Lareina Yee, partner of McKinsey San Francisco, has more than 12 years of experience in sales and marketing and she worked mainly in Asia and in the US. On top of creating marketing campaigns and managerial models to reduce costs enhancing customer experience, she also deals with the topic of gender equality in the workplace. In particular, she co-managed a research published on the Wall Street Journal on the role of women in the economy, and she also participates in publishing the yearly report “Women in the market place”.
According to such report, many firms are engaged in promoting gender equality because they believe it is “the right thing to do”, however a survey on 270 companies shows that those firms with the highest proportion between men and women in the executive roles have on average a return on capital 47% higher than those without women in a managing position. This result seems to be highlighting that the presence of women in relevant roles is not just a matter of ethics, but it can positively impact the economic performance. Another study on diversity on the workplace (year 2018 on more than 1000 companies from 12 countries) illustrates a strong correlation between profitability, value creation and diversity among executives. Companies with higher gender diversity are 27% more likely to have a performance above the average of the industry; vice versa, those firms with lower ethnic or gender diversity are less likely to have a profitability above average.
The different approach in leadership between women and men is another element that could explain the different performance between companies with more women in leading roles. In fact, both genders have a different way of leading a team: different, but both equally valuable. Women tend to encourage a more inclusive decisional process in order to enhance the working environment and make it healthier. Men, on the other hand, are better in supporting coordination and control especially when action is needed to meet objectives. Clearly, not all men and women belong to these categories, but McKinsey’s report shows a correlation between financial performance and the way work is organized.
The goal of the report is not the one of creating conflict in the relationship between men and women on the workplace, but it aims at presenting that a more diverse team is able to perform better. There is strong empirical evidence that diverse team are better performing than homogenous teams entirely made of women or entirely made of men. This phenomenon depends on many variables, a not homogeneous team has better problem solving and analytical skills : diversity helps bringing on the table complementary perspectives.
Looking at these considerations on an aggregate level, the report estimates that if women participated equally in the world economy, there would be an increase in the global GDP of about $28 trillion by 2025. This number corresponds roughly to the size of the US and Chinese economies combined together. Another study of the McKinsey Global Institute calculated that women only generate 37% of the global GDP, even though they represent half of the population in working age. The explanation to this gap lies in the lower labor force participation ratio of females, and additionally women are usually employed in part-time jobs or in less productive areas of the economy, for example agriculture.
Finally, the report highlights that in the near future women will hardly participate equally in the world economy for many reasons, even cultural ones. However, the study also shows the potential economic benefit that even a slightly higher participation of women would bring. This increase in productivity would be even higher in those countries where economic growth is endangered by the ageing of the population.
Arianna Di Marco
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