Pikay Richardson, PhD,
Lockwood Institute, Accra, and Manchester Business School
There is little doubt that women suffer discrimination in many walks of life, not least on the leadership ladder in companies and organisations. Even today women get less paid than men for the same job. In the UK much effort has gone into righting this, but the gap is still there, albeit reduced from 25% to about 17% currently. Part of the reason has been the traditional belief that a woman’s place is in the kitchen. As one Wall Street titan put it when interviewed on male attitudes towards gender and power, “How hot is that? I love it when a woman takes charge at home. In the office, not so much”.
Today in many advanced countries, although women make up more than 50% of college graduates and company talent pools, they represent less than 10% of top-level leadership teams and boards of directors. Organizationally, those that “take control” are almost always men; talented women face work-life and bias barriers that hold them back. It is only in the last five years that we have seen a substantial push for women to the top guns of big companies. These include Marissa Meyer of Yahoo, Ginni Rometty of IBM, meg Whitman of HP, Mary Barra of General Motors (a typical man industry, Lisa Burns of Xerox and Indira Nooyi of PepsiCo
Most men don’t care about this situation. It is a non-issue. According to recent global survey results from organizations like McKinsey and Deloitte, helping women overcome the leadership barriers they face is not even a top three priority for most business executives. “This is because guys don’t want the competition,” one of my female MBA students said last year during my class on Leadership and Diversity, taught at the Manchester Business School. Although the male students dismissed this amid much laughter, Warren Buffet might have agreed with her. It is said that when asked the secret to his success during an interview, he replied that one reason was because, “I only had to compete with half the population.” Interestingly, this chauvinistic view was also echoed in another of my classes in Guangzhou, China. As long as talented women, even those who graduate from top business schools, continue to get pushed and pulled out of leadership tracks, ambitious men have a clear advantage.
From a more scientific angle, there seems to be a better, more parsimonious, answer. From a business perspective, people don’t see why women should be on top. Data from multinationals, across diverse business industries, consistently show the same thing: neither gender sees the link between gender diversity in leadership and corporate financial performance. They are more likely to consider the issue one of fairness than of competitiveness.
While the issue of fairness and equality constitute a big problem, they are laudable goals, they don’t drive change in the private sector. The point of business is to make money. It is therefore crucial for women who want to get to the top, and HR departments and mentors, tasked with the mission of getting them there, to stop talking about equality and start talking about competitiveness. A large and growing body of data indicates that divers groups outperform non-diverse groups.
In the real world, this data can perhaps be best summed up by one CEO in the pharmaceutical industry. During a recent talk to his global leadership team in Miami, he said, “Given the diverse market we serve, when I look at a top decision making table filled with only white guys over 50, 1 know we are screwed.”
The financial impact of gender diversity in leadership has been quantified by organizations like Catalyst. Their reports, based on publicly available financial data, unequivocally show that the top companies, across four industries with high levels of diversity in leadership teams, outperform those with low levels, in terms of ROE (return on equity) and TRS (total return to shareholders).
Why does the presence of women in top positions result in increased financial performance? It’s because the world is not the same as it was 30 years ago (when most current business leaders entered the talent pipeline). As a function of stunning global changes in education and workforce participation, women now make up more than half of college graduates (any firm’s talent pool) and an estimated 80% of most family consumer decision makers. Globally, starting in 2008, it estimated that $7 trillion of female-generated income has come online. Economists refer to it as the biggest emerging market in the history of the world, bigger than China and India combined.
Organizations that provide opportunities to both talented men and women for decision-making, will have an advantage. Not will they be able to capitalize on their entire talent pool (rather than half), they will 1) manage to get women to help them develop and market the products and services that women consumers pay for, and 2) harness the competitive power of diverse decision making teams.
For those men who like women on top at home, but not in the firms they work for, it may be relevant to look at research on corporate survival. The key to survival is not a function of how strong or big, or indeed how successful a company has been in the past. Survival is more a function of how easily it can adapt to environmental changes. If you lead an organization that wants to survive in the 21st century, I suggest you pay attention. In today’s world, more women are needed in the boardroom., not only because it is right, or fair, but because it is key to remaining competitive in the future