Women in Power: A Strategic Imperative for Business Growth - 2024

Women are not only half of the world’s population, but also a powerful force for global growth and sustainability. Yet, they still face significant barriers and challenges in achieving their full potential as leaders. In this article, we explore why empowering women in business is not only a moral imperative, but also a strategic one, and how businesses can benefit from fostering gender diversity and inclusion at all levels.

Driving Growth Through Female Leadership

Empowering women in leadership roles transcends the mere fulfillment of quotas; it serves as a strategic lever for driving sustainable growth. Studies consistently indicate that companies with gender-diverse leadership teams financially outperform their peers. For example, a 2024 research by McKinsey & Company reveals that firms with a higher proportion of women at the leadership level achieve superior financial performance, with 25% higher returns on equity and 36% higher earnings before interest and taxes. This highlights the clear correlation between gender diversity in leadership and enhanced business outcomes.

Some of the companies that have successfully leveraged female leadership include:

• General Motors: As the first and only woman to lead a major automaker, Mary Barra has been the CEO of the American automotive giant since 2014. She has steered GM to record profits, a business model transformation, and an all-electric future. She has also championed women’s career development through flexible work arrangements, mentoring programs, and sponsorship opportunities. Under her leadership, GM has increased the representation of women in its board of directors from 33% in 2014 to 54% in 2024, and in its executive leadership team from 25% in 2014 to 50% in 2024. This has enabled GM to tap into diverse perspectives and talents and to enhance its customer satisfaction and loyalty.
• Accenture: The global consulting firm has increased the percentage of women in its executive leadership team from 21% in 2014 to 40% in 2024, and aims to achieve 50% by 2025. The company has also implemented various initiatives to support women’s career development, such as flexible work arrangements, mentoring programs, and sponsorship opportunities.
• L’Oréal: The French cosmetics giant has been recognized as one of the world’s most gender-balanced companies, with women representing 50% of its board of directors, 32% of its executive committee, 57% of all key positions, and 61% of international brand directors. The company has also launched several programs to promote women’s empowerment, such as the Women in Science Awards, the Women in Digital Awards, and the Women in Leadership Program. L’Oréal is dedicated to achieving gender equity at all levels and functions, while also creating inclusive environments for the LGBTQIA+ community worldwide.
• Salesforce: The cloud computing giant has reported 36.4% of Women in the workforce in 2022 and is committed to achieving a workforce with at least 40% women and non-binary employees by 2026. It has also appointed Molly Ford as its first chief equality and recruiting officer, who leads the efforts to create a culture of equality, diversity, and inclusion at Salesforce. The company has earned a reputation as one of the best places to work for women, with initiatives such as equal pay, parental leave, and mentorship programs. However, Salesforce still has room for improvement, as it currently has only 30.70% of women on the Board, 25% women in leadership team/executive committee, and 28.90% of women managers as reported on Women Business Collaborative. Salesforce should continue to invest in attracting, retaining, and promoting women in these areas, as well as ensuring a fair and inclusive work environment for all.

Closing the Gender Gap

Despite progress, significant gender disparities persist in corporate leadership. The Global Gender Gap Report 2023 underscores that, although women are re-entering the workforce at higher rates than men globally, gaps remain wide overall and in several specific dimensions. Despite women’s representation in senior management reaching 31% globally, the gender pay gap remains a significant challenge. As of 2024, women continue to earn approximately 82 cents for every dollar earned by men for equivalent roles. This calls for urgent action to address this gap and promote fairness and equality.

Some of the challenges and barriers that women face in leadership include:

• Stereotypes and biases: Women often encounter stereotypes and biases that undermine their credibility, competence, and confidence as leaders. These include the double bind of being perceived as either too soft or too tough, the glass ceiling of being denied access to senior positions, and the maternal wall of being penalized for having or wanting children.
• Lack of role models and mentors: Women often lack role models and mentors who can inspire them, guide them, and advocate for them in their leadership journeys. This can limit their aspirations, ambitions, and opportunities for career advancement. According to a survey by KPMG, 28% of women cited the lack of mentors as a key barrier to their leadership development.
• Work-life imbalance: Women often face work-life imbalance due to the unequal distribution of domestic and caregiving responsibilities, and the lack of adequate support and flexibility from their employers. This can affect their health, well-being, and performance, and force them to make trade-offs between their personal and professional lives. According to a report by Deloitte, 44% of women considered leaving the workforce due to the pandemic-induced stress and burnout.

Fostering Innovation Through Diversity

Envision a workplace where diverse perspectives converge to fuel innovation and drive competitive advantage. Companies with diverse leadership teams, including women, are better equipped to navigate complex challenges and seize emerging opportunities. Research from the Boston Consulting Group confirms that such organizations are 38% more likely to financially outperform their competitors. By embracing gender diversity in leadership, businesses can tap into a wealth of fresh ideas, perspectives, and approaches, driving continuous innovation and long-term success.

Some of the benefits of fostering innovation through diversity include:

• Enhanced creativity: Diversity stimulates creativity by bringing together different viewpoints, experiences, and backgrounds. This leads to more novel and original solutions, products, and services. For example, a study by Harvard Business Review found that teams with more women generated more patents and citations than teams with fewer women.
• Improved problem-solving: Diversity improves problem-solving by enabling teams to access a broader range of information, skills, and perspectives. This leads to more effective and efficient decision-making, especially in complex and uncertain situations. For example, a study by MIT and Carnegie Mellon University found that teams with more women performed better on collective intelligence tests than teams with fewer women.
• Increased customer satisfaction: Diversity increases customer satisfaction by enabling businesses to better understand and meet the needs and preferences of their diverse customer base. This leads to more loyal and satisfied customers, and higher revenues and profits. For example, a study by Catalyst found that companies with more women in senior management positions had higher customer retention rates and sales growth than companies with fewer women.

Breaking Barriers Through Mentorship and Support

Research shows that access to mentorship programs significantly enhances women’s confidence, skill development, and career progression. Organizations that invest in mentorship initiatives witness tangible benefits, including improved retention rates, enhanced leadership capabilities, and a more inclusive corporate culture. By fostering a supportive environment that nurtures female talent, businesses can cultivate a pipeline of empowered leaders poised to drive organizational success.

Some of the best practices for creating effective mentorship programs include:

• Aligning the goals and expectations: The mentor and the mentee should have a clear and mutual understanding of the goals and expectations of the mentorship relationship, such as the frequency, duration, and mode of communication, the topics and issues to be discussed, and the feedback and evaluation methods to be used.
• Matching the mentors and mentees: The mentor and the mentee should have a good fit in terms of their personality, style, values, and interests, as well as their professional background, experience, and expertise. This will ensure a positive and productive relationship, based on trust, respect, and rapport.
• Providing training and resources: The mentor and the mentee should receive adequate training and resources to prepare them for their roles and responsibilities, and to equip them with the skills and tools to effectively communicate, collaborate, and learn from each other. This will enhance the quality and impact of the mentorship program.

The Ripple Effect of Inclusion

Embracing diversity and inclusion initiatives yields multifaceted benefits that extend beyond financial metrics. The World Economic Forum’s DEI Lighthouse Programme states that effective DEI initiatives from companies across industries and geographies are shaping more resilient and inclusive economies. Empowered women serve as catalysts for change, inspiring future generations and fostering a culture of inclusivity that attracts top talent. By championing diversity in leadership, businesses enhance their reputation, strengthen their employer brand, and create a dynamic work environment conducive to innovation and collaboration.

Some of the examples of the ripple effect of inclusion include:

• Social impact: Empowered women have a positive social impact, as they contribute to the well-being and development of their families, communities, and societies. For instance, a study by the World Bank found that increasing women’s income and education leads to lower child mortality, higher school enrollment, and better health outcomes.
• Environmental impact: Empowered women have a positive environmental impact, as they are more likely to adopt sustainable practices and behaviors, and to support environmental causes and policies. For instance, a study by the Yale School of the Environment found that countries with higher levels of gender equality have lower carbon dioxide emissions and ecological footprints.
• Political impact: Empowered women have a positive political impact, as they are more likely to participate in civic and political activities, and to advocate for democracy, human rights, and peace. For instance, a study by the United Nations found that countries with more women in parliament have more inclusive and responsive governance, and are less prone to conflict and violence.

Conclusion

Women in power are not only a moral imperative, but also a strategic imperative for business growth. By empowering women in leadership roles, businesses can drive growth, foster innovation, close the gender gap, break barriers, and create a ripple effect of inclusion. The World Bank’s Gender Strategy 2024-30 provides a roadmap for accelerating gender equality and women’s leadership for global sustainability and growth. The time to act is now. Join us in this conversation, and share your thoughts on how we can empower women in business. Together, we can make a difference.

References:

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