Untapped Potential of Women Leaders

Women leaders outperform men in leadership competencies, particularly in fostering agile, innovative, and engaging workplaces, but systemic biases underrepresent them in senior positions.

Why it matters: Leveraging women's leadership strengths leads to superior organizational performance and innovation while challenging systemic biases and promoting diversity and inclusion.

The big picture: As an executive team coach, I have the privilege of coaching senior leadership teams, and the vast majority are men.

I coach very few women in the C-suite but more women when I work with the second and third leadership tiers.

That bothers me a lot.

Obviously, the percentage of women in leadership dwindles as we scale the corporate ladder.

Even the few who got a seat at the table feel ousted from an inner circle they name the "boys club."

What surprised me the most was that some of these women were highly effective leaders based on their Leadership Circle Profile scores and our Leadership Potential Indicator.

My fellow partners at the Leadership Circle studied this phenomenon.

The study

The study was published by Bob Anderson and Bill Adams, the creators of the Leadership Circle, in their book Scaling Leadership: Building Organizational Capability and Capacity to Create Outcomes that Matter Most.

This research included 300 senior leaders from 237 companies in 29 industries and six countries. It puts a premium on a very particular type of leadership—high-creative leadership—capable of rapidly growing an organization while simultaneously transforming it into a more agile, innovative, and adaptive workplace.

On the other end of the spectrum, they define High-Reactive leadership, which cancels itself out and seriously limits scale.

The Data?

Women were the majority in the High-Creative group (54%), which correlates to greater leadership effectiveness, but they represented a significantly smaller percentage of the High-Reactive group (just 22%).

This data is even more striking, considering that women comprised just 38% of all leaders evaluated.?

Across the entire norm base, women are rated 15 to 20 percentile points higher in overall Creative Leadership Competencies than men.

The Collective Leadership Imperative

Women's underrepresentation in the database is not surprising. They are also underrepresented in senior leadership ranks, especially in the very top leadership roles in organizations.

Women continue to face many unique challenges and biases in the workplace that prove tough to shake loose, even 50-plus years since the “women’s movement.”

These biases go unchecked and unrecognized in the workplace, stagnating organizational potential to thrive in today’s complex global environment.

The Leadership Circle database shows that colleagues see high-ranking women leaders as decidedly respected and among the best leaders with whom they have worked.

Nordea Study

A 2017 study by Nordea Bank validates the premise. Nordea conducted a study of almost 11,000 publicly traded companies worldwide.

The study showed that, on average, companies led by women CEOs or board chairs performed better than those companies led by men. They delivered an annualized return of 25 percent since 2009, more than twice as much as the percent generated by companies in the MSCI World Index.?

Unfortunately, only 4 percent of the companies surveyed by Nordea had a woman serving as CEO or board chair.

Women Are Better Leaders During a Crisis

There has been much discussion about how women have done a better job leading during the Covid-19 pandemic than men.?

Jack Zenger and Joseph Folkman’s Research: Women Are Better Leaders During a Crisis was published in HBR on December 30, 2020,

According to an analysis of 360-degree assessments, women were rated as more effective by those who work with them.?

The gap between men and women in the pandemic is even larger than previously measured, possibly indicating that women tend to perform better in a crisis.?

In fact, women were rated more positively on 13 of the 19 competencies that comprise overall leadership effectiveness in the authors’ assessment.

Conclusion

The data suggest that women lead more tend to lead more Creatively and less Reactively. Since there is a strong positive correlation between Leadership Effectiveness and Creative Competency scores, women lead more effectively than men.

In a VUCA world (Volatility, Uncertainty, Complexity, and Ambiguity), relational, emotionally intelligent, and authentic leadership is at a premium. Women are more effective because they lead more relationally.

Women have a hard time getting promoted into senior leadership positions because of systemic bias created and maintained by a male-dominated power structure.?

Men still exclude women from leadership. Every one of us in a leadership position can and must use our influence to accelerate this change.?

Making women full and equal partners in leadership is a competitive advantage in an increasingly complex world.