Women in Leadership Roles Help Organizations Succeed
Yesterday was International Women’s Day. It was a great opportunity to take some time to think about and thank the amazing female entrepreneurs who inspire me, my clients who support women to become the best they can be, and strong female leaders who work had to change organizations and the world.
It was also a chance to think about why having women in leadership roles is important in 2017.
A 2015 report by global executive search firm Rosenzweig & Company found that women hold 8.5 percent of the highest-paid positions in Canada’s top 100 listed companies. This is up from 4.6 percent in 2006 and from 7.4 percent in 2011. So, obviously, more women are entering leadership roles in their organizations. While this growth is certainly positive, it’s worth noting that there’s definitely more work to be done in this area.
For example, only 21 women are at the helm of Fortune 500 companies, according to the 2016 Fortune 500 list.
Why Woman Leaders Matter
Several studies have found that organizations that have more women in leadership roles are more successful.
A world-wide study conducted by human resources consulting firm DDI and non-profit business research group The Conference Board found that, in US organizations that are in the top 20 percent of financial performance, 27 percent of leaders are women. In those that are in the bottom 20% of financial performance, 19 percent of leaders are women.
A study on gender diversity by the Peterson Institute for International Economics found that there is a positive correlation between the women in corporate leadership and organizational performance.
There aren’t too many concrete answers as to why this is true, but there is a likelihood that an organization that is more diverse overall is likely to perform better. Research by McKinsey and Company found that gender-diverse organizations are 15 percent more likely to outperform others financially and ethnically-diverse organizations are 35 percent more likely to outperform.
Greater diversity in an organization means more ideas, more creativity, and greater employee engagement.
As Sheryl Sandberg, Chief Operating Officer of Facebook, told USA Today in 2014 “Endless data show that diverse teams make better decisions.”
Many high profile organizations have made a public commitment to increase female representation at the top but struggle with how to operationalize that goal and bring the vision of gender parity on teams to life.
So why aren’t there more women in leadership positions?
Reasons for a Lack of Women in Leadership Roles
There are many reasons why women do not hold leadership roles in similar numbers as their male counterparts. They include:
- Unconscious Bias
- Bias against women still exists in the workplace, on various levels. Some of this bias is overt discrimination, but much of it is subtle. For example, some people continue to see women who are confident, outspoken and opinionated in a negative light, while men are often seen as “strong leaders” for possessing these same traits.
- Often people unintentionally correlate fields like science, technology, and math with men. They also attribute typical leadership qualities (decision making, strength, etc.) with men. This is rarely done intentionally, but it is a cultural bias that certainly exists.
- There is also a type of bias known as “affinity bias” in which people are more likely to favour those who are like themselves. This leads to leaders seeking out those with similar backgrounds, experiences, etc. and it extends to promoting those who are similar to the leader. If an organization’s leadership is made up entirely of men, unconsciously more men are likely to be promoted.
Watch this recent video of how a Polish lawmaker argues that woman shouldn’t receive equal pay and the response from a female colleague. There is much work to do in Canada and abroad to raise awareness and gain acceptance of gender equality.
- Work-Life Balance
- Work-life balance is desired by nearly everyone. However, traditionally, it was expected that men focus their energy on work while women focused on the family. Obviously, this is no longer the case. That said, many women still end up performing the majority of the household and family related tasks compared to men, which can limit women from leadership roles that are more demanding of their time.
- For many women, the cost of childcare makes continuing to work in their job (and therefore advancing upward) difficult, if not impossible. In many cases, women need to choose between the cost for childcare and the cost of going to work. If their income level isn’t high enough, childcare costs can become a significant obstacle, thus forcing women out of the workforce.
- In addition, many women still make less than men for doing the same work. This leads to women being the ones who sacrifice work to look after their families, since there is less money at stake in doing so.
- A Lack of Female Role Models
- It is often difficult for a young woman to picture herself as a president or CEO when she doesn’t have many female role models to look up to. A lack of representation has a ripple effect on young girls’ dreams and goals for the future.
How Organizations Can Gain More Women in Leadership Roles
As mentioned, organizations that are more diverse and that have more women in leadership roles tend to be more successful. Therefore, it is in the organization’s best interest to have women leaders, at all levels. There are several ways that organizations can get attract, develop and gain women in leadership positions.
- Organizational Awareness
- For an organization to have more diverse leadership, the organization first needs to understand the issue and why diversity is good for everyone. Women bring balance and different perspectives to a management board and this needs to be recognized by senior management.
- Once an organization understands the positive business impact for why women in leadership roles is important, leaders themselves should take the time to recognize their own biases and the barriers that the organization has set up that have prevent women from progressing to the most senior levels.
- Formal Mentoring Programs
- As mentioned, a major reason why many women don’t strive for leadership goals is that they have few female role models. They might feel as though they can’t become leaders for various reasons. Global studies have demonstrated that female graduates rate themselves as less competent on leadership abilities than their male classmates. A lack of confidence when entering the work force translates into few women applying for promotions, asking for more responsibility and seeking out development opportunities. By creating formal mentoring programs, where leaders can speak with women directly and where women can work with one another, your organization can demonstrate a strong commitment to gender diversity and profile that taking on a leadership role is possible.
- Internal Recruiting
- If organizations want to add more women to leadership teams, an effective strategy is to actively recruit from your existing talent pool. Managers should look for high-performing talent who have potential for leadership roles and recommend them for development opportunities.
- Removing Bias
- Organizations need to take steps to eliminate biases from their hiring and promotion processes. For example, some organizations have found success by removing names and other identifying characteristics from resumes and applications during the hiring process. This helps eliminate unconscious bias by placing everyone in a neutral position.
- Work-Life Balance
- By improving flexibility and ability to achieve a better work/life balance, not only will the organization encourage more women to seek leadership roles, but all employees will be more engaged.