A small number of women are quickly entering company leadership positions. But growing their numbers will take increased effort.
Dr. Bonet and Dr. Hamori are faculty members at IE Business School, IE University, and Dr. Cappelli is a professor at the Wharton School of the University of Pennsylvania. This article draws on their recent research.
We know there’s value to having women in corporate leadership positions. Companies with women in top roles are more profitable, innovative, and respected.
We also know that women aren’t filling those positions in the numbers they should. For example, women hold about 9% of the top management positions in the S&P 1500 firms.
What’s needed for more women to reach leadership positions?
To understand that, we studied paths to leadership. We looked at the career paths of almost 1600 women and men who made it to the top of Fortune 100 companies.
Our results suggest that major companies, facing pressure from stakeholders on diversity, promote a small number of women to top executive positions even faster than men.
Currently, the opportunities aren’t spreading beyond that small group. However, their experience shows the potential for women to rise in companies. When companies are really motivated, qualified women can quickly enter leadership positions, through approaches such as individual sponsorships.
And companies can stop missing out on valuable talent.
Women have made real — but limited — gains in company leadership
For our research, we identified the top 10 executives in the largest corporations in the United States —the Fortune 100 companies — in 1980, 2001, and 2011, and studied their career histories.
The percentage of women in that group increased from 0 to 11 percent between 1980 and 2001, and it increased from 11 to 18 percent from 2001 and 2011.
Most intriguingly, we found that some female executives are promoted even faster than men with comparable skills, suggesting that companies are keen to diversify leadership. We found that the first women to reach an executive position in a company got to that position about two years faster than did male executives with comparable education and career experience.
However, the gains are limited. These women’s success isn’t followed by similar achievements for other women in the same organization. Once there are two women among the top 10 leaders in a company, women won’t be promoted any faster than men. Once there are four or more women at the top of a company, men will actually be promoted faster.
Companies may be doing the minimum to meet stakeholder pressure
We believe that many companies, facing pressure from stakeholders for diversity, are taking a short cut: fast-tracking a small number of women to visible roles. It is much easier to achieve diversity in a few top jobs than throughout an organization; and because these jobs are so visible, stakeholders may be satisfied.
There seems almost to be an implicit quota. If there are no women among the top 10 executives, women reach these leadership positions faster than male candidates. But beyond a certain limit — two women in our study — women’s advantage decreases. Once several women are at the top, men have a greater chance of promotion.
Diversity becomes “window dressing” – a symbolic effort, but not a broad, systemic change.
To achieve greater diversity, change promotion throughout the company
Our study found that women in top jobs got there faster by moving through previous positions faster and skipping steps in job ladders. In these cases, it seems that companies targeted a small number of individuals for faster advancement. But the same strategies could be used to promote women across the organization.
Companies can proactively invest in the development and promotion of women at lower organizational levels, by making sure that there is a certain number of women in fast-track positions or that women have an organizational sponsor that helps the promotion happen.
Here are some examples:
Cloud-computing company Salesforce introduced a “women’s surge” in its promotion practices. Now, every applicant pool for executive positions must contain women candidates. (Wall Street Journal)
Intel Corporation has mandated that women be paired with a sponsor; “Sponsors are senior players who open the doors to promotions and push their protégé through. By contrast, mentors typically offer informal advice.” (Wall Street Journal)
Price-Waterhouse Coopers has similar sponsorship program, offering women not just advice but advocacy. The program is for women in the first year of a partners-in-training program. (Human Resource Executive)
Promoting women means extra effort – and extra reward
Research shows that a majority of male executives hold gender stereotypes that act as an obstacle to promoting women. Because women have traditionally been homemakers, our culture sees them as more passive and less competent than men. These stereotypes don’t match the perceived requirements of managerial and executive roles. As a result, women have often needed to demonstrate more experience or achievements than their male counterparts to be considered apt for a promotion.
The good news: our findings show that this pattern can change, and that companies can promote women when motivated to do so. Now, these strategies need to spread more broadly across firms.
Remember: These changes can only benefit firms. Our results find that the women who get to these top executive roles are not less prepared than their male counterparts. In some cases, they even lead men in qualifications such as years of education. Companies that don’t provide women with advancement opportunities are missing out on a key source of advantage.
Read the research: Bonet, R., Cappelli, P., & Hamori, M. 2020. Gender differences in speed of advancement: An empirical examination of top executives in the Fortune 100 firms. Strategic Management Journal, 41(4), 708-737.
To identify how the effects of having women in the leadership team affects the promotion prospects of other women: We started with the careers of women who held executive positions in 2001. We then examined whether the number of female executives at a given Fortune 100 company in 2001 influenced the career advancement of women who had top executive positions in 2011.
Some have hypothesized that some women’s success will lead to success for other women. This is called the “contact” hypothesis. The theory is that when men interact with women, their bias against promoting women decreases. Sadly, our research found no evidence for this dynamic.
Who makes decisions about high-level appointments? In the case of CEOs, the decision maker is the board. In the case of lower-ranking executives, decisions are made by CEOs, higher-ranking executives and perhaps the board.