Women in Leadership Roles Can Increase Profitability
December 16, 2016 | Focus on Women
In a 2016 study, the Petersen Institute for International Economics found that companies with women on their boards and in executive positions saw increased profitability compared to those without. Based on its sample of nearly 22,000 companies from around the world, Petersen estimated that firms with a board and C-suite made up of at least 30 percent women could increase net margins by 6 percentage points.
Why do companies with women in leadership positions perform better? Daehyun Kim, assistant professor of accounting at the University of Toronto’s Rotman School of Management, told The Wall Street Journal that his research found that women are more likely than men to possess four of the five skills that boards struggle to find: risk management, human resources, sustainability, and politics or government.
But this doesn’t mean companies simply need to add women to their top tiers. They need to foster a strong female workforce at all levels to create a pipeline of women who can work their way up and lead the company into the future.
No matter your career level, there are things you can do to develop your leadership potential and become a woman of influence at work.
1. Get your credentials. Having a proper education is one of the first steps in becoming an executive or leader. Getting a bachelor’s degree is the most natural step, but if you’re looking to climb higher in the ranks, consider getting an advanced degree. While 40 percent of S&P CEOs have an MBA, an additional 30 percent have a PhD or law degree. Majority says go for the advanced degree.
2. Go to boot camp. If you’re looking to gain a better understanding of what you’ll need to reach the executive level, a leadership training program might be the answer. These programs are designed for you to gain insight and skills to move you toward your goal AND to help you prepare for the challenges you will face as an executive. It also makes a nice addition to the skills section of your résumé.
3. Start small. A board of directors serves an important role no matter what size the organization. They typically appoint and manage top leaders and provide direction for the organization. So before you get to the big boardroom, start small. There are even resources available to help you find an open position on a local board. Serving on a smaller board can expose you to professionals from different industries, which can help you develop soft skills you may lack. Not only that, you might catch the attention of other business leaders who could help accelerate your career for the future.
4. Step up. Donating your time and talents through community involvement and volunteering is a great way to build skills that will benefit you in the future. Consider asking your employer to allow employees to donate work hours to community involvement—volunteering can increase staff performance and fulfillment, which leads to increased productivity. Not only that, it might be the differentiator between you and the competition for a leadership position.
Women are increasingly taking on leadership positions, and firms are benefiting from the increased revenue that comes from having a diversity of skills at the top. Don’t forget to build your network, seek mentors and accept feedback to help you become an influencer in your organization.