. The following is a short summary of an experiment that we received results for in March 2023. It’s being written up as a scientific study, but everyone involved is keen to share the results as soon as possible.
We present these findings for you to learn and build upon, and to inspire you to run your own experiments on how to create inclusive, high-performing cultures. Open scientific inquiry is the way forward. We need more organisations to pick up the baton and scale it.
Women in leadership - the broken rung problem.
We all know there’s a significant gender problem in corporate leadership. The gap is most pronounced at the top level, with women accounting for just 10% of CEO roles in the Fortune 500. The imbalance continues down the hierarchy, with women holding 23% of executive roles, 37% managerial roles and 47% administrative roles.
Research by Ingrid Haegele at LMU Munich identifies the ‘broken rung problem’ as a significant barrier in the way of progress. Working with combined personnel, job application and survey data from over 30,000 professionals, Ingrid finds women in lower level positions are 28.5% less likely than men to apply for promotions to managerial roles. If we are to change the representation of women in leadership, we need to tackle the broken rung problem.
Tackling the broken rung - the diversity target hypothesis.
There are countless ways in which we could try to increase women’s aspirations to lead, many of which are both costly and time intensive (think £multi-million mentoring schemes and women’s development programmes). There is limited evidence either approach is effective and we have concerns about the additional burden these programmes place on women, who are already experiencing disproportionate time pressure.
Our intervention with Ericsson was far simpler and drew on gender diversity targets, a commitment that almost all organisations in the FTSE100 and Fortune500 have made public in recent years. Our research question was as follows: Would making diversity targets explicit to women, at a point when they are asked about their career aspirations, help mitigate the exclusion and/or uncertainty they might feel about leadership?
Because Ericsson have also linked these targets to executive incentives, we added a secondary question to our experiment: Is any impact on women’s career aspirations amplified or reduced if they know their executive leaders are financially incentivised to meet gender diversity targets?
The experiment
While we predicted our interventions would work, we could also think of reasons they might backfire and cause harm. So as usual, we robustly evaluated our work with a scientific-standard, randomised controlled experiment in collaboration with our academic team. This is the only way we could decide which intervention to roll-out at Ericsson over the long-term.
The moment we selected for our intervention was Ericsson’s annual performance review, a process they call ‘Wrap Up’. The standard global invitation to take part in Wrap Up didn’t mention gender diversity targets, so we used the opportunity to design our experiment. Nearly 3000 employees at Ericsson MELA were randomly allocated to one of three groups:
The standard global Wrap Up communication.
The global Wrap Up communication + diversity target message.
The global Wrap Up communication + diversity target and executive incentive message.
We evaluated the effect of these communications on two questions employees are asked about their career aspirations in the next 12 months:
“I want to manage others” (Yes/No)
“I see myself taking a bigger challenge” (Yes/No)
The results
We’ll let the results speak for themselves, suffice to say that while we predicted a positive effect, the magnitude of these differences shocked us as a research team.
In the first chart, we show a 15% increase in leadership aspirations for all women who received the diversity target + executive incentive message. In the second, we show a 20.3%-55.8% increase in taking on a bigger challenge for women in early career and low tenure groups respectively. For these sub-populations, the incentive message was not a necessary addition to the diversity targets message.
Women aspiring to leadership roles (%)
Women aspiring to a bigger challenge (%)
An incomplete journey – our next steps.
These are remarkable results, and some of the largest effect sizes we have seen at MoreThanNow. Perhaps one of the most surprising insights is how a simple intervention can increase leadership aspirations among women (and we no longer see a gender gap in the aspiration to manage at Ericsson; there is no longer a broken rung problem at the company). We’ve read so much about family duties and gendered career motives holding women back from leadership, but this experiment suggests strong organizational commitment to gender diversity can help overcome these barriers. Whatever was causing a reluctance in women to aspire to management, it was significantly reduced by a simple, well-timed signal of commitment.
While we’re delighted with the impact, effect-size and scalability of these results, we don’t wish to go too far too fast. This is still an incomplete journey. Our job is to increase women’s representation in leadership, and raising aspirations is just one step on this challenge. We still need to make sure women have every chance to meet their aspirations and that managers are actively supporting those ambitions. As always, our research on how to make progress effectively will continue, and we hope to be back to share our findings on improved representation later in the year.
A huge thanks to the academic team, this time from Harvard Business School and Chicago Booth School of Management. And to incredible colleagues at Ericsson: Emma Birchall, Global Head of D&I, Natalia Farfan Santos, Head of D&I Programs, Selina Millstam, VP Talent Management and Veronika Ivanovic, VP People for Europe and Latin America. These leaders are true pioneers; their impact is clear from these results.
As usual, we encourage other organisations to come forward and run their own inclusion experiments. Robustly testing DEI initiatives and sharing what we learn with the world is our only collective route to progress.