4 Steps to More Female CEOs
In a recent article by The Wall Street Journal, the author inquired, “where are all the women CEOs?” Less than 6% of CEO roles in the US’ top 3,000 companies are held by women, despite an equal split of women and men in the workforce. Why?
The study indicates it is because women are far less likely to serve in roles with profit-and-loss (P&L) responsibilities, and it is those roles that typically path to the CEO seat. As the WSJ points out, it is much more common for us to see women in the C-Suite in roles that do not have P&L, including Human Resources, Administration, and Legal. Women often advance by specializing in a function rather than developing broad enterprise experience that makes them more competitive for the Chief Executive role, according to the study’s contributors.
As a leadership development partner to hundreds of top organizations, ExecOnline has a unique vantage point into the future of corporate executive leadership. Companies partner with us to develop their high-potential talent, successors for executive roles, critical teams, and leaders who are driving business transformation across the enterprise. The impactful virtual experiences we deliver with our elite business school partners (Columbia, Yale, Wharton, Stanford GSB, Chicago-Booth, etc.) make business leaders more effective in their roles and prepare them for greater responsibility. So are women leaders getting an equal opportunity from a development perspective? Our data indicates there is progress to be made here: only 37% of senior business leaders enrolled in ExecOnline® programs over the past few years are women.
This is just one indicator. But is it a signal that despite an increasing commitment to equality in corporate leadership, businesses are still doing too little to prepare more viable female CEO candidates? What can organizations do to ensure that more women are equipped with the skills, P&L experiences, and sponsorship that are critical for the senior-most roles?
Based on our collaboration with hundreds of HR executives to develop their leadership pipelines, cultivate more inclusive organizations, and accelerate women leaders, I recommend 4 steps:
1. Combat bias in the performance review, promotions, and succession planning processes.
We all have unconscious biases that have developed over the courses of our lives and influence the way we engage with others and make decisions. If not managed, bias about women’s capabilities and ambitions can significantly limit their advancement in organizations. In a recent CNBC report, Lean-In Co-founder and CEO Rachel Thomas asserts:
“We know that performance bias — or this belief that men are slightly more capable or competent than they are, and that women are slightly less capable and competent than they are — is so pervasive that it impacts our decision-making,” she says. “Men are typically hired based on potential and what we believe they can do,” Thomas adds, “while women are typically hired and promoted based on what they’ve already accomplished.”
The good news is that leaders can understand and manage their biases. Through ExecOnline’s programs with Yale School of Management, Fostering Inclusion and Diversity and Leading Effective Decision Making, leaders learn how bias plays a role in their thinking and how to reduce its influence on their interactions and decisions. The chart below shows a significant increase in the confidence levels of senior leaders in managing their bias after completing the 3-week program with Yale, Fostering Inclusion and Diversity.
In addition, we see that the program dramatically prepares senior leaders to increase the inclusion and diversity of their organizations.
2. Focus on making women leaders competitive for P&L roles.
The WSJ study cited the 2019 report “The Gender Gap at the Top,” which offers important insights into the accessibility of P&L roles for women. One of the most alarming findings of the study is that 46% of surveyed men had been encouraged to consider P&L roles, while only 14% of women had received the same encouragement. Other findings in the report indicate that women are also far less likely to know about advancement opportunities that could lead them to P&L roles, such as career pathing and development that focus on broadening experience across the business and deepening leadership in areas critical to effective business management, like finance and operations.
Surveying our portfolio of leadership programs at ExecOnline, we see that strategy, team leadership, and change leadership are the most common leadership development programs for high-potential women. Women are 3 to 4 times less likely to enroll (or be enrolled) in programs focused on areas critical to running P&L, including:
- Leading Operational Excellence with MIT Sloan
- Leading Through Financial Excellence with MIT Sloan, and
- Leading Effective Decision Making with Yale.
Organizations that want to increase the viability of women leaders for more executive roles must be intentional in having conversations with women to discuss P&L paths and opportunities, then align development to make women more competitive for the P&L roles.
3. Encourage active and intentional sponsorship of high-potential women leaders.
Very early in my career, I earned extraordinary opportunities to live and work in Europe and Asia, helping to build the international operations of a high-growth organization with a mission I loved. I worked hard and showed both strong results and strong potential, but I was offered these opportunities because sponsors put my name forward for consideration.
According to “The Gender Gap at the Top,” 41% of women report they have a strategic network of people supporting their advancement, versus 62% of men. Sponsorship matters. Relationship capital matters. If you’re leading talent development and succession planning processes, you can embed sponsorship to drive impact. In ExecOnline’s development journeys, we recommend that high-potential women leaders are matched with an Executive Mentor or Sponsor. Each leader in an ExecOnline® program advances a real business initiative, demonstrating her competence in a core business area such as process flow diagramming to optimize business operations, or scenario planning for an investment. Through this structure, she can gain critical exposure by presenting her work to senior leadership.
4. Craft a compelling business case and get it sponsored.
HR leaders can underestimate the importance of framing an investment in women leaders in the context of the business bottom line. It’s essential to understand and articulate why gender parity increases business performance. Here’s how to build your business case from there:
– Examine the current gender balance in your organization’s leadership. Are there parts of the business with bright spots of strong women leaders and successors? Do you see a dramatic decline in the number of women leaders at the VP level, despite more gender balance at the Director level? Of your identified high-potential talent and successors, what percentage of those leaders are women?
– Seek early buy-in from an executive who is passionate about diversity and gender equality to support you. Ideally, this is your CEO, but it could be another C-Level leader or executive. Co-create the business case with that executive and enlist him or her to help you share your business case with other key stakeholders.
– Make it the priority to discuss. Too often, HR executives tack on “Women in Leadership” to the end of meeting agendas. Inevitably, time runs short and the topic falls off the agenda. Give women’s leadership planning the attention it deserves as agenda item 1 (or 2).
– Draft an action plan with measurable goals, accounting for how you will combat bias, make women more competitive for P&L roles, and increase sponsorship of high-potential women.
– Ask for the funding. If your organization is setting goals to advance women leaders, hold it accountable to invest in the process.
Josh Bersin recently observed that we are in the middle of “The Big Reset, a new way of thinking about work, life, business, and leadership.” We have an opportunity, Bersin suggests, to redefine our standards for leadership (focusing on empathy, compassion, strong listening skills) and to redesign our businesses. Ask your high-potential women leaders how they want to contribute and what role they want to play in the business. Listen. Encourage. And then advocate for them. Who knows? One of them might be your next CEO.
Senior Director, Corporate Partnerships at ExecOnline
Erin is a Senior Director of Corporate Partnerships at ExecOnline. In her role, she partners with Heads of HR and business executives at industry-leading organizations to design and deliver leadership development experiences that advance critical business priorities and deliver measurable impact. She also leads a team of client partners at ExecOnline. Erin has more than a decade of experience working with global organizations to advance strategy. She has deep expertise as a business development leader in startup environments, having helped build account management and sales organizations in three venture-backed growth stage companies.