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McKinsey & Company |

Women for GrowthUnlocking the full potential of women in the economy

Elizabeth Stephenson

McKinsey & Company

March 22, 2013

McKinsey & Company | 1McKinsey & Company | 1


Women for Growth

McKinsey & Company | 2

The case for change

Where do we stand and what are the barriers?

How to grow the number of women in top management?


Women bring additional productive power in the economy

McKinsey research shows that

the additional productive power

women brought in the US

economy since 1970 accounts

for a quarter of current GDP

3


Women are critical to the global talent gap

4

An equal

employment rate

between men and

women would close

almost all the gap

high skill workers shortage by 2030


Women contribute to better financial performance

Companies in the top quartile for the women representation in executive committees

Average return on equity2007 - 2009

Average EBIT margin 2007 - 2009

15%+47%

22%

11% +55%

17%

Companies with 0 women in executive committees

5


Men apply more

Women and menapply equally

Women apply more

Women and menapply equally

6

Women exhibit behaviours that are critical to future growth

Individualistic decision making

Control and corrective action

Efficient communication

Role modeling

Participative decision making

Intellectual stimulation

Inspiration

People development

Expectations and rewards

Leadership behaviours

% ranking behavior as most effective to address the future

12

18

23

34

38

57

57

61

62


Women for Growth


The case for change




In 2012, women are still underrepresented at the top of corporationsat a global level

8

2

5

8

13

15

16

16

20

25

35

Japan

India

China

Australia

United States

United Kingdom

Germany

France

Sweden

Norway

1

3

9

12

14

11

3

8

21

15

Corporate BoardsPercentage of total; 2011

Executive CommitteesPercentage of total; 2011


EUROPE

9McKinsey & Company | 9

Women for GrowthWhere do we stand and what are the barriers?


In Europe, women are underrepresented at all hierarchical levels, not only at top management

Odds of advancement for men over those for women

xx

10

37

22

14

9

2

1.8x

1.7x

5.0x

2.1x

Overall company level

Middle management

Senior management and vice president

Seats on executive committee

CEO

Percentage of women


The ‘double burden’ syndrome and the performance model are key barriers

“Double burden” syndrome (women balancing work and domestic responsibilities)

1

Absence of female role models4

“Anytime, anywhere” performance model

2

Women’s tendency to network less effectively than men

5

Women’s reluctance to promote themselves

3

Top 5 barriers in Europe

11



ASIA


Executive committeesPercentage of total; 2011

Corporate boardsPercentage of total; 2011

1

23

59

1112

15

JapanKoreaIndiaMalaysia

China

Hong KongAustraliaSingapore

2

155

8

913

7

In Asia, women are less represented at the top of corporationsthan in the Western World

14Europe average 10 (Best in class 21%)

US average 1517 (35%)


The gap comes partly from lower labor participation rates for womenacross Asia

35

47

47

52

53

55

6062

65

68

69

70

74

76

Taiwan

India

Malaysia

HKIndonesia

KoreaSingaporeJapan

FranceUS

UKAustralia

ChinaNorway

Asian countriesFemale labor participation ratePercent


1China 955 21

<1Japan 145 11

<1India 329 9

8Singapore 1550 20

5Indonesia N/A47 20

5Malaysia N/A53 11

<1Korea 240 6

3Australia 1245 N/A

1Taiwan 944 18

2Hong Kong 52 23 11

Percent of women

The biggest talent loss happens at the mid-to-senior management level

Executive committee

Mid-to-senior management

Entry-level professionals

CEO

15


Lack of pro-family public policies is a big barrier in Asia

“Double burden” syndrome (women balancing work and domestic responsibilities)

1

Absence of female role models4

“Anytime, anywhere” performance model

2

Women’s reluctance to promote themselves

5

Lack of pro-family public policies or support services (e.g., child care)

3

Top 5 barriers in Asia

16



UNITED STATES


18

As Europe, Corporate America has a leaky talent pipeline

Executive Committee

VP and senior management

Entry level professional

Early to middle management CEO

53% 37% 26% 14% 3%2010 F-500 pipeline % women

Men

Women

18


We have quantity and quality gaps

19

Women at entry-level. At least 53% entry level women1 or same odds to advance to manager as men

Odds of advancement. At least 85% likelihood2 of women making it from Manager to Director and from Director to VP compared to men

Women at the top. 22% or more women at c-suite2

Presence in line roles. At least 55% women in revenue generating roles at the VP/SVP level2

12 companies satisfy at least 3 of the 4 conditions

52 companies satisfy at least one condition27 companies satisfy at least two conditions No one satisfies all four conditions

SOURCE: 2012 Submitted pipelines; McKinsey analysis

Threshold levels set based on:1 Overall pool entry level average2 Metric determined by cutoffs of top third of companies


CEO intentions are not always believed

SOURCE: 2012 Employee survey – 14 companies, 300 respondents per company (4200 total); McKinsey analysis

1 Includes responses from the 5 companies who ranked gender diversity as a top 10 item or higher and completed an attitudinal survey.

Do you agree with “Our CEO is visibly committed to gender diversity”?% of employees at companies who rated gender diversity as a top-10 strategic priority1

AverageMenWomen

Even when the CEO sets a gender diversity priority…

…only about half the employees agree s/he is visibly committed to it

47

6154

20


Women opt into support roles fairly early

34

28

38

50

54

65C-Suite 12535

SVP 1K46

VP 6K50

Director 29K62

Manager 100K72

Entry Level 330K66

Support Staff

Operational role

WomenPercentage of women in operational roles versus support staff

21


Women for Growth


The case for change




Why are so few companies successful?

SOURCE: McKinsey Women Matter 2012 report

Up to 50% drop off between ‘being done’ and ‘being done well’Paper not practice

41% of CEOs actively leading….but only 13% of middle managersCommitment at the

top – but not further down

Average of 16 initiatives….but less than half fully implemented Lack of focus


In Asia, the first step is to establish gender diversity as a strategic priority for companies

47

7052 55 61 63 64

73 75 77 77 79

100%

India

27

China

25

Japan

23

Indo-nesia

23

HK

21

Taiwan

36

Singa-pore

37

Malay-sia

39

Aus-tralia

45

Korea

48

Ø Asia

30

Ø Europe

53

“How important is gender diversity on your company’s strategic agenda?”Percent of respondents

Not on Top 10

In Top 10


Successful women demonstrate the foundational attributes of success…

What successful women have in common…

… and share many characteristics

Early career acceleration 70%

Line experience 79%

Significant sponsorship 90%

Switched companies 74%

Have children 84%

Robustwork ethicRobustwork ethic

Willingness to consistently go above and beyond to get the job done

90%

Results orientationResults orientation

Relentless focus on achieving impact – to the organization and the bottom line

82%

Grit/ResilienceGrit/Resilience

Perseverance in the face of challenging situations or adversity92%

Persistent feedbackPersistent feedback

Active elicitation of feedback from leadership, peers and subordinates

78%

Team leadershipTeam leadership

Collaborative leadership; ability to motivate and lead teams80%


Women for GrowthConclusion

Three priorities for committed leaders

1. Treat gender diversity like any other

strategic business initiative with senior management comitment

2. Ask for—and talk about—the data

3. Change the mindsets (benefits of

diversity, culture of sponsorship)

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