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Microsoft boss Nadella's gender pay gaffe: Trusting in "karma" is poor advice

10:05AM | Monday, 13 October

Microsoft chief executive Satya Nadella’s excruciating gaffe that women should not ask for a raise but trust in “karma” that they would be rewarded eventually has been met with widespread condemnation. He made the statement, ironically enough, during an interview at the Grace Hopper Celebration of Women in Computing conference.   The conference , dedicated to women in technology, had a largely female audience who were confounded when Nadella gave his advice. The statement was met with an instant reaction on social media and Nadella, realising the seriousness of his mistake, issued a retraction saying that his answer to the question on whether women should ask for a pay raise was “completely wrong”.   Nadella’s statement is completely wrong for a whole host of reasons but in particular, it highlighted the fact that he seemed completely unaware of the context of the question given that Microsoft’s workforce is made up of just 29% women. When looking at the high status tech jobs at Microsoft, that number drops to 17%.   Nadella also seemed unaware that the 17% of the female tech work force at Microsoft are likely to be paid salaries of around 87% the salaries of men.   Of course, when you take merit-based bonuses into account, the gender pay gap is even greater, as women receive bonuses that are half the size of men’s.   He must have been unaware of these facts, because if he was aware of them, how could he possibly have thought that a woman’s silence would result in the “right thing” happening?   For Nadella, a 22 year veteran of Microsoft it is perhaps not surprising that he would have been unaware of the reality of being female and working at the company. The truth of the matter is that he may rarely have encountered women in his day-to-day job other than those employed in non-technical roles.   As CEO of the company however, it is particularly revealing that he would have been insensitive to the challenges women face in that working environment. His statements perhaps point to the limitations of his abilities and will now remain as the “elephant in the room” when he is trying to navigate Microsoft from being relegated into irrelevance by its stronger rivals, Apple and Google.   At the very least, Nadella joins the ranks of other CEOs who have made similarly public missteps, three of whom lost their jobs as a result:   Mozilla’s CEO, Brendan Eich eventually was forced to step down over his support of anti-gay marriage legislation Lululemon’s CEO Dennis “Chip” Wilson also stepped down after blaming the fact that some of their yoga pants became see-through on overweight women saying that “Some women’s bodies “just don’t actually work” for Lululemon trousers” BP CEO Tony Hayward was forced to resign after a series of PR bombs in dealing with the 2010 Gulf of Mexico oil spill that included his famous quote “There’s no one who wants this over more than I do. I would like my life back.”   The fact that a CEO can lose their job over a single statement reflects the nature of the job. The perceived importance of the CEO to a company’s performance is highly debated, especially when it is framed in terms of how much pay they are worth. However, the consensus is that CEOs have little impact on the overall performance of a company.   Nadella comes as a novice to the job of chief executive and his turn in this position follows on from a long reign of the founders running the company.   A chief executive’s main role however is to present the public face of the company and to inspire the market and their customers as a visionary. Perhaps we should have expected less of Nadella given that his first email to Microsoft employees encapsulated this vision as Microsoft enabling people to “do more” and that staff should “believe in the impossible”. Presumably the latter was aimed at female staff wanting equal representation and pay at the company.   David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.   This article was originally published on The Conversation. Read the original article.

Diversity is good, except as a business model

12:25AM | Monday, 2 December

When you were young, your grandfather always warned you not to put all your eggs in one basket. Well, when it comes to launching a business, your grandpa was wrong – and here’s why.   Back in the 1970s and 1980s, not putting your eggs in one industry basket was the business wisdom of the day. The end product was the diversified conglomerate.   In the US, Gulf and Western, a predecessor to Paramount Pictures, also sold clothing (Kayser-Roth), auto parts (APS), zinc, sugar, financial services, video games (Sega), bedding (Simmons) and tool manufacturing services (Thomas Ryder and Sons). They also owned a stadium (Madison Square Garden) and a couple of sports teams (the New York Rangers and New York Knicks).   Aside from oil, BP got itself into petrochemicals (including some it bought off Union Carbide), coal, minerals, seeds, fertiliser, livestock feed and sold pet food under the Purina brand.   In Australia, the worst offender was Pacific Dunlop. Among many other things, it sold clothing and footwear (Pacific Brands), rubber gloves (Ansell), tyres, auto parts, pacemakers, cochlear implants, tyres, dairy products (Yoplait, Peters), processed vegetables (Edgell, Birds Eye), baked goods (Four n’ Twenty Pies), tyres, fibre optic cables, healthcare products, bedding and ran auto stores.   Then there was Mayne Nickless. They were a trucking and air freight company that also offered pathology labs, IT and payroll services, computer networks (Maynenet), security services (MSS), non-prescription medications (including Cenovis and Nature's Own), ran retail pharmacies (Terry White and Chemmart) and owned 25% of Optus.   And when it comes to Christopher Skase’s Qintex and Bond Corporation, the less said the better.   Of course, there are good reasons why diversified companies usually end in tears. Just ask former coal, horse racing and rugby league mogul Nathan Tinkler.   Looking at these lists, many of these products don’t have the same customers, meaning there’s little benefit in cross selling or upselling products. There was really little way Mayne Nickless could have cross-sold next-day home delivery with a 24-hour pay TV sports channel on Optus Vision. And here’s a Four n’ Twenty pie – do you want a pacemaker with that?   Many of these products don’t share any common ingredients. While pet foods sometimes use questionable ingredients, you hope BP’s dog food didn’t share too many ingredients with its motor oil.   There’s also little advantage when it comes to branding. After a century of marketing “Dunlop” as a brand of tough rubber, would you really want a nice bowl of Dunlop ice cream? With sprinkles?   And underperforming businesses can fly under the radar with cross-subsidies for inefficient business models, where the management of a standalone company would be forced to act. There’s a reason why Christopher Skase’s three-time wooden spoon winning AFL team, the Brisbane Bears, were nicknamed the Koalas from Carrara.   Meanwhile, while there are plenty of executives who could effectively manage a medical implants firm market ice cream to 12-year-olds, the pool of people who have experience with both is a lot narrower.   It’s better to have a highly focused management team overseeing one business than it is to have a big bureaucracy overseeing a clutch of unrelated, poorly performing businesses.   Now don’t get me wrong. It’s great to be ambitious, to expand your business and to grow. But remember what your company’s core competencies are. Focus on doing what your business does well and then expand on it – but don’t go chasing millions in an industry you know little about!   So are you thinking of growing your business? If so, think long and hard about what you’re good at before you choose a path for growth. After all, you don’t want to end up like Bond Corporation!   Get it done – today!

Top 10 PR disasters

5:44AM | Wednesday, 2 May

Just two weeks ago, Airbnb appeared to be on an unstoppable rise to the top. The business had expanded internationally, including Australia, and had raised $112 million in funding.

THE NEWS WRAP: Federal Government to revamp its apprenticeship scheme

2:45PM | Monday, 21 February

The Federal Government is to revamp its apprenticeship scheme after a report found that it was failing to solve skills shortages for businesses.

THE NEWS WRAP: The major banks are expected to unveil profit growth this week

2:58PM | Sunday, 6 February

The major banks are expected to unveil profit growth this week, despite six months of falling lending to small businesses.

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