Business – Hard news for men

This article comes with a warning – if you are a man, especially a “boomer” man, stop reading! I am about to impart some well researched knowledge and information that you don’t want to hear. So stop now!

Leadership effectiveness is without doubt the single most significant factor attributed to business success. This is not an opinion – it’s a fact that has been exhaustively researched, and confirmed, for decades. It doesn’t matter if we are talking about Fonterra, the biggest banks, or your favourite café along the Ōrewa strip – success comes primarily from effective leadership. So which people make the most effective leaders, and what are the characteristics that are important?

If you average out the characteristics of the leaders of the Standard and Poor’s 500 stock market index in the US (the 500 biggest US companies, in essence) you come to an unsurprising conclusion – white, male, 50, taller than 1.8m. I fear you will find a similar average over the NZX as well, but there is change in the air and for very good reason.  

A recent global survey of 22,000 companies found that fewer than 5 percent of those companies had a female leader, and almost 60 percent had no female board members. However, when analysing the profitable companies in the sample it was found that increasing female leadership in a company across any leadership position by 30 percent, translated to a 15 percent increase in profitability.  

Heady stuff for boomer men! More recent research has analysed the negative impact of the Covid-19 pandemic on women in the workforce – in the first year of the pandemic 54 million women around the world left the workforce, almost 90 percent having exited completely. 

The effect this has had on women in leadership positions, and resultant company profitability, is stark. Women leaders have more engaged teams and drive better job performance. They rank far higher than men in the crucial leadership qualities of wisdom and compassion, which allows women to do “the hard things” better than men – things like difficult conversations, negative performance reviews and managing the complex decisions that often had to come during the pandemic. 

So, women leaders in business were few prior to the pandemic, and even fewer after it, but there are positive signs in New Zealand, and locally on the Coast, that they are making a comeback – and our businesses need that to happen.

In my work with local leaders there is one area that we continually come back to – the importance of ‘soft’ leadership skills such as wisdom and compassion, but also the ability to foster collaboration, team performance and developing and mentoring direct reports. These skills can be taught, as long as our experienced leaders are prepared to listen and change their thinking. 

Our workforce is changing as younger generations join it, their motivators are changing, what they care about is changing. Those soft skills help leaders, paradoxically, do the hard things better, such as engaging and motivating their people, and driving financial success.