For over 20 years, we’ve been talking about diversity and inclusion. Organizations today are, for the most part, more diverse, but inclusion lags behind.
Francis McDormand moved inclusion to centre stage. In Hollywood, women directed 11% of the 250 top-grossing films in the US in 2017, up from 7% in 2016. In 1996 there was one woman CEO amongst the Fortune 500. That same year, Francis McDormand had the lead role in Fargo, and not one female director was nominated at the Oscars. Today, the Fortune 500 reports the greatest number of women running companies. Still in single digits, 6.4% women running companies demonstrates a shift in the right direction.
Maybe it’s time for McDormand’s inclusion rider to move beyond Hollywood and into the boardroom. A relatively new concept, the inclusion rider came from Stacy Smith’s 2016 research at The Annenburg Institute. She concluded that of the top grossing films from 2007 to 2014, only 30% of 30,000 speaking characters were female; one female for every 2.3 males. The goal of the inclusion rider is to increase representation of others besides women – ethnic minorities and people with disabilities to reflect reality. If implemented, it would be a major step to equality and inclusion.
Smith’s number sounds eerily familiar. If we map the number of working women across the number of executive positions, we’d see a similar ratio. There is an upside. Women run seven of the largest Fortune 100 companies: Mary Barra at General Motors, Ginni Rometty at IBM, Indra Nooyi at PepsiCo and Marillyn Hewson at Lockheed Martin, Abigail Johnson at Fidelity Investments, Meg Whitman at HP, Phebe Novakovic at General Dynamics.
When Frances McDormand made her pointed remarks at the Oscars a few days ago, people took notice. What if we took her idea and designed an inclusion rider in corporate functions, not just behind the camera?
Women in the corporate world – why inclusion matters
Outside of Hollywood, we’ve all read corporate commitments to diversity and principles of equality. But it’s insufficient to say “We have a high percentage of women” – or other diversity targets- if they’re not part of the leadership. Inclusion is the ability to feel connected, to be part of the organization, leadership and decision-making.
Although percentages are shifting, there’s room for improvement. We continue to examine the lower percentage of women in boardrooms and decision-making roles. Globally we’re losing out by not tapping into the potential of women. Women leaders deliver results.
“Peterson Institute for International Economics and EY found having 30% women in the C-suite, adds 6% to net profit margin.” (Quartz 2016)
Catalyst, McKinsey, Credit Suisse, Boston Consulting and other researchers found a positive correlation between gender diversity and financial performance. Gender diverse teams have a higher performance and innovative thinking. MIT and Carnegie Mellon have provided quantitative data, illustrating that the inclusion of women on teams results in better problem solving and innovative thinking. Their research corroborates the gender diversity and positive performance finding, which is that being inclusive-using the wisdom of the group- increases collective intelligence. Demographics should now guide inclusion in business, and this critical mass of talented women will then be a phenomenal force of change.
What makes women successful leaders?
Work orientation and leadership style.
While there’s no conclusive evidence on gender differences across leadership, women lean towards transformational leadership. Grant it some leadership leans towards a masculine style, but transformational leadership qualities bring out the best in both men and women. Alice Eagly, professor at Northwestern University, research found women were more likely to be transformational leaders, and transformational leaders have a higher return on engagement and performance. Imperative Consultants and New York University studies found that purpose-oriented workers are 50% more likely to be leaders, and that women are more likely to be purpose-oriented.
Eagly’s research found women are more prone to this interpersonal style of leadership, more likely to build strong relationships with co-workers, clients and customers. Similarly, Sarah Burke and Karen Collins, Villanova University found higher scores around coaching and communicating with female accounting managers. And, this interpersonal leadership style correlated with success. Organisations with transformational leaders achieve higher profit, revenue and a more stable strategy.
If women are more likely to be transformational and purpose driven, why aren’t more leading today?
An organisational fixation and outdated definition of what constitutes leadership pinpoints why some women fall off the talent path. Forty years ago, James McGregor Burns, the seminal expert on transformational leaders wrote that ‘’leadership is the most observed and least understood phenomena on earth.” It’s time to change our lens and examine unconscious bias more deeply, not just at a surface level, but to make the much-needed changes inside organisations.
Recruitment and leadership selection present the biggest hurdle for organisations, as men and women are viewed differently in leadership competencies, categories or attributes. There are strong gender associations attached to leadership, the perceived differences of achievement and ambition. Women can be recognized for leadership excellence, yet often stuck in second place or trapped in middle management.
What does the future of corporate leadership look like?
It’s easy to examine the demographics and economic shifts and see where it is headed. There are more women in the workforce and more women graduating with advanced degrees.
And, this trend is significant.
Since the late 1990’s, across many parts of the world, women became the most dominant gender in terms of high education preparation. According to the OECD, today women represent 55% of the higher education student population. In some countries, men have become the ‘’second sex’’ in higher education earning a minority of college degrees across all levels, bachelors to doctoral degrees. In China, women represent 36% of the global business school pipeline, with US and India in second and third place as largest source for graduate management education. The OECD predicts by 2025 “in Austria, Canada, Iceland, Norway, the United Kingdom there could be almost twice as many female students as male.”
This demographic shift represents an extraordinary force in business on many levels. More education, more women working equals a rise in discretionary spending. Globally women control 75% of discretionary spending. According to BCG this percentage will increase significantly in the next 5 years as the global incomes of women increase to US 18 trillion with China and India delivering extraordinary growth.
Global leaders know well enough the value diversity and inclusion–as a source of revenue, not simply for show. In order to retain women leaders, organisations must acknowledge and look beyond leadership differences. Demographics and economics create change, but organisations must better value the differences, rethink talent strategies to capture the globally astute, female talent who will likely dominate business, governments, and academia for the foreseeable future. These future leaders are morally upright, purpose-driven, collaborative, and most assuredly, female.
Make certain you incorporate this group under your new Inclusion Rider.
