In the last board meeting I attended, there were 15 white men, two Indian men, and me. Not unusual.
Back in 2003, I co-founded SunEdison with Jigar Shah, and I can attest that 12 years later neither the boardroom nor the makeup of leadership teams in the clean energy space have changed much.
Only one-quarter of companies in the S&P 500 have at least one woman director on their U.S. boards, per Ernst & Young. Despite the fact that women make up 47 percent of the U.S. workforce, women account only for 13 percent of senior management teams in the power and utilities sector and just 22 percent of U.S. solar workers.
The women I often see in in cleantech companies are in human resources, marketing, maybe legal, sometimes operations, and almost never on the financing or deal side.
Why is cleantech, like many other industries, so homogeneous?
Why haven’t we attracted and kept more women in the industry? If we want to solve some of the world’s most significant problems and create policy and business models that make this happen, shouldn’t we be enlisting the best and brightest men and women to help?
Why it matters: Companies with women leaders are more profitable
Gender diversity in business is not just about fairness and accessing our total workforce. It makes businesses more profitable and it allows us to benefit from the perspectives of individuals who are proxies for all of our customers.
Successful venture-backed startups with female executives are more successful than those without female executives. Companies with top-quartile representation of women in executive committees perform significantly better than companies with no women in the top ranks, according to a 2013 McKinsey study.
Gender diversity is related to greater relative profits. Women-operated, venture-backed high tech companies average 12 percent higher annual revenues. The top 20 utilities ranked by diversity have a combined average return on equity (ROE) of 8.5 percent, outpacing the bottom 20's combined average ROE of 7 percent.
Having women in leadership ranks returns insights that matter. Women drive purchasing; they are typically the main purchase decision-makers in a home. The connection between this consumer base and a company is critical for success.
Women, for example, initiate 80 percent of home improvement contracts, and 90 percent of women in a recent survey said that they would make or participate in the decision to go solar in their home. In many customer testimonials, we see repeatedly that women are gatekeepers, and we need to think about their decision-making and needs throughout product delivery.
Some utilities are also realizing that they need to be more closely aligned with the female consumer to increase adoption of smart meter programs.
Why are women missing in cleantech?
Companies with gender diversity in their leadership ranks outperform others. What's holding companies back from hiring more women? Are there actions that individuals and companies can take to increase the number of women in cleantech industry?
In cleantech (and other industries), managers often have to put in very long hours to get deals done in a field that is changing quickly. But work-life balance matters, and women often can’t be or choose not to constantly be at work, either because they are caring for children or because they are willing to insist on some form of work-life balance. (Some argue that millennials of both genders are now the drivers on the need for work-life balance changes.)
The result is that women are judged for not being “tough” enough to handle the pressure that comes with closing deals. This is a structural issue across many fields. Women get “mommy-tracked” as they try to care for children. Some companies are embracing more flexible work hours. For instance, I’m personally grateful to my company, Next Step Living, for the flexibility in hours and geography that it provides. Parenting and commitment to one’s profession are always in the balance, with lots of recent discussion including “Why Women Still Can’t Have it All.”
All of us in this volatile field have to promote ourselves constantly with a thick skin to forward our careers. Women often don’t promote themselves and their accomplishments as well as men do and often lack the confidence men have. I co-founded SunEdison with Jigar Shah in 2003, but I have not shared his level of well-deserved public recognition for that success.
The person who manages the money manages the company. Those who rise are originating or negotiating deals and often directly involved in finance. Women sometimes either don’t have or are perceived not to have the finance skill sets they need.
This is a very entrepreneurial field. Nationwide, men are twice as likely as women to launch a new business. A meta-analysis of 95 studies shows that while men are often more confident leaders, they are not any more effective leaders.
Is this because fear and self-doubt are typical entrepreneur problems, which are harder for women, as a general rule, to manage? Or because financiers trust men more with money? Because men are better risk-takers? It's more likely that all of these factors come into play.
Finally, women are often not encouraged to specialize in science or math, and there are subconscious institutional biases for women in science. Cleantech is a science/engineering-heavy space. There’s been some great research about the reasons women leave the sciences, including an antagonistic workplace culture, isolation as the only woman on one’s team, and mystery around career advancement.
Attracting and keeping women in cleantech leadership
We need both institutional and personal change to increase the gender diversity in the cleantech industry. Here is some advice to both females and companies.
- Build your skills and gather and refine the "tools in your toolbox" so that you can manage through any situation when it arises. It’s incumbent upon leaders to hone their skills in finance, negotiating and management.
- Develop and nurture a network of professional and personal friends whom you respect to give you honest feedback about your work, your communication style, your management capabilities and your leadership skills.
- Set boundaries and stick to them. It’s the old adage: “Whatever you are willing to put up with is exactly what you will have."
- Foster an equal playing field by creating an atmosphere of trust and connections through encouragement, an open office policy, leadership groups, mentoring and providing advice.
- Informally coax female (and male) colleagues into taking actions (i.e., talking to new people, using new resources, considering alternatives, building tool kits, networking) to create the change that you want in your organization.
- Build and work for companies that foster collaboration with interactive leaders interested in sharing power and information and companies that work through consensus.
- Examine your culture and policies. What I find is that if a company is sincere about changing its numbers of women, it must also be genuine about examining its culture and policies.
- Don’t just hire people that look like you. It’s easy, but not always the best for your organization. Seth Weissman of SolarCity said: "Really busy people are really good at getting things done, and who's busier than a mom?" Think outside of the box about how to hire and keep all types of people.
- Learn about your own likely subconscious biases about women in leadership positions and about women as caregivers. Understand why they exist and learn to overcome those biases.
- Create clear, actionable, objective performance indicators at your company and require that of your managers, and yourselves -- communication is key.
- Personally, each woman should internalize a leadership identity and develop a sense of purpose as a leader. “Integrating leadership into one’s core identity is particularly challenging for women, who must establish credibility in a culture that is deeply conflicted about whether, when, and how they should exercise authority.”
- And for women specifically: take more finance courses and take on P&L responsibility. A friend of mine says to her daughters, “Whoever understands the numbers wins.” You are always more credible when you can run a good cash flow statement and balance sheet. Driving revenue in a company will move you faster to a leadership position.
We need not only the awareness and the discussion about women in cleantech leadership, but very specific tools and plans like the ones above. If you have more, please email me or visit cleantechwomen.org. I’d like to know.
Use your voice to make incremental changes at your organization. Best practices about improving our profitability and our effectiveness as organizations should be our collective goal. I’m aggressively suggesting that the people in this industry work harder to get the best and brightest women in our leadership positions.
***Claire Broido Johnson is the Chief of New Markets at Next Step Living, the leading provider of home energy solutions in the Northeast. Previously, Claire co-founded SunEdison and was acting Program Manager for the Office of Weatherization and Intergovernmental Programs, deploying $11 billion of the American Recovery and Reinvestment Act of 2009.