Class I diversity strategies help women break through the glass ceiling

— by Julie Sneider, assistant editor

When it comes to closing the gender gap among top leadership posts in corporate America, women made no significant gains in 2011, according to Catalyst Inc., a nonprofit organization that researches workplace trends and women in business.

In fact, women are no higher up the corporate ladder than they were six years ago, according to Catalyst's report, "2011 Catalyst Census: Fortune 500 Women Board Directors, Executive Officers and Top Earners," which was issued in December. In the transportation industry, women remain under-represented at all levels of the workforce, Catalyst's research shows.

At U.S. transportation and warehousing companies, women make up 23.1 percent of the industry's labor force, 12.9 percent of executive officers, 13 percent of board directors and 0 percent of chief executive officers, according to Catalyst. In Canada, the numbers are about the same: women represent 23.6 percent of the labor force, 16.2 percent of senior officers, 14.4 percent of board directors and 0 percent of CEOs.

The numbers come as no surprise to Marcia Ferranto, international CEO of Women's Transportation Seminar (WTS). Women are under-represented on all steps of the transportation career ladder, but especially at the upper levels, which is why WTS exists — to help women break through the glass ceiling in the industry, including rail, Ferranto says.

"My hope is, and the reason we are here is, to narrow that gap and get more women in those executive positions," she said in an August 2011 podcast with Progressive Railroading.

While Class I executives acknowledge railroads have a way to go to achieve a gender equity in the rail workforce, they say their companies have been successful at narrowing the gender gap through diversity initiatives dedicated to recruiting, retaining and promoting women into positions of authority. And they say they want to increase the number of women not just because it's the "right" thing to do, but because gender diversity makes good business sense. On average, companies with the most women board directors and corporate officers achieve better financial results than companies with few or no women in leadership posts, according to Catalyst's research.

Board-level Direction

All six publicly traded Class Is — CSX Corp., CN, Canadian Pacific, Kansas City Southern, Norfolk Southern Railway and Union Pacific Railroad — contacted by Progressive Railroading have at least one woman director on their boards. [The seventh Class I, BNSF Railway Co., became an operating subsidiary of Berkshire Hathaway in 2010, so it no longer has its own board of directors.] And one Class I — CSX — also ranks among Fortune 500 firms with the highest percentage of women executive officers, according to Catalyst's annual list of companies with 25 percent or more women executive officers. At CSX, 42.9 percent of its total executive officers are women, placing the Class I fifth-highest on the list.

"Gender diversity is very much a part of our overall inclusion program to ensure equal opportunities for women and minorities," CSX spokesman Gary Sease said in an email. "A total of 23 percent of our management employees are women, and we're committed to increasing that number."

CSX's and other Class Is' diversity strategies also are aimed at helping the companies prepare for a deluge of retirements in the near term.

"In the next five years, more than a third of our workforce (approximately 40 percent) will be made up of employees with fewer than five years of service," said Sease. "We are working to develop a deep and talented pool of future leaders, and making specific outreach to women."

For women on the leadership track, CSX provides mentoring and one-on-one executive coaching, and works with associations such as the National African American Women's Leadership Institute and the Executive Leadership Council to provide professional development opportunities.

One of CSX's top female executives, Cressie Brown, has witnessed CSX's diversity "transformation" during the past 20-plus years. When Brown began her career at CSX in 1988, it was common for her to be the "only diverse person" in company meetings, she says.

"Sitting around the table with 20 males was very common back then," says Brown, who now is CSX's vice president of service design and advanced technology. "That was two decades ago. Now if you look at our executive leadership team on down, we're much more diverse."

Brown started with CSX as an intern and management information systems trainee in technology while still attending Jacksonville University in Jacksonville, Fla., where she received a degree in finance and economics with a minor in computer science. After graduation, she joined CSX as a full-time employee.

Although Brown never felt being female was an advantage or disadvantage at CSX — "we're very performance based and you sink or swim on your merits" — she has felt encouraged to stay through the years by being offered new challenges and opportunities for professional growth and advancement, she says.

Mentoring And Networking

The kinds of corporate initiatives that helped Brown and other female executives advance their Class I careers included one-on-one executive coaching, formal and informal mentorships, leadership training and networking opportunities inside and outside the organization. Policies that encourage employees to pursue advanced educational degrees, such as tuition reimbursement, also help, they say. What's more, policies that enable employees to balance work, education and time with their families have been critically important to their professional advancement, they add.

To Katie Farmer, managing the work-life balance has been the biggest challenge of her railroad career, which she began as a management trainee at BNSF predecessor Burlington Northern Railroad in 1992 after graduating from Texas Christian University with a degree in business administration. Today, she is BNSF's vice president of domestic intermodal.

BNSF's corporate culture allows employees — male or female — "to get through all the peaks and valleys" of their lives as they pursue their careers — and that was key to Farmer getting through graduate school while also raising her two then-small children and continuing a travel-heavy schedule, she says.

Over the years, that culture allowed her to continue moving up the corporate ladder, holding a variety of positions in sales and marketing in the chemical, plastic and minerals business units, says Farmer. She was appointed general director of chemical product sales in 2001; a year later, she was named assistant vice president of carload equipment. And in June 2010, Farmer was promoted to vice president to oversee sales and marketing for the domestic intermodal business unit.

Growing Their Own

Farmer is an example of BNSF's efforts to diversify its leadership ranks from the ground up by recruiting talented individuals right out of college or very early in their careers, then offering them opportunities to develop skills that help them advance through the corporate pipeline, says BNSF Vice President and Chief Human Resources Officer Riz Chand.

"One thing we do well here is hire people early in their careers and develop them into leaders," Chand says. "We hired Katie right out of school, and we think she has a long career ahead of her."

To meet the company's diversity goals, BNSF recruiters cast a wide net to find a diverse pool of talent when pursuing job candidates, he says. They also look for individuals who want to stay and grow with the company.

Julie Piggott didn't join BNSF right out of college, but she is a product of the Class I's efforts to find diverse candidates who are interested in long-term career growth and advancement. Piggot was an accountant at a private firm in the Twin Cities area when she answered a blind ad in 1991 to join the then-BN as an accountant, and stayed on to rise through the ranks to become vice president of planning and studies and controller — one of BNSF's top female executives.

Piggott periodically receives unsolicited calls from search firms looking to recruit her to an executive post at another company, but she hasn't been tempted to look elsewhere for a promotion. That's because BNSF has been "very good at giving women opportunities to continue to learn and be challenged," she says.

"When you think about why people leave an organization, it's because they aren't being challenged," says Piggott. "They're not learning anything new and aren't being given the opportunities to advance in their careers. As long as companies stay focused on that, they'll be able to attract talent."

Looking Outside

Although BNSF typically seeks to promote from within, the company will search outside the organization to find executive talent if the position can't be filled internally, says Chand. Two of BNSF's top women executives — Jo-ann Olsovsky and Amy Hawkins — are prime examples of women recruited to the company after establishing careers elsewhere.

An attorney, Hawkins spent six years as counsel for U.S. Sen. Kay Bailey Hutchison (R-Texas), and served two years as statewide projects director in Houston before joining BNSF. She also worked for U.S. Sens. Phil Gramm (R-Texas) and John Tower (R-Texas), as well the Texas Office of State-Federal Relations in Washington, D.C.

Through those experiences, Hawkins developed an expertise in transportation policy, and BNSF recruited her to become assistant vice president of federal government affairs in August 2001. In January 2006, she was promoted to vice president of federal government affairs.

Hawkins appreciates the style of BNSF's formal leadership training, which embraces the notion that women and men bring different leadership and communication styles to the decision-making process — something BNSF execs believe makes for a stronger company.

"Everyone's leadership style is aligned with the principles that are important to the company, but you also are appreciated for what you bring to the table," she says.

Hawkins also says she's witnessed an increase in the number of women serving in high-ranking roles in the industry.

"I think there is a lot more opportunity for women in railroads today than there once was, and I'm happy to point that out to people," she says.

Olsovsky also is happy to point that out. BNSF's VP and chief information officer, Olsovsky was director of enterprise network services and technology support services at Verizon Communications when she was recruited by the Class I in 2006 to lead the telecommunications division. She was promoted to VP and CIO two years later.

Under Olsovsky's leadership, the BNSF technology team supports all data center systems, communications and application infrastructure that support core business applications for railroad operations, including transportation, engineering, mechanical, intermodal and business applications.

"With many companies that are very operations-focused or engineering-focused, you generally don't see a lot of women in those fields," says Olsovsky, who's involved in efforts to encourage girls and young women to study and pursue careers in science, technology, engineering and math.

Olsovsky also encourages her technology team to maintain a diverse pipeline of future leaders. Of the AVPs who report to her, 50 percent are women; of the general managers and directors, 33 percent are female.

Making A Difference

With the increase in numbers also comes greater influence in making decisions for the company's future direction.

The demographics of Norfolk Southern Railway's executive team has changed considerably since Cindy Earhart joined the railroad as AVP of accounting operations in 1985. Now VP of human resources, Earhart is one of three women corporate officers at NS, along with Executive Vice President of Planning and Chief Information Officer Deb Butler, and Vice President and Treasurer Marta Stewart.

"To me, what has changed even more than the numbers is that myself, Marta Stewart and Deb Butler are very much at the table around decision-making time," says Earhart. "And that is a very important step."

Still, increasing the number of women in decision-making positions remains important at NS, where affirmative action goals are reviewed when hiring and promotional decisions are made, said David Cobbs, NS' AVP of diversity and equal employment opportunity, in an email.

"Human resources assists departments in identifying and developing employees who exhibit high potential," he said.

Consistent with those efforts, NS has seen a 62 percent increase in the representation of women at senior management levels since 2002, he said.

CN, too, recognizes the importance of gender diversity in its senior ranks. The Class I is "working to advance that goal through its talent acquisition and talent management strategies and progressing women across a variety of functions, including operations, mechanical, engineering, information technology, sales and marketing, supply chain solutions, financial planning and accounting," said CN spokesman Mark Hallman in an email.

As a result of CN's gender diversity efforts, 25 women now hold positions in senior management. In addition, 25 percent of CN's promotions in 2011 through the third quarter involved women, and women make up 9 percent of CN's workforce, he said.

While acknowledging the progress made in closing the gender gap at management and executive levels, Class I female leaders agree there's work yet to be done, particularly when it comes to recruiting women into the operations side of the railroad business.

For their part, the women execs embrace their roles as mentors. And as long as their railroads — from the CEOs on down — continue to embrace diversity, the women remain optimistic that more opportunities will open up for females at all levels of railroading.

"I'm really encouraged by the progress we're making as an industry," says BNSF's Farmer. "With that said, there is always room for improvement. Staying focused on developing the top talent — like a sports team focuses on developing the best athlete — is really important. And that will be part of my job going forward: Making sure that happens."