Since the 1970s, many companies have understood and taken action on the business case for gender initiatives, made progress and reaped benefits. Others are still questioning whether this topic warrants their attention. In a recent interview for an upcoming TV biz news interview I was asked about this:
For example, a Credit Suisse study of 3000 global companies found a 52% higher Return on Equity for companies that had 15% or higher women in senior management compared to those where women represent less than 10% of the top management.
(For other examples of credible and consistent research and findings look here.)
No one can definitively say that women at the top cause stronger financial performance because of different strengths or perspectives, although some studies seem to indicate this. Nor can we definitively say that better run companies get more women to the top though there is also evidence of this.
At this point, it doesn't matter. The evidence is clear - it’s important for organizations to rise to the challenge of closing the leadership gender gap.
Extensive research reported by Rocio Lorenzo in her TED Talk found strong bi-directional correlation between innovation and diversity.
Rising to the challenge of closing the gender gap at the top means changing "the way we do things around here." This makes sense. After all, if companies keep doing what they've always done, they'll keep getting what they've already got in terms of percentages of women throughout the organization.
The idea of changing things gets met with several responses, the most frequent of which is...
And while men often get "concerned" about the idea that a gender initiative might give women special advantages, most simply do two things:
We often make the point that no matter how gender-neutral an organization's talent processes are, the mindsets of managers are likely to undo their designed equality.
A colleague recently told me a story about a rigorous assessment center exercise that ranked 10 candidates for promotion. Women were among the top 3 candidates. But, the 4th ranked candidate received the promotion because he had "chapness, you know, he seems like a good chap."
I kid you not!
These are examples of why companies that are serious about closing the gender gap include initiatives that require managers to examine their mindsets and commit to changing behavior.
When actions such as these are not taken, the subtle barriers also mean that selection processes aren't tapping the entire talent pool. Therefore, the best people might not be getting to the top and the company isn't a true meritocracy. because certain groups are playing by different rules. The opposite is also true. Companies that work to weed out bias and put a premium on making talent decisions on the basis of proven performance over "style," comfort or "chapness," generally have a proportional % of women in management.
And this can explain the correlation between the % of women at the top and improved financial performance. The less bias in talent decisions, the more women get to the top and the higher performing the organization.
As long as these and other important steps are not taken to close the gap, companies will have a talent development problem.
Companies that smugly think that their processes are fair will keep failing at gender balance. Changing the percentages of women at all levels requires rigorous review of talent and performance systems AND rooting out gender dynamics that create a playing field that is anything but level. Time won't solve the problem! The sensibilities of the Millennials won't solve the problem! It takes concerted effort to open doors and create a level playing field.
At the end of the interview, I was asked: