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By Amelia Beattie, Chief Executive, Liberty Two Degrees
In the ever-changing world of business, it’s crucial to recognise the essential contribution of women in propelling organisational achievements and cultivating an environment that thrives on creativity. Apart from the evident need for diversity and inclusivity, there are compelling reasons rooted in business logic to advocate for gender diversity and support women in leadership positions and other key business functions. By delving into a vast array of studies and real world examples, let’s delve into four diverse reasons why women play a vital role in shaping enduring businesses.
Catalysts for financial performance
Research shows that gender diversity in leadership is linked to financial success. According to McKinsey & Company’s Delivering through Diversity report (Jan 2018), companies with diverse executive teams, especially those with significant female representation, are 21% more likely to be more profitable than average. Credit Suisse’s The CS Gender 3000 (2016) study also found that companies with more women on their boards outperform those without any female board members. Similarly, Africa.com’s research, and noted by Teresa Clarke, shows that companies with women CEOs often excel in various benchmarks. These findings highlight the need to move beyond just making the financial case for diversity and focus on actively leveraging it.
Do we need more documented evidence? There is more than enough to move past the financial business case and focus on how to harness this diversity intentionally.
Power sources of innovation and problem-solving
Women bring valuable experiences, skills, and perspectives that enhance innovation and creativity in organisations. Studies by the Peterson Institute for International Economics (2016) and the Boston Consulting Group (BCG) have both shown that gender-diverse teams drive higher innovation and better problem-solving. The Peterson Institute found that companies with at least 30% female executives could boost their net margin by 6 percentage points. BCG’s 2017 report The Mix That Matters, highlights how diverse management teams achieve higher innovation revenue. However, as noted in the Harvard Business Review (Nov-Dec 2020), simply increasing diversity isn’t enough. In fact, true effectiveness depends on how organisations leverage diversity and whether they are willing to reshape their power structures to see women as equals. Increasing diversity does not, by itself, increase business effectiveness; what matters is how an organisation harnesses diversity, and whether it’s willing to reshape its power structure. Seeing women as equals is what matters.
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Magnets for talent acquisition and retention
A commitment to gender diversity boosts a company’s reputation and attracts top talent. The International Labour Organisation’s 2019 report, “Women in Business and Management: The Business Case for Change,” emphasises that organisations with diverse cultures and women in leadership are more successful in attracting and retaining high-calibre employees. The retention of women therefore is crucial, as they tend to leave when diversity and inclusion are not integral to the business.
Architects of better decision-making
Gender-diverse teams consistently make more informed and effective decisions. Studies by organisations like BCG and Harvard Business Review not only highlight that diverse perspectives and decision-making approaches lead to better outcomes, but strategic growth. The Harvard Business Review’s November 2023 article, “How Women Improve Decision-Making on Boards,” reveals that women directors are often well-prepared and proactive in board meetings, enhancing discussions and governance. They openly acknowledge what they don’t know and ask in-depth questions, fostering a more open atmosphere. This has led to initiatives like Menomove by Business Engage, which was born from these discussions making workplaces more menopause friendly.
Bringing together various research findings shows a clear and compelling case for having more women in business. Women bring unique skills, perspectives, and leadership qualities that drive financial success, spark innovation, attract talent, enhance decision-making, and improve an organisation’s reputation. By empowering women in the workplace and promoting gender diversity, businesses can unlock new opportunities for growth, competitiveness, and long-term value creation in an increasingly diverse marketplace. It’s not a matter of only women or only men, it is how the different voices and perspectives are blended to create organisational magic.
The question is no longer ‘why women?’. In understanding how we harness the full potential of women to achieve business goals and shape a brighter future for all, the question should now shift to ‘why not women?’.
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