Since the Women's Liberation Movement of the 1960s, women may have pushed open the front door of corporate America's workforce, but as a gender, they have yet to fully represent their talent pool in upstairs board rooms and high leadership positions.
According to the research group Catalyst, while women made up 46.7% of the U.S. labor force in 2010, they held only 14.4% of the Fortune 500 executive officer positions and 15.7% of Fortune 500 board seats.
Although in recent years, individual industries - marketing and public relations, for example - have made gender diversity a front and center issue, many companies aren't putting their money where their mouths are.
According to Mercer research, almost three-quarters of companies have no formal philosophy or clear strategy as it relates to women leadership development, despite conclusions that gender diversity in leadership positions can yield tangible benefits such as innovation capabilities and overall higher engagement levels, as well as showing through in the return to shareholder value.
"Women and minorities continue to make up a larger proportion of profits for companies [as well as] a larger proportion of your overall employee base," says Aditi Mohapatra, senior sustainability analyst for Calvert Investments, an investment management company. "Unless you have the diversity of viewpoints and opinions that exist within your shareholders and within your community, you're not going to be best fit to represent shareholder interests in a corporation."
Molding future female leaders
A 2007 Catalyst study found that Fortune 500 companies with three or more women on their boards consistently outperformed the Fortune 500 average in terms of return on equity, return on sales and return on invested capital.
Further, a 2010 McKinsey study confirmed that companies with the highest share of women on executive committees outperformed those with all-male executive committees by 41% in terms of return on equity and by 56% in terms of operating results. Further, a 19-year study of Fortune 500 companies by Roy Adler found that the 25 companies that most represented women in executive roles exhibited higher profits as a percentage of revenues, assets and stockholders' equity than the median firms in their industries.
"It pays to be more diverse. We see that that has a positive impact on the bottom line," says Colleen O'Neil, a senior partner in Mercer's human capital consulting business. "From an emotional intelligence standpoint, there are some things that come easier to women, so that's why it's good to have a blend of leaders."
While many companies already educate women on how to succeed in their careers, it's much harder to change company culture and executives' perceptions regarding women in leadership.
"Typically, when leaders are looking down the pipeline for their successors, they're looking for Mini-Me's. And frankly, women are not going to look like the Mini-Me's when over 90% of leaders are male," says Rashid.
Historically, employers targeted the needs of women leaders with flexible work arrangements, diversity sourcing and recruiting, coaching and mentoring.
"For a while we were just focused on flexible benefits and work-life issues, [but] that allows people to participate in work, not help them lead," says O'Neil. Rather, she adds, high-potential women need sponsors or advocates at the senior level - "someone who promotes you and who helps pave the way for you."
Rashid concurs, adding, "Women have lots of mentors, but it's not getting them anywhere. They're over-mentored, if you will. Sponsors are what women are lacking." She notes that men are 50% more likely to have sponsors, and are also more likely to have sponsor-like relationships.
Deloitte Consulting launched its Leading to WIN program within its tax practice in 2009 to increase the number of sponsor relationships for its female population. Its Leadership Acceleration program followed a year later across all four of its business units - audit, tax, consulting and financial advisory. Both programs pair high-potential women with sponsors - male or female - to help pave each woman's individual's career path. Candidates have been partners or directors for five or more years, so they are a tenured group that is well positioned for leadership roles.
Leading to WIN's first class included 21 women, 18 of whom eventually moved into a new role or were promoted. Of the 20 women participating in the Leadership Acceleration program, 15 have been promoted or are taking on a new opportunity with increased responsibilities.
"Sponsorship has been the key for developing these women, rather than just training them," says Barbara Adachi, national managing director of human capital consulting at Deloitte. She's also Deloitte's national managing principal of WIN (Initiative for the Retention and Advancement of Women). "We want to see more women in leadership roles, where they're running businesses, large clients, and critical parts of our firm."
When Deloitee launched WIN in 1993, there were less than 100 women (7%) in partner, principal or director leadership roles. Now, there are 1,000 (23%).
At Ernst & Young LLP, the firm's CareerWatch program aims to get high-performing women and minorities into top-level partner positions. The program targets managers and senior managers who have been with the organization five or more years.
Teams of leaders in the company review the annual performance of each individual as well as their potential in becoming partner in the firm. If gaps exist between the experience of the applicant and what they will need to become a partner, they devise a plan to bridge those gaps. For example, if a candidate hasn't worked extensively with the community, but has the technical skills, they match them with someone who can mentor them in that area.
Once they've reached partner, the Inclusiveness Leadership program identifies women and minorities who have been partners for five or more years and have high potential for large client roles or titled leadership roles.
In the three-year program, candidates undergo a 360-degree review and external executive coaching, and are paired with a mentor from the firm's executive board. Thanks to the program, today, 21% of E&Y's title leadership roles are held by women.
Diversity as a business imperative
At Symantec, a technology company, leaders recognize that the industry traditionally struggles to recruit and advance women. However, of the 18,000 employees working at the technology company Symantec, 27% are women, which is above the industry benchmark 25%.
"At Symantec, we are keenly aware of the link between innovation and differing perspectives, so for us diversity is a business imperative," says Ellen McLatchey, director of diversity and inclusion at Symantec. Last year, the National Center for Women in Technology reported that 56% of women leave the technology field mid-career, over double the rate of men. In addition, the number of women graduating with degrees in computer science and technology is on the decline.
Thus, "our goal is to drive systemic change within the company, while working with our external partners and communities to address the underrepresentation of women in tech," McLatchey says. "To do this, we take a multi-pronged approach to building diversity," both internally with policies and programs and externally by encouraging young girls to study technology and science and building partnerships with advocacy and specialist organizations that promote and support gender diversity in the STEM (Science, Technology, Engineering and Math) arenas.
Internally, the company achieves this by ensuring women participate in the Top Talent Program in proportion to their representation in the workplace. In this program, women in leadership positions work one-on-one with a coach and focus on developing skills, knowledge and experiences that will broaden their strategic perspective, increase their knowledge of the company, and expand their professional network.
One policy that has helped all employees but is especially meaningful for women is the flexible work program called Ways2Work, which provides flexibility for where when employees perform their roles. The program shifts focus to the importance of employee contribution and results, rather than when or where work is completed. The company supports managers taking advantage of the flexible work program to send the message that flexibility in when and where you work is not a barrier to career advancement.
The company has launched 11 chapters of Symantec Women's Action Network around the globe with over 2,000 members. SWAN promotes career progression for women in the company through personal and professional networking. SWAN members are also a means for Symantec to connect with organizations in the community that support girls in technology like Expanding Your Horizons, Dare2BDigital and Digigirlz. Symantec also hosts onsite "Geek Girl" events where leaders teach girls how to code software and talk about the different types of fun and interesting jobs in technology.
"The SWAN members are role models to these young girls and help to debunk the schoolgirl myth that technology is just for boys," says McLatchey.
SWAN members organize Mentoring Circles for women at all levels of the organization. Both men and women volunteer as mentors for groups of ten women from cross-functional teams. The group meets for six months and share experiences and best practices on topics ranging from strategic thinking to balancing work and family.
SWAN members also organize Toastmasters classes at Symantec sites so that women can develop public speaking and leadership skills through practice and feedback in a safe and comfortable setting.
Despite the progressive companies featured here, unfortunately, "[developing women leaders] is not a burning platform for many leaders, but as we move forward ... it will become a business imperative," says Rashid. "If you're not leveraging the full market and the full talent pool, then you're leaving money on the table. It's as simple as that."
