AI’s Role in Achieving Gender Equity

Gender equity is a challenge for all kinds of companies — from the Fortune 500 to Silicon Valley. But even now, with almost everyone seeming to agree that the problem must be fixed, not much has been done to actually move the needle.

This week’s guest argues that traditional excuses for why the problem exists — and why traditional strategies to address it have failed — just don’t add up. There’s been a false narrative that women don’t know how to operate in the workplace, says Katica Roy, founder and CEO of Pipeline Equity. But the workplace was not designed to value them. So we will perpetuate that narrative unless we actually change the ways we make decisions and evaluate talent.

The solution Roy puts forth is to focus on removing bias from performance evaluations — the conversations, reviews, and processes that lead to career advancement (or a lack thereof). Using AI and natural language processing, software can identify bias in performance evaluations and point organizations toward making better decisions about promotions and new opportunities for employees.

While there is a matter of simple fairness on the table, Roy argues that this is also about the bottom line — and she has the data to back that up. Pipeline’s research found that for every 10% increase in gender equity toward parity, there is a 1% to 2% increase in revenue.

Listen to the full episode to learn more about the problem and AI’s role in helping leaders shift from paying lip service to equity to taking meaningful action.

In this week’s episode, we’ll explore these three big points about gender equity:

1. Gender equity is not just a social issue. It’s a massive economic opportunity.
2. Gender equity is not a synonym for women’s rights. Women are half the conversation, and men are the other half.
3. You can’t close the gender pay gap by starting with pay. You need to address talent development and the talent pipeline.

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Transcript

Katica Roy: Pay is the symptom — it’s not the disease. So in other words, pay is the quantitative value decision that you’re making about your talent. The actual value decisions that you’re making about your talent happen upstream.

Women are half the conversation, and men are the other half. And not just because men hold the majority of all leadership positions in corporations, but also because gender inequity impacts them too.

The average Fortune 500 company has 60,000 employees, right? So you are trying to operationalize gender equity across 60,000 employees, probably in multiple countries. That’s a very heavy task to take on.

Paul Michelman: I’m Paul Michelman, and this is MIT Sloan Management Review’s Three Big Points. In each episode, we take on one topic that leaders need to be on top of right now and leave you with three key takeaways for you and your organization.

Gender equity is a challenge for all kinds of companies — from the Fortune 500 to Silicon Valley. But even now, with most everyone seeming to agree that the problem must be fixed, not much has really been done to move the needle. Could technology be the answer?

Katica Roy: We are specifically looking at that within companies and using advanced technology to solve the issue at scale. What we know is that if we fundamentally change the decisions that we make about our talent, we can actually accelerate the time to closing the gender equity gap.

Paul Michelman: That’s Katica Roy, CEO and founder of Pipeline Equity, which has developed a software platform looking to improve gender equity within organizations. Roy argues that traditional excuses for why the problem exists — and why traditional strategies to address it have failed — just don’t add up.

Katica Roy: A lot of the solutions to date that have been put forward for closing the gender equity gap either focus on fixing women or they may not really solve the problem. And they could actually make it worse. There’s a fair amount of talk around “Well, if there’s a job posted, women [will] only apply for the job if they have 100% of the qualifications; men will apply if they have 60%.” The other half of that story is that the person sitting on the other side of the table judging whether or not someone can do that job is using the very same criteria — that is, we judge women based on their past jobs and men based on their future potential.

Paul Michelman: She says that solutions like women’s leadership development programs are fine — but that they don’t go far enough. We need to change the workplace itself.

Katica Roy: There’s been, I think, a false narrative around “Well, women don’t quite know how to operate in the workplace.” Well, the workplace was not designed to value them. So we will always perpetuate that narrative unless we actually change the decisions in how we value talent.

Paul Michelman: Equity gaps play out in a number of places within companies.

Katica Roy: So within organizations, there are five key decisions that they make across their talent: hiring — who they’re going to hire, internal and external; how they’re going to pay them; what their performance is — so performance reviews, ratings, etc.; what their potential is — so are they a potential for a future leadership role, etc.; and who gets promoted. And if you change those decisions, you can make a massive improvement in gender equity.

Paul Michelman: Bias is always going to exist in humans, says Roy. There’s no way to totally get rid of that altogether. But reframing this problem — that will help.

Katica Roy: Gender equity has largely been focused on and used as a synonym for women’s rights. In actual fact, women are half the conversation, and men are actually the other half. And [that’s] not just because men hold the majority of all leadership positions in organizations —about 68% of Fortune 500 leaders are men. It’s also because gender and equity impact men, too. We just don’t talk about it. And so if we begin to change the narrative and talk about how gender equity impacts everyone and it’s fundamentally an economic opportunity, you begin to move away from this black-and-white thinking, this us versus them — that in order for someone to win, someone else has to lose, which is not actually true.

Paul Michelman: Time for the hard facts. Pipeline did a research study across 4,000 companies in 29 countries, and they found a very strong correlation between increased gender equity and business results, according to Roy.

Katica Roy: What we found was that for every 10% increase in gender equity toward parity, toward 50/50 — we measure that across some key KPIs, key performance indicators — there is a 1% to 2% increase in revenue.

Paul Michelman: With this study and more like it, you’d think the business case would be made to leaders of organizations that addressing gender equity is in their best interest. And while many leaders do seem to have bought in, their commitment is simply not going far enough.

Katica Roy: What we have seen over the past five years or so is an increasing commitment to closing the gender equity gap. There have been a number of pledges that have been launched — CEO Action for Diversity and Inclusion, Paradigm for Parity, etc. I think almost 90% of CEOs that participate are now committed to gender equity [and] put it in their top priorities. What we, unfortunately, are not seeing is any movement on that — or very little.

Paul Michelman: And that disconnect between CEOs saying it’s a priority and the little to no progress actually occurring? It’s not going unnoticed by employees.

Katica Roy: What we see is that there’s actually a 56-point gap between CEOs who put gender equity in their top priorities, which is about 78%, and 22% of employees who regularly see it shared and measured. And that’s what they’re really looking for — not the perfection but the commitment, the transparency, and the accountability.

Paul Michelman: The solution, according to Roy, is actually putting those hopes and dreams into tangible actions.

Katica Roy: I believe that CEOs are committed to gender equity. And they struggle. They probably would hate me using that word, but they struggle with how to operationalize that commitment. And if you break it down within the Fortune 500 (so we just take that as a data set), the average Fortune 500 company has 60,000 employees, right? So you are trying to operationalize gender equity across 60,000 employees, probably in multiple countries. That’s a very heavy task to take on.

Paul Michelman: And this brings us back to Roy’s company. Pipeline is a cloud platform that supports companies moving toward gender equity by helping to remove bias from decisions about employee development — specifically decisions that come out of the performance review process. Here’s how it works.

Katica Roy: You write a performance review about an employee of yours. You save it as a draft in your core HR platform, like a Workday or a SuccessFactors. That sends a trigger to the Pipeline platform that you need a recommendation. All this is automated. What we do, actually, is we review that performance review, use natural language processing to call out biased phrases, and then calibrate the rating itself. We may or may not make a recommendation on the rating and then also the text of the performance review. You get that back automatically, and then you can accept or reject the recommendations.

Paul Michelman: So this solution aims to help companies make better decisions at the operational level that can in aggregate profoundly impact the big picture.

Katica Roy: So hiring, pay, performance, potential, and promotion — we intercept those decisions before they’re made. So let’s say you’re taking the average Fortune 500 [company that] has 60,000 employees. There are three key decisions they make across their talent every year, which [are] performance, potential, and pay. So that’s 180,000 opportunities for the average Fortune 500 company to move toward gender equity every single year. That’s what we make possible. And so we can show companies through all of these tens of thousands, sometimes hundreds of thousands, of decisions that they’re making, how those decisions are actually moving them either closer to closing the gender equity gap or farther away.

Paul Michelman: And these changes impact everyone.

Katica Roy: So one of the things that people are often surprised to learn is that Pipeline closes gaps for women and men. We’ve closed pay gaps for men. We’ve closed promotion gaps for men. So this is not just about women; this is about everybody. What Pipeline fundamentally does is uses artificial intelligence to augment the decisions that companies are already making.

Paul Michelman: Another thing Roy has learned: You can’t close the gender pay gap by focusing only on pay.

Katica Roy: Pay is the symptom — it’s not the disease. So in other words, pay is the quantitative value decision that you’re making about your talent. The actual value decisions that you’re making about your talent happen upstream. They happen before that in performance and potential. So you need to get those right before you can actually close your gender pay gap.

Paul Michelman: We’ve discussed the bottom-line benefits to the individual company. But addressing gender equity has implications that go beyond that.

Katica Roy: From an economic perspective, it’s not good to underpay people. Of the $2 trillion that is the upside for gender equity through closing the gender equity gap in the U.S., $512 billion of that is closing the gender pay gap. It’s a massive economic opportunity for our country. It is not just an issue of fairness, of paying people equitably. And it’s not just about women. … [In] 40% of households with children in the U.S., women are the breadwinners. There are 16 million breadwinner moms in the U.S. — they support 28 million children. That’s our future labor force. When we leave women behind, we leave families behind. We leave our future labor force behind. We know that there’s a connection between the economic standing of parents and the future opportunities of their children. That doesn’t just impact my bank account. … Actually … we are all tethered together in that.

Paul Michelman: That’s Katica Roy, CEO of Pipeline Equity. We’ll let her wrap this one up with three big points on addressing gender equity.

Number one:

Katica Roy: Gender equity is not just a social issue. It’s a massive economic opportunity. In the U.S. alone, we could increase our GDP by $2 trillion if we close the gender equity gap.

Paul Michelman: Number two:

Katica Roy: Gender equity is not a synonym for women’s rights. Women are half the conversation, and men are the other half. And not just because men hold the majority of all leadership positions in corporations, but also because gender and equity impacts them too. It’s just that we don’t talk about it.

Paul Michelman: Number three:

Katica Roy: You cannot close the gender pay gap by starting with pay. What we know is that pay is the quantitative value that you place on your tech talent. But the actual value that you place on your talent happens before that in performance and potential. If we fix those, then we can really close the gender pay gap.

Paul Michelman: That’s this week’s Three Big Points. You can find us on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and wherever fine podcasts are streamed. We will be forever in your debt if you’d take a moment to rate our program or post a review on Apple Podcasts or wherever you get your podcasts.

Three Big Points is produced by Mary Dooe. Music by Matt Reed. Marketing and audience development by Desiree Barry. Our coordinating producer is Mackenzie Wise.