Gender diversity feeds organizational excellence because men and women differ in how they use leadership behaviors.
Evidence for these claims is presented in Women matter 2: female leadership, a competitive edge for the future (WM2). McKinsey’s second Women matter publication focuses on the relationship between leadership behaviors and organizational excellence.
As I discussed in Woman matter: gender diversity, a corporate performance driver (WM1), the first report establishes a correlation between organizational excellence and having a minimum of 30% women among top leadership.
This second study tries to find out why. Why would the presence of women in leadership positions yield enhanced organizational performance? In WM2, focus is placed on one possible answer, namely variation in leadership behaviors.
Drawing from independent research, WM2 identifies nine leadership behaviors that enhance organizational performance.
Five of these are used more often by women: people development, expectation & rewards, role models, inspiration, and participative decision making.
Two are used by men and women with equal frequency: intellectual stimulation, and efficient communication.
And two are used more by men: control & corrective action, and individualistic decision making.
While all nine of these enhance corporate performance, they naturally affect different components of the organizational performance measures that were identified in WM1.
With more women in leadership positions, companies will be rated higher on those components of organizational excellence that are positively influenced by the leadership behaviors that women favor.
For example, work environment and values is an excellence factor that is positively influenced by two leadership behaviors, namely people development and participative decision making. Since women leaders use these two behaviors more than their male colleagues, the presence of women will positively affect work environment and values scores.
By connecting particular leadership behaviors to specific aspects of organizational excellence, we are given deeper insight into the findings from WM1. WM1 established a correlation between the presence of women in leadership and organizational excellence. But there was no basis for suggesting a causal relationship.
When we understand that individual leadership behaviors are a source of influence on organizational excellence and when we tease apart gender differences in the use of the various behaviors, we begin to see a relationship that looks more like causation.
The presence of women in leadership positions causes enhanced organizational excellence because some leadership behaviors are used more often by women than men. Those behaviors yield higher scores for some components used to measure organizational excellence. Hence, they produce an overall increased evaluation of the excellence of a particular organization.
The nine leadership behaviors, however, are not of equal value in facing the biggest challenges upon us. 1000 business executives were asked to rank the importance of certain long-term global trends for their companies. Then they were asked what kinds of leadership behaviors were necessary to tackle the challenges represented by those trends.
The executives consistently identified four leadership behaviors as crucial for their future performance: intellectual stimulation, inspiration, participative decision making and expectations & rewards. Intellectual stimulation is used equally often by men and women leaders, but the other three are used more by women.
Pulling it all together, the report offers a significant conclusion.
Gender diversity has all the key attributes of a competitive advantage: it is difficult to create, it is strongly conducive to current performance, and it is critical for future achievement.
Of course, what is true of a group need not be true of every individual in that group. For that reason, we need comprehensive leadership development programs for both men and women.
This is true at universities, too. We do scandalously little to prepare people for leadership positions. Only once have I heard a PhD student talk about a career path that included first research and teaching, and then leadership. Young academics simply don’t consider this option, and we do nothing to encourage them.
Many universities, however, have at least reached the point where we work with those who have landed in leadership positions to help them do their jobs well. When we train colleagues in leadership, we must create the opportunity for enhanced self-awareness about individual leadership behaviors, as well as the opportunity to learn new ones.
What about organizational excellence? How is that concept relevant for universities? We all care about excellence in education and excellence in research. But do we care about whether or not our university is excellent as an organization?
When I study the research, I conclude that the daily pursuit of excellence in our universities as organizations will enhance the quality of our teaching and research. I believe that increased diversity will be crucial to that pursuit. Do you?