More women in leadership roles leads to richness of debate, increased innovation and more success.
The data is in. The results are conclusive. If you want a successful business, you need more women leading it. At the recent Financial Times Women at the Top event, McKinsey unveiled their latest research on the impact of diversity. It demonstrated that for every 10% increase in gender diversity, EBIT rose by 3.5% and that “companies in the top quartile for gender diversity were 15% more likely to have financial returns beyond their respective national industry medians”.
This is just the latest research that reinforces the positive contribution women make to business growth.
A global analysis of 2,400 companies conducted by Credit Suisse revealed that organisations with at least one female board member yielded higher return on equity and higher net income growth than those that did not have any women on the board.
A study of 21,000 public companies in 91 countries by the Peterson Institute, a US think-tank, and EY, the professional services firm, concluded that more women in higher management boosted profitability. The analysis showed that a company with 30 per cent female leadership could expect to add up to six percentage points to its net margin when compared with a similar business with no female leaders.
All the evidence points in one direction: more women means more growth. In the words of Vivien Hunt, McKinsey’s UK Managing Partner: ‘It’s very clear that women at a critical mass, 20 per cent or more, at the decision-making level, is most correlated with higher performance.’
Diversity is more important than ever in organisations. It’s a factor in attracting and retaining talent. In attracting consumers and customers. And in attracting funding. Investors or shareholders looking at the potential of your company will be aware of this data.
So, how do you do increase female representation in leadership roles? There are many approaches you can take, for example ‘family-friendly’ approaches, and of course hiring right is important (see the brilliant Iris Bonet’s work in this area). But before you even get into specific policies and process reviews, make a start with three (relatively) easy first steps.
i) Take this personally.
Change needs a courageous leader with the ability to make decisions. Is that you? Is that someone you work with? You need someone prepared to be a diversity leader. Take Aviva whose CEO Mark Wilson declares himself happily to be the ‘Feminist-in-Chief’ and asserts confidently that it is the responsibility of the majority to be the ones that help the minority. Learn from and build on the experiences of others – Unilever and Procter & Gamble, Google and Facebook – who have openly shared their approaches – for you to speed up your success. All you need is someone who is decisive to make sure this gets used and things happen.
ii) Take it seriously.
You cannot have a lovely website telling a positive story about valuing skill and diversity but have an exec team photograph that looks like a ‘Spot the Difference’ competition. Work with your exec team on ways to lead which allows independence and diversity to flourish. Put in place a more listening organisation to allow ideas and perspectives to be more important than fitting in. Diversity is about more than aiming to make your website look like a 1990s Benetton ad, it’s about creating a smart-thinking culture that values difference.
iii) Accelerate it.
The idea of quotas is uncomfortable for many. But the idea of accelerating your high-performers makes sense to everyone.
So, look at the level below the exec team. Look for the people who look different to the majority of your leaders. Identify, encourage and empower strong female leaders who aren’t yet at exec level. Give them specific leadership performance coaching. Show them a clear path to progress. Continuously offer them messages of support and practical tools to increase their influence and their impact.
Above all, use the data. Remind yourself and others repeatedly that this is ‘the right thing’ for the organisation. Ethically and commercially. If you want to do the right thing for your people, for your profits and for the performance of your company, be driven by the facts. The most important fact is this. If you want to succeed in a fast-moving, competitive world, you need a diverse leadership. Diversity doesn’t just make a difference, it drives growth.
The Caffeine Partnership work with exec teams and senior leadership teams on leadership acceleration programmes. Talk to us for ideas and insights.
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