At this year's World Conference on Women, one of the two main topics focused on the economic empowerment of women and their role in the work force. We thought it was a good time to check in and see how women in this country are advancing in the workplace.
Unfortunately, available statistics from the Catalyst U.S. Women in Business report are still disturbing. Note the following percentages:
- Women in the U.S. labor force: 46.3%
- Women in management, professional and related occupations: 50.6%
- Female Fortune 500 corporate officers: 15.4%
- Female Fortune 500 board seats: 14.8%
- Female Fortune 500 top earners: 6.7%
- Female Fortune 500 CEOs: 2.4%
Why is it that even though women make up half of the workforce, they continue to have such poor representation in the executive ranks? This is especially dumbfounding given that current research shows that Fortune 500 companies who have the biggest percentage of female directors outperform the companies with the lowest percentages by 53% in terms of return on equity, and 66% in terms of return on invested capital. (See a more detailed ROI on women in leadership in the article below.)
But instead of agonizing over the dilemma, let's look for the light at the end of the tunnel. It's there...we can see "It". "It" is called Transformational Leadership. And as "It" replaces Situational Leadership as one of the most popular leadership models, the door to the executive suite is being kicked wide open for women.
So...what is a transformational leader? Well, transformational leaders foster the acceptance of group goals. They focus on followers, communicating an expectation of high performance while, at the same time, helping followers develop their own leadership potential. Gandhi is a good example of a transformational leader. His vision went beyond himself - he satisfied the needs of his followers while remaining sensitive to a higher purpose.
Transformational leaders are adaptive, skilled in emotional and social intelligence. Through clearly outlined goals and a press for excellence, they create opportunities for employees to be accountable for attaining their goals. Transformational leaders help to create and sustain the kind of healthy work climate that fosters increased employee engagement and helps optimize employee performance.
Thereare 4 components to transformational leadership, sometimes referred to as the 4 I's:
- Idealized influence: Charismatic vision and behavior that inspires others to follow.
- Inspirational motivation: Capacity to motivate others to commit to the vision.
- Intellectual stimulation: Encouraging innovation and creativity.
- Individualized consideration: Coaching to the specific needs of followers.
Research proves that groups led by transformational leaders have higher levels of performance and satisfaction than groups led by other types of leaders. Why? One reason is that 50-70% of employees' perception of WorkClimate is linked directly to the characteristics of the leader. Transformational leaders focus on ensuring clarity, press for excellence and hold positive expectations for followers. As a result, they inspire, empower, and stimulate followers to exceed normal levels of performance. Transformational leaders key in on and care about followers, their personal needs and development.
Good News for Women Leaders
The good news for the female half of the population is that women exhibit these traits more often than men. Recognized by Psychology Today as the top scholar on gender and leadership, Social Psychologist Dr. Alice Eagly's studies confirm that women are more likely than men to possess the leadership qualities that are associated with success. She believes that women are more naturally transformational than men; that they care more about developing their followers, listen to them and stimulate them to think "outside the box," and that women leaders tend to be more inspirational.
Jackie Zehner, who in 1996 became the youngest woman to become a partner at Goldman Sachs, weighs in on women at the top with regard to the financial meltdown in 2008. "If there had been a critical mass of women over a period of time at the decision-making tables, would we be in the place that we are in today? I don't think so. (Putting women in leadership positions is) not just the right thing to do anymore just because it's the right thing. It's the right business thing to do." Joe Keefe, president and CEO of Pax World Mutual Funds, agrees; three of the firm's six portfolio managers are women. "I do think that when women are at the table, there's a richer discussion on issues like risk and that you make better decisions because of their input."
And Dr. Bernard Bass, who developed the current theory of transformational leadership, predicts that in the future, women leaders will dominate simply because they are better suited to 21st century leadership/management than are men.
So, we are encouraged. We look forward to the day when we see "percentage of female Fortune 500 CEOs: 50%".