Gender diverse leadership makes economic sense

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The globalized economic environment of the 21st century requires a leadership that combines the masculine and feminine leadership qualities. The masculine leadership model alone is not adequate for managing techno-savvy knowledge workers. Women represent 50% of the under-utilized talent pool and the fastest growing market for consumer goods and services. This market can no longer be ignored by companies that want to be ahead of their competitors in a highly competitive globalized economic environment.

To its credit, the democratic government has introduced gender equality policies and laws. This has resulted in an increased participation of women in the workplace to almost 50%. Unfortunately, the change in gender composition of the workforce has not been coupled with a change in the workplace culture to accommodate the needs of working women. Working women are expected to change their behaviour in order to fit into a work culture that was designed by men to meet the needs of women. The time has come for women and men to work together to build a new gender-sensitive workplace culture.

The corporate ladder for most women ends in the middle management level while their male counterparts continue to climb the corporate ladder to the top executive level and board rooms because leadership continues to be associated with masculine qualities. The reasons often cited for the limited opportunities for women’s advancement to top leadership positions are lack of confidence and lack of interest in top leadership positions because of women’s commitment to their families.

The criticism and debates of the Women Empowerment and Gender Equality (WEGE) Bill focused mainly on the legislated gender quotas and failed to address the potential economic benefits of increasing the gender diversity in leadership teams of corporates. The equal participation of women in the workforce has contributed to an increase in women’s economic power and more women are responsible for making the purchasing decisions.
More than 60% of students graduating from South Africa’s Higher Education Institutions are women and more women than men are obtaining post-graduate degrees. The globalized business environment of the 21st century is dominated by knowledge workers, therefore, companies that employ highly educated men and women would perform better in this highly competitive business environment. In addition, these are individuals that would be able to keep up with the rapid advances in ICTs.

The World Bank predicted that by 2014 women’s earning power would reach US$18 trillion and companies that continued to exclude women from their boards and top management teams would not benefit from the increasing economic and purchasing power of these women because their products and services would not meet the needs of the women. Women in the United States were responsible for making more than 80% of purchasing decisions while the UK women made more than 70% of purchasing decisions. 

Interestingly, the growing female economic power seems to have gone unnoticed by companies that provide consumer goods and services to the fast-growing female consumer market. This in part because men continue to dominate boards and senior executive leadership teams of these companies. The economic sectors that continue to be dominated by men in their boards and top leadership teams include motor industry, financial services sector and retail sector. Inclusion of talented female leaders in the top leadership teams of these industries could significantly improve their financial performance and contribute to economic growth for South Africa because they will be able to improve their understanding of the needs of the female market. The female members of boards and senior executive teams would help companies to design products and services that would appeal to the different segments of the female market.

Several studies have demonstrated that inclusion of at least 30% women in boards and executive teams of corporates contributed to improvement in financial performance and innovation. The studies showed that leadership teams of talented men and women outperformed all-male or all-female teams because of the combination of different gender perspectives to problem solving, diverse viewpoints, market insights and ideas resulted in superior solutions to problems. Companies that include talented females in their top leadership teams and boards were better able to attract and retain more talented women.

The command and control management style of the industrial and post-industrial era was associated with power and authority within an organisational hierarchy. It worked well in that era where male leaders relied on positional power to order workers to follow instructions. This leadership style is no longer appropriate for the rapidly changing and complex globalized economic environment of the 21st century where the ability to influence others is considered more important than positional power. 

Leadership competencies suitable for the 21st globalized business environment include the feminine leadership style that encourages employees to connect, to communicate and to collaborate in the performance of their job responsibilities. Companies that want to benefit from gender diverse leadership teams would need to create a workplace environment that promotes collaboration, inclusiveness and openness. The combination of masculine and feminine leadership qualities will lead to better outcomes for the companies in terms of better financial performance and increased innovation.

The gender quotas proposed by government are not a magic wand for solving the problem of poor representation of women in top leadership positions because they could lead to the marginalization of women if they are appointed to comply with legislation. Talented women should be recruited to leadership positions based on their capabilities that could contribute to the improvement in financial performance and innovation. It is important to note that research has shown that the appointment of one or two women to corporate boards or executive leadership teams has minimal or no benefits in improving financial performance. 
  
Companies that want to implement gender diverse leadership must conduct market research to understand the profile of their customers. The next step should be the determination of the alignment of the composition of the boards and executive teams with the profile of the customers and, then develop a strategy for ensuring alignment between the profile of the company leadership and that of the profile of its customers.

Successful business leaders of the 21st century will be the ones that can couple experience and expertise with the ability to encourage innovation and creativity amongst the employees. Companies that want to be successful in the globalised economy of the 21st century should embrace the balance between the male and female leadership styles in order to achieve superior outcomes. Companies that want to attract and retain talented women must be willing to remove gender bias in human resource policies and practices. They must also create a gender sensitive work environment that promotes collaboration and inclusiveness amongst employees. In return for making these changes, the companies that invite employees to participate, as opposed to ordering them to follow instructions dictated from the top, would reap benefits of improved financial performance and better working relationships between the employers and employees. 

Talented female leaders represent an under-utilised source of innovative ideas that could contribute solutions to the social and economic development challenges that are currently facing South Africa.


Dr Nozi Mjoli is Director of Hlathi Development Services. She is a Gender and Leadership Specialist and a Development Consultant. She is the author of a book entitled: ” Embracing Gender Diverse Leadership for Innovation in the 21st Century”.