At least once a year, a female colleague will tell me how much she hates math. Here is just one example of a real conversation:
Female colleague: I hate algebra. I have no idea why we had to learn it. I never use it.
[a few minutes later]
Her: Hey, I could use your help with a project. Do you have any time to meet with me today?
Me: I’m open until 2.
Her: Great, you have 20 minutes for me then?
Me: You just did algebra.
When a woman tells me that she hates math, I tend to wince. She may as well have told me that she doesn’t like breathing. It is like she just boasted that she cannot read, albeit with no self-awareness that reading is an important life skill.
Numbers are the lifeblood of the workplace. It is the universal language of boardrooms, executive meetings, customer discussions, employee negotiations, performance evaluations and most business decisions. As Peter Drucker famously said, “If you can’t measure it, you can’t manage it.” And if you cannot manage it, then you cannot be an effective leader.
We’ve been told that the percentage of women in STEM professions (Science, Technology, Engineering and MATH) hovers somewhere in the mid-teens to low twenties, depending on the source. But, what is truly a “math profession?” I challenge you to name a leadership role that does not require proficiency in math, or more specifically a basic understanding of finance. The higher up you go, the more critical financial literacy becomes. So it should not be surprising that the ratios of women in leadership roles and women in STEM jobs are jarringly similar.
In the case of leadership, the “M” in STEM stands for more than just “math.” The “M” in STEM stands for “management.” The “M” in STEM stands for “money.”
While men score better than women on financial literacy tests, the scores are shockingly low for both genders. The Global Financial Literacy Center endeavored to answer the question “[h]ow financially literate are women?” The answer: only 2 in 10 women pass the literacy test. The study surveyed men and women in the US, Germany and the Netherlands, asking three multiple choice questions about savings and applying interest rates. Only 38% of the men in the US answered all 3 questions accurately; the women, a discouraging 22%. Results were similar for Germany and the Netherlands.
Here is what was worse. Not only were female respondents less likely to answer financial literacy questions correctly but they were also more likely to state that they do not know the answers to the questions and avoid answering them at all. And the gap isn’t narrowing for the next generation. For the respondents under the age of 35, only 12% of women and 26% of men answered all 3 questions correctly.
This is not only troubling for gender parity in the workplace, financial ignorance can be a huge issue at home as well. More and more financial decisions are falling to consumers in their home life as well: mortgage decisions, retirement investments, budgeting, and so on.
So how do we fix it?
1. Make financial literacy a priority for education.
We need to teach our girls about money. Like the efforts around “Women Who Code” and “Code.org,” we need to develop a similar movement to teach young girls (and boys) about how to manage money. For those of us who are no longer girls (or never were), there is a great website called DailyWorth. Amanda Steinberg, the author of Worth It, created a website especially for women. It primarily relates to personal finance, not professional finance, but it is still a great resource, and her book is an easy read.
2. Provide financial literacy training as part of leadership training in the workplace.
It is critical to teach emerging leaders (of both genders) how to gain an understanding of the strategy and the financials of their particular company. Moreover, emerging leaders need to learn how to personalize the numbers to define their own role in driving financial success. As part of leadership training, companies should offer Finance for Non-financial Managers. The training should include the company P&L, the Balance Sheet, the Budget, the Strategic Plan and key performance metrics of the business. A company could offer regular “lunch & learns.” Enable your finance department to mentor non-financial managers.
3. Champion female role models who are good at math.
This year, Hollywood released the highly-acclaimed film Hidden Figures where the female protagonist is a brilliant mathematician. The movie tells the true story of Katherine Johnson, who defied gender and race stereotypes and calculated the flight trajectory for the first manned mission to the moon. Women need more role models who excel at math. More specific than the old adage “knowledge is power” is that financial knowledge is the language of the powerful.
4. Remove shame and fear from the equation.
Women, you are not alone in your discomfort with numbers. Men did not score much better on the literacy test. Finance people like me have built their entire career around helping people understand the numbers. It is our job to present financials in a way that is easy to consume. We need to stop speaking in jargon, and make finance simple for everyone to grasp.
5. Encourage women to seek out information and how-to books designed to help non-financial managers understand finance.
There is no shortage of books on the topic of finance. If you find the topic daunting, search for a book that is written for “non-financial managers.” There are hundreds of them. Amazon and the library are your friends.
If you’d prefer more hands-on learning, reach out to the experts in your company’s finance department. They would love nothing more than to feel like the reports that they create are actually read and understood. Take them out for coffee and pick their brains.
If you want to be a leader, you need to understand your business, where it is heading, and your part in taking it there. Put simply, you need to become financially literate. You don’t need to be a mathematician or a rocket scientist, but you do need to understand a few simple financial concepts. It is easier than you may think. It is time we embraced our inner math geek, and lead.
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Beth Crocker is the Founder and CEO of Crocker Finance, a consulting firm created to provide services to C-suite executives, private equity firms and corporate finance teams. She is passionate about helping women realize their true leadership potential. Prior to starting her own business, Beth was Sr. Vice President, Finance for Rovi Corporation (now TiVo), a global leader in entertainment technology. She has served in a variety of finance roles over the past 25 years, working for technology companies including IBM and McAfee. Her other titles include keynote speaker, multi-tasker, math geek, mom, viral blogger, executive whisperer, coffee addict and world traveler.
(c) 2017 Crocker Finance.