Catalyst and McKinsey have both shown correlations between gender diversity in leadership and bottom line results. Catalyst has shown that Fortune 500 companies with more women at the “C-level” and on boards of directors have higher returns on equity, capital and sales. McKinsey reports that European companies with more women in positions of influence outperform their competitors on both qualitative and financial measures including stock price growth. Neither McKinsey nor Catalyst asserts that there is a causal link between profits and having more women in management. But, McKinsey concludes, the facts argue in “[favor] of greater gender diversity.”
I suggest two explanations for why companies with greater gender diversity do better. First, gender diversity in a group makes it more likely that there is a balance of masculine and feminine approaches to work. That balance leads to better decisions and outcomes. Second, the fact that an organization has gender diversity in leadership is an indicator that the culture is inclusive and, therefore, engagement is broad and deep. Both inclusiveness and high levels of engagement have been shown to drive bottom line results.
A Balance of Masculine and Feminine Approaches
Both men and women use both “masculine” and “feminine” approaches to work. If an organization is run primarily by men, the masculine approach is likely to dominate. If an organization is run by both men and women, it is more likely there will be a balance of the two approaches. And that’s good for the bottom line.
Both masculine and feminine approaches have strengths--and downsides. When an organization is dominated by either approach, you are more likely to see the downsides of that approach. When there is balance, the organization is more likely to get more of the upsides, and less of the downsides, of both.
So what are masculine vs. feminine approaches? When I describe the feminine approach, I am not saying all women do that—but that the average woman is more likely to do that than the average man. The masculine approach is how the typical man is more likely to think and act. Here are examples of the differences in a few areas of workplace behavior:
Structure: how one structures organizations, teams and work
Masculine approach: Hierarchy; levels and status matter; power and information flow top to bottom
Feminine approach: Network; relationships matter more than status; roles overlap; power and information are shared
Work Focus: what is forefront in making a decision
Masculine approach: Goal focus; keeps focus on the goal/result; pushes aside distracting ideas
Feminine approach: Process focus; focuses also on the process to get the result; gathers multiple inputs; considers related issues
Influence: how one gets others to do what he/she thinks is important
Masculine approach: Commands; gives orders; tells; is direct, clear
Feminine approach: Persuades; makes requests, asks; is indirect, polite
Work Style: what is energizing when working with others
Masculine approach: Competes; sees work as a game to be won; coming out on top is key
Feminine approach: Collaborates; gets results through relationships, involvement and sharing power
Hierarchy is great for some situations, for example, when consistency is required; a network structure is better for others—like when creativity or buy-in are needed. Keeping focus on the goal is critical in some circumstances; taking time for more process is important in others. Influencing by giving clear orders is necessary in some circumstances (for example, when there is urgency); using persuasion to influence works better in others. A competitive approach can lead to great outcomes; a collaborative approach can, too. A wise leader knows the value of both approaches and when to leverage each. But that leader is more likely to have both available to leverage if there are both men and women at all levels.
Let me illustrate how having a balance of masculine and feminine approaches leads to better results. If a project is being managed by people (men and women) who all think in a masculine way, they will look to the person with the most power for direction and follow his or her lead. They will focus on the task or goal, avoiding being distracted by what they see as collateral issues. They may overlook critical information or issues—or pursue one idea when another would have been better!
If the same project is handled only by people who operate in a feminine way, they will consult and involve more people, gather lots of input and ideas, and take the time to build consensus and buy-in. They may get paralyzed by process. In any case, they are likely to take longer to reach the goal. If the team has a balance of masculine and feminine approaches (again, as it is more likely to have if both men and women are involved), the masculine thinkers will keep the group moving toward the goal, and the feminine thinkers will bring in issues and perspectives that will improve the outcome and assure the result is more sustainable!
Diversity, Inclusiveness and Engagement
When both men and women reach their full potential and progress to the top of an organization, it is likely that the organization (a) has a high level of engagement, and (b) is “inclusive.” Both are associated with better results.
In inclusive cultures, difference is appreciated. Inclusive cultures do better on retention, customer satisfaction, productivity and profitability. (See Business Case for Diversity and Inclusion). In inclusive cultures both men and women, whether they have a predominantly masculine or feminine approach, will feel valued, included and supported. As a result, they will be more engaged. Higher engagement is linked with higher retention, productivity and profits. (See, for example, Gallup’s employee engagement survey and The Effort Dividend: Driving Employee Performance and Retention through Engagement by the Corporate Leadership Council.)
The two explanations come together in a virtuous circle. Engagement and inclusiveness themselves drive results. And they make it more likely that women (as well as men) will stay with the organization, do their best work and reach their full potential. The result will be gender diversity at all levels, which will give the culture a balance of masculine and feminine approaches, which will contribute to the best outcomes.
Caroline Turner is a business consultant, advising clients on creating cultures of inclusion, facilitating workshops and delivering speeches. Formerly, she was the Senior Vice President at Coors Brewing Company (now MillerCoors and MolsonCoors). Her new book, Difference Works: Improving Retention, Productivity and Profitability through Inclusion, is available for purchase on Amazon.com and at other major online book retailers.