Why Having Women in Management is Good for Business

New research by global workplace supplier Regus has revealed that a staggering 77 per cent of employees would choose one job over another if it enabled them to access opportunities for flexible work.

New research shows women managers outperform men

Many women struggle to reach the highest levels of management in the corporate world. Removing these barriers would, of course, benefit women but new research shows that it would also benefit companies.

According to research conducted by consultancy firm Zenger Folkman women outperform men in many areas of leadership competency traditionally thought to be the strength of men.

Researchers used a sample of more than 7200 managers across the world who had their leadership effectiveness evaluated in 2011, 64 per cent of the sample were men and 36 per cent were women.

Of the 15 functions assessed females rated more positively in 12, including some of the functions typically dominated by males including sales, product development, legal, engineering, IT and research and development. Men came out on top in only three functions: facilities management, customer service and administrative/clerical.

Function Male Female
Sales 55.9 62.6
Marketing 45.7 52.4
Customer Service 52.4 50.6
Operations 50.4 53.8
HR, Training 48.7 50.6
General Management 49.6 55.0
Finance and Accounting 46.2 50.6
Product Development 42.0 49.0
Legal 54.7 59.4
Engineering 41.1 44.5
Information Technology 42.0 52.1
Research and Development 47.4 52.2
Facilities management, Maintenance 49.8 37.8
Quality Management 48.5 49.5
Administrative, Clerical 48.8 43.2

Women were also rated more positively than males on overall leadership effectiveness based on 16 leadership competencies. These competencies included qualities such as:

  • Developing others
  • Relationship building
  • Taking initiative
  • Practicing self development
  • Practicing self development
  • Integrity/honesty
  • Driving for results
  • Collaboration and teamwork
  • Inspires and motivates others

In fact of the 16 qualities assessed, males were rated more significantly positively on only one competency: Develops strategic perspective.

The CEO of Zenger Folkman says the findings of this research could have a profound effect on business and he encourages organisations to look inside their ranks to fill management positions:

“It is a well-known fact that women are underrepresented at senior levels of management. Yet the data suggests that by adding more women the overall effectiveness of the leadership team would go up.”

The Global Leadership Forecast 2011, a report by talent development company DDI surveyed more than 12,400 business leaders from 74 countries on organisational trends and best practice around building leadership substantiates the findings of the Zenger Folkman research.

This report finds that an alarming number of women fall off the corporate ladder at the highest levels of leadership but shows that companies which hold on to a critical mass of at least 30 per cent women in higher level management roles enjoy an improved financial performance.

According to DDI’s report removing the barriers to women wanting to enter leadership roles and ensuring their development opportunities is important because:

  • A better balance of women in top leadership positions can mean a more diverse team of leaders with different perspectives and a greater ability to contribute new ideas.
  • Organizations that confront the gender gap and make efforts to appeal to and retain female talent will be better positioned to take advantage of a larger pool of emerging leaders
  • Women improve the overall leadership within companies. The report revealed that leaders from organisations with a majority of women had over 50 percent more leaders rating their leadership quality as high compared to organisations with fewer women.
  • Organisations with a higher percentage of women in leadership positions more frequently reported their financial performance as better than the competition.

According to DDI the message is clear: women mean business and organisations with more women in leadership roles outperform their competition. They recommend these simple steps for companies wanting to increase the number of women in leadership:

  • Train current leaders to act as talent advocates for all
  • Challenge existing paradigms about what leadership potential and talent look like
  • Recruit more women at all levels; get them in the door
  • Cultivate the female talent you currently have in the company and help them realise their full potential
  • Support women by creating an organisational culture that is merit based
  • Work on retaining the women you have

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1. Stroope & Hagemann, 2011

This Better Workplace Bulletin was First Published in June 2012

Why Having Women in Management is Good for Business