What if someone were to tell you that you could increase innovation and productivity in your firm by 50% by taking one simple step? You’d say, “Bring it on!”
The answer is women. Study after study shows that businesses with women in leadership do better. It bears repeating: Female leaders are good for your bottom line.
Academics at Pepperdine University have followed this trend over the last decade and found a consistent relationship between female executives and high profits at Fortune 500 companies. And this trend isn’t happening in just U.S. companies. Michel Ferrary, a professor at Ceram Business School in France, found that French companies with more female managers fared better in the financial crisis than others.
If you’re still not a believer, you might be interested to learn that similar results were reported in Vietnam. According to Mekong Capital, over a two-year period ending in January 2009, publicly traded companies with female CEOs outperformed firms with male CEOs.
Governments also fare better with women participating in the economy. In fact, nations lose GDP when women aren’t in the workplace. A United Nations report found that countries in Asia and the Pacific lose the equivalent of $42 billion to $46 billion each year because of laws restricting job opportunities for women.
As this month’s feature on global talent trends reveals, businesses around the world are headed for a showdown on finding and retaining the talent they need to grow and thrive. In America, with unemployment still high, it sounds counterintuitive to imagine a shortage of talent to fill the desks of retiring baby boomers. Yet Lloyd’s 2011 Risk Index found that a shortage of skilled talent was the second most important risk facing businesses globally. The index tapped into considerable anxiety among top management over the suitability of available staff for the jobs required. This lack of sufficient talent could result in risks such as poor product development and inappropriate risk management strategies. In short, the quantity of workers is there, but the quality isn’t.
With demographic trends pointing to a talent shortage, why let the talent you have slip out the door? Unfortunately, women are doing just that. Some leave because they are looking for better pay and more responsibility. But increasingly women are dropping out of the workplace altogether, often to raise children or care for aging relatives. The U.S. Bureau of Labor Statistics reports the participation rate for women in the prime work years, ages 24 to 54, has been declining for the last 10 years. And the rate is projected to continue to decline for the foreseeable future.
“This is a concern because significant investments are made in acquiring talent,” says Erica Desrosiers, the senior director of global talent development at Walmart, “and women leaving the workforce in great numbers amounts to a loss of resources and talent.”
So the question becomes: How do you keep and utilize talented women? What you need is a strategy that truly recognizes the value women bring to the job. As McKinsey notes in “Women Matter: Making a Breakthrough,” there has to be a commitment at the top level of management. The CEO and executive team have to be champions of gender diversity. It’s not enough to pay lip service. You have to mean it.
Desrosiers says organizations have to be authentic and create an accepting environment. The commitment also has to be communicated throughout the organization so that lower-level management and employees understand the firm’s culture supports diversity.
But many of the same old attitudes and excuses for not promoting women prevail even today. Women leave to have children. Women aren’t risk takers. Women aren’t decision makers. Women are too emotional. Etc., etc., etc. Yet the skills women often bring to the job—their ability to collaborate, to build relationships, to communicate, to be inclusive, to solve problems—are just the ticket that our industry needs in the 21st century. In fact, any industry in which relationship building with customers is the key to success would benefit from the skills that women bring to the job.
If your firm falls into the bias trap, then the mindset has to be reset. Root out bias wherever it exists. Do not tolerate disrespect to women (or, for that matter, anyone) in your firm. Recognize your own biases and don’t make it part of the problem.
What do women want? They want to be treated fairly and equally. They don’t want special treatment. They want to rise or fall on their merits, but they need a culture that allows them to do that.
As firms transition toward a new understanding of women’s strengths in the workplace, development, diversity and mentoring programs can help raise corporate awareness and unhinge women from lower-level and middle-management positions. Work-life balance is not just a women’s issue. Men are spending more time with their kids, attending soccer games and recitals, and they’ll need flextime as well.
You don’t need Mitt Romney’s “binder full of women.” You just need to provide the women you have with the right opportunities.