The truth about women in business

Recently I was asked about the business case for having more women in senior roles. I paused, not because it was a difficult question but because I had hoped that we had moved beyond this. I am frequently asked to explain the value of having more women in leadership, yet I am never expected to do the same when it comes to having men in senior roles.

Well, there is a compelling business case for getting more women to the top of the house, according to research by Catalyst – a nonprofit organization with a mission to expand opportunities for women and business that has been corroborated by others. Having more women in organizations has been shown to improve financial performance, on average, and increase innovation and group performance.

Companies with more women board directors are also more likely to have more women corporate officers five years later; and companies with more women in senior leadership positions are more likely to have better corporate social performance. So it's a win-win on many levels.

Thomas Falk, chief executive of Kimberly Clark said: "You and I are going to pick an all-star team from this room in front of us. Now, I only get to pick from these 50 people on the left side, and you get to pick from the whole room. Who will have a better team?"

"If you're only picking your team from a small subset of the group, you can't possibly believe that you have the best team."

Unless they have been living under a rock, most companies get this to some degree or another. They know that if they want to be innovative and perform better, they need to include ALL talent throughout the ranks.

Why then are we still moving at a snail's pace when it comes to women holding senior leadership positions?

My sense is that two important ingredients are often missing – a sense of urgency and a measure of accountability. Historically, many thought that this situation would naturally take care of itself – the adage that give it time and that the best and the brightest women would rise to the top. However, we know that giving it time does not work, especially when the culture is not valuing ALL talent in the same way.

Facebook's Chief Operating Officer Sheryl Sandberg, one of a handful of women in leading positions in the business world.
Justin Sullivan | Getty Images
Facebook's Chief Operating Officer Sheryl Sandberg, one of a handful of women in leading positions in the business world.

The time for change is now. How do you create a movement of change?

For starters, educate yourself; find out what you need to know in order to change what needs to be changed.

I heard a story once from a woman who was questioning if there could be a gender pay gap in their company. In questioning a manager about this, his immediate response was that there was not a problem and there was no pay gap whatsoever, although no assessment had been done up until then. His assumption was based on his perception, not on fact. Her response was "do you think we are the one company who magically got this right, by accident?" when research showed the opposite. He had to concede it could be possible there was a gender pay gap.

Secondly, stop blaming the women. For example, we see from day one, women face more obstacles in the workplace. Catalyst research finds that women graduates get paid $4,600 less than men in their very first job out of business school and this gap only widens over time. According to the Center for American Progress, the wage gap stretches to $431,000 over woman's 40-year working career.

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And contrary to a popular myth, it's not because women don't negotiate salary. Women do, almost as often as men: 47 percent of women vs. 52 percent of men negotiated for a higher salary during the hiring process.

The gap isn't caused by women having children and leaving the workforce; and it's not to do with women's lack of ambition. We know that women and men aspire equally to board service and executive positions, according to Catalyst research.

What we know is that this inequality starts from day one on the job and that not all leadership opportunities are created equal. Our research found that "hot jobs"—the highly visible projects and international experiences that predict advancement—are significantly given more to men than women (35 percent vs. 26 percent).

Even those women willing to relocate still miss out. Women are no more likely than men to turn down "hot" international assignments that can help their careers, but the problem is that they may not be asked. Because 70 percent of leadership development occurs on the job, this means women are losing out greatly.

To make change, companies need to be looking at how they recruit, retain and foster women's advancement. They must make intentional effort to sweep away any obstacles in their path, questioning whether men and women are treated differently because of their gender; set accountable targets aligned to business objectives; and finally disable the 'think-leader-think-male' default - just because the top of the house is all men, it doesn't mean leaders are all men.

Today, women are leaders in business, sports, and politics, and they are shattering stereotypes. But women can't do it alone. Men have many opportunities to level the playing field by role-modeling 'inclusive' behaviors to inspire other men to act too.

Studies show that inclusion benefits both women and men. Beyond gender, other dimensions of diversity are also found to be good for business: race, board member background, LGBT identity and nationality.

"Having diversity in your business is the key to success," said Gerald Schotman, Former EVP Innovation and R&D, Chief Technology Officer, Royal Dutch Shell, in March 2015. "Innovation and technology advances really are the result of diversity."

We see more and more business leaders stepping up to the plate and treating this as a business imperative. It is not about 'doing the right thing' but rather it is essential to the success of organizations.

Allyson Zimmermann is Executive Director of Catalyst, a nonprofit organization that promotes expanding opportunities for women in the workplace.