success A study into women executives

Transcription

1 Learning from their success A study into women executives In these times of decreasing productivity, encouraging stronger female participation at all levels of an organisation is good for business. Hay Group s latest study into women executives offers solutions that create a workplace where both men and women can achieve their potential. >>

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3 1 Contents Executive summary 2 Introduction 3 About the research 3 Background 4 Supporting female success is good business 4 Key findings 6 Career transitions 6 Career challenges 7 Supports 8 Key success factors 10 Recommendations 14 Final thoughts 16 Further issues for research Hay Group. All rights reserved

4 2 Learning from their success Executive summary The representation of women at the higher levels of organisations in the Pacific lags behind the rest of the Western world. Goldman Sachs has calculated that closing the gap has the capability to raise the Australian GDP by 11 per cent. In these times of decreasing productivity, encouraging stronger participation by women at all levels of an organisation is good for business. To provide insights on how we can close the gap, Hay Group invited 27 women who have successfully navigated into executive roles to participate in a study of their achievement. Particularly, we wanted to understand how successful women made significant career transitions as well as to identify the critical competencies that contributed to their success. Key findings from our research showed: Women are twice as likely to actively drive their own careers than be internally promoted or headhunted. Partners were seen as the biggest personal support to women making it onto executive roles. Managers and mentors seen as the biggest professional support to women transitioning into executive roles. The competency of self-confidence and personal courage are notably high in women executives. In addition, they are strong leaders articulating what is expected from performance and holding others to account for delivering outcomes. The research revealed two surprising findings: Contrary to previous research, work-life balance was not seen as the biggest barrier to career advancement. HR progams are not delivering their intended impact. Conclusions and recommendations from this study were made for both the organisation and aspiring executives of both genders. Recommendations made for organisations: Consider the ROI of your approach to increasing female representation in the executive suite. Hold managers to account for development and promotion. Help them to build skills in identifying talent in their teams. Provide rich career experiences. Take a long term view of career advancement. Recommendations for aspiring executives: Build relationships with mentors. Be proactive in determining what you want from your career. Develop self-confidence. Manage your expectations around your work and career.

5 3 Introduction - Why study women executives? Declining productivity in Australia and New Zealand, like most developed nations, remains a newsworthy subject of much debate. Boards and executives of local organisations have an important role to play in sustaining long term productivity. One of the available, yet under-utilised resources to organisations is women, particularly at the upper echelons of an organisation. Indeed, closing the female participation gap has been calculated, by Goldman Sachs as being capable of increasing the Australian GDP by 11 per cent. In addition, we are facing skills shortages, brought on in part by an ageing population, placing pressure on Boards and executives to get smarter about tapping into their entire talent pool. This calls on leaders to ensure they have effective talent management processes. Therefore, leaders of organisations cannot afford to overlook their potential available talent, as they ll risk losing them to their competition. Finally, Hay Group s own studies into gender diversity prove that fostering women into leadership positions has a tangible impact on improving business performance. The 2009 Best Companies for Leadership report commissioned by Hay Group and Bloomberg/Business Week shows that two thirds of the companies rated in the top 20 have a high proportion of women in senior leadership roles. These same top 20 companies in the global survey also produced eight times better shareholder returns than their peers over a five year period. Our interest in women executives stems from our passion to help organisations perform at their best. About the research Between May and August 2012, Hay Group gathered data from 27 women executives in Australia and New Zealand, aged between 35 and 60. These women were CEOs/ MDs/ General Managers (54 per cent) or direct reports to the CEO, such as Directors and Heads of Functions. Participants represented a range of industries, including financial services, professional services, mining, pharmaceuticals and not-for-profits. Data were collected through intensive 1-3 hour behavioural event interviews. In addition a follow up roundtable discussion was held with 12 of these executives. This study set out to understand how successful women made significant career transitions, as well as to identify the critical competencies that contributed to their success. This research sits within wider Hay Group research conducted in the USA on successful executive women that has been running for around 25 years Hay Group. All rights reserved

6 4 Learning from their success Background In Australia and New Zealand, over the past 10 years, women have made noticeable, albeit slow gains in their representation in management and Board roles. On the positive side, women in lower and middle management are now over one third of the management population (up from 25 per cent in though this is 50 per cent in the USA). However, at senior levels the number of female executives is still remarkably low representing only nine per cent of all executive positions in Australia (Source EOWA, 2012). There are currently only seven female CEOs in the top 200 Australian ASX listed companies. Female executives are also more likely to be in staff/ support functions such as human resources or public relations, positions not likely to lead to the CEO role. 68 women were appointed to Boards in 2011, but 2012 saw a decrease to only 36 appointments (Source Australian Institute of Company Directors, 2012). At this rate, it will take a very long time to reach gender equity in the Pacific. Supporting female success is good business Having more female employees, especially at the management and executive level, not only helps broaden the talent pool in a talent-constrained environment, it also brings shareholder returns through greater innovation and performance. Recent studies show: A Hay Group study conducted on 163 executives in the United States in 2004 showed that outstanding female executives, when compared to their typical counterparts and male executives, created greater engagement from their direct reports, which supports high performance. In 2007, Catalyst reported that, on average, companies with three or four female directors had 83 per cent greater return on equity, 73 per cent better return on sales and 112 per cent higher return on invested capital. In 2011, Catalyst found that top-quartile companies (with per cent women Board representation) had extra 26 per cent of Return on Invested Capital (ROIC) when compared to bottom quartile companies (with zero women directors). In 2011, McKinsey found that companies with three or more women in top positions received notably higher Organisational Health Index (OHI).

7 5 Despite a strong business case, gender equity in the workplace is yet to be consistently seen in Australia and New Zealand. Whilst Australia is ranked number one for female educational participation in the 2010 World Economic Forum report, the country significantly lags behind in terms of female workforce participation (ranked 44th). According to the Equal Opportunity for Women in the Workplace Agency (EOWA), women were still significantly underrepresented in executive/key management positions (eight per cent) in ASX200 companies when compared to men (92 per cent) in This figure had only slightly increased from seven per cent from Similar trends are observed in board representation. Women currently occupy 12.3 per cent of seats on ASX200 Boards. 1 Gender inequality is also reflected in pay/remuneration. ABS statistics released in August 2012 showed that Australian women earned 17.5 per cent less than men. 2 The gender pay gap was even greater for key management personnel in ASX200 (28.3 per cent) as of Whilst Hay Group acknowledges the value of large-scale initiatives, we also see a need for developing a deeper, more comprehensive understanding of the issue through research, such that we can more effectively devise and tailor solutions for organisations to promote gender equality. In the following sections, we will summarise the key findings of our research, provide insights for organisations on how they can effectively support and promote women to executive positions in their respective organisations and insights for women on how to manage their careers. 1 EOWA, Australian Census of Women in Leadership, ABS, Category , Average Weekly Earnings - Trend, May 2012 (released ) available at: 3 EOWA, Pay Power and Position: Beyond the 2008 EOWA Australian Census of Women in Leadership, Hay Group. All rights reserved

8 6 Learning from their success Key findings Career transitions As part of our research, we asked the executive women participating in the study to describe 3-4 significant career transitions. Our findings revealed that the women were energised by increasing their responsibilities and learning new things. It was interesting to note that they were twice more likely to drive their own careers than to be internally promoted or headhunted (66 per cent compared to 34 per cent). Though a few of the participants challenged their own organisation for new responsibilities, the majority found it easier to look outside of their current organisation to progress their careers. More often this drive sent them to explore opportunities with other companies, go overseas or even to start their own business. This finding highlights that within their current organisations, the ability to articulate and promote their need for new responsibilities may still be an issue for successful women. Many of the women in our study had a clear idea of what they wanted from their career and the experiences they needed to get ahead. A number of the women were deliberate in planning their career and they targeted specific career opportunities to attain their long term goals. For example, one woman first moved to a multinational to attain merger and acquisition skills, and subsequently moved to a listed company to strengthen her skills in Board management. Figure 1. Career transitions of executive women participating in the study

9 7 Career challenges When investigating the types of career challenges faced by the participants, our study uncovered similar challenges to those faced by men, in progressing through executive ranks. They were concerned with growing their businesses, improving efficiencies and managing performance. In addition, they faced the same difficulties in making the transitions between managerial and executive leadership experienced by their male colleagues. As they progressed through the ranks, they needed to change the way they spent their time, learnt new skills and dealt with both internal and external stakeholders. Though we did not study a cohort of similar executive males, these challenges are similar to those articulated by the changes in role accountabilities and competency requirements identified by the Hay Group in a study of 600 outstanding executives (predominately male) as well as those outlined in the Leadership Pipeline (Charan, Drotter and Noel, 2001) based on a long-term study of executive transitions at General Electric. A surprising finding was that work-life balance, contrary to widespread belief, was not seen as the biggest barrier to career advancement for women. Only five (18.5 per cent) of the women in this study reported challenges around maintaining work-life balance. Key challenges mentioned: Transitioning into executive leadership e.g. developing strategy, mergers and acquisitions, large scale change programs. Progressing into senior roles mentioned as a challenge faced earlier on in their careers (dealing with the isolation of leadership, leading teams, selecting the right people). Facing cross-cultural challenges e.g. when working overseas or working for large multinational corporations. Adapting to organisational culture being unable to fit into an organisation s culture to feel valued and included and understand the subtleties of organisational political environments. Dealing with constant change and pressure on results dealing with uncertain economic and business conditions. Balancing work-life needs meeting the needs of their immediate family (children and parents). Dealing with a difficult boss inability to build a mutually successful relationship with their manager Hay Group. All rights reserved

10 8 Learning from their success Supports For these women, the journey to the top is more than a one-person job. At work, women executives in our study received support from two important sources managers who championed them in the organisation and mentors. However, in comparison with other global research, what weren t mentioned as supports were the importance of having other active positive female role models at work, or company-wide gender equality initiatives. Another finding, also notable by its absence, was that none of the women in the study mentioned the importance of flexible work options or other support services as making a difference to their ability to get ahead. The reasons for these supports not being mentioned could be: 1) These women found their own way to meet their need for flexibility; 2) There were few active role models to emulate when they were progressing through their career; 3) They worked in industries that were more open to female progression, for example, pharmaceuticals was mentioned as a female friendly environment. At home, as one would expect, personal supports including partners, were most commonly cited by the women we interviewed. Resonating with findings reported in the literature, almost half of these women (48%) considered their partner to be a major source of support to progressing their careers. Partners not only provide instrumental support (e.g., participation in household chores), they are also there to listen, encourage and motivate. Partners who are flexible and open to new adventures, including putting their own career on hold or moving overseas to support their spouse made a significant difference to their careers. I think one of the most helpful things was just sharing, you talk to a couple of colleagues, ask how they see things, and listen to how they respond.

11 9 Key sources of support mentioned: Personal support 48% of the women considered their partner to be a major source of support to progressing their careers. Mentors 44% of the women credited mentors as another significant support. This result is consistent with a recent finding that more Australian female CEOs (all but four) than male CEOs (half) recognised the contribution mentors made in their careers. Peers participants spoke of support from peers both inside and outside their respective organisations. Managers over a third of the participants considered bosses as an important source of support, offering valuable career opportunities and support during career transitions. Networks one third of the women executives received support from their networks at some point in their careers. In addition to the above, organisational initiatives, academic support and individual qualities (being self-driven, resilient and having a positive outlook), were also mentioned. To our surprise, despite of extensive effort and resources organisations invested in various HR programs such as talent management, job rotations, leadership development programs, only five (18.5 per cent) of the women executives recognised the added value of these organisational initiatives to their career development. My partner is absolutely there for me and I think that makes a huge difference Hay Group. All rights reserved

12 10 Learning from their success Key success factors In this study we used the Behavioural Event Interview technique, to get a picture of the behaviours and challenges faced by these women. During the interview, we asked them to tell us real life stories of times where they felt particularly pleased with their contributions, and where they were may have been frustrated by organisational, cultural or other obstacles. The strengths demonstrated by this group are listed below: Key competencies identified: Self-confidence and Personal Courage the women in the study demonstrated a strong sense of self belief, resilience and integrity. Political Nous/Organisational Awareness participants had developed a strong understanding of the key influencers, decision-makers and power dynamics in the organisation. Empathy/Interpersonal Understanding these executives showed a strong ability to hear and understand the spoken and unspoken thoughts, feelings and concerns of others. Influencing they used empathy and their understanding of how things get done in their organisation to influence others. Flexibility these women adapted their strategy and initiatives to the changing business challenges they faced. Team Leadership the women in the study built strong teams by promoting team effectiveness, obtaining resources for the team, positioning themselves as leaders and communicating a compelling vision. Holding Others to Account they were not afraid to hold people to account for delivering performance, this is a skill that is often cited as the most difficult for managers to master in managing performance.

13 11 Self-confidence The women in the study demonstrated a strong sense of self belief, resilience and integrity. They were able to stand up for their beliefs, take over in critical periods and continue on even when the situation looked bleak. Some examples of the stories we heard which required this self-belief and courage are shown below. One executive accepted a promotion to head up a functional area where she had little personal experience. She now had to manage men and women who were previously her peers in an area she knew little about. To establish her credibility, she proactively identified, pursued and won a significant business opportunity for her business. Her strong focus on the needs of the customer, stakeholder engagement and focus on the end goal allowed her to secure a profitable deal. Another story confirmed the willingness of women to stand their ground in matters that make a significant difference to their business, for example, one of our leaders refused to sign off on a tender, opening it once again to competitive bidding, with the outcome of saving her company millions of dollars. Influencing/Empathy/Political Nous Influencing for these women involved convincing individuals across the organisation, as well as Board members, to adopt and drive specific strategies, initiatives, business lines and or products for the short and long-term value. Our executives utilised their strengths in empathy and political nous/organisational awareness to influence others most effectively. That is, these executives showed a strong ability to hear and understand the spoken and unspoken thoughts, feelings and concerns of others. Coupled with this, they had developed a strong understanding of the key influencers, decision makers and power dynamics in the organisation. The two strengths together allowed them to appeal to the interests of others, and tailor their influencing strategies to the audience in question. Our executives had the identical level of interpersonal skills as both male and female outstanding executives in the US, in terms of both organisational awareness and influencing. For flexibility, the result of our analysis is even higher. Our female executives exceeded the skills of their US female counterparts, and matched the males Hay Group. All rights reserved

14 12 Learning from their success Examples are shown below: Negotiations had come to a stop and one of the women executives identified the need for a different approach. She and her colleague decided to engage the key decision makers the women who represented the aboriginal land owners. They visited them and took the time to build rapport by engaging the women around their personal and community visions. By demonstrating empathy and building genuine relationships, she was able to break through the deadlock and negotiations proceeded to a successful outcome for all. Another executive identified that there was going to be a significant shortfall in the annual reported results of her company. She formed an alliance with her peers to convince the CEO radical change was needed to be made early in the financial year to avoid reporting poor results for the year. Holding others to account The female executives readily addressed performance issues and inappropriate behaviour of peers and direct reports through regular and consistent feedback, coaching and appropriate termination activities. These executives had strong skills in holding others accountable for results, a skill that is often cited as the most difficult for managers to implement in managing performance.

15 13 Team leadership Very often, the development and delivery of business solutions requires more than individual effort. The fruition of their business solutions was dependent on their strong team leadership skills, allowing them to achieve results through others. Team leadership here refers to managing team meetings well, keeping people informed, promoting team effectiveness, obtaining resources for the team, positioning self as leader, and communicating a compelling vision. The fact that team leadership ability emerged as a key strength for these women is supported by Hay Group research with a US sample, which found almost identical results in the team leadership skills of both outstanding male (n=44) and female (n=45) executives. On joining a new organisation, another executive confronted a series of financial disasters, threatening the future existence of the organisation. She identified two key areas to address revenue and systems shortfall, developed alternative suppliers and changed the organisational structure of her business to position her organisation for the future. So in the end, your resilience has to come from within because you are the one who has to remain standing even when things get tough Hay Group. All rights reserved

16 14 Learning from their success Recommendations Our recommendations are made from two perspectives for organisations and aspiring executives. For organisations Consider the ROI of your approach Introduce or enhance structured mentoring Consider the whole approach to improving representation of women at the higher levels of the organisation. This includes, reviewing existing HR programs (e.g., high potential, graduate programs) to ensure return on investment and effectiveness in delivering long-term potential to the top of their organisation. Formalising mentor programs can facilitate this process and benefit both the women and the mentors. An additional benefit is that as mentors become more aware and familiar with the organisations high potential women; this familiarity can help the mentors (and the organisation) to overcome any conscious and/or unconscious bias. Hold managers to account for development and promotion The managers role in identifying, supporting and providing challenges to high potential women should be a major accountability of managers at every level of the organisation. Developing managers skills in coaching, identifying talent and career development, improves the level of connection and inclusion for both women and men. Provide rich career experiences Career management across the lifecycle Organisations are urged to provide a range of rich career experiences (e.g., job rotation, international experience) as a way to engage and retain their female employees. A longer term view and a less aged based view of careers is required to ensure that organisations benefit from contributions of men and women at all stages of life. With the average life expectancy continuing to increase, a career can now span up to years.

17 15 Organisations (cont d) Flexible work arrangements Although work-life imbalance did not come up as a major challenge for our respondents, research suggests that it is an issue that is affecting a lot of women at work, and domestic responsibilities often prevent women from advancing in their careers. To address this issue, organisations should consider providing flexible work arrangements (e.g., telecommuting, part-time arrangement), which was reported to be the most commonly used measure to achieve gender diversity in the States, according to a report released by McKinsey in For aspiring executives Build a relationship with mentors Building a relationship with mentors is a great help to moving ahead. It is also important to spend time building a strong relationship with your manager and your peers. The stronger the relationship with your manager, the easier it will be for discussions on the next role on both sides of the equation. Be proactive early in your career Manage your expectations of what can be achieved Develop your selfconfidence Being proactive in articulating and pursuing a progressive executive career is one thing that distinguishes the women in our study. Aspiring executives ought to consider articulating their career goals early on with a view beyond the duties of parenthood. In addition, anyone aspiring to become an executive is highly encouraged to invest the time in building networks both inside and outside their respective organisations, and with executive search firms. The women in this study managed their expectations of what can be achieved and recognised their own limitations. Early in their career, they set priorities on those things that mattered to them and the rest of their lives, e.g. not having a perfect house or carefully manicured lawns. We have identified that respondents in this study demonstrated high levels of self-confidence, leadership and influencing competencies. Asking for and acting on feedback on these competencies and those required by your organisation to succeed is important both for communicating your intentions and attracting the development and advancement opportunities Hay Group. All rights reserved

18 16 Learning from their success Final thoughts We look forward to the day when successful CEOs of both genders, are asked: how do you balance running a successful business as well as meeting your commitments outside of work? Many companies have implemented flexible work hours, onsite day care and other practices which have gone a long way to support families. The aim of this study was to understand what organisations can do to continue to improve their female representation in their senior leadership ranks. The conclusions and recommendations in this report do not make organisations work better for women, they create a workplace where everyone can achieve their potential. Further issues for research When we presented our findings to two groups of executive women in Sydney and Melbourne, the following questions were suggested for future research: 1. Is it possible for executives of either gender to have partners with equally successful careers? We would be interested to find out what support structures need to be in place, as supportive partners made such a big difference to women in our study by either staying at home or having a less demanding job. 2. Do executive men have the same supports, challenges, success factors and career transitions as described by our sample of executive women? We would be interested in understanding how an equivalent group of men reached their executive positions.

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