Recent studies suggest that bringing women up through the ranks to senior leadership positions has a direct impact on corporate performance. Recent research shows:
- Companies with the highest percentages of women on their board of directors outperformed by 53 percent those with the least on return on equity, and by 66 percent on return on investment. (Catalyst)
- Hedge funds managed by women delivered nearly double the investment performance (9 percent) versus those managed by men (5.82 percent) from 2000 through 2009. (Hedge Fund Research)
- The 13 U.S. blue-chips run by women in 2009 showed a 50 percent gain in share price—double the S&P average. (USA Today)
- Women small business owners will create more than half of 9.72 million anticipated new small business jobs, a striking figure given that women-owned business currently account for just 16 percent of U.S. jobs. (The Guardian Life Small Business Research Institute, Bureau of Labor Statistics)
The Family Factor
When women are in top positions, some important conversations become possible. Before joining Facebook as COO, Sheryl Sandberg was the most senior female executive at Google. Intensely committed to the development of women, Sandberg has a unique ability to address the career development of her female team members in a way that male managers would find difficult. The conversation often starts when Sandberg offers a critical leadership opportunity to a woman. If she is initially enthusiastic but then hesitates, Sandberg sometimes says, “I’m sorry for bringing up something so personal, and feel free to tell me you don’t want to discuss it. But just in case you’re concerned about taking this on because you’re considering getting pregnant sometime soon, I’d love a chance to tell you why it makes sense that you accept this responsibility.”
No male manager could say that, and even Sandberg considers bringing up that topic in the workplace a risk. “We are not supposed to show any bias or take childbearing plans into account as we manage people,” she says, “but after watching talented woman after talented woman abandon her career before she actually leaves it, I now ask this question and I ask it directly.”
Sandberg sees this dynamic play out too often to ignore. When ambitious and successful women contributors consider starting a family, they no longer agitate for new responsibilities and if any are presented, they offer the kind of ambivalent responses that get the project assigned to someone else. This slowing down before their circumstances actually change is what Sandberg calls “leaving before they leave” and she knows how this cost can impact the organization.
Xerox: Getting It Right
The poster child of gender-balanced Fortune 500 companies has to be Xerox, the first company to pass executive authority to one woman, Ursula Burns, directly from another woman, Anne Mulcahy. That particular succession illustrates the advice that professional women’s organizations, like the National Association for Female Executives, have long offered members—that possessing technical or engineering skills is a solid way to advance.
Burns, who has two mechanical engineering degrees, says that when she was an engineering manager at Xerox in the early 1990s, she was invited to sit off to the side in monthly meetings presided over by Paul Allaire, then president of the struggling Xerox. Every month, Burns recalls, Allaire would impose a hiring freeze. But the next month, Xerox added another 1,000 employees. When this happened a number of times without anyone making an issue of it, Burns finally raised her hand. “I’m a little confused,” she said. “If you keep saying ‘No hiring,’ and we hire 1,000 people every month, who can say ‘No hiring’ and make it actually happen?” Allaire squinted at Burns for a few seconds and then moved on.
In some companies, it would have been a career-limiting move to challenge the prevailing culture so directly. Fortunately, Xerox culture valued forthrightness. Soon thereafter, Allaire asked to meet with Burns and, expressing gratitude for her candor, made her his executive assistant and no doubt helped pave the way for her succession to CEO almost 20 years later.