5 Reasons Why Women Make Effective Business Leaders

If your organization is looking to hire ambitious go-getters and potential leaders, it is necessary for your hiring managers to pay special attention to the finer details of recruitment assessment.

What qualities should you screen for? What strengths, skills and abilities are needed to lead a team? What personality characteristics are known to lend themselves to effective management? Taking the time to ponder these questions will ensure you make the right hire, thereby reducing employee turnover and boosting overall company productivity.


One hotly debated topic over recent years is the issue of gender and leadership. Despite the fact that 79% of mid-level female managers want to reach top management, women are not well represented in C-Suite. This can be observed by the fact that there are currently only 22 female CEOs in the Fortune 500. The reality is that, for one reason or another, women tend to get stuck in middle-management positions.


Despite this, women can and do make incredibly effective senior leaders. Organisations need to do more to truly embrace and encourage gender equality and diversity, not least because of the competitive advantage it can bring. With this in mind, it is worth considering a few studies that have shown small, yet significant, results that may contribute to the positive impact women can have over their male counterparts when operating in positions of power and leadership responsibility.


Women excel at developing others

A number of sources argue that women have the upper hand when it comes to the development of others. According to a study published in the Harvard Business Review, women outranked men in 12 out of 16 leadership competencies, one of which was developing others. This area includes career counseling, detailed feedback, and on-the-job training. It has also been shown that employees who work for a female manager are 1.26 times more likely to agree with the statement “there is someone at work who encourages my development.”

It is essential that a good leader is able to develop the skills of their team. Those employees who lack a sense of purpose or fulfillment tend to be disengaged, prompting high staff turnover. Conversely, if an employee is allowed to grow and learn, they develop a heightened sense of loyalty, while experiencing a surge in productivity.


Women are more likely to reward and recognize their team

It is well known that reward and recognition are critical to employee engagement and retention. Employees require constructive feedback, acknowledgment, and positive reinforcement to motivate them and to reassure them that their work and efforts are valued. A Gallup poll shows female leaders are far more likely to reward and recognize when compared to their male counterparts. The reasons behind this are complex, but it may in part be due to the fact that women are generally more empathetic. They are more likely to recognize when an employee needs to be congratulated or encouraged. This can make all the difference if a company is seeking to unite and strengthen an existing team.


Women put effort into self-improvement

It has been shown that women regularly put more time and effort into self-development. This means that female leaders are eager to improve their existing skills to increase their efficiency, while consequently boosting company productivity. One source suggests women who are concerned with self-development are focused on improving job performance and driving results. As a result those women participating in leadership coaching may well be more inclined to work hard and challenge themselves in order to make positive behavioural changes.


Women tend to drive better financial performance

It was once reported that when a Fortune 500 company has more female board directors than male, they are more likely to attain higher financial performance with respect to return on sales, return on invested capital, and return on equity. This was later backed up by a McKinsey white paper and a DDI study. Some argue that this may be down to women having greater analytical skills and an enhanced ability to coordinate activities, while upholding company strategy.


They have competitive zeal

The reality is, despite diversity laws and an ever-increasing acknowledgment that women and men can perform the same duties to the same degree, women continue to struggle against preset prejudices in the workplace. Personal biases can have an effect; after all, people tend to surround themselves with others who are similar to them.  So women often have to work harder, be more tenacious and resilient to setbacks in order to prove themselves and thus climb to the top of their field.


While gender diversity isn’t simply the solve-it-all issue when it comes to workplace performance, a more objective selection and performance management process will help ensure companies are hiring and promoting the best leaders, regardless of gender.


About the Author:  Nick Davis is a Business Psychologist and Director at Davis Associates in London (UK) . By applying best practice recruitment assessment, coaching, and leadership development, Nick has helped clients across the globe achieve greater individual, team, and organizational performance.

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