Yes, Gender Diversity in Leadership Is Important for Business Success

“ Diversity is the engine of invention. It generates creativity that enriches the world” – said Justin Trudeau, the Prime Minister of Canada.

In a little narrower context, I firmly believe that gender diversity in leadership roles is not only necessary but critical to business success. Check out these marvelous studies and research in this context –

• A Forbes Global Diversity report tells you how diversity is the main driver for innovation. It helps businesses grow. Research has now found a causal link between women in leadership and financial success of a business.
• A report known as Global Leadership Forecast makes a telling conclusion: companies with top 20% financial success comprised 37% women leaders compared to the bottom 20% of companies who have less than 19% women leaders.

Why Does Gender Diversity Matter?

It’s a women’s market. Many industries show it’s the women who make 41% of buying decisions. Women entrepreneurs make a big impact on the economy and it’s the women who influence 85% retail decisions too.

New global and economic challenges need an updated profile of business leaders; wouldn’t you agree? Certain behaviors such as being role models, enhanced people skills, and participative decision-making are key to success in today’s business environment. So, between men and women, who do you think displays these behaviors more?

I remember – when I was associated with Infosys, during the senior management meetings, I used to have a slightly different point in views on the aspects of inclusion, empathy and team performance and those did help us in taking quite a few right decisions.  I personally feel that in the current era of conscious capitalism, compassion, creativity, love, and nurturing, which are traditionally seen as feminine values, play a very important role in the success of any business.

Female leaders make a big contribution to businesses because they think and behave differently than men. A 2007 McKinsey study gives you an extensive report on how the behavior of women is a big contributing factor to a company’s financial success. The study shows both genders have their own strengths. Both men and women apply equal intellectual stimulation and efficient communication. Men apply more individual decision-making and control corrective actions. Women apply more of participative decision-making and inspiration to the team. Women apply much more people behavior, expectations/rewards and display behaviors inspiring others as role models.

Advantages of having more women leaders

Smart businesses promote more women to leadership levels. Women directors and higher lead by example and if you were wondering, here are other benefits to allowing more gender diversity in leadership.

A mélange of thoughts. Today’s businesses face more challenging issues every day. Women in leadership roles bring different perspectives to different problems. This diversity gives businesses more options to better decision-making.

Company Representative. A company with a diverse group of leaders and boards of directors represent the company in a positive way and show the employees, shareholders, and customers what it stands for.

Competitive Advantage. Changes are ever so rapid in today’s business. A diverse group of leaders make more informed decisions which are strategic to the growth and financial success of the business.

Skilled Talent Pool. Women in senior executive positions have skills that most companies need, including people management, operational experience, etc.

A few examples of women in leadership in successful businesses

• Chitra Ramkrishna, MD & CEO, National Stock Exchange, ensures to hire more women on merit basis.
• Priya Nair, Executive Director, Home Care, Hindustan Unilever, realized her division made 45% of total revenues when she moved from an operation role to a strategic leadership role.
• Arundhati Bhattacharya, Chairman, State Bank of India, introduced innovative initiatives in digital banking and delivered profitable growth for the largest bank of India.
• Kirthiga Reddy, Managing Director, Facebook India, heads the advertising and sales division; with social media consumption Indian being the third largest in the world, she helps business partake in the consumer’s media consumption.

“Don’t let being a woman hold you back from the leader that you’re destined to be.” – Jamie Farsnel, Due.com

What should companies do?

Delegating women’s empowerment to the HR department as a to-do will not do anymore. Even if the recruitment teams includes more women hires, inclusion of women remains a vital issue. Ask yourself, do the women in my team feel engaged? Do we have women role models in executive levels within the company?

Women have skills that benefit the organization in a big way, but, these may stay dominant if not nurtured or given an opportunity to have ambition. Companies must try to raise women’s awareness about their self-imposed limitations. Programs that mentor, coach and train women to manage their careers should be included. Women also need a network of other like-minded women crucial for accountability.

Yes, there’s a lot of work to be done. Gender diversity is necessary if your business must thrive in today’s competitive world. There are many ways for business leaders to face these issues head on and create more gender diversity in workplaces, and especially, in leadership.

• There still seem to be quite a few organizations which have the ‘time spent in office’ as a metric for productivity. I feel that, instead of that, ‘output’ should be the measure of productivity.  It will help women deliver high quality work without having to worry about spending a stipulated amount of time in the office.
• Make sure performance-based appraisal systems are gender-neutral.
• Ensure that the internal and external recruitment hires include more women shortlists.
• Support women with more flexible working hours, if they need, for better work-life balance.
• Create development programs where women form a network of role models and mentor each other.
• Offer more leadership training and coaching programs to women.

Initiatives as these may seem mundane and obvious. Yet, many companies struggle to start them, imbibe them as a part of their culture or get full support from the top management. Either way, companies who prepare future leaders, especially women, get a competitive edge and thrive in a culture open to different thoughts, culture, and mindsets.