Overcoming blocks in the corporate pipelines

WHILE the roles of women have evolved tremendously over the last 30 years, there are still entrenched mind sets and behaviours, not just in companies, but among women themselves, which pose roadblocks to their further advancement.

And this old-fashioned prejudice is visibly hampering a woman’s transition from middle to senior management level.

Indeed, it is glaring that despite the leaps made in this area, women are still under represented in corporate boards and barely present in executive committees.

There are a multitude of surveys that show that companies with more women in their executive committees fare better financially, which confirms the case for change.

Joanna Barsh, director of McKinsey & Company, New York office, describes these as “leaks and blocks in the corporate pipeline”. She says big barriers need to be changed.
Barsh: Unlocking the full potential of women is a driver of growth for individuals, companies, the public sector and the country.

Barsch was recently in Malaysia as one of the speakers for The Women’s Summit 2011 conference. She believes that in Malaysia, women still represent one of the largest under-leveraged pools of talent.

“Our work finds the same conclusion everywhere we do the analysis.

“Unlocking the full potential of women talent is a driver for growth whether for indivudals, companies, the public sector or the country,” she says.

In her presentation, Barsch says that at each transition up the management ranks, women are left behind.

Based on research done by McKinsey, women currently make up some 53% of new hires. At the very first step in career advancement, (when individual contributors are promoted to managers) the number drops to 37%.

Climbing higher, only 26% of vice-presidents and senior executives are female and only 14% of the executive committee, on average, are women.

Finally only 2% to 3% of women become CEOs among the Fortune 500 companies.

There are a myriad of reasons for these trends.

For example, there are perceptions even among top executives that certain jobs are more suited for men.

“There is still a tendency to reward men for their potential but women only for their performance.

“So many women react by reducing their ambitions, in favour of more satisfaction in their lives.

“If women are to reach their full potential in the economy, companies must do at least as much to address those issues as they are doing to address the ones they can more easily see,” she says.

In a survey done by McKinseys, on the Fortune 500 companies, Barsch pointed out that whenever there are more than 3 women at the top of any organisation, there tends to be strongger financial performance and higher organisational health.

In the survey, it was seen that return on sales was 11.6% when there were no women on board, and 13.4% when there were.

The same trend was seen under Return on Invested Capital. Without women, the ratio was 7.2%, while with the presence of women on board, this figure increased to 9.1%.

In terms of Return on Equity however, the difference was not significant. Without women, returns were at 13.7%, while with women, returns were at 12.9%.

Thus, Barsch says that having three or more women at the top management of a company instills greater leadership, provides clearer direction and nurtures better capabilities for the company to ultimately do financially better.

The sad fact is that men have twice the chance of getting ahead of women in the workforce.

Structural barriers exist, such as realities in a company that make it harder for women to succeed. Lifestyle issues such as lack of policies and processes to support women and men to balance work and family responsibilities.

Institutional mindsets such as widely-held beliefs limit women’s advancement. Lastly, there are also personal beliefs that limit one’s own professional growth and advancement.

Of all the forces that hold women back, however, none are as powerful as entrenched beliefs.

“Managers, whether male or female, continue to take capable female candidates out of the running, often on the assumption that the woman can’t handle certain jobs and discharge family obligations at the same time. These mindsets are difficult to eliminate,”

“People still say things like: Oh women are too emotional and don’t make good bosses. Women must watch what they say.

“ When they speak out, they are seen as aggressive, while when men speak out, they are seen as assertive,” says Barsch.

Furthermore, the desire to move to the next level dissipates faster in women than in men. Once a woman has a child, her ambition reduces.

The effect is quite the contrary for men. As they have more children, their desire to succeed increases.

Barsch adds that between 1970 and 2009, women went from h