Article: It’s no longer about being fair


It’s no longer about being fair

While about 28% of junior leadership positions is filled by women, it drops to 9% for senior leadership positions
It’s no longer about being fair

Top-performing companies tend to do a better job of identifying and grooming high-potential females


The century-old issues of diversity and inclusion in the workplace once again seem to be attracting widespread attention in the business world. And India is no exception. Globalization of our businesses demands more ethnic and geographical diversity. Nissan, for example, has radically transformed the make-up of its leadership team from a predominantly Japanese one to a true global melting pot. With women now occupying almost 50 per cent of the global workforce, more attention is being paid to the need for more women in leadership positions. (It’s simply inexcusable that less than 5 per cent of U.S. companies in the Fortune 500 have female CEOs!) Younger workers, with different values than their older counterparts, put even more pressure on companies to ensure diversity in the leadership ranks. At one company we work with, 80 per cent the senior team is over the age of 60, while 80 per cent of employees hail from younger generations.

A closer look at India reveals a unique situation. The average age of the Indian population is 27 years old versus 37.6 years old in the US. This younger workforce will present special challenges for companies as they face engaging and retaining increasingly ambitious millennials. This is, in part, a good problem to have, considering that many countries have aging populations that make it difficult to find an ample (and qualified) supply of talent.

Meanwhile, Indian female executives like Chandra Kochar and Neelman Dhawan, have become the faces of gender diversity but they are the exception! The MasterCard Index of Women’s Advancement ranks India below most Western and Emerging economies. Plus, India has one of the highest percentages of what we call a “leaky leadership pipeline”. While about 28 per cent of junior leadership positions are filled by women, this number drops to 9 per cent for senior leadership positions. We at DDI, with People Matters as our research partner, set out to explore diversity issues in the Global Leadership Forecast 2014-2015 (GLF). As I mentioned in my previous two columns, the GLF is the largest study on global leadership, crossing 48 countries and more than 2,000 companies. We found some interesting things. In the GLF survey, leaders were asked to report their company’s degree of financial growth. We then divided the sample into high, medium, and low/no growth companies. What we found was that 30 per cent of the total leaders in high-growth companies were millennials. The low-growth companies reported a significantly lower proportion of millennial leaders (just 21 per cent).

This bodes well for India, with a high number of millennials to be groomed for leadership positions. By comparison, China suffers from an aging workforce and a severe shortage of younger workers. Holding onto their younger leadership talent pools will be no easy task for Chinese organizations as the GLF shows that these younger leaders will be far more likely than older workers to hunt for new jobs.

Gender inequality presents a more complex problem. DDI research, including both our survey data and data from assessment center results for thousands of leaders, shows little difference between the competence of female and male leaders. What we have found, though, is that when it comes to self-confidence as a leader, women lag their male counterparts. While there are numerous other factors holding women back, the lack of confidence could be a big one! But there is good news: Using independent financial metrics, we divided our GLF sample into top-20-per cent and bottom-20-per cent performers. Those companies in the top 20 per cent had far more women in their leadership ranks (37 per cent) than the bottom 20 per cent (only 21 per cent).

One of the reasons for this is that top-performing companies tend to do a better job of identifying and grooming high-potential females. In the top financially performing companies, females represented 12 per cent of high-potential pool, compared to just 7 per cent in the low-performing companies. That said, however, 12 per cent representation is still way too low!

If the findings above tell us anything it’s this: Workplace inequality is not only unfair; it’s also bad for business!

For more information on the special GLF India Country report, click here

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Topics: Diversity, #Trends

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