Women in Business - November 2015

When we hear so much about how progress for women is too slow, it is easy to lose sight of the bright spots. And there are bright spots in how leadership and accountability are being reframed.

Reframing Leadership
In 2004, McKinsey, a top tier global consulting firm, set out to learn about what makes a highly successful female leader. Their research included interviewing top women leaders, consulting with experts in leadership and studying academic literature. They applied their research to create a “centered leadership” model that gets to the essence of how to evolve into a strong leader who also is highly satisfied in life.  The model focuses on five leadership components:

• Meaning - Knowing what you are doing matters and feeling passionate about it.
• Energy - Understanding what gives you energy and aligning your priorities with what energizes you.
• Positive Framing - Looking realistically at challenges and focusing on a constructive path forward, finding opportunities in disappointments.
• Connecting – Building broad and influential networks from which to gain knowledge, support, and resources.
• Engaging - Becoming astute at recognizing windows of opportunity, embracing risks, and then acting without hesitation.

Although this model was created based on natural attributes and motivators of women, subsequent McKinsey studies have shown that this model is a differentiator for both men and women. In fact, 92 percent of leaders who have mastered the above five components feel confident in their ability to lead their organizations through major change versus 21 percent of those who assessed themselves as less adept at centered leadership.  

I have seen time and time again how organizations take on the personalities and rise or fall to the values of their leaders. Centered leadership, therefore, has the potential to create more caring organizations that instill meaning, energy, optimism, community, and engagement that affect managers and employees throughout. These organizations are not only healthier and inspiring for staff, they also are more productive and profitable.

Reframing Accountability
Over the past two decades, accountability for gender balance reform has placed considerable focus on the number or representation of women on boards of publicly held companies. Progress has been disappointing and, continuing at the current pace, some estimate it will take another 75 years to achieve gender balance on boards. However, there are shifts occurring that I believe are already creating more positive experiences and will accelerate progress in the future— it is no longer just governments and women’s groups that are pushing for gender balance, and the focus of attention now goes beyond representation numbers.

More business leaders are stepping up to the accountability plate to influence their peers. For example, in 2010, the 30% Club was launched in the UK. The club consists of CEOs and chairpersons committed to increasing the representation of women on boards of publicly held companies to 30 percent. Since the 30% Club was formed, female representation on the UK’s FTSE100 boards has increased from 12.5 percent to 26 percent. A US chapter was started in 2014, and if the same results are achieved here, the 30 percent target could be reached by 2020 (currently women represent 19 percent of S. & P. 500 boards).

Numerous studies have been conducted over the past ten years to assess the impact of women on boards. A Catalyst study comparing Fortune 500 Companies with the most women on boards versus the least, found the former experienced 73 percent higher return on sales, 83 percent higher return on equity, 53 percent higher return on investment and 112 percent higher return on capital. Board surveys also have found that adding women to boards results in better quality of debate, more focus on human factors, stronger accountability and work ethic, better attendance, more professional behaviors of men, and a greater likelihood of holding CEOs accountable for poor stock performance.  
Women now control 65 percent and influence up to 80 percent of the world’s annual consumer spending. Having women in top leadership roles driving decisions on how to deliver to this critical mass of customers will give any business an advantage. In addition, if women start looking at the gender diversity track record of companies when deciding where to spend their money, they will have a major economic impact on companies across industries.  It is not surprising that some investment analysts are using a company’s track record on gender diversity as a filter in putting together recommended investment portfolios.

In 2011, the World Economic Forum launched the EDGE certification, which is global standard for assessing businesses based on their gender equality by looking at factors such as equal pay, recruitment and promotion, leadership development, flexible work opportunities and company culture. These are factors that enable women to thrive in organizations. The good news is that companies that care about gender diversity also are more likely to care about building inclusive organizations that enable all employees to achieve their potential.

What these trends show is that attention on gender is raising the tide, and to use a New England aphorism, a rising tide lifts all boats. For this we can be grateful!