Issue: No Pink Collar Union

When Marilyn Carlson Nelson decided Carlson needed to create leadership opportunities for women, she encountered resistance at the very top

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When she was a senior executive at Carlson Companies more than a decade ago, Marilyn Carlson Nelson and a team of women took on the challenge of creating opportunities for women in leadership at the company. It was not a good beginning. When the task force presented its idea for a women's council to the company's founder and chief executive, Curt Carlson (Marilyn's father), the women were accused of attempting to create a "pink collar union." This only made Nelson work harder. In her judgment, the Minnetonka (Minn.) company could not be competitive in the long run if it did not draw from the entire talent pool.

In 1998, when her father turned the reins over to her, Nelson's mission to create a meritocracy began in earnest. At that time, only two women held senior leadership positions. Ten years later, 49% of the company's U.S. management team (of 2,098) are women—one of the highest percentages of any large company in the world. No BusinessWeek Global 100 company comes close to having such a high percentage of female executives.

Nelson, chairman and recently retired CEO, not only transformed the company culture during her decade-long tenure; she also took the company's revenues from $22 billion to more than $40 billion. Today, 160,000 employees in more than 150 countries work under the Carlson brands—Radisson and Regent hotels, Country Inns & Suites, Carlson Marketing, T.G.I. Friday's Restaurants, and Carlson Wagonlit Travel. But Nelson's successful run began in fits and starts as she labored to convince her father that the right man for the job just might be a woman.

As Nelson describes the meeting in which the task force presented its recommendations, a very bright woman—a newly hired MBA—was only minutes into her pitch when her dad jumped up and asked, "How long have you worked here?" The new hire answered, "A few months." He said, "Why are you unhappy?" Then he turned to the executives in the room (all male, except for Nelson) and asked, "Do any of you support this?" Although they had all been involved and had periodically encouraged the task force's work, not one dared speak up. Nelson realized she would have to take a different tack.

It was clear that her father, who had created a command-and-control culture (with a senior leadership that was all male, except for Nelson), needed more of a "guerrilla warfare" approach to enact her vision of a meritocracy. In the 1960s, Curt Carlson had been a pioneer of health-care benefits for single mothers, and he felt he could handle any issues women might have in the company. Marilyn felt differently, however. She framed and named her judgment as the need for Carlson to build a meritocracy.

Her judgment was both strategic and people-focused. The strategy of the company, which operated in the service sector, required strong "relationship leaders"—something generally acknowledged to be a strong suit for women. In Nelson's view, leaving women out of the equation was a poor business judgment. She points out that her father saw capital as the scarcest resource. He grew up in the Depression, started the business with $55 he had borrowed from his landlord, and struggled over the years to capitalize and build the business. By contrast, Marilyn saw the importance of "human capital,", and she did not want to miss out on a huge source of it—the female half of the planet's population.

A decade ago, Nelson had a clear Teachable Point of View™ of what it would take to bring Carlson to the next level. Her aim: to shift Carlson's focus from financial capital to human capital while developing business goals for her company that included world-class brands, customer-centricity, and strong customer loyalty and innovation. She articulated her vision companywide with the phrase "a great place for great people to do great work."

Exercising judgment is a three-phase process: preparation for the judgment call; the judgment call; and execution of the judgment. The preparation phase starts with the leader sensing and identifying a need for a judgment. Nelson first experienced the forces against women in business in the 1960s as a security analyst at Paine Webber, where she was a star. Her reports were well respected but she was told she could not sign her first name—it had to be "M.C. Nelson" because investors would not take stock recommendations from a woman. At that time, she felt her best strategy against this inequity was to prove her competency.

It would be 20 years later, when she began her career in the family business ,that she framed and named the issue, not so much in terms of unfairness to women but in terms of building a globally competitive company that needed both male and female talent to win.

Eventually, after her "pink collar" fiasco and her "redo loop" with her father, Nelson had the leverage as CEO of Carlson to begin a sustained period of implementing inclusive business strategies. The company invested in mentoring programs with other major employers in the area, such as General Mills (GIS) and Medtronic (MDT), and ultimately created its own cross-company mentoring experience for woman. She continued to address the issues systemically. Carlson revamped its succession planning system, and the company worked with the Carlson School of Management at the University of Minnesota to build business capacity in men and women both. Carlson began to offer flextime and on-site child care—major pulls for high-performing women trying to balance work and family.

Men and women were offered the opportunity to stop out of fast-track careers, then get back in. In most companies that is a career killer, and the talent usually goes someplace else. Carlson is a benchmark of what is possible.

Nelson continues to work to advance her judgment call around the issues of women's participation at all levels—across all sectors. She is co-founder of the Women's Leadership Program at the World Economic Forum and is a member of the Private Sector Leader's Forum to close the gender gap at the World Bank. She is also actively engaged at the Carlson School to encourage more women to seek an MBA.

When I started as a professor at the Columbia Graduate School of Business in 1972, 3% of students were female. By the time I moved to the University of Michigan in 1981, 33% of our enrolled students were female, as was the case at most of the top 10 business schools at that time. Since then, the percentage of women MBAs has stayed the same or has fallen. I asked Nelson about her thoughts on this. If she can achieve nearly 50% women in management at Carlson, why can't we get the equivalent at the Carlson School of Management or at Harvard, Stanford, or the University of Michigan?

Nelson's solution is multifaceted. It includes building more flexibility into the university programs, having earlier exposure to opportunities in business so undergraduates have a real preview of the business world, and having companies play a more proactive role so business schools, like law and medicine schools, can prosper with 50% female enrollment.

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Dr. Noel M. Tichy is a professor of management and organizations at the Ross School of Business at the University of Michigan, where he is the director of the Global Business Partnership. His most recent book is Judgment: How Winning Leaders Make Great Calls, written with Warren Bennis and published in 2007.