Harvard Business Review is catching on. A recent article on the female economy declares that women present a marketing opportunity more than twice the size of China and India combined. Yet most companies fail to see or capture this prize. Those that do are winning even in the down economy. How? They are listening to smart women in their own companies.
At H&M, a Swedish clothing company, the formula for success includes a board and management structure where women are in the majority. This strategy has produced a
- 34% increase in profits during a sluggish economy when retailers around the world reported lackluster results
- Doubling of stock value over four years
- P/E of 21.47, ROI 44.11 and ROE 46.82 compared to respective industry figures of 5.28, 5.07, and 5.
The Rule of 3 – A Strategy for Capturing and Retaining this Market
Employing the advice of women in your own company to capture this market makes sense. Consultants can help in the short term and it may be wise to call one now. But as the saying goes, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
Savvy women in your own company will advise you that women decide to buy based on the relationship as well as the product or service. They will teach you how to use social media to engage women in meaningful conversations that deliver business results. They will make sure you understand that women want to be smart consumers so educating your buyers is important work. They would have told the powers that be at Dell that matching a computer to her outfit is not a priority for women and the reference recalls an outdated stereotype that insults current and potential customers. Dell would have been spared the negative press and other costs of this error.
In order to get and benefit from the advice of women many companies must first change a culture that worked when business was a man’s world.
The Rule of 3 will help you make the culture change and win the market.
What is the Rule of 3 and How Does it Work?
Three members of a minority group, in this case women, are typically required for individual members to speak up, be heard and have influence. The Rule of 3 is based in social science research on the influence of minority groups – defined as those who do not determine the mainstream culture. It has been confirmed by the observations of colleagues who are experts in the field of diversity.
Test the rule. Ask any woman who has worked in or with a company for the past 10 years whether she’s ever had the experience of speaking at a meeting and being ignored, discounted or told why her idea won’t work. Then within minutes a man in the group shares the same idea and suddenly it’s a good one. You will see her nod of recognition before you complete your question. The Rule of 3 changes this dynamic, especially if the women agree to intervene with and for each other. The rule works even better if a member of the mainstream group – such as the leader – intervenes, “Didn’t Margaret just say that same thing a few minutes ago?”
How to Apply the Rule of 3
First, as you charter groups to capture women customers, make sure there are at least 3 women in each of these groups. More is better.
Second, start now to ensure that over time there are at least three women on senior leadership teams that make critical and strategic decisions at your company. Ask and listen to what they say about how the culture needs to change so you can hire, retain, and maximize the contributions of savvy business women to gain even more market share.
Results from the Rule of 3
Read what happened at Deloitte and Best Buy when they employed the rule.
Over 15 years ago Deloitte chartered WIN an initiative led by women. Why? Deloitte recognized the increasing financial wealth of women and the implications for their business. In a recent conversation Barbara Adachi,* WIN’s National Managing Principal, stated when WIN began the company had a “7% gender gap in turnover rates and a small representation of women at the partner, principal and director levels. Today at Deloitte, the gender gap is less than 1% and approximately 22% of the partner, principals and directors (PPDs) are women, in fact, they just reached a notable milestone of surpassing 1,000 women PPDs in the U.S. firm.” (Barbara also manages Deloitte Consulting LLP’s Human Capital Practice, U.S. Western Region.)
At Deloitte, the benefits of WIN have accrued to the entire organization regardless of gender. The recent implementation of Mass Career Customization, initiated by WIN, applies to all professionals at Deloitte. It also resulted in a book published by Harvard Business School Press. The “Women as Buyers” program is a more recent innovation to help the 91% of Deloitte’s partners and senior managers who are pitching to women clients and need to understand how women think and make decisions about financial matters. One male attendee remarked, “Women as Buyers is a great program. It provides insights into the things you need to know but were afraid to ask.”
At Best Buy regional WOLF packs (Women’s Leadership Forums) develop ideas to attract more women customers. Why? Ninety percent of home electronic purchase decisions are made or influenced by women. The packs have implemented small changes that produce big results, such as carrying designer cases for PDAs and changing signs designating washing machine capacity from cubic feet to number of loads. Like Deloitte, Best Buy measures results – increase in women customers – and by this measure the program is a success. Best Buy has also succeeded in hiring more women sales managers and lowering the turnover rate.
If You Think This Doesn’t Apply to Your Company, You May Want to Think Again
“We are a military supplier, so the growing women’s market doesn’t apply to us.” In 2008, General Ann Dunwood was named the military’s first woman four star general. We are in all branches of the military, and some of us love shopping with other people’s money. (Apologies for the stereotype.)
“We supply technology companies and sell to engineers.” Women currently hold over 40% of lower level management positions in science, engineering and technology companies. These women and those who come after them will be movers and shakers in your customer base before you can implement the Rule of 3.
A company that designs and manufactures surgical instruments failed to make the devices small enough to be held by women who are a growing proportion medical school graduates. Makers of dental equipment are also taking note of the growing number of women enrolled in dental schools.
Summary
The Rule of 3 – start now before it’s too late.
*Barbara Adachi serves on the National Board of the Girl Scouts of America and has been repeatedly named one of the “100 Most Influential Women in Business” by San Francisco Business Times (2003-2009).