Ensuring adequate diversity among company leaders is good for business. We have already highlighted a McKinsey & Company study that shows a potential tie between senior-level diversity and company financial performance.
Another McKinsey study shows that, although women are making progress toward senior positions in many companies, there is still a ways to go. The study looks at gender diversity at 60 Fortune 500 or similarly sized companies and found that these companies are not meeting all of the measures necessary to achieve gender diversity.
Companies can use the following four metrics used to gauge their company's own gender diversity. If your company does not meet all of these standards, it is not alone. The McKinsey researchers found that only 12 of the 60 companies they studied met three out of four of these standards. None of the companies met all four.
1. The odds of promotion. Women hold at least 53% of entry-level professional positions in most companies so the odds of advancement for women and men from entry-level to management should be at least equal. (31 companies met this standard.)
2. Senior leadership. Women should account for at least 22% of the executive committee. (20 companies met this standard.)
3. Opportunities for higher promotion. To make the odds of promotion to more senior levels roughly equivalent for women and men, women should have at least 85% of the chances men have for senior-level promotions. (19 companies met this standard.)
4. Line roles. To ensure a good mix of women in line roles rather than staff roles, women should hold at least 55% of the vice president and senior vice president positions in line roles. (20 companies met this standard.)
The study identified two key approaches among companies with higher scores on these metrics. One approach is to have a "fat" funnel with a large number of women in the talent pipeline that naturally leads to more women in senior positions. The second approach is having a smaller but steady stream of female candidates for senior roles that the company is able to retain as they move through the talent pipeline. Which approach is more appropriate depends on each company's unique circumstances.
Companies that want to improve gender diversity should consider a number of issues that the study found could be holding women back.
First, even if senior leaders express support for gender diversity, that commitment does not always translate to removing structural barriers to women.
Second, companies may not be doing enough to support lifestyle choices—for example, by offering and supporting the use of part-time work and flexible work arrangements at all levels of the company.
Third, companies should honestly assess institutional mindsets that expect women to act like men or that cause leaders to make assumptions about female promotional candidates.
Finally, companies can help female leaders work on their own mindsets about promotion and career issues, for example, by encouraging mentoring relationships and developing other supporting programs.
You can find more on the study including a full report by clicking here.