Why Women May Be Better Leaders
By Ray Williams
The issue of the glass ceiling has been with us for sometime now, yet relatively little progress is being made in North America, when it comes to senior executive positions and boards of directors, compared to other countries, where significant progress is being made in gender diversity. At the same time, there is increasing evidence that women actually make better leaders, and are more suited to the style of leadership needed today in organizations.
What is the evidence to support the contention that women are better leaders?
Kellie A. McElhaney and Sanaz Mobasseri of the Haas School of Business at the University of California, Berkley, produced a report, “Women Create a Sustainable Future.” Among the conclusions in their research and published in the report, was “companies that explicitly place value on gender diversity perform better in general, and perform better than their peers on the multiple dimensions of corporate sustainability.”
A 2012 Dow Jones study shows that business startups are more likely to succeed if they have women on their executive team. And according to the Center for Women’s Business Research, although women own about 40% of the private businesses in the U.S., women make up less than 10% of venture-backed start-ups.
A 2005 Report on Women and Entrepreneurship, the percentage of entrepreneurs who expect growth for the businesses is higher for female entrepreneurs than male entrepreneurs. And according to a separate study by Babson College and the London School of Economics, women-led start-ups experienced fewer failures in moving from early to growth –stage companies than men.
Catalyst, the U.S. non-profit company, found that in 2011 a 26% difference in return on invested capital (ROIC) between the top-quartile companies with 19-44% women board representation and the bottom quartile companies with zero women directors. When the McKinsey team asked business executives globally what they believe the most important leadership attributes are for success today, each of the top four—intellectual stimulation, inspiration, participatory decision-making and setting expectations/rewards—were more commonly found among women leaders. McKinsey reported in its Organizational Health Index (OHI) companies with three or more women in tip positions scored higher than their peers.
A Pew Center Global Attitudes Project found that 75% of respondents in the U.S. and 80% in Canada believe that women make equally good political leaders, and the numbers were much higher and Europe, Asia and parts of South America. Another Pew Center study, Social and Demographic Survey found women leaders possessed more leadership traits of honesty, intelligence, compassion and creativity than men, whereas men scored higher only in decisiveness.
Jack Zenger and Joseph Folkman, authors of The Inspiring Leader: Unlocking the Secrets of How Extraordinary Leaders Activate, writing in the Harvard Business Review Blog Network, argue that in today’s complex demanding world of organizations, women may possess superior leadership capabilities compared to men.
Zenger and Folkman make that contention based on 30 years of research on what constitutes overall leadership effectiveness that comes from 360 evaluations of a leader’s peers, bosses and direct reports and a 2011 survey of over 7,000 leaders from some of the most successful and progressive organizations. They concluded “at every level, more women were rated by their peers, their bosses, their direct reports, and their other associates as better overall leaders than their male counterparts—and the higher the level, the wider the gap grows.” Specifically, the authors note, “at all levels, women were rated higher in fully 12 or the 16 competencies that go into outstanding leadership. And two of the traits where women outscored men to the highest degree—taking initiative and driving for results—have long been thought of as particularly male strengths.” Men outscored women significantly on only one management competency—the ability to develop a strategic perspective.
Thomas Malone, a management professor at MIT and his colleagues completed research which tried to determine what made a team smarter. He created teams of people aged 18 to 60, had them take IQ tests and then gave them a series of problems to solve. He found that those with the highest IQs did not perform the best, but the teams with the most women did. He reported in the Harvard Business Review, “the standard argument is that diversity is good and you should have both men and women in a group…But so far, the data show, the more women, the better.”
Tony Schwartz, writing in the Harvard Business Review Blog Network describes what women know about leadership than men don’t, arguing “An effective modern leader requires a blend of intellectual qualities—the ability to think analytically, strategically and creatively—and emotional ones, including self-awareness, empathy and humility…I meet far more women with tis blend of qualities than I do men.” He goes on to say “The vast majority of CEOs and senior executives I’ve met over the past decade are men [who] resist introspection, feel more comfortable measuring outcomes than they do managing emotions, and under-appreciate the powerful connection between how people feel and how they perform…For the most part, women, more than men, bring to leadership a more complete range of the qualities modern leaders need, including self-awareness, emotional attunement and authenticity.” Schwartz contends that men overvalue their strengths from an early age, while women tend to undervalue theirs, and that men are often victims of their own egos, and their need to win and use power.
In an article I wrote in the Financial Post in May, 2010, entitled “What’s Happened to the Glass Ceiling,” I said, “Call it a glass ceiling, glass wall or a glass floor—there is still a barrier blocking senior women leaders in organizations. High-powered executive and professional women are increasingly opting out of, being bypassed, or otherwise disappearing from the professional workforce. While this exists, true diversity in organizations will not happen.”
The World Economic Forum’s 2012 report called the Global Gender Gap Index, which has been used since 2006 as a tool to capture gender-based disparities, by measuring national gender gaps in economic, political, health and educational metrics on the best countries for women in economic equality terms, place the Scandinavian countries and New Zealand in the top 8, with Canada rated at 21st and the U.S. at 22nd. Countries such as Latvia, Cuba, South Africa and the Philippines are ranked higher.
A 2011 Grant Thornton International Business Report found that women now hold 20% of senior management positions globally, which is actually down from 24% in 2009 and only up 1% since 2004. The report also showed that G7 countries lag behind the global average with only 16% of women holding senior executive positions, compared to 27% in the Asia-Pacific region. More women have risen to top positions in countries such as Thailand, Hong Kong and countries in Africa, than in North America. Thailand, in contrast, leads the way with 30% of companies employing female CEO’s, followed by China (19%), Taiwan (18%) and Vietnam (16%), compared to only 3.6% of the Fortune 500 companies. As of 2011, there are only 98 female CEOs among the 3,049 publicly trade companies in the U.S., a 3.2% increase over 2010 and 2.9% increase over 2009.
In the U.S., the recent divisive and acrimonious political campaigns have unearthed attempts to actually move women’s rights and diversity backwards. A record number of state legislative attempts and several in Congress to roll back women’s reproductive rights have been evident. So too, has the proposed pay equity legislation been held up in Congress. ABC News/Washington Post reported recently that one in four American women have been sexually harassed on the job, yet only 64% of Americans see harassment as a serious workplace problem, down from 88% in 1992. Yet pay equity would produce a significant stimulus to the consumer-based economy, according to Heidi Hartmann, president of the Institute for Women’s Policy Research, who estimates that pay equity would grow the U.S. economy 3-4%, compared to the 1.5% produced by the $800 billion stimulus legislation.
So what action needs to be taken?
According to the Catalyst research organization, since 2008, at least 9 countries, including France, Norway, Italy and Spain, have passed legislation requiring some kind of quota requirements for diversity on corporate boards. Other countries, including the U.S., Britain, Australia and Germany have adopted regulations requiring organizations to review board diversity at their annual meetings. Canada at this point lags far behind in these initiatives, with no legislative actions or regulations. In October, 2012, the European Commission proposed a new law that would enforce quotes of 40% for women’s representation on European corporate boards by 2020.
Avivah Wittenberg-Cox, writing in the Harvard Business Review Blog Network, commenting on changing corporate culture, “leaders need to tell the majority of men in corporate life that they also need to change, and allow new and different styles of leadership to move in—and up.”
Two things seem more certain today. First, the glass ceiling has not been broken in any substantial way at the senior executive and board level in North America, and second, research points to women possessing the kind of leadership style we need today.
Ray Williams is President of Ray Williams Associates, a company providing leadership development and executive coaching services. He is also Vice-Chair of the Vancouver Board of Trade. He can be reached at firstname.lastname@example.org or through his website at http://raywilliams.ca
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