Women in Leadership Positions: Improving the Pipeline

A few weeks ago we wrote about the underrepresentation of women in leadership positions in large law firms, reporting that not much progress has been made in the last five years, according to data from the National Association of Women Lawyers.  In contrast, the number of their counterparts at Fortune 500 companies – female CEOs and GCs – is on the rise.

While we noted that opportunities for advancement appear to be more abundant in the corporate world, a new study by The Boston Consulting Group (BCG) suggests that companies can do better, especially with regards to their management of leadership pipelines. 

Globally, only 9 percent of CEO positions are held by women reports BCG, citing data from Grant Thornton International.^[1]  Additional BCG analyses found that only 17 percent of their survey participants said their companies had targeted efforts for recruiting more women, yet 90 percent of executives interviewed saw a link between gender and the success of their company. The study suggests that companies take an analytical approach for advancing women into leadership roles, an approach that sets quantifiable objectives for recruiting, retention and promotion.  Current diversity efforts are often highly qualitative in nature and efforts that are more measurable are far less common. 

The study’s authors, Susanne Dyrchs and Rainier Strack (resident in BCG’s offices in Cologne and Düsseldorf, respectively), analyzed 44 multinational companies around the globe. Their findings indicate that the lack of women in leadership positions is not due to lack of awareness of the gender diversity gap.  Companies clearly understand the importance of diversity.  The study found that 90 percent of those interviewed saw a “connection” between diversity and the success of their companies, but very few of them were using quantitative measures such as reporting, monitoring, or setting targets for the number of women in particular roles.

Neither is it an issue of supply and demand.  Women are well-represented in the workplace.  Data cited by the report shows that male dominance in the workplace is declining^[2] and that the number of working women has been increasing^[3] by 2.2 percent a year.  Women account for 55 percent of college graduates worldwide.^[4] 

Major Themes from the Study

BCG’s benchmarking revealed five themes emerging from the study which are noted for their impact on gender diversity in management:

• A culture of office presence and “face time”
• A lack of off- and on-ramping procedures for women who leave and then return to work
• Male-oriented selection criteria or “self-cloning” (i.e., the tendency to hire and promote individuals with similar backgrounds and personalities to the decision-maker)
• Lack of gender diversity awareness among management
• Inadequate management of leadership pipelines

While all of these themes are important and are dealt with in the report, the BCG study cites an International Labour Office (ILO) report^[5] that says that the management of leadership pipelines is the “one factor that companies can influence the most.”  The pipeline, BCG contends, is broken and it breaks down somewhere between middle management and the C-suite.  BCG’s analysis indicates that the pace and the number of women moving through the pipeline from junior and middle management jobs into executive positions can be greatly increased by employing a fact-based and systematic approach. 

What Can Be Done to Keep the Pipeline Flowing?

The first stage is an in-depth quantitative study of the company’s recruiting, promotion and retention history in order to establish key performance indicators.  The second stage involves qualitative analyses – surveys and interviews – designed to get at the root causes of key problems as well as best practices.  Companies then need to synthesize the data and findings to tailor a solution that fits their identified needs, which may be shaped by their business strategy or global reach.  Companies should also calibrate their findings against broader benchmarks to see how their efforts compare to those of their peers.  At this point, according to BCG, companies should move forward with specific, relevant action items in hand, to be executed within a tight timeframe – “quick wins.”

As an example, the report cites the experience of Telstra, the Australian telecommunications provider, in developing a segmented employment brand for female talent, including a website which featured recruiting messages highlighting the company’s pro-active approach to gender pay equity.  A few months after the website’s launch, Telstra experienced double-digit growth in the number of female job applicants, “resulting in sustained positive impact for female representation overall.”

BCG also recommends that companies develop and use gender diversity dashboards (“cockpits”) to give senior managers an array of at-a-glance metrics by which they can gauge their progress.  This and other types of diversity measures require company resources, and can be difficult to support without a fact-based business case.  Thus, it becomes important for the case to emphasize how well those measures fit with the company’s business strategy or addresses a particular “hot spot” identified through the quantitative and qualitative analyses.

Lessons for Law Firms

Law firms, too, can take away the same advice that is being imparted to companies in this report.  Both law firms and corporations need to recruit and retain top talent in order to put a new generation of women on track for leadership positions. Companies will need to act before they are forced to comply with gender-diversity regulations.  The pressure for mandated quotas is gathering momentum, especially in Europe, and according to BCG, the movement is also gaining traction in Asia and Latin America.  The increasingly globalized nature of corporate legal practices will be impacted by such mandates, even if the U.S. never adopts similar quotes.  Those organizations that have implemented a strategic, fact-based approach to gender diversity will have much to gain on the global playing field.  As Dyrcks and Strack conclude,

Organizations that can harness the untapped intellect and energies of their current and prospective female leaders will establish enormous advantage over their competitors . . .  They’ll be better able to woo new generations of female  leaders.  They will be welcomed into markets where women are the primary economic influencers.  And they will start to see even higher levels of engagement among all their staff, regardless of gender – thereby initiating a self-sustaining cycle of diversity activity from within.

Posted by Marianne Purzycki