There is compelling evidence that female leaders outperform their male counterparts. Research from the Leadership Circle shows that women are much more effective leaders, outsourcing their male counterparts by 15-20%. If that isn’t compelling enough, S&P published research that showed the appointment of a female CEO resulted in 20% better stock performance than when firms appoint a male CEO. This same research shows that firms with female CFOs are more profitable.
Organizations are leaving money on the table
Despite the compelling evidence that female CEOs improve organizational performance, only 6% of S&P firms have a female CEO. While the CEO numbers are stark, with 94% of S&P 500 CEOs being male, the issue persists at all levels with 62% of manager-level employees being male. The facts seem to indicate that organizations are literally leaving money on the table by choosing to hire and promote more males than females.
There is something compelling about female leadership
The S&P research concludes that part of the gap in performance might be because women are held to a higher standard to reach the CEO seat. While this small group of female CEOs might include some of the top female leaders this wouldn’t explain the difference in the Leadership Circle data from leaders at all levels of management. Their data shows an eerily similar 15-20% difference in leadership effectiveness – which they have proven directly correlates with business performance. That’s a compelling difference.
Our early research also indicates that female leaders are more effective. The SupportingLines Institute is also building a base of research in this area. We study high-performance culture, where teams achieve critical goals and people have a positive, fulfilling human experience of work. Our initial research shows some compelling patterns in the data, as it pertains to female leadership:
- Female leaders currently outperform their male counterparts in all three categories of the High-Performance Leader 360 Review™️
- The differences are most significant in Help People Collaborate & Help People Grow
Female leaders do three important things more effectively
While men do have some of the highest scores we have seen in our High-Performance Leader 360 Review, it is clear that there are three areas that women seem to truly excel. This is important because these are also critical areas to cultivate high-performance culture. Female leaders are more likely to:
- Show genuine interest in the personal development of others. Female leaders are more likely to show genuine interest in the personal development of others. Our research with the High-Performance Index™️ indicates that genuine interest in personal development is a critical factor of psychological safety.
- Respect the opinion and appreciate the contribution of others. Female leaders are more likely to make sure people feel respected and included. This is true in team environments and on an individual basis. Our research shows that inclusion is the strongest driver of employee work engagement.
- Actively seek feedback. Female leaders are more likely to seek feedback from direct reports and colleagues. Our research shows that a culture of continuous feedback helps cultivate trust within an organization.
Female leaders positively impact all elements of high-performance
As expected, our research shows that these elements of helping people align, collaborate, and grow directly improve the human experience of work (psychological safety + work engagement). What is also compelling is that each element also directly impacts revenue growth, based on our research comparing HPI results to organizational Key Performance Indicators (KPIs).
Are you leaving money on the table? We strongly suggest that companies hire and promote more female leaders. We also encourage male leaders to take a page from the playbook of their female counterparts and focus their leadership development efforts on the three leadership capabilities outlined above. While female leaders currently outperform their male counterparts, anybody can learn these techniques.
Jeff Smith
Jeff is the Founder & CEO of SupportingLines. He is also a certified Master Corporate Executive Coach, seasoned C-suite business leader and yoga instructor.