Q&A: Kerrie Peraino

'Sponsorships can help women get to the top'

Are women ascending the corporate ladder in lockstep with men? While they are entering the while-collar workforce in big numbers and also making gains at the middle and senior management levels, they just aren’t making it to the very top. Women today hold just 3 per cent of Fortune 500 CEO positions, and in the C-suite, they are outnumbered four to one. The case is not much different in India — the number of women on top can be counted on one hand. A recent research by the Center for Work-Life Policy, a New York-based think tank, reveals that women who are qualified to lead simply don’t have the backing necessary to inspire, propel and protect them through the straits of upper management. “Women lack, in a word, sponsorship,” it says. Kerrie Peraino, senior vice-president, International Human Resources & Global Employee Relations, American Express Company, is a strong advocate of sponsorship and the role it plays in career advancement of women (and also men). In a conversation with Amit Ranjan Rai, she talks about how sponsorship is transforming the work culture at American Express and has become a key pillar of its diversity and inclusion strategy. She explains why the dynamics of sponsor-protégé relationships are critical for success at any level.

 

The idea of sponsorship, which you’ll discuss today, is part of American Express’ diversity and inclusion strategy. Most global organisations today have a diversity and inclusion strategy. What does it mean and how are you taking it forward at American Express?
We have been on the journey of diversity and inclusion at American Express for over three decades. At a basic level, it is about increasing or enhancing the diverse representation of talent in the organisation. It usually starts with a company wanting that it has a good representation of men and women, people of different generations, embracing different cultures, and so on. That is, whatever country you are operating in, ensuring that you have a good representation of the market place in your workforce. So that’s diversity.

Over the last decade, the term inclusion has come into focus because it is not enough to just have a diverse representation in the organisation; you actually need to create the right environment and culture so that the diverse talent can thrive and be successful. Inclusion is about creating that environment; where you are attracting, developing and retaining the best talent wherever it comes from and whatever points of difference it may include.

Why so much focus on diversity? How is a diverse workforce better?
Because it is a business driver. The business proposition for diversity and inclusion is that it really impacts the bottom line. If a company’s talent base is reflective of the market place, it can better understand and sell products and services to a more diverse customer base. It helps companies with useful insights about the market place. What American Express is doing today — we actually have a patent pending process called ‘diverse marketplace intelligence’ or DMI — is connect all the dots as to what consumers want as a product or service from American Express and how we deliver to their expectations. If you are more diverse in your composition, you are likely to get better insights on a diverse set of consumers.

Can you explain it with an example?
Let me give an example from the US market. We offer pre-paid gift cards that people buy to give as gifts to their family members or friends. Recently, we have started targeting different consumer groups with these cards. So we have a Felicidade card targeted at the Hispanic consumer, and a Diwali card at the Indian. Now American Express’ diverse workplace in the US is reflective of the consumer market place. We have employee networks which are affinity groups for both of these consumer groups — Hola for the Hispanic one and Anna for the Indian — which decide on the design, wording and marketing of the cards. These two employee networks certainly get more insights from consumer groups which are connected to translate into better sales. In both the cases, the cards have been very successful.

The diversity and inclusion strategy at American Express has three prongs — talent segmentation, market segmentation and workplace transformation. All the work that we do with respect to our workforce around the world, including India, is connected to these three prongs. Sponsorship comes from the talent segmentation effort. 

One of your current diversity and inclusion strategies is to have a better gender balance in the organisation…
We have been at this for three decades and as a result the company is 60 per cent female and at our senior level, which would be the top 500 positions around the globe, we are 30 per cent female. One of our three executive is a woman. So arguably we have very strong statistics. 

Then why is it still a key focus area?
That’s because we want to advance women to the most senior levels both globally and at the market level. India and the UK are our two big focus regions. 

But organisations do have proper systems in place where, based on merit and performance, one gets promoted and can reach the top… Men or women, it should not matter. Don’t organisations treat them as same? Why then this emphasis on women taking the top positions?
I love when you say it that way, and I wish that was true. But the reality is that there is more than meritocracy at work in the systems we operate in — whether they are our societal systems, corporate systems, and so on. Meritocracy is a foundation and it is a baseline — it is a requirement for all corporate cultures. Now, if there is meritocracy then over time we should have equal representation at all levels. Today, if we look at global numbers, almost 50 per cent of the degrees earned at universities and 50 per cent of the advanced degrees and PhDs, they belong to women. If that is the case you would expect the tide to rise equally for both.

Yet we see at the top of the house of most companies the world over, the average female representation at the very senior level is as low as about 15 per cent. So what is happening? Women come at the same rates as men, sometimes at higher rates, they have good representation at mid levels… But then what happens, there is this mysterious drop off.

We took a good hard look at ourselves to figure out what’s been happening. We looked at several female departures that happened over a three-month period in 2008. Of course, several departures had occurred before then. Senior women at American Express had voluntarily left the company. We looked at their performance ratings; they were getting very positive messages from the company. We looked at their employee survey results — what other employee were saying about them, the kind of followers they had, their employees’ ratings — and they were all very good.

So what happened?
We started to scratch our head. If meritocracy is at play, what is different, what is causing this? There were two things we were able to find, both linked to sponsorship. One was that for most of these women, at some point within the 12 months leading to their departure, they experienced a change in their sponsored relationship. So the sponsor either left the company and was no longer there to sponsor; or she moved to a part where sponsorship was no longer effective. One of the common denominator for most of these women was that they just had one sponsor compared to their men counterparts who had more than one.

Can you explain what exactly do you mean by sponsorship?
Let’s consider how we engage at work. Both men and women network at work, but studies show that men are better at it than women. Women are better at networking outside work. So it is not a skill issue, but a will issue. Mentoring is common at workplace, but it is often confused with sponsorship. The two are very different. You can ask a senior to be your mentor, and if (s)he agrees the two of you can meet once or twice every month for, say, six or nine months, and talk about your career and issues you want to discuss. So you get your career advice and guidance from mentoring.

Sponsorships, however, have to be earned — and this is the primary difference between sponsorships and all other relationships at work. Sponsorship is earned from you delivering and driving results. Doing a good job gets noticed by superiors who take a vested interest in your work and are willing to be your sponsor. It means that they are no longer investing time in you, but are invested in you. In fact, the reputations become linked. They are willing to use their power and influence to your benefit. They are helping in advancing your career. Unlike mentoring, it’s not about monthly meetings and calendared discussions. It is a more organic relationship that forms, and I often tell people to figure out if they have a sponsor or not. If someone has the will to take risk on you and is willing to write his reputation alongside yours.

The Center for Work-Life Policy research on sponsorship, which is supported by American Express and of which you are an author, says that women are often reluctant in actively engaging with senior male colleagues; in fact, both are not really comfortable about it as people often look at such relationships as inappropriate. This seems to be a big hindrance in women finding sponsorships…
Yes, this is a barrier for women earning sponsorship at work. The study shows that more men have sponsors than women, though both men and women preferred male sponsors. It is difficult for women to earn sponsorship from men because a high percentage of men are apprehensive about a sponsorship relationship with a junior woman for fear of a rumoured inappropriate relationship. That is an inhibitor and something we at the workplace need to abolish. We need to create more pathways to sponsorship so that women have the same availability. 

Is such a fear really a big reason?
Yes, it is a real reason and it was cited by many women in the research studies we did. Large organisations have great meritocracy at play, and great systems to advance their talents. But at the same time, these relationships act as the defining factor in who gets the job and who does not.

The perception lens is often inaccurately applied. “Is she far more competent or is there something more to why she’s being assigned the job” — such perceptions are quite common. Often women who are capable and competent are reluctant to seek out sponsorships — though they really need one — from the male leader because of such perceptions. 

What’s the way out? What are you doing at American Express to make it easier for women to earn sponsorships?
We have taken an aggressive approach on sponsorship at American Express. Our position is that top spots in our company or any company for that matter, are filled in the context of sponsorship because those jobs are too big and too important to give them to an unknown. So it is the relationship factor that matters here — someone will have to sponsor you for that position.

We are getting our talent — both men and women — to recognise sponsorship and pay attention to earning it at the earliest point their careers. We encourage them to use it as a building block in their careers. Sponsorship in an informal way was always there, but typically in the boardroom and the senior management level, it would come for men more easily. What we and many others are doing is to formalise it in the organisation by labelling it. Labelling it, in the case of men sponsoring women, helps in taking the sexual connotations away from that relationship. The moment you put a formal process, as a programme, the employee starts realising that it is okay to find a sponsor for yourself. You are bringing it out from behind the scene to the front.

Globally, we are paying attention to our most senior bench strengths for the top spots. We are looking at 19 of our senior women who we believe we have the ability to move in those very top spots. We are not pairing them with sponsors, because we cannot. But we have our most senior team to pay attention to these women, to get more invested in them through some cross-functional assignments. In that way, more of the senior leaders could advocate for these very women. When the time comes to fill in those top spots, we need them to know these women, and we need a couple of them to be sponsoring them. This will make a difference in who gets job and who does not. So you can be deliberate in creating pathways to sponsorship.

In India, we have a Gen X initiative in place, which is looking at both gender and generation in the workplace and paying attention to raise the awareness level of sponsorship for our youngest generation of workforce, so that they can harness the power of it over the long term of their career. We have good gender representation here and so we need to sensitise our employee population to pay attention to earning sponsorship across genders. It is as valuable for men to be sponsored by women as men to be sponsored by women.

The Center for Work-Life study shows that fewer than 20 per cent of the employees in large organisation actually have a sponsor — it is 19 per cent for men and 13 per cent for women. We are looking to increase this. Sponsorship is a talent management tool; if we can increase the number of people earning sponsorship and actively managing those relationships, we will increase career advancement for men and women, and we will increase retention, which costs companies a lot of money. 

Does it help control attrition? How?
It does, because people follow sponsors. You work hard for your sponsor and your sponsor is there for you. You stay in a company because you have a sponsor who supports you. There is a real loyalty factor. But, by the way, you also tend to follow your sponsor — if he leaves the company, you may follow him to another company. It is a weighty relationship with risk and rewards. It is risky for someone to sponsor because when you’ll do well they’ll look good, but if your fail, they’ll be taking a bet on you. They are probably going to help you succeed, but you could still fail, and that could have a negative consequence on their own brand in the organisation. 

What should be some of the criteria for earning a sponsorship?
The first and foremost is performance. It should be earned by driving results. It is based on the very meritocracy that we discussed earlier. If not, then the notion of favouritism creeps in. If you’re not good at what you are doing then people start seeing the support you’re getting as favouritism. If you’re good at it, then people see it as you deserving it. Second is investing in relationship — it does not miraculously fall upon you as a gift, you have to invest in it. It does require some active networking — we call it the ‘maintenance factor’ — keeping your sponsor up-to-date on what you are doing.

At the same time, it is important to get comfortable in self-promotion — not bragging but highlighting your skills and capabilities. Women and people from different cultures tend to underplay their accomplishments. In some Asian cultures it is difficult for people to put the spotlight on them. We have to help people to get more comfortable highlighting their skills and capabilities. That’s how they can earn sponsorship.