by Sharon Florentine

6 Reasons Your Business Needs Female Leadership

Jan 19, 20153 mins
CareersIT JobsIT Leadership

Recent research reveals there are significant business advantages to having a woman in key leadership positions.

Corporate culture doesn’t change because it’s the right thing to do. That includes fostering a culture of inclusion and diversity that actively seeks to hire and retain women. Corporate culture is driven by hard data and business results and, fortunately, there’s plenty of data to back up the need for more female leadership in business.

Here are six reasons your business should work toward gender diversity — and the hard data to back them up.

Greater Revenue – A 2014 research study from predictive analytics and marketing firm Mintigo revealed that women-run businesses with more than 1,000 employees generate revenue-per-employee that is 18 percent higher than at businesses headed by men.

Greater ROI – At Fortune 500 companies with three or more women in director-level positions, return on invested capital jumped over 66 percent, return on sales went up 42 percent and return on equity increased by 53 percent, according to a paper published by the Anita Borg Institute (ABI), a nonprofit that seeks to improve women’s standings in the tech field.

Lower Turnover and Easier Recruitment – Gallup found that companies with more diversity on staff have a 22 percent lower turnover rate, and if an organization has a more inclusive culture that embraces women, it’s easier to recruit a more diverse staff.

Demand for technical talent is fierce and companies that develop women in roles at every level are able to attract more qualified applicants, sending positive signals to the labor market and improving their reputations in the marketplace.

Improved Operational and Financial Performance – Women have tremendous purchasing power. A recent study by Deloitte revealed that women impact up to 85 percent of purchasing decisions; or approximately $4.3 trillion of total U.S. consumer spending of $5.9 trillion, making women the largest single economic force not just in the United States, but in the world. Organizations that employ more women in key roles are better equipped to meet the needs of the broader market, because women know what women want.

Increased Innovation – For many companies, innovation is a strategic imperative. Research shows that women bring valuable perspectives and approaches to the ideation process, resulting in more innovative solutions to complex problems. Or, as the Gallup research shows, “Women and men have different viewpoints, ideas and market insights, which enables better problem solving, ultimately leading to superior performance at the business unit level.”

Better Problem Solving and Group Performance – The ABI study reveals that, since most knowledge work is performed in teams, diverse groups solve problems more effectively than homogenous ones, raising overall performance and giving teams that include women a distinct competitive edge.

Final Thoughts: What Will Really Drive Cultural Change?

As Caroline Turner says in this article for The American Diversity Report, “Creating an inclusive culture is great for those who would otherwise feel less included. Supporting the advancement of women in business is great for women. But these aren’t the ultimate goals; and they won’t inspire action. Inclusive cultures and organizations with gender diversity achieve superior business outcomes — customer satisfaction, retention, productivity and profitability. That’s what can drive action and culture change,” she says.