The management traits ideal for success in today’s business climate are changing, and many of them come more naturally to women. There is a need to shift from the traditional top-down hierarchical organizational structure, generally led by men, to a collaborative, team approach that emphasizes open communication, empathy, inspiration and motivation.
These are traits that come naturally to many women, and men who don’t come by them naturally can learn them.
The Feminine Archetype
Men may lead most of today’s large companies, but numerous studies suggest these companies would be more profitable if there was a woman in the corner office, or at least more of them on the leadership team.
A study by McKinsey & Company indicates organizations with gender-balanced leadership post financial returns above the national industry median. Organizations with women in leadership also attract and retain top talent, have stronger customer relationships and make better business decisions.
Both Catalyst, a nonprofit dedicated to expanding opportunities for women in business, and the Haas School of Business at the University of California in Berkeley report that companies with more women on their boards perform better on environmental, social and governance issues. They also exhibit higher returns on equity, higher valuations and higher payout ratios according to the CS Gender 3000: Women in Senior Management Study by Credit-Suisse.
The study revealed more compelling data:
• Return on Equity: On average, companies with the highest percentages of women on the board of directors outperformed those with the least by 53 percent.
• Return on Sales: On average, companies with the highest percentages of women on the board of directors outperformed those with the least by 42 percent.
• Return on Invested Capital: On average, companies with the highest percentages of women on the board of directors outperformed those with the least by 66 percent.
Inside the Female Mind
How are women moving the financial needle in business? Having interviewed female CEOs across the country, women excel in leadership in three key areas: people, prosperity and partnership.
People: Women tend to focus on people. They are consensus-builders and great communicators. Words like “vulnerability, empathy and transparency” have been thrown around as traits that promote great leadership. They are being tailored to men but have naturally been a fit for most women. Women lead the way in engaging the workforce and in being sensitive to their needs, according to the Zenger Folkman study that compared men and women in 16 key leadership competencies. Most traits are associated with the soft skills of leadership: relationship building, communication and emotional intelligence. Women outscored men in 12 of the 16, outscoring the highest in “taking initiative” and “driving for results,” traits previously thought to be superior in males. Men scored higher in “strategic perspective.” With employee engagement at a record low of 27 percent, the best strategies are ineffective unless you can get your people aligned with the goal.
In previous eras, the leader had all of the answers, or at least they thought that was their responsibility. Today’s leaders focus on communicating with their employees, customers and stakeholders and using the insight gathered to drive decisions. Women are more apt to use collaboration to seek answers.
“Trusting your team of people, allowing them to be influential in decisions and knowing how to engage with people is key,” says Lisa Guertin, president of Anthem Blue Cross and Blue Shield in NH, ranked second on the 2015 list of NH’s Top Women-Led Businesses. Guertin is committed to knowing the pulse of her organization by frequently meeting with team members, asking for input and trusting her team to make decisions that support the values of the company.
Wendy Tirollo, CEO of TRM Microwave in Bedford (ranked 21 on the 2015 list of NH’s Top Women-Led Businesses), walks the hallways of her production floors daily speaking with employees in each department. She is committed to listening to what they have to say and showing appreciation for their efforts. Her culture attracts top talent, especially the more selective innovative tech savvy millennials.
Prosperity: Women-led companies are often more successful than those owned by men. If you’re skeptical, consider this: Shark Tank’s Kevin O’Leary often proclaims his love for money and profit, and that’s why most of his companies are run by women. “I don’t have a single company run by a man right now that’s outperformed the ones run by women,” O’Leary told Business Insider recently. O’Leary has 27 companies, 55 percent of them run by female CEOs. Of his investments, women run 100 percent of his
profitable companies.
Also, women control roughly $20 trillion of total consumer spending and influence up to 85 percent of purchase choices ranging from automobiles to technology. Women in leadership provide valuable insight into the mindset of customers.
Partnership: Women not only build cultures that promote collaboration and innovation, they also build great partnerships. Finding the right alignment for partners and strengthening those relationships is often the key to an organization’s success.
Many companies worry about losing ground to a newly rising competitor. Innovative fast growing organizations worry about losing top talent as they add layers of processes. Both require a culture that promotes an entrepreneurial mindset to attract and retain its people. Women cultivate a culture that invites the sharing of ideas, promotes creativity and nurtures an environment for innovation.
The soft skills matter: Effective communication, relationship building, empathy and transparency. Women know their pathway to profitability is by engaging with their people to boost performance and positivity.
When Mary Barra stepped into GM’s executive suite in 2014, replacing CEO Dan Akerson, she had a company with a myriad of problems. Since then her inclusive style of leadership, her trust in her employees and her openness with customers has paid off. Barra is known inside GM as a “consensus builder who calls her staff together on a moment’s notice to brainstorm on pressing issues,” according to the New York Times.
At the onset, she saw the root of the problem. “Numerous individuals did not accept any responsibility to drive our organization to understand what was truly happening,” she says, stating they were “a company that operated in silos, with a number of individuals looking for reasons not to act, instead of finding ways to protect our customers.” Barra blamed a divided culture, which impairs many organizations.
Barra introduced the concept of teaming to spur collaboration and innovation. As a result, 86 percent of her employees rated her as most popular CEO in the June 2015 Glassdoor survey and GM boosted its ability innovate and refine its products.
Not only did GM gain a competitive edge, as of July 2015, Mary Barra has produced eight straight quarters of year-over-year growth in its profit margins.
Barra focused on building a customer-centered company. GM has gained insight by collaborating with its customers and stakeholders to guide the company’s direction.
Attracting Top Talent
Businesses can gain bottom line results, engaged employees, competitive advantage and sustainability when they leverage women in leadership positions.
In order to tap into this female leadership advantage, companies need to develop a work environment that attracts and retains top female talent:
1. Create pathways for advancement for women leaders early in their careers.
2. Foster a mentoring culture that encourages career advancement. Women start their careers with their eye on the C-Suite but within two years lose sight of that ambition. One reason is the lack of early mentoring.
3. Balance your board with women members, which will improve business and stakeholder results.
4. Encourage think tanks, focus groups and customer groups to open the door to creativity and create a collaborative atmosphere.
5. Provide soft skills training and leadership development for all leaders to equip them with the skills to navigate the complexity of today’s business climate.
Current Issue - May 2024