Why mixed-gender management teams perform better

Written by Miti Ampoma on 4 November 2019 in Opinion
Opinion

The business case for more women in senior positions is overwhelming, says Miti Ampoma.

A business with both men and women on its leadership team will perform better than one without. The weight of evidence in support of this is now too great to dispute.

The Pipeline, a leading gender diversity business, published a report this year that found firms whose executive committees are more than 25% women have profit margins almost three times higher than those with male-only executives.

In its 2018 report, Delivering Through Diversity, McKinsey found that companies with the most diverse executive teams are 33% more likely to outperform on profitability.

And survey after survey shows that mixed-gender management teams give far better results than single gender teams – of either sex.

A quick Google search shows reports from the Peterson Institute for International Economics, the University of Arizona, Credit Suisse, Forbes, Catalyst, and the University of California-Davis, to name but a few.

Yet, companies still don’t change. Women remain under-represented on boards, filling less than 10% of seats on FTSE 100 boards. This figure is even lower on the FTSE 250.

Women are also paid less. According to the Chartered Management Institute, last year the average gender pay gap was around 15% for women of all grades, 55% for CEOs and a staggering 77% for chairs.

As Anthony Hilton, journalist at The Evening Standard, wrote in 2018 when comparing the salaries of male and female bosses: “The highest-paid male boss was Jeff Fairburn of Persimmon, the housebuilder, who earned £47m. The highest-paid female CEO was Emma Walmsley, at GlaxoSmithKline, who earned £4.9m. One might have thought GSK was the more taxing challenge.”

Earlier this year, Rebecca Burke launched a crowdfunding campaign so she could take TalkTalk to tribunal for unfair dismissal and unequal pay.

According to reports, Burke led a cybersecurity programme at the telecoms company after it was hit by a high-profile hacking scandal in 2015.

Companies with the most diverse executive teams are 33% more likely to outperform on profitability

Burke was made redundant 15 months later and subsequently discovered that four of her male colleagues, who were all doing the same job, were paid up to 40% more in salary and 50% more in bonuses.

Three of her colleagues also kept their jobs when she lost hers.

Burke said: “When I started this case I was shocked to think that a British business could treat a woman so unfairly, but this life-changing experience has opened my eyes to the gender discrimination and equal pay issues that women and girls are facing every day.”

Women and communication

The people in your C-suite set the style and tone for communication across your whole organisation. This has an impact on the overall culture of your business. So it makes sense that a diverse leadership team will create a diverse culture; one that communicates effectively throughout your organisation and connects with people at every level.

Without women on your leadership team, your communication style and resulting culture will be more uniform and have less impact.

And as The Pipeline, McKinsey and others report, your productivity and profitability will suffer.

Communication: a hard or soft skill?

Many people class effective communication as a soft skill. However, there’s nothing soft about the ability to communicate in a way that inspires others and leads change; that develops consensus and shared understanding; that creates and maintains valuable connections; and that, as a result of all this, drives consistent and sustainable improvements in performance.

These days, the triple bottom line – that of people, profit, planet – is common practice for every business that takes its corporate social responsibility seriously. It reflects our new focus on doing business in a way that is good for everyone, in the long term.

As with everything else your business does, to be successful, this approach depends on effective communication.

When I talk about effective communication – or what in my work I call innovative communication – I’m talking about how you set the style and tone for communication at every level across your whole business. How you connect with people, create loyalty and build relationships. And how you encourage others to do the same.

How women can break through

Women still have to prove themselves more than men do. They have to work harder and for longer to achieve the same as men. Along the way they face more barriers.



All this makes it much harder for women to reach leadership or senior management positions, including a seat on the board, where they often have the most impact in terms of increased productivity and higher dividends.

For women, the path to the top is steeper with many more twists and turns. Until we’re competing on an equal basis, most women will need support to help them get there.

Wise firms know this; so they invest in recruiting, training and promoting women. And as a result, are more successful than those who don’t.

 

About the author

Miti Ampoma is the founder of Miticom Communications Training

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