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Changing the game for women

Increasing the number of women at every level of an organization is possible if its leaders are ready to use practical solutions.

Although we all know that women now graduate college at higher rates than men and make up nearly half of the workforce, we also know they are a long way from being equally represented on the way to and in the C-suite. Only 22 percent of board directors for S&P 500 public companies are women, and only 7 percent serve (pdf) as CEOs at Fortune 1000 companies. And although today’s leaders talk about advancing women in business and society, the concrete actions they take to increase leadership diversity are grossly underwhelming. The 2018 Pipeline Equity for All report found a 56-point gap between the percentage of CEOs in the United States who say they prioritize gender equity (78 percent) and employees who regularly see information about it measured and shared (22 percent). Eighty-seven percent of CEOs (pdf) say they are highly focused on talent, diversity, and inclusiveness, but according to a 2018 PwC survey (pdf) of 3,627 professional women from around the world, women do not trust what their bosses are telling them about promotions and pay, nor about what helps or hurts their careers.

This article is not intended to make the case for why women should be leaders in far greater numbers. There’s plenty of evidence to show diversity improves profitability and leads to more innovative and happier working environments. Our goal, rather, is to prioritize and emphasize concrete actions organizations can take to change the game for women and improve their path to leadership. Our experience working with companies to find and develop leadership talent and with women trying to return to the workplace after extended breaks has helped us identify four strategies that we believe can accelerate the pace of women reaching senior leadership roles in proportion with their numbers, talents, and ambitions. This requires creative thinking, a change in culture, and the will to take practical steps.

Specifically, these strategies are to (1) actively increase the pipeline of women in middle and senior management roles, (2) improve the culture and receptiveness of organizations toward women leaders, (3) develop creative solutions to structural job design issues that hold women back, and (4) move more women into general management and P&L roles from which CEO and other top management appointments are made.

Companies are well aware of the existing problem. The CEO Action for Diversity & Inclusion, which launched in June 2017, is the largest CEO-driven business advocacy group on this issue. It has 450 CEOs pledging to cultivate environments “where diverse experiences and perspectives are welcomed, and employees feel comfortable and encouraged to discuss diversity and inclusion.” (Full disclosure: Tim Ryan, chair of PwC US, is currently chair of this organization.) Here are the actions we believe these CEOs and others can take to back up these words.

1. Move More Women into Middle and Senior Management

Although women enter the workforce at rates similar to those of men, their upward path often deviates right at the beginning. According to the World Economic Forum’s (WEF’s) 2017 Global Gender Gap report (pdf), which measures the participation gap, remuneration gap, and advancement gap, women lag men by 58 percent across the combined three categories and are even further behind in developing countries.

The under-promotion of women early in their careers massively impacts the pipeline of women available for middle and senior management positions, which significantly affects the gender gap at higher organizational levels (see “Unequal Promotions”). If women were promoted at a rate equal to that of their male peers, solely at the entry level, the number of women at the senior vice president level and C-suite level would more than double.

What causes this promotion disparity? Bias is a primary reason. Managers at a leading tech company, for example, told a high-performing 25-year-old woman that they were “holding her to a higher standard” when they selected a male peer over her for the first promotion. When pressed, they did not (or could not) elaborate on why. Another form of prejudice is the implicit family caregiver bias. The 2017 PwC report found that 42 percent of women were nervous about what having a child would do to their career, and 48 percent of new mothers said they were passed over (i.e., overlooked) for career advancement because they had children.

In our ongoing conversations with CEOs, chief human resources officers, and corporate board directors, one consistent theme is the lack of talent they have to draw from to compete with changing business models, digital transformation, and other forces that put performance pressure on their organizations. Yet they are not disrupting the traditional ways talent is sourced and evaluated.

Work and family are complex, especially for women, but companies need to meet their employees in the middle — not put up barriers. Women are increasingly anticipating a series of “off-ramps” in their corporate careers, so businesses must plan for them. A 2015 Harvard Business School survey (pdf) found that 37 percent of female MBA graduates were taking a break after earning their degree, the majority so they could look after children. A growing number of women (pdf) are also choosing an entrepreneurial path in which they can control their own fate.

Work and family are complex, especially for women, but companies need to meet their employees in the middle — not put up barriers.

Given these planned exits, we anticipate that the pipeline of experienced professional women will become depleted at precisely the time when decisions are made regarding who gets the critical middle management roles from which senior managers are selected. In the United States alone, the latest figures available show that 2.6 million mothers with professional experience and undergraduate or advanced degrees are not working outside the home. In various polls, as many as 60 percent of women not working have said they are open to returning to work. That means there could be a pool of 1.6 million well-educated, professional, highly experienced women who could fill the depleted pipeline and move into middle management and ultimately senior management roles. This is corroborated by a 2015 study in the U.K. by She’s Back; 85 percent of the 1,300 professional women surveyed by the organization said they wanted to return to work, and 55 percent said they were ready to go back immediately. The top reason: to fulfill their career goals. (In 2017, She’s Back founders Lisa Unwin and Deborah Khan wrote for strategy+business about women returning to the workforce.)

This talent pool on the sidelines just needs the opportunity: clear on-ramp solutions for their off-ramps, to paraphrase Sylvia Ann Hewlett, the CEO of the Center for Talent Innovation and author of Forget a Mentor, Find a Sponsor, who has written about this phenomenon extensively (including in strategy+business). These solutions include flexible hours, the ability to work from home, and better access to the mentors and sponsors who can advance careers. All this can make a tremendous difference in retaining talented women, even if they take breaks. So, while companies are confronting the dearth of talent, there is simultaneously a diverse talent glut hiding in plain sight.

Leadership needs to be proactive about tapping into this market. Since 2013, Fidelity Investments, for example, has offered its return-to-work internship programs. Currently there are programs in New England, Texas, Kentucky, and North Carolina as well as in Ireland and India.

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In our experience, women will work to refresh their skills, but companies need to work with them. Take the example of Lisa, a brand manager at a preeminent consumer packaged goods company. She took a 10-year break to bring up two children, then wanted to go back to work. “For perhaps the first time in my life, I lacked confidence in my abilities and in the inherent value I could bring to an organization,” Lisa said.

Lisa enrolled in a career reentry program via reacHIRE (the organization founded by coauthor Addie Swartz) and received a refresh on workplace technology, got help in building a resume and an online presence, and participated in workshops to prepare for job interviews. Then reacHIRE placed her into a project role at a Fortune 500 company, which led to her getting hired as a full-time marketing professional.

2. Improve the Culture and Receptivity of Organizations toward Women Leaders

Expanding the pipeline of middle and senior management women through proactive “returner” programs is only part of the solution. Companies, government organizations, academic institutions, not-for-profit organizations, and society at large need to change the culture in which women and men operate. Although outright gender discrimination remains a key problem (see data from the U.S. Equal Employment Opportunity Commission), there are more insidious day-to-day problems. These include inhospitable and often hostile work environments, negative stereotypes women combat every day (#metoo and more), outdated parental leave programs, and outright bias, all of which combine to create frustrating environments, hold women back at all levels, and prevent them from moving through the pipeline and reaching many top leadership roles. But there are ways this can begin to be addressed.

Uncover unconscious bias. Part of the problem affecting the number of women in leadership is the genuine and well-researched difference in the sexes in their approach to employment. Women and men, for example, look at job descriptions in fundamentally different ways, and research shows that even small things like word choice can put off female candidates. Terms such as rock star, guru, and even hacker can prevent women from clicking on job listings, as can descriptions of an aggressive workplace culture, such as “work hard, play hard.” Also, unless they meet virtually all the criteria for a job, women tend not to apply for it. When men see that they meet as little as 60 percent of the criteria, they tend to believe they are absolutely qualified.

As a consequence, men tend to go for the positions and promotions while women tend to hold back. Recognizing this imbalance and giving women the confidence to go for the next challenge and opportunity, even if they don’t meet all the official criteria, is a key part of increasing their presence. Companies must become more sensitive to unconscious bias in how they write and discuss job listings and assess candidates against the “stated” requirements as well as a candidate’s potential beyond the job description.

Offer more gender diversity incentives and training for men. Frontline managers often don’t consider taking action to improve gender diversity. One of the root causes is a lack of proactive communication and training for men. Only about one-third of working men (pdf) say they have received gender diversity training that was helpful in understanding or addressing the issue. An important way to make substantive improvements in creating the conditions for more women to thrive is through training, measurement, and incentives. Progressive companies such as Liberty Mutual Insurance are doing just that. In a historically male-dominated industry, women make up 50 percent of Liberty Mutual’s frontline managers, 23 percent of its top management, and a third of its board of directors. The company holds a one-day Men as Allies Summit, attended by more than 450 male and female employees, that has fostered further discussions, as well as related employee events.

Provide sponsors and role models, not mentors. Our work with women professionals confirms that women need strong role models at all stages of their career and sponsors for support and advancement, as summed up by the phrase “You need to see it to be it.” The lack of women leaders who can advocate for other women’s professional growth is a significant hindrance to getting more women through the pipeline into senior leadership roles. In her research, Hewlett documents that women typically have three times as many mentors as men, but men have twice as many sponsors as women. A sponsor is defined as someone who actively seeks a person’s advancement, a mentor as someone who serves as a sounding board. When individuals have sponsors rather than mentors, they are more likely (pdf) to have the confidence to ask for stretch assignments and pay raises than their peers of the same gender. This assertion has given rise to organizations such as #GoSponsorHer that encourage men to take an active and intentional role in the success of high-potential women.

Because men currently hold the vast majority of the top-level roles, male leaders need to bring promising female professionals along. And because people tend to both mentor and sponsor in their own image, often unconsciously because these are typically unofficial roles, it is essential to make male leaders more cognizant of this important responsibility and encourage them to widen their circle to include women.

As the trajectory of women leaders improves at every level of the organization, more senior women will be able to serve as role models and sponsors and help raise their more junior female colleagues through the ranks to leadership.

3. Develop Creative Solutions to Workday Job Design

The traditional 9-to-5 workplace is often not a conduit for women’s advancement. When the structure of jobs is inflexible and lacks equal advancement and equal pay, many women decide they have no choice but to leave. This need not happen. More and more companies are rethinking what flexibility means. The chief marketing officer of one of the world’s largest consumer products companies recently told us how he restructured the company’s senior marketing management team to be more mindful about supporting women’s advancement. The company made a point of creating a safe environment in which the women could share their life and career situations and brainstorm how to structure their roles and schedules on a customized basis so they could meet their responsibilities outside work. For some women this meant advancement and pay increases; for others it meant more flexibility, accountability, and even job sharing.

This move has fundamentally changed how the company makes decisions, takes risks, collaborates, and drives results. Now more than half of its top leaders are women. The company achieved higher performance, significantly higher commitment, and higher job satisfaction from the individual leaders and their teams. And as this change became known across the company, the global marketing function became a magnet for the company’s best female talent at all levels.

 “Whatever we may have given up — in terms of how work has traditionally been done, on a 9 to 5 basis — we have gotten back far more in terms of results and commitment,” the CMO said. “Everyone wants to join our team. These women have shown that they have so much capacity and desire to lead and deliver results. We simply unleashed this by meeting them where they were individually in their lives.”

Adapting work patterns by creating more project-based work, mobilizing current teams in new ways, or hiring women (including returners) from outside the company for assignments will help move more women into key roles. By employing the “jobs to be done” theory — a concept introduced by Clayton M. Christensen at Harvard Business School — as a complement to the theory of disruptive innovation, companies can change the policies, structures, and processes that are currently inhibiting the hiring and advancement of women. The more women a company brings in and supports, the more women it will bring through into leadership.

4. Move More Women into General Management and P&L Roles

We analyzed the path to the corner office in S&P 500 companies from 2014 to 2017. The vast majority of CEOs were appointed from within (see “The CEO Fast Track”). Approximately 80 percent of CEO appointments were internal promotions (up from 59 percent in 2004). Of these appointments, the significant majority were promoted from the roles of chief operating officer or divisional president. Specifically, from 2014 through 2016, 86 percent of CEOs were appointed from these general management positions. The next most likely position from which CEOs were appointed was chief financial officer. In the United States, 8 percent of CEOs were appointed from the CFO ranks from 2014 through 2016. In Europe, over this time period, 69 percent of CEOs were appointed from general management and 19 percent from the CFO position.

There is a drastic mismatch between men and women in CEO grooming roles. The lion’s share of women who do make it to the C-suite are typically in corporate support functions rather than general management and P&L roles. Even if women are on company executive committees, they are unlikely to move into the CEO role unless they move from corporate, administrative, and support functions into general management. According to DiscoverOrg’s analysis (pdf) of top leadership roles at Fortune 1000 companies, women represent a majority of C-suite positions in only one occupation: chief human resources officer. This is followed closely by chief marketing officer. Women represent only 9 percent of CFOs and only 7 percent of COOs, which is why it is absolutely no surprise that only 7 percent of CEOs at Fortune 1000 companies are women (and 6 percent at Fortune 500 companies).

It doesn’t have to be this way. To dramatically increase the number of women in top leadership roles, progress needs to be made to move them into the key general management positions. Today, most of these positions are held by men. Companies can encourage and sponsor more women to move into line management positions with P&L responsibility so they have the training and organizational credibility to be eligible for the highest positions. If organizations are truly committed to increasing the representation of female CEOs and COOs, they need to manage this as a pipeline and pay attention to the gender mix of general managers and divisional leaders.

Seize the Moment

We are clearly at a watershed. There has never been more discussion about gender balance, pay equity, discrimination, and hostile workplaces. Nor is there any doubt about the value of increased diversity and gender balance. On a global scale, PwC’s Women in Work Index 2018 (pdf) concluded that achieving economic gender parity in line with Sweden, which has one of the highest female employment rates, could add US$1.82 trillion to the GDP of the United States, $580 billion to that of Japan, $310 billion to that of Germany, and $250 billion to that of the United Kingdom. When professional women thrive, so do businesses and global economies.

The status quo will change when organizations take action. Society needs to leverage all the talent available to ensure that companies perform at their peak. As a society, we simply cannot afford to waste valuable resources, and as business leaders, we should not let the best talent leave our corporations and innovate elsewhere. To change the game, companies need to make asymmetric progress between women and men, especially at the more senior organizational levels. With the power of focus and a real commitment to action, this is achievable. We know the talent is out there.

Author profiles:

  • James M. Citrin leads the North American CEO practice of Spencer Stuart, the global executive search and leadership advisory firm. He has published seven books, including Lessons from the Top, The Five Patterns of Extraordinary Careers, and You’re in Charge — Now What?
  • Addie Swartz is the founder and CEO of reacHIRE, a company that partners with businesses to bring women back from career breaks and helps younger women grow and develop their careers.
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