Copyright, © 2005, eePulse, Inc. 1 Bringing Life to the Diversity Business Case Through the Voice of All Employees Dr. Theresa M. Welbourne President and CEO, eePulse, Inc. Executive Education, Ross School of Business, University of Michigan

Copyright, © 2005, eePulse, Inc. 2 Agenda Introduction to Data and Dialogue Driven Leadership™ Research and Theory: The case of women in business Data and Dialogue Tools: Simple way to bring life to the diversity business case

Copyright, © 2005, eePulse, Inc. 3 Scientific Research and eePulse Proprietary Technology Led to Discovery: Data and Dialogue Driven Leadership™ Which is our “lens” for diversity

Copyright, © 2005, eePulse, Inc. 4 Research 18 years of study on what predicts long- term firm and individual performance Over 100 firms and hundreds of thousands of employees in research Includes weekly and monthly data collection in firms such as Citigroup, Washington Mutual Bank, GM, Toyota, British Telecom, InterFirst, Amazon.com, and more

Copyright, © 2005, eePulse, Inc. 5 Simple Process That Works eePulse tracks employee energy as frequently as weekly (trends and variance hold predictive power) Comments gathered; give employees “voice” via technology Managers receive results instantly Managers take action on key problems and new opportunities; employees feel valued; someone listened “Always look for the simple solution”

Copyright, © 2005, eePulse, Inc. 6 Results $17m ROI in 10 month project Reduce turnover by 26% in 6 months Stock price increase for new CEO in 6 months Change management initiatives accelerated Merger success Diversity is at the heart of the solution... but we may define it differently

Copyright, © 2005, eePulse, Inc. 7 Define Diversity

Copyright, © 2005, eePulse, Inc. 8 Our bias: Performance Bias and Science Lens Theory and Empirical Data

Copyright, © 2005, eePulse, Inc. 9 Summary Research and Theory What we know: Lack of diverse ideas can destroy organizations

Copyright, © 2005, eePulse, Inc. 10 Economic Theory Agency theory perspective –Organization suffers when information not in hands of owner Information asymmetry problem –Management can solve problem and increase performance By giving employees VOICE

Copyright, © 2005, eePulse, Inc. 11 Empirical Study on Firm Performance Initial public offering (IPO) research: –What predicts long-term firm performance? –IPOs = the “fruit flies” of management IPOs are going through change; today almost every firm we work with also is going through change. They are large, small, and global organizations.

Copyright, © 2005, eePulse, Inc. 12 Why Study Women in IPOs?

Copyright, © 2005, eePulse, Inc. 13 Is there an effect? Regression analysis for 1993 data Controlled for “other” factors Having women on top team had positive and significant effect on initial IPO price, stock price growth, Tobin’s Q growth (market/book), and growth in EPS –Study conducted with data that went out both 3 and 5 years after the IPO

Copyright, © 2005, eePulse, Inc. 14 Some additional facts Distribution of 93 sample –1% of firms had 50% or more women on their top teams –9% between 20% and 49% –17% reported 8% to 19% –73% had no women Tobin’s Q for firms with women was 6.70, without women = 2.21

Copyright, © 2005, eePulse, Inc. 15 Additional research Replicated findings for 1996, 1998, and – Women as CEOs started to show up –505 firms went IPO –217 had women in their teams –25 had women CEOs

Copyright, © 2005, eePulse, Inc. 16 Diversity Diversity of ideas Diversity of thought Brought in by diversity of people... in this case women Next, more on women in business – but from a “within firm” perspective

Copyright, © 2005, eePulse, Inc. 17 Energy Research shows energy is key to success But.. energy is something that is optimized – not maximized Energy fluctuates considerably

Copyright, © 2005, eePulse, Inc. 18 Energy Trended

Copyright, © 2005, eePulse, Inc. 19 Sample Results With Zone Status Purple = My energy pulse for females Yellow = Perception of others energy

Copyright, © 2005, eePulse, Inc. 20 eePulse Data Company Data Blue line = men; yellow line = women; purpose = all company

Copyright, © 2005, eePulse, Inc. 21 Across Clients We find that female scores on energy are “below their zone”

Copyright, © 2005, eePulse, Inc. 22 The “Below Zone” Phenomenon Being busy NOT = in the zone Stacking work NOT = prioritizing

Copyright, © 2005, eePulse, Inc. 23 Other data points Percentage of time interacted with manager in the last week – highest choice was 3 to 5 times –Men = 40% –Women = 26% Percentage of time you want to interact with your manager –Men = 37% –Women = 22%

Copyright, © 2005, eePulse, Inc. 24 Catalyst / eePulse Study (April, 2005) Women are “showing up” at work We know that, in IPOs at least, there is a positive impact when women are on the management teams. But, what does the within-company data and stereotype data say about the female experience at work?

Copyright, © 2005, eePulse, Inc. 25 Diverse People Not Enough Diverse people cannot help performance IF these “diverse” employees will not or cannot share what they know Will not = environment poor; manager problems; burnout Cannot = no time; no opportunity; no power

Copyright, © 2005, eePulse, Inc. 26 What eePulse team has learned Not safe to speak up “out there” Managers do not listen equally Data and Dialogue Tools can help managers learn to listen

Copyright, © 2005, eePulse, Inc. 27 Diverse Idea and Opinion Process Cannot Be Program of the Month If you want success – or to sustain energy, you need to give all employees voice and then take action on data.

Copyright, © 2005, eePulse, Inc. 28 Diversity via Data and Dialogue Driven Leadership Diversity is part of day-to-day practice Diverse opinions and ideas are gathered all the time When diverse ideas and options are ABOUT THE BUSINESS and drive performance; business case is not an issue Language of Diversity Changed to Language of Business

Copyright, © 2005, eePulse, Inc. 29 Dialogue? Insights? Questions?