The Strategic Benefits of Women in Leadership

The Strategic Benefits of Women in Leadership

Mary Beard, the acclaimed Professor of Classics, has a bone to pick with Homer. She notes that The Odyssey contains the “first recorded example of a man telling a woman… that her voice was not to be heard in public”.

If you haven’t read Beard’s Women and Power yet, then head straight to the library. It’s a fitting book recommendation to continue the legacy of last week’s International Women’s Day.

But back to The Odyssey. That was 3,000 years ago, and this is 2019. While we hear women’s voices louder and clearer than ever, women in the workplace may still struggle to be heard when their leadership teams do not represent their gender.

It’s an argument often used in the call for greater board room and managerial diversity. We chose to examine if we had further justification for diversity already at our fingertips.

We work with hundreds of organizations around the world to gather employee feedback, analysing the results to help them measure and improve employee engagement. When we delve into our dataset, we’re able to see exactly how workplaces differ depending on leadership composition—and the results may surprise you.

Our Investigation Into Women in Leadership

We took a confidential subset of our data spanning almost 60,000 employees under 3,000 managers. Forty-three countries are represented in the data, with the majority of respondents from the UK and US.

From this, we wanted to see how companies with better female representation in leadership positions differed from those with more male representation. We defined “female-led” companies as those with greater than 50% female representation in management, and “male-led” as those with less than 50%.

The leadership distribution by gender across organizations in our dataset is, as you might expect, imbalanced. This is broadly reflective of workplaces in general, so it’s not at all surprising. In our data, 37% of executive positions are filled by women, and 84% of companies have less than 50% female representation in leadership.

Employees at Women-led Businesses Display Greater Faith in Their Organization

We measure data using 45 core driver and sub-driver questions, and usually we don’t find a huge difference between male-led and female-led companies. However in this case, we did find a substantial difference when we looked at the answers to four specific questions as compared with male-led companies.

Employees at female-led companies, regardless of gender, consistently report having a stronger belief in their company and its strategy compared to those at male-led companies:

Question Difference in female-led businesses (0-10 scale)
“I’m inspired by the purpose and mission of our organisation.” +0.8
“How likely is it you would recommend [Company Name] products or services to friends and family?” +0.6
“Our organisation does a good job of communicating the goals and strategies set by senior leadership.” +0.6
“The overall business goals and strategies set by senior leadership are taking [Company Name] in the right direction.” +0.3

While we can’t draw definitive conclusions about exactly how workplaces may evolve as diversity is addressed, these results form the start of a discussion about how diverse leadership can be positively transformative to all.

Ieva Zeromskaite, Data Scientist at Peakon, a Workday company comments: “While the data has shown substantial differences in employee responses at female-led organizations, we must be careful not to draw cursory conclusions. We shouldn’t assume a one-way causal relationship, but the initial findings do raise some very interesting questions about the potential benefits of diverse leadership.”

Diversity Beyond Gender

When we hear about the call for greater diversity in leadership, we often talk about the negative effects of a homogenous, insular ‘echo chamber’ within leadership positions, or the cost of attrition when a talented employee hits the glass ceiling and leaves.

However, data like this can help demonstrate the actual value of diversity in the workplace, both in terms of employee engagement and impact on business outcomes.

Our study focuses on the impact of gender diversity, but we should acknowledge that true diversity also encompasses race, sexuality, economic background, physical and cognitive differences, as well as a broader consideration of gender beyond the two homogenous groups. It’s important to take this on board as we move to inspire the finest work from everyone in the workplace.