Woman executive
On this International Women’s Day in 2023, the “glass ceiling” is alive and well, blocking women from advancement across the corporate world. This is true at Fortune 500 companies, where they experience slower career climbs than their male peers, among executives in general—where more are excluded from informal networks and mentors—and among MBA graduates’ careers, where women end up paid less. That’s all despite having similar qualifications, skills and experience.
Smart, savvy businesses should hire more women for those top jobs, for reasons that go beyond even fairness. That’s because a wealth of research suggests that hiring women for the top perch pays off—a hidden, discriminated-against, key to success in the business world.
One Harvard Business Review study, for example, reported that companies with a higher proportion of women in principal leadership positions “are more profitable, more socially responsible, and provide safer, higher-quality customer experiences.” Focused on innovation, the study researchers looked at 163 multinational companies over 13 years to determine how these firms’ long-term strategies shifted after women joined their top management. They discovered the firms became more open to change and less vulnerable to risk, shifting their focus from the financial engineering of mergers and acquisitions to the real engineering of research and development.
Other scholarship shows similar results: Research from the 1996–1997 National Organizations Survey revealed that firms with more gender diversity tend to have more clients, higher sales revenues and greater profits. A Journal of Business Ethics study found that companies with at least 30 percent of women on their board of directors tend to be more profitable. And a Harvard Kennedy School field experiment found that teams with gender balance tend to have better sales and profits compared with mostly male teams.
But why do teams led by women tend to perform better? A litany of business school and consultant research suggests that women may be more effective leaders because they are more likely to foster more mentor friendly and compromise welcoming workplaces. Companies that prioritize diversity and inclusion tend to have more engaged employees who are happier with their company’s culture. That translates into increased productivity and employee satisfaction, as well as a more innovative and adaptable workforce.
For example, one study of three Australian businesses found that on business teams with inclusive leaders, teammates had a 17 percent higher probability of claiming they are high achievers, a 20 percent greater likelihood of stating they make excellent decisions, and a 29 percent increased chance of stating they act collaboratively. Further, the study showed that a 10 percent enhancement in feelings of inclusivity leads to an almost one-day increase in work attendance per employee annually reducing absenteeism. Happy people are happier to go to work, it turns out.
In a recently updated survey study of 7,280 executives evaluating 360-degree annual assessments (in which employees rate others they work with), the authors found that women received higher leadership ratings than men, measured in their ratings for initiative, resilience, self-improvement, results and integrity. They were deemed more proficient in 84% of the competencies that were commonly evaluated. Men were considered to have an advantage in two areas: developing “strategic perspective” and possessing “technical or professional expertise.”
All these percentages are impressive, but it’s not just about the numbers. Women should have equal opportunities to succeed and not be held back by the unconscious (and conscious) biases against them that are discernible in a lot of these studies. Companies can counteract these biases with diversity and inclusion programs, training employees on implicit bias and its effects, promoting introspection and self-awareness, and most of all, seeking out and promoting qualified women for leadership. They must do the work, in other words, to create fair workplaces that are better for every employee.
Acknowledging the strengths and competencies of women does not mean putting down men. There are plenty of individual men with fine leadership skills, and women who don’t aspire to a corner suite. Rather, it suggests that women overall may excel in ways that matter for success.
Women face discrimination at work, even in the 21st century, and the research has the receipts to prove it. But here’s the exciting part: by tackling this bias head-on, we can smash through the glass ceiling and create a workplace that’s inclusive and equitable for everyone. Not only will this create a better environment for women to thrive, but it will also boost better, happier business and put more cash in the bank.
So, let’s make gender equality a priority. Women leaders are an underutilized resource, and savvy businesses should tap that resource on this International Women’s Day.
