Inadequate Career Development Holds Back Female Executives, McKinsey Says
Inadequate career development has kept women from reaching the top ranks of the corporate ladder, according to a report set to be released Tuesday by management consulting firm McKinsey & Co.
Xerox CEO Ursula Burns, pictured with Microsoft Chairman Bill Gates, far left, and General Electric CEO Jeffrey Immelt in June 2010, is among the few women to reach the pinnacle of U.S. corporate leadership.
The report, which examines barriers to women’s advancement in corporations, is primarily based on a 2011 survey of 2,525 college-educated men and women, including 1,525 individuals employed by large companies, mainly in management.
Despite efforts by major companies, just a handful of women have ascended to the leadership pinnacle, the McKinsey report concluded. Only 11 chief executives of Fortune 500 companies are women, down from a peak of 15 in 2010, according to a spokeswoman for Catalyst Inc., a nonprofit women’s research group. There were two Fortune 500 female CEOs in 2000, up from one in 1995, Catalyst said in a 2000 report.
Similarly, the McKinsey study cited a 2010 Catalyst report that said 37% of lower-level and middle managers are female, while just 26% of vice presidents and other senior managers are women at Fortune 500 companies. McKinsey plans to release the results during a “Women in the Economy” conference sponsored by The Wall Street Journal in Palm Beach, Fla.
To crack the upper echelons of corporate America, McKinsey says companies must groom a deeper bench of female middle managers for advancement.
“By increasing the number of women who make it from middle management to the vice presidential level, corporations could vastly improve the odds for building diversity in top management,” the report added. Even a 25% increase in the ranks of middle-management women reaching the next level “would significantly alter the shape of the pipeline,” it said.
Joanna Barsh, a McKinsey senior partner who co-wrote the report, said companies need to spend more time coaching women and offering more leadership training and rotation through various management roles before their ambitions sour.
Ms. Barsh said the McKinsey study found that companies weren’t “systematically watching these women at the middle management level and putting in programs that would help them develop and get over the next [promotion] hurdle.”
The paucity of such assistance partly explains why women’s ambitions decline over time, said Ms. Barsh. “Barriers become insurmountable,” especially for working mothers, she added.
Based on the survey, McKinsey researchers found that female ambition declines sharply at middle age. About 64% of women ages 45 to 54 years old expressed a desire to advance professionally, compared with 78% of the men in the same age range. The comparable figures were 92% and 98%, respectively, for women and men aged 23 to 34.
A female former senior executive for a major insurer who wasn’t involved in McKinsey’s research agreed with the recommendations. Businesses committed to gender diversity at the top shouldn’t just give “lip service by having tokens,” this executive said. They should be “actively grooming women, making sure they have mentors and actively promoting their careers.”
As part of its research, McKinsey also analyzed the makeup of executive committees at Fortune 200 companies and found women make up just 15% of the top management panels.
These “women are doubly handicapped” because 62% occupy staff jobs “that rarely lead to a CEO role,” the study said. In contrast, the report found that 65% of men on the executive committee hold line jobs, which typically involve profit and loss responsibility for an operation.
To remedy this situation, the McKinsey report proposed that businesses work harder to change the mind-sets limiting women’s opportunities, such as the popular notion that a woman can’t juggle certain jobs and family duties. As further encouragement, the report said that the performance of top managers should be judged partly on their ability to groom and promote female talent.
“A diversity program by itself, no matter how comprehensive, is no match for entrenched beliefs that prevail,” the report said.