Gender equality as ‘trade secret’? Businesses awaken to a long-dawning idea.

The message that workforce diversity deserves a conscious (even proprietary) effort has begun to resonate throughout US boardrooms – boosting bottom lines and responsiveness to concerns of women employees and others. Part 7 of Reaching for Equity, a global series on gender and power.

In the tech industry, “non-compete” agreements are not uncommon; they prevent employees from job-hopping to rival firms and taking inside knowledge with them. But here’s a novel twist: The latest tussle of this sort is not about someone with key technical information.

It’s about a woman promoting gender equality.

When IBM lost its chief diversity officer, Lindsay-Rae McIntyre, to rival Microsoft earlier this month, Big Blue went to court to stop her working for a year.

Ms. McIntyre, IBM said in a statement, “was at the center of highly confidential and competitively sensitive information that has fueled IBM’s success" in diversity and inclusion. 

It seems that ways to recruit talented women, then retain and promote them, have become proprietary business data, just like more traditional trade secrets. In the eyes of a growing number of companies such as IBM, gender equality is central, not peripheral, to their business success.

That’s because both the bottom line and the office atmosphere benefit from female-friendly workplaces, studies have found. IBM officials say they are convinced of that, and last month the company won an award from Catalyst, a global nonprofit promoting women’s leadership, for its efforts.

“Companies are going to start looking more at these types of programs,” not only to attract but also to retain workers, predicts Mary Pharris, director of business development at Fairygodboss.com, a website that serves as a forum for women to swap information about working conditions at different companies.

Pressure for progress

Amidst widespread concern among women about unequal pay, less-than-generous family leave policies, and workplace harassment that helped spawn the #MeToo movement, women rarely make it to the top of American business. Only 27 Fortune 500 CEOs are women.

But there are signs that progress may be picking up speed. Already, women enter the workforce more educated than men, and employers competing to attract high-skilled workers are finding that woman-friendly and ethnically diverse workplaces give them an edge with the rising cohort of Millennials.

IBM is trying to sharpen that edge, and some of its policies are hardly rocket science. One is simply to offer generous paid family leave, bumping it up last year to 20 weeks for moms, and 12 weeks for dads, partners, and adoptive parents.

Another is a program the company calls “Elevate Tech,” providing a mix of mentoring, extra training, and networking opportunities to nurture the career development of high-potential women. The goal is to rebalance a talent pool that, here as elsewhere, grows increasingly male-heavy the higher up the company ladder you go.

Jen Jones, a new IBM worker, is a beneficiary of another program to create opportunities for women who’ve been out of the work force for two years or more; often because they’ve been looking after children.

In the fast-moving tech world, that kind of absence can really set a woman back. And women are particularly prone to drop out of jobs in the fields of science, technology, engineering, and mathematics. When they want to return to work they have talent and education, but their skills need freshening.

Luring talent back to work

The Tech Re-Entry program offered Ms. Jones a 12-week internship, with the promise that IBM would be interested in hiring her. “It allows you to cut your teeth in a safe space,” she says.

Starting at the Weather Company, an IBM subsidiary, Jones drew on her marketing background while pushing deeper into data analytics. “We were using math that nobody on our team had ever used before,” she recalls.

It served her well. She eventually got a job in IBM’s Human Resources department, using data analytics to promote more of the kind of diversity policies that she had already experienced as an intern. Her team is trying to ensure that, as IBM uses artificial intelligence to track the skills and performance of more than 300,000 employees around the world, no unwitting bias against women or racial minorities creeps into assessments. 

Jones says her manager is framing the difficult task this way – to “quantify the unquantifiable.” Yet IBM thinks it is an important nut to crack. “Everybody matters,” says Jones. “You don’t want to lose anybody who ... really loves and cares about the work they do.”

Debora Bubb, IBM’s chief inclusion officer, says a diverse workforce is both a moral imperative and an important tool to recruit and retain top talent in a competitive industry. “The business case is increasingly clear,” says Ms. Bubb, whose purview includes the diversity efforts that McIntyre oversaw.

Recent research backs her up. The companies with most women on their executive teams are 21 percent more likely to make above-average profits than those with the worst gender balance, according to a new study by McKinsey, the consulting group.

And an analysis by Katharine Klein of the University of Pennsylvania's Wharton School, while reaching a more tentative conclusion, said studies show a “small but dependably positive” effect of female executives on corporate success.

But it takes a conscious effort to diversify a workforce. Companies cannot expect that “diversity and inclusion automatically happen,” Bubb says.

That message has begun to resonate throughout US boardrooms, if only because of the potential threat that a loss of trust among female workers poses. Women make up nearly half the US workforce, yet some polls find that they are less satisfied than men about a number of issues, from pay to work-life balance.

Not at every company, however. French cosmetics firm L'Oreal topped a recent gender equity ranking by Equileap, a group encouraging investment in workplace equality, partly because it has virtually no pay gap between men and women.

And when Rockwell Automation, a Wisconsin-based industrial firm, realized that white men were staying loyal to the company longer than women or people of color, management made those white men “diversity partners” in a drive to make the business more inclusive.

Workplace culture as a #MeToo solution

How responsive companies are to women’s concerns “is going to be a huge piece of their ability to retain their talent,” says Ursula Mead, founder of InHerSight.com, another online platform where women post scorecards on the firms that employ them.

“This past year has been huge and eye-opening for companies and women about the issues that still remain” to be addressed, she says. Where once the focus was on pay and parental-leave policies, now the spotlight is also on revelations of sexual assault and abusive behavior from Silicon Valley and Hollywood to halls of power in Washington.

Almost every large US employer offers training programs to counter sexual harassment in the workplace, and many impose “zero tolerance” policies too; there’s one at IBM. But some experts say the simple fact of promoting more women to high-ranking roles can reduce the prevalence of harassment.

They help cultivate an atmosphere where women feel able to speak up against a harasser, for one thing. And when a company’s leaders make a diverse work force a priority goal, that can change the attitudes of men, too, making them more likely to become allies in countering offensive behavior rather than looking the other way.

Even when a company makes a concerted effort to create a positive culture for women, though, the gains come only gradually. “We are really rewarding progress not perfection,” says Julie Nugent of Catalyst, who chairs the group’s awards committee.

Despite IBM’s stated commitment to gender equality, and the programs it has introduced over decades to broaden women’s prospects, women still make up just 26 percent of the company’s managers and executives. And that is enough to put IBM in the top 5 percent of global firms when it comes to gender equality, according to the Equileap study.

Nurturing more female executives

Sree Ratnasinghe is one of those female execs, a graduate of IBM’s program to develop female talent that she says was “just critical to me getting the job that I have today” in cloud computing.

She also credits simple human understanding for her success. When her first daughter was born prematurely, Ms. Ratnasinghe took 15 months off and her managers gave her “amazing support,” she recalls.

Ratnasinghe took six months off when her second daughter was born. “Things really ebb and flow when you're a parent when you're juggling these things,” she says, and her employer has been tolerant of that.

Now she’s not only a fan of the kind of benefits and programs that have helped her thrive, she wants to help extend them. “I would not be where I am today without the support and help of mentors,” Ratnasinghe says. “I'm looking to pay that forward.”

Part 7 of Reaching for Equity, a global series on gender and power.