March is Women’s History Month.
All month long, we see posts celebrating the contributions of women in business and in society. Female CEOs are highlighted, women founders are honored, glass ceiling breakers recognized, across LinkedIn, on news sites, TV, and more, all deservedly so.
Then it’s April, and the world moves on.
And women founders continue to get only 2.7% of venture capital dollars, despite women-led business revenue increasing by 68%.
And only 8% of Fortune 500 CEOs are women (and women of color are just 1% of the Fortune 1000.)
And women continue to struggle to get the opportunities they deserve. And shareholders suffer.
All of this continues in spite of the research that shows that firms with more women in the executive suite are more profitable, more socially responsible, and provide higher-quality customer experiences. (Harvard Business Review, 2021)
The Harvard research goes on to add that as firms add more female executives, they shift from a “knowledge-buying” strategy – mergers and acquisitions – to a “knowledge-building strategy” of investing in internal research and development.
Study after study confirms that female-led businesses are more profitable – 15% and more – than male-led companies. Stock prices of publicly traded companies increase an average of 20% after they add a woman CEO.
If overwhelming evidence shows that gender diversity in the executive suite leads to higher profitability, why does this problem persist? Why does Women’s History Month seem to be the only time we notice the female leaders driving businesses?
More importantly, what can we do to address this problem?
Fix the broken ladder.
McKinsey calls it the “broken rung” on the corporate ladder: for every 100 men promoted to manager, only 86 women are promoted. That means there are fewer women to promote up the ladder. Diversity generates diversity.
Eliminate unconscious bias.
Women who negotiate for salary or promotions are 30% more likely than men who negotiate to receive feedback that they are “intimidating,” “too aggressive,” or “bossy” — and they are 67% more likely than women who don’t negotiate at all to receive the same negative feedback.
This unconscious bias means that women are in a “damned if you do, damned if you don’t” situation when trying to get ahead in the corporate world.
Look at the future instead of the past.
Women are usually promoted based on past accomplishments, while men are judged on future potential. And women tend to get slotted into roles such as HR and marketing, while men get more P&L focused opportunities – sales, investments, or heads of divisions. And a past performance of generating revenue sets them up for the CEO position.
In other words, women get trained around people and men get trained around the guts of the business.
It’s time for a change.
Boards and C-suites need to look more like the human population – 50/50, rather than the unbalanced room we see today, rather than the less than 20% they are now.
Let’s make Women’s History all year.
Until we meet again.
CEO, Focus & Find