Today: December 8, 2023

DCFO IWD Series: Reaping the benefits of diversity

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Violet Chung, Partner at McKinsey | 11 March 2022

Violet Chung

Partner at McKinsey

While there are social and egalitarian reasons for gender equality, the business benefits of having greater diversity cannot be understated. A diverse workforce is great for business as often for companies with a balanced C-suite, the return for shareholders is likely to be 20-25% more than those that are not as balanced. 

So if the business benefits are well understood, why – according to our global research in 2018 and 2021 – are there still not as many female senior managers as their male counterparts in the industry? And what can both companies and individuals do to create a greater culture of inclusivity?

Understanding equality across the professional lifecycle 

Some challenges that women across organisations face, including the insurance industry, is the number of women in both entry and C-suite positions, and the intersection of perceptions around age and gender. For example, one of our reports found that women accounted for 1 in 15 entry positions and 1 in 50 C-suite positions. 

Having a more holistic view on all parts of the talent funnel, tracking the composition of teams and new hires, promotions and given C-suite roles is an important first step. It sounds very geeky and scientific, but it is extremely important to do the math and understand which part of the funnel is breaking down, and how the process can ensure gender equality across the professional spectrum. 

Creating a culture of equality and support

Creating a culture of flexibility and support is especially important for women who want to start their own family or have a family they are caring for. Within my expertise of digitalization and innovation, some of the clients I work with are the most well-known innovation shapers, and by working together with this level of understanding and empathy, they have improved their core capabilities, transformed with holistic impact, created happier workforces and improved both their top and bottom lines significantly. 

This needs to be a top-down approach with programs that mandate CEO/CXOs to spearhead support for women leaders and work towards a comprehensive approach in shaping diversity and inclusion within their firms. The holistic approach in shaping diversity and inclusion within firms must not simply frame initiatives as a “women for women” programme. Instead, companies should focus on creating ongoing and fundamental processes that focus on empathy and understanding of diverse perspectives across not just gender, but also age and race.

One interesting thing to note here is that corporate cultures that put an emphasis on empathy do not just benefit women, but also a wider range of individuals. 

Break the bias

Fundamentally, executives and boards have to understand and recognise that diversity brings benefits. Fortunately, this is starting to change, and we are seeing much more conscious change and more female leaders in the pipeline, but there is more work to be done.

McKinsey has worked hard to see that its women leaders have “more of a stake in the ground,” however, we recognise that bias exists – often unconsciously too. 

On an individual level, my advice is that if you feel you have a minority status, lean into that perspective – it can be a great advantage for businesses to spot both challenges and opportunities. And if you are in a position of privilege, use your position to highlight others that may not have the some opportunities. My observation is that when there is a diversity of experiences in a room, it leads to a much more “balanced” perspective. This is also one of the best and most telling pieces of feedback from one of my client’s CEOs that I have received over the years. 

I would also be clear on what you want and ask for help throughout all stages of your career. Instead of making too many assumptions or overthinking, speak up and make yourself heard. If you want to be taken seriously, you need to make yourself known to your fellow employees and clients.

The future

In the next ten years, we are going to see more women in senior leadership positions, including at the board and C-suite levels. One of the chief drivers of this transition will be the increased awareness of challenges and priorities for women – both from the perspectives of women employees and customers. 

Something to note here is that this support for more women will not just come from other women in senior positions, but from both genders. As we get more women working alongside male counterparts at a senior level, we are going to see more leaders gain a deeper understanding on the importance of having more diverse perspectives.

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