“Companies that lack gender equality in their senior innovation management teams are missing out on one of the most crucial aspects of innovation: diverse perspectives!”
Recent research by by Post, Lokshin, and Boone[1] has highlighted the importance of diverse perspectives in senior innovation management teams. The presence of women in these teams can bring new insights and challenge the status quo, leading to a greater openness to change.
However, despite the potential benefits, women remain significantly underrepresented in C-suite positions. In 2019, women accounted for only 4.4% of CEOs, 14% of CFOs, and 13.6% of senior business management positions[2].
Despite these statistics, there is reason for optimism. The representation of women on company boards has been steadily increasing, rising from 15.3% in 2015 to 20.6% in 2019. The number of female CEOs has also increased by approximately 10% from 2016 to 2019. While progress has been slower than many would like, these trends are encouraging.
Research has consistently shown that boards with greater diversity, including gender, ethnicity, and age, can lead to increased profitability for companies. Here are a few reasons why:
- Diverse perspectives: When a board includes members with diverse backgrounds and experiences, they bring different perspectives and ideas to the table. This can lead to more creative and innovative solutions, which in turn can help the company stay competitive and adapt to changing market conditions.
- Better decision-making: Diverse boards tend to engage in more thorough discussions and debate before making decisions. This can help prevent groupthink and increase the likelihood that decisions will be based on a variety of viewpoints and information.
- Improved reputation: Companies with diversity at a senior level may be viewed more positively by customers, employees, and investors. This can lead to increased brand loyalty, improved recruitment and retention of talent, and more support from shareholders.
- Expanded market opportunities: Boards with diverse members may be better equipped to understand and serve a wider range of customers and stakeholders. This can help the company access new markets and identify new business opportunities.
While there is no guarantee that a diverse board will lead to increased profitability, research suggests that companies with diverse boards are more likely to perform well over the long term.
How do consumers dictate your company structure?
From another perspective, looking now at the consumer side, growing female participation in the purchasing decision-making has impacted how businesses design and define their offers.
Over the past few decades, there has been a significant increase in the buying power of women. This is largely as women globally have made great strides in education and the workforce, resulting in higher salaries and more disposable income. In addition, there has been a shift in societal attitudes towards gender roles, with women now more enabled to serve as primary breadwinners or sharing equal financial responsibility with their partners. This has led to an increase in women’s purchasing power and decision-making ability.
The rise of e-commerce and online shopping has also contributed to the increase in female buying power, as it has provided women with greater access to products and services, and the ability to compare prices and make more informed purchasing decisions.
Overall, the increase in female buying power has significant implications for businesses, as they must adapt their portfolio development, innovation, and sales strategies to cater to this growing demographic.
In a previous blog by my colleague, Edwina, on ‘Do Female Leaders Excel?’, she proposes that female entrepreneurs (or intrapreneurs) are less inclined to align themselves with an industry as part of their identity. This means if a business needs to pivot in disruption and develop into new markets quickly, there may be less reluctance to stick with ‘what you know’ and be faster to evolve.
Closing the loop, a changing market rooted in female participation would require more disruptive behaviour from companies, in which women are ready to lead.
In conclusion, companies that lack gender equality in their senior innovation management teams are missing out on the benefits of diverse perspectives. The underrepresentation of women in C-suite positions remains a significant issue, but the increasing representation of women on company boards and in CEO roles is a positive trend. It is important for companies to continue to prioritize gender equality in their leadership teams in order to drive innovation and growth. If you would like to discuss this or other innovation topics further, please get in touch!
Aline Figlioli
Aline’s LinkedIn: https://www.linkedin.com/in/alinefiglioli/
I am a professional and champion of innovation and entrepreneurial ecosystems. I have a particular interest in the design of processes and tools to support the innovation strategy and its implementation reflected in robust innovation management practices.
[1] Post, C,; Lokshin, B,, and Boone, C., (2021) “Adding Women to the C-Suite Changes How Companies Think”, Harvard Business review: April 06.
[2] Credit Suisse Research, “The CS Gender 3000 in 2019: The changing face of the companie”s, 2019.