MGMT 3100

BY LOREN GARY AND BRIAN ELLIOT

COMMENTARY BY

LINDA E. TAYLOR,

RONALD K. ANDREWS,

AND STASHA GOLIASZEWSKI

When Steve Becomes Stephanie What does a star player’s gender change imply for a traditional

company’s culture?

THUNK! The Audi trunk slammed shut, and Eric and Henrietta Mer­ cer carried their bags of groceries into the house. As Eric started put­ ting away the food, Henrietta sorted through the mail. She was surprised to find a letter from Morgan, their 29-year-old daughter, a genome re­ searcher in Boston,

“What’s the special occasion?” Hen­ rietta wondered aloud as sh~ settled into a kitchen chair and kicked off her shoes. A moment later she ex­ claimed, “Jeez Louise.”

Eric turned around. “What’s up?” “Morgan sent us a copy of her Massachusetts driver’s license

renewal form. Take a look at this: ‘Complete only if some­ thing has changed – name, address, telephone number,gender designation. ‘”

Morgan’s letter was eerily connected to the challenge fore­ most in her mother’s mind. As the senior vice president for human resources at LaSalle Chemical, Henrietta knew that about 25% of the leading U.S. companies had policies in place to protect employees against discrimination based on gender identity. But she had never imagined she would actually en­

counter the issue, and certainly not at LaSalle, a Fortune 1000 company headquartered in Aurora, Illinois, that provided products and services to oil-drilling, refinery, and pollution­ control businesses.

Yet that was precisely what had happened: Steve Ambler, a rising star at LaSalle, had informed senior management that he was going to become, Stephanie through a pro­ cess known as gender transition. Karl Diener, the CEO, had asked Henrietta for regular updates on the problems LaSalle might face as a result – and

matters had taken an unsettling turn that very morning. Henrietta had the weekend to collect her thoughts for a Mon­ day meeting with Karl and the executive committee.

“Look, why don’t you work on your presentation while I get supper ready?” Eric said, shooing her out of the kitchen. “And don’t get too discouraged;’he said, deadpan. “Steve’s transition to Stephanie will improve your affirmative-action numbers;’ -~~~~~~~~—–~~~-

HBR’s cases, which are fictional. present common managerial

dilemmas and offer concrete solutions from experts~

hbr.org I December 2008 I Harvard Business Review 35

HBB Case Study When Steve Becomes Stephanie

The Next Round of Change Nine months earlier LaSalle had ac­ quired CatalCon, a company in Detroit that sold fluid catalytic cracking technol­ ogy to petrochemical businesses. Karl Diener had announced a major con­ solidation of the two sales teams: They would be integrated and streamlined so that both could sell CatalCon’s and LaSalle’s technology and services. Catal­ Con’s salespeople would be relocated to Aurora. Karl had handpicked Steve to lead the change initiative and appointed him group sales director.

At 38, Steve was LaSalle’s golden boy. He had overhauled the company’s pollution-control sales strategy to make it customer driven rather than product based. Sales had more than doubled in that sector, and the new approach had been rolled out to the group’s larger petrochemical customers. Steve was the natural candidate to lead the next round of change.

Then, just three weeks ago, Steve had made an appointment with Henrietta. When he showed up 20 minutes early, she suspected it was something urgent.

“Henrietta,1 have something very per­ sonal to tell you,” he said. “1 know this is going to be surprising if not shocking:’ Steve sat stiffly on the brown leather couch in her office. Henrietta waited, wondering how she could talk him out of quitting.

“I’ve been seeing a psychologist for years to deal with how unhappy I am with my gender. I’m planning to live as a woman in. the near future, and I want to make sure we can work through this together.” Steve spoke slowly, giving Henrietta time to di­ gest his news. She was stunned. Intel­ lectually she knew that people some­ times had feelings of being trapped in a body of the opposite gender. But Steve? He was a guy’s guy, a jock, a hus­ band with two children.

When she tuned back in to the con­ versation, Steve had begun to tick off the steps in the transition process: elec­ trolysis, voice lessons, hormone therapy, facial feminization surgery, genital sur­

gery. Now that the gender counseling was behind him, he was ready to embark on the first three. “This isn’t something I would undertake because of some adolescent fascination with alternative lifestyles,” he said, looking at Henrietta directly_

“When are people going to be able to tell that you’re … a woman?” she re­ sponded, a little more bluntly than she’d intended.

“I won’t have facial hair anymore and in about six months I’ll have breasts,” Steve said. “My voice will continue to change as I train it. But I won’t be overtly female until I’ve had the facial surgery and start wearing women’s clothing in public?’

Henrietta paused. Questions clouded her brain. What were the legal implica­ tions of changing gender? Maternity

Simmering Resentment Nearly three weeks after his conversa­ tion with Henrietta, Steve sat in a bar at the Houston airport, waiting for a de­ layed connection to Chicago. He and Alex Grant, CatalCon’s top salesman, were returning from a four-day sales trip. A master at putting the right person in the right position, Steve was ebullient. The trip had confirmed his hunch that Alex was critical to his plan for the sales in­ tegration. Alex, however, was exhausted and armoyed by Steve’s high spirits.

“These trips together are invaluable;’ Steve said, sipping his pomegranate martini.

“I’m glad you think it’s working.” Alex reached for his draft ale. He didn’t ex­ actlydislike Steve, but he didn’t like him, either. He understood that they had to work together to make laSalle’s new

I JJA demotion in exchange for becoming a woman?JI he joked. JlJust another

woman you can pay less!”

leave was considered disability. What about gender reassignment surgeries? And what would Steve’s colleagues and customers think? LaSalle’s clients were mostly conservative oilmen.

“Steve;’ she said, choosing her words carefully, “would it be easier for you to play an internal role while you’re mak­ ing this transition?”

He had anticipated her reaction and met it with a joke: “A demotion in ex­ change for becoming a woman? Just an­ other woman you can pay less!”

A nervous silence followed as Henri­ etta avoided his eyes. She explained that she would have to do more research before the company could commit to anything.

sales strategy a success, but it grated on him that Steve had been awarded the plum position of sales director.

True, the LaSalle folks had gotten most of the top pOSitions after the ac­ quisition, but Alex thought his 20 years’ seniority and his sales record at’ catal­ Con made him a better candidate than Steve, and part of him wondered ifhe’d been the victim of age ‘discrimination. Alex was great at building relationships. When he advised customers to buy ad­ ditional products and services from the company, they rarely questioned his recommendations; they trusted him im­ plicitly. At the time of the acquisition he had been making almost as much

money as CatalCon’s CEO. “I’m not asking for more The sales director position

than that,” Steve said. He got would have entailed a big to his feet, relieved that the is­ salary cut, but Alex’s wife, sue hadn’t caused his job to Mary, had recently been

diagnosed with breast can-blow up at least not yet.

36 Harvard Business Review I December 2008 I hbr.org

cer, and he wanted to spend less time traveling. Not getting the job had made the move to Aurora that much more dis­ tasteful to him.

“I don’t know if I should be so impor­ tant in this sales integration; Alex said as the loudspeaker announced a further delay in their flight. “I’m on the road a lot more than I expected!’

“I need you as my collaborator;’ Steve replied. “No one else in this company knows CatalCon’s technology like you do. Having you playa major role after the acquisition reassures your clients:’ As he got up to go to the men’s room, Steve patted Alex on the back. “We can do this together. Trust me!’

Fatigue from the trip and his worry about Mary’s condition made Alex un­ characteristically mean-spirited. “We can do this – trust me;’ he muttered, mimick­ ing the peculiar way that Steve’s voice tended to rise in pitch at the end of a long day.

A Toxic Tip Alex was still in a foul mood when he ar­ rived at work the next morning. He was coming in for just an hour or so before taking a couple of weeks’ family leave to help Mary-through her first round of chemotherapy. He had finished reading and answering his e-mails when he no­ ticed a blank manila envelope among the papers strewn across his desk.

Inside it was a plain white envelope marked “Alex – For Your Eyes Only!” As he unfolded the contents, the header “Confidential’~ caught his eye. It was a one-page memo from Henrietta to the members of laSalle’s executive commit­ tee. The subject line read “TImetable for Steve Ambler’s Gender Transition!’

“Steve Ambler’s what?” Alex gasped. He inspected both envelopes. Someone was tipping him off anonymously.

Alex’s eyebrows shot up as he read about Steve’s plan for the next six months, starting with hormone therapy. As Alex scanned the memo, he couldn’t help imagining that he’d be named to replace Steve as sales director. Then an impossible idea dawned on him: They

hbr.org I December 2008 I Harvard BUSiness Review 37

—-

might let Steve keep the job! Having Steve shadow him on calls to some of his best clients was a nuisance, but if he had to take Steph-a-nie along­

“Alex?” Henrietta was at his door, ask­ ing if he could be interrupted. “How’s Mary doing?”

Alex glared at her and thrust out the memo. “Do you really want to risk our customer relationships just to accom­ modate somebody’s aberrations?” he barked.

“Alex, hold on a minute.” Henrietta closed his office door and lowered her voice. “How did you get hold of this?”

He ignored her question. “Just when were you gOing to tell us?”

“You have to understand that this is new for all ofus, and I’m not at liberty to discuss it right now. We have to respect Steve’s privacy. Ultimately this is a medi­ cal issue!’

“Have you thought about what’s going to happen here in the office six months from now, when Steve shows up in a dress?” Alex was fuming. “Trust me, a lot ofus are going to be wondering just how unstable a person must be to choose to have this kind of surgery. It’s indecent. It’s wrong. Don’t expect me to feel otherwise:’

“Alex, calm down;’ Henrietta said. “I’m not asking you to change your values or your beliefs. There are solutions to the problems that might be worrying you. Other companies have been through this and have worked out how to adjust”

“My God, Henrietta, listen to yourself. What’s become of you?” Alex started to pace. “Don’t you get it? It’s not a ques­ tion of adjusting. This is a moral issue, not a medical one. Frankly, I’d rather leave than be part of an organization that has lost its moral compass.” He looked at his watch angrily. Mary was going to be late for her chemotherapy treatment

“Isn’t there something toxic about a work environment that stirs you up so much you forget your own wife’s strug­ gle with cancer?” he said, stalking out.

lt was dreadful that Alex had heard about Steve this way, Henrietta thought

as she walked back to her office. But at least she now had some idea of how people in the organization might react. Luckily, Alex would be away for the next couple ofweeks, unlikely to cause a com­ motion. She could use that time to fin­ ish crafting her strategy for dealing with the issues raised by Steve’s transition.

“Very Complicated” Saturday night Henrietta and Eric sat on the living room couch and discussed her upcoming meeting with Karl and the ex­ ecutive committee.

“Illinois law protects employees against gender identity discrimination;’ she said, rehearsing the facts. “We have no option but to come up with a com­ pany policy that complies with state law:’ She rose to put another log on the fire.

“But it’s more than that;’ she said, pok­ ing the embers. “We want our people to be able to bring their whole selves to work. Having employees who are fully engaged is core to our culture.”

“That’s all well and good;’ Eric said, “but how are you going to let Alex bring his whole self to work?”

“Probably not through gender sensitiv­ ity training:’ Henrietta reflected. “But I’d like to find a mediator who can get Steve and Alex talking to each other;’ She stood in front of the fire, rubbing her hands together, before turning back to Eric. “The problem is, I’ve been checking into resources,and many of the coaches and advisers in this business are trans­ gender themselves. That could tum Alex

• off completely:’ “And Steve probably won’t go along

with your bringing in someone who has no experience with transgender issues,” Eric replied. “Isn’t there someone in-house who can fill the role? How about you?”

Henrietta grimaced. The fire crackled and lit up the room.

Eric spoke first. “I know you’re not go­ ing to like this, but you could read Steve the riot act. Frankly, your customers will never accept him when he starts transi­ tioning to Stephanie. Insist that he take an internal pOSition – at least until the transition is complete.”

“I don’t know:’ Henrietta said. “Maybe people will be more tolerant than you give them credit for:’ She was thinking of an employee who had come back from rehab and had reintegrated into the company seamlessly. “Besides,” she reminded her husband, “we need Steve engaged to make the integration pro­ cess work. If I’m going to play hardball, it makes more sense to play it with Alex. He might choose to leave – though that’s unlikely, given Mary’s health and his need for benefits:’

“But having Alex stay for those reasons alone is no solution either!” she said, throwing up her hands in frustration.

“I don’t just need Alex on board, I need him engaged, too. For heaven’s sake, he’s our top salesman – the main connection to our CatalCon customer base. LaSalle needs both these guys – ”

“One guy, one gal;’ Eric said with a rue­ ful smile, as Henrietta’s cell phone rang. It was their daughter, Morgan, calling from Boston.

“What did you think of that license re­ newal application?” she asked.

“All roads lead to Rome;’ Henrietta re­ plied. She started to unburden herself but thought better of it. “Morgan, you’re the scientist here – what does your work on the human genome tell us about all this transgender stutf?”

“Very complicated;’ Morgan replied. Great, Henrietta thought. Just what

Karl Diener doesn’t want to hear.

How can Henrietta help Steve

transition in a company where not everybody is on board? Three

commentators offer expert advice.

Loren Gary (w.gary@comcast.net) is the associate director ofleadership development and public affairs at the Centerfor Public Leadership at Har­ vard’s Kennedy School ofGovernment in Cambridge, Massachusetts. Brian Elliot (brian@brianelliot.net) is a George Fellow, and aformer Zuckerman Fellow, in the joint MBA and MFA program at Harvard Business School and the Ken­ nedy School.

Find the program that will inspire

you to put yourideas into.actioh.

kellogg.northwestern.edu/execed 847-491-3100

HBR Case Commentary How Cao Henrietta Help Steve Transitioo?

linda E.Taylor (linda3_ taylor@raytheon,com) is the director ofwork life, equity, and inclusion at Raytheon Missile Systems in Tucson, Arizona.

I My advice to companies is don’t wait until someone walks in the door and tells you he or she is transitioning.

RAYTHEON MISSILE SYSTEMS (one of six

business units within Raytheon) has about

12,500 employees. In my seven ye.ars here

I’ve overseen three gender transitions. I inher­

ited four others. (My predecessor had worked

closely with one person, and the other three

had progressed to various stages of transi­

tion without assistance from the company.)

Our approach to gender transition has been

shaped largely by my experience in managing

these people.

Prior to 2005 Raytheon did not include gen­

der identity and expression in its antidiscrimi­

nation policies, so the company was not fully

prepared to deal with this issue. In one case

I inherited, the employee’s superior was still

referring to her as “him” with external cus­

tomers and at all-hands meetings two years

after she had transitioned.

The line had to be drawn. I said to that man­

ager, “I understand this change was difficult,

but you’ve had two years to adjust. You can

go home without pay and think about whether

you want to change your behavior, or you can

do what you need to do.” Today I get manag­

ers involved early; by and large, they provide

positive leadership to their employees.

My advice to companies is don’t wait until

someone walks in the door and tells you he

or she is transitioning. You need to have your

policies in place or you’ll be wrong-footed, as

Henrietta has obviously been. She consid­

ers giving Steve an internal position that will

surely feel like a demotion. You should never

create the impression that a person is some­

how getting shortchanged because he or she

made a gender identity choice. It will blow up in your face.

Henrietta worries too much about clients.

Of the three people who most recently tran­

sitioned at Raytheon, two (both engineers),

have had a lot of contact with both internal

and external clients. We are a technology

company that specializes in defense, home­

land security, and other government markets.

Not one military customer has behaved badly

to our faces. I suspect this “business as usual”

attitude has something to do with the fact

that the military is less concerned about who

makes the equipment that protects our men

and women in uniform than about how the

products work in the field. It’s a safety issue.

For a variety of personal <;lnd religious rea­

sons, some of our employees have opposed

our policy of inclusion, so I give lots of gender

identity training – another lesson I’ve learned

over the years. When someone transitions,

force the organization to do some training so

that employees can work through their mis­

perceptions, questions, and fears. If you don’t

provide that opportunity, it will come back to

haunt you.

During our trainings I put the difficult ques­

tions on the table for us all to talk about­

especially “Isn’t Raytheon condoning some

unhealthy or immoral lifestyle by allowing

this change?” My answer is that Raytheon

doesn’t pass judgment on its employees’

personal lives. At times we all have values

that differ from the company’s, and we don’t

need to change our values. But as a Raytheon

employee, you are here eight hours a day, and

during that time you agree to adhere to the

company’s policy of making our workplace as

inclusive as it can possibly be.

We are not prepared to qualify that policy.

It’s the way of our company and the way of

the future. We’ve built relationships with col­

lege LGBT (lesbian, gay, bisexual, and trans­

gender) engineering groups, and they are a

great source of talent. Many of the interns

who’ve come from these groups have ended

up staying with us. Our culture of inclusion

absolutely gives us a recruiting edge.

40 Harvard Business Review I December 2008 I hbr.org

I’VE OVERSEEN only one transition in my

career, back in 2003, and like Henrietta, I an­

ticipated a great deal of organizational dys­

function. But instead I often heard people

admiring the courage of the individual who

transitioned, whom I’ll call Debbie. How tor­

mented she must have been all her life – and

then to take such a grand, courageous step.

In situations like this it is crucial to work

very closely with the person who’s making

the transition. The success of Debbie’s transi­

tion owed a lot to Debbie herself. It certainly

helped that she was a star employee who had

been with the company for 14 years. And she

has a great sense of humor that she has used

to put people at ease.

Besides working closely with Debbie, we

turned to other people with relevant expe­

rience. We talked to Debbie’s therapist to

our internal medical director, to our employee

ation. They were given very specific talking

points to use with clients, which were vetted

by Debbie, our lawyers, and HR. The account

executives all telephoned their respective cli­

ents. We thought it best that they discuss the

news directly rather than sending a letter or

an e-mail. We didn’t lose a single client.

The greatest noticeable opposition to Deb­

bie’s transition occurred in that meeting of

account executives. One person out of the 25

or so who were present was especially vocal.

The idea of gender transition was outlandish

to him, and he had ethical and religious con­

cerns. More than anything, he worried that co­

operation would be seen as an endorsement

of Debbie’s decision. But as we explained,

you can hold to your beliefs while being civil

to a colleague who has decided to transition.

He accepted that argument grudgingly. He

had to. Compliance is one of our employees’

I I anticipated organizational dysfunction. But instead I heard people admiring the courage of the individual who transitioned.

assistance people, to lawyers, to an HR per­

son in another company.

By law, in states that have gender identity

protection, the person transitioning has to be

the one to reveal the change to other people.

We agreed that Debbie would send an e-mail

to her colleagues, in the full expectation that

it would be forwarded. Then, because Debbie

was a senior executive and made presenta­

tions to the board, we agreed that the presi­

dent of our investment area (in which Debbie

worked) would share the information with the

directors.

Debbie also had a lot of client contact, be­

cause she worked with account executives,

and we thought carefully about how to handle

that. We ended up making a list of all the key

clients that she had significant interactions

with. We gathered together their account ex­

ecutives and educated them about the situ-

job requirements. That said, if strong opposi­

tion to Debbie’s transition had continued, we

were prepared to invest some time in sorting

out the problem.

We also offered awareness training to Deb­

bie’s team on a voluntary basis – we thought

it would give people an opportunity to ask the

kinds of questions they might not be comfort­

able asking Debbie. You know what? They

said they didn’t need the training. They felt

comfortable enough to go to Debbie directly

with any questicms.

Of course, the toilet situation is a delicate

issue – even in a close group like Debbie’s.

We gave her a private bathroom at first, and

only when we had all agreed that the time

was right did she begin using the ladies’ room.

There was no fanfare; it iust happened. Today

Debbie’s transition is a nonevent – which is

exactly what we want it to be.

Ronald K. Andrews is vice president and head ojhuman resourcesjor Prudential’s U.S. businesses and is based in Newark, New Jersey.

hbr.org I December 2008 I Harvard Business Review 41

BIB Case Commentary How Can Henrietta Help Steve Transition?

Stasha Goli8szewski

(goliaszewski@gmail.com) is a scientist and engineer in integrated defense systems at Boeing in Philadelphia.

I STARTED transitioning at Boeing in 2002,

after four years with the company. First I came out to human resources, but we kept it quiet

for a while. Then a woman working on her

doctorate about transitioning interviewed me

on the phone at work; someone overheard

us and started a rumor that I was transsexual. Boeing has a policy to not let rumors circulate,

so HR called my manager and me in for a

meeting. Since the rumor was true, and I was

planning to go public soon, we decided that it

was time to make the announcement to the

organization.

Our first step was to hold a meeting that

included the head of HR, myself, the com­

pany therapist, my manager, and manag­

ers two levels up. The therapist went over

the condition and explained the transition

process. A week later we called a full staff meeting of about 100 people and presented

them with all the facts. After that I began

it up. I don’t get any comments, because the

company considers that to be harassment. Of

course I do get looks, but part of that is be­ cause I am overweight and have not opted for

any facial surgery.

Henrietta worries that her company’s Cli­

ents will react badly to Steve’s transitioning.

But while I was transitioning, Boeing sent

me all over the country to talk to the likes

of IBM, Raythe~)Q, and the military. I never had a problem. I do remember dealing with a

lieutenant colonel whose blood was obviously

boiling. But he swallowed hard and called me

ma’am. Clients knew I was transsexual, but

they couldn’t put me down because I have

expertise.

In the case, Alex thinks that people who

transition have psychiatric problems. I suf­

fered from depression because I was so un­

happy with my gender. It was a terrible situ­

ation: I was presented with equipment that

I t dealt with a lieutenant colonel whose blood was obviously boiling. But he swallowed hard and called me ma’anl.

my hormone treatment and started to dress

androgynously.

I like to think that I’ve contributed to Boe­

ing’s positive reputation today with the

transgender community. When I first started

transitioning, Boeing’s policy could best be

described as “plumbing to plumbing”: You

had to use the men’s room until you’d had

genital surgery. I quietly pointed out to HR

that by federal law, employers aren’t even

allowed to ask when or if an employee has

had any surgery. After some consultation

with people inside and outside the company,

Boeing included gender identity in its anti­

discrimination policies_

On the whole, I didn’t have many negative experiences. A few women objected to my

using the ladies’ room, but the head of HR

called them in and basically told them to suck

I tried for years to live with. Today my therapist

tells me I am a well-managed person -and

that’s the feedback I get at work. Also I have·

three children and I’ve succeeded in holding

my marriage together.

Statistically, a company Boeing’s size

should have one or two transsexuals com­

ing out a year. Boeing is seeing many more

than that because of its reputation. My

advice to companies with more than 30,000

employees is to get ready: Somebody in

your organization is going to transition. Better

to get your ducks’ in a row now than to run

around as Henrietta has·to do. ei

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42 Harvard Business Review I December 2008 I hbr.org

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