The Third Billion – How We are Missing Out on an Opportunity
We talk about the impact of China and India – yet we miss the third big economic driver that will have a huge global impact. Women.
In the next ten years, women are expected to have an economic impact greater than the development of China or India. The aspirations and priorities of women are engines for growth. In the West, we are not prepared.
In developed countries, organizations are not accounting for women nor are they providing leadership opportunities for women.
An interesting study (Strategy + Business, Summer 2010) outlined that in our smart, developed economy women are prepared for leadership but not enabled. When people are not prepared, it is related to a lack of education. That is not the case here. Only 3% of women in developed countries were seen as not being sufficiently educated to take charge. Not being enabled is a function of lacking support (through family, organizations, professions, or communities). Nearly 70% of women in developed countries were seen as lacking support to take leadership! A further 27% lacked both support and preparedness.
Incredible. More women than men in the US have university degrees yet men are nine times more likely than women to gain senior leadership roles. We are not providing the right support!
With the women’s market in developing countries predicted to make a tremendous impact in the next ten years, Western organizations need to do something different – and now – to remain competitive.
We need to strike a balance of inner strength and outer confidence.
“Women have to be outstanding to get their (leadership) compared to men.”
Nearly 60% of women are passed over for selection and promotion to leadership roles. Why? Most companies lack formal processes for assessing and selecting candidates for promotion. In fact, only 12% of organizations have a structured framework for selection decision-making. Most decisions result from “self-promotion” rather than criteria for promotion. Men are much more outwardly self-confident than women (see below) and are the more obvious choice for selection. However, in the companies with structured and consistent selection processes, 62% more women are chosen for promotion. We need to stop missing out on our greatest asset for competitive strength.
“Those who shout the loudest may not be the best”
Research indicates that men need only be about 60% confident of their abilities before they put their hand up whereas women need to be more than 90% sure of their ability prior to stepping forward. Men are more willing to take risks; particularly in a male-dominated environment (financial services and investment banking, anyone?). However, as our business environment becomes more and more complex and ambiguous, one leader alone is not enough. The key characteristics of strong future leaders are seen as the ability to build and lead effective teams, work collaboratively, and make change happen. Women are seen as stronger in all three characteristics than men. Women need to take a step forward.
“Women need to fight very, very hard.”
We should have won this battle by now. We need to take smarter risks. It is an interesting outcome for developing countries that investment in women’s businesses provides a greater long-term benefit than similar investments in enterprises run by men. Yet, less than 3 of 10 strategic projects are led by women in the West.
Going forward, organizations need to invest smarter to be competitive. What can we do to develop the right women for leadership roles and meet the challenge – and opportunity – of the new economy?
There are two critical shifts leaders can make to capture the opportunity of women in organizations. Leadership is both internal as well as externally developed. First, provide investment in development (and not just for women – men as well will benefit) to build self-awareness of inner strengths. Second, put in place a consistent and fair framework to assess and select the best candidates for promotion.
Great leadership always starts with self-awareness. Knowing yourself is the key to being effective as a leader and having the confidence of your strengths. Using assessments and development experiences to identify each person’s natural strengths and forming a “compass” that guides the person to their best way to lead provides clarity and confidence to take a leadership role.
We need to understand our strengths for interpersonal communication, decision-making and judgment, and strategic thinking. Knowing what we bring to a situation gives us the courage – and conviction – to take a step forward and upward.
Organizations should invest in assessments to clearly and tangibly identify the strengths and challenges for women. With this knowledge, women will have an accurate picture to know what they can do.
We need to end the “ad-hoc” approach to selecting people for promotion. Who talks the loudest, who gets things done, and who we like the best are usually the decision criteria. Could this be the reason that 70% of candidates chosen for promotion are not the right ones? There seems to be a connection.
Leadership and performance characteristics are needed in people to deliver the strategy going forward; however, organizations also need to put in place a process that links these characteristics with an understanding of people's current strengths and potential for development. Connecting strategy and people is the only way to get the right people in the right places for success. With clear criteria for assessment, high-performing talent can be reviewed fairly and consistently by senior management. The result is the selection of the right people without biases. Annual talent reviews against the criteria framework define gaps for development and who really are the high-potential people. Promotion should not be a competition but rather a selection.
Once management defines the gaps between skills and strengths with qualities needed, training and job assignments can be provided to support the development of people to meet future needs. In general, women are seen as having innate strengths for team building and change management although with some weakness in strategic thinking. Going forward, organizations need leaders with more emotional depth.
The leader of the future – be they female or male – will need to be more comfortable dealing with complexity and being more cerebral than competitive. Organizations will need leaders that apply common sense, analytical skills, optimism, listening, and self-belief. Women and men are equally capable.
There is a huge economic opportunity opening up in the next ten years based on the maturing of the Third Billion as an organizational force. Interestingly enough, developing countries are moving faster to capture women’s energy for growth than Western counterparts.
To protect the sustainability of our competitiveness and realize the benefit of the women’s market, leaders in developed countries today need to provide the right environment to enable women to play their part. It is not happening. Despite the women’s movement of the past 30 years, women still hold less than 30% of senior leadership roles in organizations, and that statistic has been stagnant for more than a decade.
We are not saying women are better leaders; women and men have equal ability and capacity for leadership. We are saying that organizations today do not provide the right environment to enable women to take their rightful place. We need to enable women to lead.
Leaders today need to make the right investment to remain competitive.
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The Third Billion – How We are Missing Out on an Opportunity
