If Companies with Women at the Top Are More Profitable, Why Aren’t More Rising?

by Christine Middleton

Getting more women into the C-suite and on boards is an economic issue, not just a woman’s issue, according to the U.S. Chamber of Commerce.

Currently, just 4.2% of CEO positions and approximately 14% of board positions are held by women.

Additionally, women continue to leave traditional work environments to start their own companies in order to have their ideas come to life, gain more control over their schedules, and achieve greater job satisfaction.

According to Forbes.com:
“Women will create over half of the 9.72 million new small business jobs expected to be created by 2018…  a surprising statistic, especially considering that women-owned businesses only created 16 percent of total U.S. jobs that existed in 2010.”

In short: Even though companies with more women at the top are more profitable, women are still stuck… and now bailing.

Recently, the U.S. Chamber of Commerce’s Center for Women in Business hosted an event to release findings of a study, Ascending Women to the Top, conducted in partnership with McKinsey & Company to “identify the companies that are ahead of the curve. [The study] examines the best practices of 12 Fortune 1000 companies that are good at promoting and developing women at the board, C-suite, and management levels.”

The Six Common Factors of Companies Growing & Promoting Them Successfully 

Organizations, such as Campbell’s, AETNA, MetLife, Charles Schwab, and SteelCase, are apparently doing things really well. They see women as strategic assets and the growth of their companies provides proof.

Here is a snapshot of the six common strategies they all implement in common, plus a few additional insights captured from the event:

1. “Take the long view.”  A focus on women MUST be a sustained effort over time that is part of culture.

• While the effort may be hard to initially start, success begets success and equates to company profits over time, so stick with effort
• Processes and incentives to keep momentum going must be present and built into overall culture, assessments, rewards
• Important to build a significant pipeline of female talent on all levels of women  for upward movement and succession planning to key leadership positions

2. Use advantages and acknowledge disadvantages.  According to the study:

The best performers have leveraged natural advantages, such as a greater percentage of women entering the pipeline, affinity with a female customer base, a larger top leadership team, or a greater number of women on the board. In contrast, some companies with none of these assets have successfully overcome their disadvantaged positions to include more women in top leadership ranks. Overall, the best performing companies have gender diversity numbers that demonstrate success, and they want to do even better.

3. CEOs need to make this personal and part of their legacy.

• Through stories and how a CEO engages the organization versus a program given to HR to figure out and implement. It is also different from sponsorships, which are also important.
• CEOs who were most effective, not only had a story to tell about the impact and importance of women’s leadership from a personal experience, but also actively served as a mentor. Doing so ensured other executives took the effort seriously and became part of the cultural norm.

4. Walk the walk that it’s about the people.  Find ways to humanize the culture, including:

• Have more “heart” infused in policies
• Flexibility is a big driver for women so consider flexibility on a case-by-case basis about time of for illnesses, supporting caring for parents and kids, maternity leave, etc.
• Host meetings with CEO and board to expose women and create relationships that would otherwise not happen.
• Create different career tracks for women based on interest, career goals, family goals and company needs versus assuming a natural rise in the ranks will take place.
• Assemble special project committees with cross department talent, including women with various experience levels, to solve unique challenges or meet unexpected marketplace opportunities.

5. Human Resources’ (HR) role — focus on only a few key tactics/initiatives. This shouldn’t be HR’s main responsibility, but there are three key initiatives for the department to focus on that prove to be important in ensuring women get promoted:

• Succession planning specifically with women in mind.
• Talent development – finding ways to build business skills across an organization, including exposing women to P&L responsibilities a lot sooner in their careers.
• Talent pipeline – intentionally building a pool of talented individuals, internally and externally.

6. Enable the board.

• Diverse boards are critical and there must be at least three of any demographic (women, minority) for this representation to be effective versus seen as a token.
• Board agendas need to include talking about developing and attracting female talent and succession planning to support the build-out of a healthy talent pipeline.

If you are interested in learning more, these links will take you to the Chamber’s Center for Women in Business (CWB), the February 2013 event (including the study) or its featured panel discussions.

About Christine Middleton
Christine Middleton is a business development, marketing and brand strategist helping executives in various industries expand their relevancy, reach and revenue potential. Christine thrives at building strategies that incorporate a web of tactics to effectively spread the word and generate new moment in the marketplace. She has a master’s in leadership from Georgetown University McDonough School of Business and regularly works with non-profits, corporations and government agencies. To learn more you can visit her blog www.cemiddleton.com.