92% of respondents in a recent Skillsoft survey believed there is a lack of women in business leadership. Research shows that getting more women into leadership positions can make a significant difference to the bottom line. Investment research firm MSCI found that companies with strong female leadership had higher Return on Equity (ROE) than companies without, as well as a superior price-to-book ratio. This impact is also reflected in company financial performance. DDI, a global human resources (HR) firm, found that in the top 20% of companies – in terms financial performance – 37% of their leaders were women. In the bottom 20%, women comprised just 19% of the leadership.
Almost half of the UK workforce is female. Most companies have a lot of capable women who simply are not making it into leadership roles, but organisations cannot afford to underutilise this significant percentage of their workforce. The key question for the c-suite is how to utilise this untapped resource, which comprises a significant percentage of the workforce.
How can a business ensure its talent pipeline is realising the full potential of its female workforce? The best performing companies in this area are taking small, simple, yet effective steps to increase the number of women in senior leadership positions.
Riding the wave of change
Tapping into this talent requires changes across the board. This includes changing behaviour, process and the culture within an organisation. Companies have had some success by fostering greater senior leader accountability, by becoming less biased in decision-making processes and by changing their cultures to be more inclusive. In reality, however, there is often a lot of talk and little action.
The 2016 McKinsey ‘Women in the Workplace’ report found that approximately 75% of US CEOs felt gender diversity was a priority. But is this reflected within the organisations? When Skillsoft conducted primary research on the topic, 71% of respondents felt that their organisations were not doing enough to address the lack of women in senior leadership roles.
While the intention to change is often present, when attempting to implement strategies, good intentions often meet a lack of will across an organisation. A variety of common factors contribute to the ineffectiveness of change efforts.
A check box mentality
HR leaders are often pressured to demonstrate they are addressing the gender gap. They need to produce evidence programmes are in place and projects are underway. While many efforts do in fact produce useful outcomes, they often fall short of their full potential by not integrating fully into the organisation. Often, leadership development programs are sporadic, and specialised events only focus on selected employees. When training is not consistent, widespread and fully integrated into the culture of an organisation, it can very easily turn into a check box activity.
While leadership training in general has a much higher efficacy when integrated, this is particularly true for women’s leadership training. Too often, a selected group of women is provided sporadic professional development, where the women attend one to a few sessions without any specific follow-up, measurement of progress, or any attempt to link the program to particular leadership skill gaps. In any given session there may be engagement and a willingness to try out new skills from the participants, but the organisation subsequently fails to invest in the on-going reinforcement and environmental support required to cement the change. Women return to their daily work environment, and the organisation as a whole fails to make any meaningful behavioural change.
Implementing effective change
In many organisations, women predominate in human resources and marketing but are less represented in operations, finance, R&D and other areas of a business. Some businesses do exceptionally well at talent development, but struggle with promotion. Others excel at helping women get into positions of power but face challenges in keeping them there. Identifying what the organisation already does well and where it needs to change enables the challenge to be broken down into more manageable aspects. These can be assessed, changed and measured for success against specific progress criteria.
Myriad changes have been identified as effective, including expanding the talent pipeline in recruitment, job diversity, and middle and senior leadership by broadening where the talent is identified. By identifying and changing the unconscious biases embedded in the decision-making processes around talent, mind-sets will open up and women are empowered to realise they are capable of moving into positions of leadership. Continued professional growth and development, including focused training with follow-up and implementation support, then helps ensure these benefits are sustained.
Slow and steady wins the race
Systemic changes are not easy. Often large organisations are successful at creating lasting change by starting the process with one team, in a single business unit or defined area of the organisation. They learn what works, and the effort can then be scaled into other areas of the organisation.
Starting small provides an opportunity to experiment, creates built-in change agents for a wider roll-out and means everyone can become comfortable with the pace of change. It also yields examples that can be shared organisation-wide to increase understanding and reduce resistance.
By creating on-going opportunities to develop female leaders throughout their career cycle and committing to company-wide leadership programmes that are relevant, time efficient and flexible, women will be better supported and businesses will undoubtedly achieve better results.