Organizations are more financially successful with females in leadership roles. And gender has (almost) nothing to do with it.
By Beverly Crowell
This is a woman’s world, but not every company has received the memo. Today, women make up the majority of the U.S. population and earn 60 percent of all undergraduate and master’s degrees in the United States.
If we subscribed to the law of large numbers, it would seem logical that more women would also find themselves in leadership roles and more evenly represented on senior leadership teams inside organizations.
But when it comes to women in the boardroom, the law of large numbers doesn’t always add up.
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When the global nonprofit Catalyst analyzed women in Standard & Poor’s (S&P) 500 companies, it found that while women make up 44 percent of the overall S&P 500 labor force and 37 percent of first- or mid-level officials and managers in those companies, they only account for 25 percent of executive- and senior-level roles, hold only 20 percent of board seats, and lay claim to just 6 percent of CEO positions.
Even with the great strides that female leaders have taken, 25 percent of Americans still say it’s more likely that humans will colonize Mars in their lifetime than half of Fortune 500 CEOs will be women, per data from the Rockefeller Foundation and Global Strategy Group.
The numbers suggest we ought to prioritize putting women in the boardroom before sending people to the red planet. The investment research firm MSCI found that just seven companies in its key global index, composed of more than 2,500 women, have boards dominated by women.
Of those seven organizations, more than half have outperformed industry peers. And in 2016, the Credit Suisse Research Institute issued a report on women leaders and company performance, saying results “[continue to] demonstrate that the higher the percentage of women in top management, the greater the excess returns for shareholders.”
What’s more, 70 percent of Americans say having women in leadership positions would have significant positive impacts on the wage gap, changing policies, and a diverse workforce, per research from the Rockefeller Foundation and the Global Strategy Group. So isn’t it time for organizations to start thinking the same way?
Management consultant and author Margaret Wheatley has suggested that leadership is a series of behaviors, not a role for heroes. When distilled down to that level, the study of who might make a “better leader” or even a team member isn’t about male or female, but instead, the behaviors intuitively demonstrated through each person’s distinctive qualities.
These leadership qualities have been the source of studies and the basis for leadership competency models inside organizations for years. And if recent research suggests that organizations are achieving higher levels of success with more female leaders, what are women doing that their male counterparts aren’t?
Lumina Learning, a global provider of psychometric assessments in personality and leadership, may have the answer. After leaders evaluated themselves across 24 qualities, Lumina found there isn’t much difference in personality between genders, with a few exceptions.
Men score higher in competitive, tough, and logical. The qualities of radical and conceptual have more gender difference, suggesting men may be greater risk takers and more abstract thinkers. Women score higher in empathy, implying they’re more compassionate.
Empathy may be a hallmark of better leaders. In Leaders Eat Last, Simon Sinek says true leadership is about empowering others to achieve things they didn’t think possible. Exceptional organizations “prioritize the well-being of their people and, in return, their people give everything they’ve got to protect and advance the well-being of one another and the organization.”
Lumina’s findings line up with other personality studies, like 2001 research from the National Institute on Aging and National Institutes of Health that found women reported themselves to be more anxious and risk-averse (down to earth) and agreeable and warm (empathetic). Men, meanwhile, were higher in assertiveness (tough) and openness to ideas (conceptual and imaginative).
Women appear to have the edge in other areas, too. In 2012, when the development firm Zenger Folkman wanted to see which gender supplies better leaders, it looked at assessment results from thousands of leaders’ managers, peers, direct reports, and others.
Women were rated more positively on 12 of Zenger Folkman’s 16 researched differentiated leadership competencies, including takes initiative, develops others, builds relationships, and champions change. The data suggested that by adding more women to leadership teams, their overall effectiveness would increase.
In a separate Lumina study, women were also rated significantly better than men on the majority of 16 effective competencies across Lumina’s four leadership domains. At the same time, men were rated significantly higher on the “overextended” leadership domains of laissez faire leadership, unfocused leadership, transactional leadership, and driven leadership.
It’s in these differences where organizations can find balance by having more women on teams and in leadership roles.
Women also share some unique differences in their levels of emotional intelligence (EI). According to the Center for Creative Leadership, 75 percent of careers are derailed for reasons related to emotional competencies, including inability to handle interpersonal problems; unsatisfactory team leadership during times of difficulty or conflict; or inability to adapt to change or elicit trust. Male and female leaders with high EI have a realistic understanding of their own self-worth and an understanding of their strengths and weaknesses.
In Lumina’s research across 16 emotional qualities, the differences between men and women are broadly consistent with other research using the five-factor model of personality. Women are generally more modest and responsive than men. These qualities usually emerge in humble, unassuming leaders who have the ability to act with urgency under pressure.
The more that boards take notice of the unique and effective leadership qualities women bring to the table, the better. But it’s not all or nothing: Each gender has unique qualities that can ultimately support an organization’s success. The secret is assembling the right collection of people with the perfect leadership qualities.
Chances are you could use some more female talent at the top—and you shouldn’t have to look far to find great women leaders who are up for the task.
BEVERLY CROWELL is a management consultant, practitioner for Lumina Learning, and a speaker and contributing author to The Talent Management Handbook and Coaching for Leadership: Writings on Leadership from the World’s Greatest Coaches.