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Women MatterGender diversity, a corporate performance driver
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McKinsey & Company is an international
management consulting frm that helps leading
corporations and organisations make distinctive,
lasting and substantial improvements in their
perormance. Over the past eight decades, the
Firms primary objective has remained constant:
to serve as an organisations most trusted
external advisor on critical issues acing senior
management. With over 7,500 consultants
deployed rom some 90 ofces in about
50 countries, McKinsey advises companies
on strategic, operational, organisational andtechnological issues. The Firm has extensive
experience in all major industry sectors and
primary unctional areas, as well as in-depth
expertise in high-priority areas or todays business
leaders. McKinsey & Company also helps a
diverse range o government institutions, public
administrations and non-proft organisations with
their management challenges.
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Women Matter
Companies with a higher proportion o women in top management may
perorm better
Women Matter s a study conducted by McKnsey & Company as part o ts global
partnershp wth the Womens Forum or the Economy & Society.
The study suggests that the companes where women are most strongly represented
at board or top-management level are also the companes that perorm best.
Conrmng the exstence o the gender gap most notably n the composton o
corporate management bodes the McKnsey study oers act-based nsghts
nto the mportance or companes o osterng the development o women n the
busness arena, so that a greater number attan postons o hgh responsblty.
Fnally, buldng on these nsghts and observatons, and hghlghtng the man
barrers to emale representaton on management bodes, ths study seeks to brng
the practcal debate o how to make the transton rom awareness o the stuaton
to the mplementaton o change.
Are women the uture o busness? The queston s open
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iWOMEN MATTER
Contents
Too ew women in business:
a persistent reality
4 As things stand, change will come only very slowly
4 Known dspartes
4 The derence s even more strkng n top management
postons and on boards
6 Natural growth n the number o women graduatess nsucent to brng about change
7 A model which remains predominantly male-oriented
7 The anytme, anywhere perormance model rreconclable
wth the womens double burden
8 Masterng male codes as the only way to rse through the ranks
8 Womens ambitions restrained by an acute awareness o barriers
8 Dculty n dentyng wth success
9 Lower ambtons
9 Optng out: a real and serous reason or the gender gap
n top management
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WOMEN MATTERi
Major economic potential
10 More women in business: an imperative or competitiveness
10 A response to the upcomng talent shortage n Europe
10 Women: a growng advantage or companes?
1 More women in control: a corporate perormance lever?
1 Womens postve mpact on organsatonal excellence
1 and on nancal perormance
Reinventing the model?
17 Increasing womens participation in the workplace:
the crucial role o political bodies
19 Pursuing tried and tested initiatives within the workplace
19 Four best practices or achieving gender diversity
19 Create transparency by mplementng gender dversty KPis0 implement measures to enhance the work-le balance
1 Adapt the human resources management process
1 Help women master the domnant codes, nurture ther ambton
1 The pivotal role o the CEO
Womens path to success:
what you need to know
15 The Big Three-O: a time or setting aspirations
15 Career plans beore amily considerations
16 Do women pay a higher price or success?
Conclusion
Going urther?
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4 iWOMEN MATTER
It is widely recognized that women are stillunder-represented in European business,both in number and in status, but has thesheer size o the gender gap in managementbeen truly grasped?
Known disparities
Although women account or 55% ouniversity graduates in Europe1, they area smaller part o the labour market: theiremployment rate is 21% lower than that omen2. There are also signicant disparitiesin their levels o responsibility and in theirpaychecks: according to the European
Commission, theaverage wagegap between menand women is as
high as 15%3
. Women are also less likely tohave ull-time jobs: 33% o women workpart-time, compared to 7% o men3.
The disparities are wider in the privatesector than in the public sector. In Francesprivate sector, only 42% o workers arewomen4, against 58% in the public sector,and the pay gap is generally wider (19% asopposed to 14% in the public sector).
The dierence is even more striking
in top management positions
and on boards
Within companies, women are particu-larly under-represented in managementand decision-making roles: inEurope, they rep-resent on aver-age just 11% othe membershipo the governing bodies o listed compa-nies5(Exhibit 1).
The situation varies greatly rom
one European country to another: inNorway, women hold more than 32%o top executive jobs, against just 1% inLuxembourg. More generally speaking,gender diversity is stronger in Northernand Eastern Europe than in the South orin Germany. And despite being at the topo the class, Norway and Sweden are still along way rom achieving gender parity.
The employment rate or women
is 21% lower than or men
In Europe, women represent
only 11% o the membership
o the governing bodies o listed
companies
As things stand,change will come
only very slowly
Too ew
womenin business:a persistentreality
Thirty years ago, we would never have
thought that there would be so ew women
in the boardrooms Charwoman o the board o a holdng
o an nternatonal company
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WOMEN MATTERi 5
32 %
24 %
21 %
21 %
19 %
12 %
11 %
8 %
7 %
6 %
4 %
3 %
1%
Share of women in executive committees in the top European companies*
Norway
Sweden
UK
Finland
Latvia
Bulgaria
Germany
France
Netherlands
Belgium
Italy
Luxembourg
* European statistics on the top 50 listed companies per country in 2006
Source: European Commission
EU average: 11% women
Spain
Exhibit 1
Women represent only 11% o the membership o governing bodies o listed companies in Europe
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6 iWOMEN MATTER
2005
2035***France
58 %
11 %
Germany
* Female graduates with the equivalent of a masters degree
** European Commission statistics on the top 50 listed companies per country
*** Extrapolation based on trends 19752005
**** Female graduates with the equivalent of a masters degree in economics, law or sciences, or from the Grandes Ecoles and MBA programs
Source: OECD; national statistics; Eurostat; European Commission; McKinsey; data from French institutions
Country
Sweden
1970s 2000s
61 %1978
24 %2006
41 %1975
2006 8%
1976
2006
32 %
11 %
1975
2006 2035***
2005
2005
2035***
2005
2035***Spain
Female graduate trajectories
Even if these projections are applied only to
the academic channels that traditionally produce
company managers****, the proportion of women
on management boards in France would still
only reach 16% in 2035
32 %
17 %
64 %
25 %
61 %
49 %
4% 8%
University graduates*
On executive committee** c. 30 years later
Proportion of women:
1970s, 2000s, linear projection for 2035
Exhibit
The increase in the number o emale graduates will have a limited impact on diversity
Natural growth in the number
o women graduates is insucient
to bring about change
Gender inequality continues to exist inmanagement unctions, and the increase inthe number o emale university graduateswill not itsel be sucient to close thegap. As shown by the linear projectiono the historic trends in numbers owomen graduates applied to womensrepresentation in top managementpositions, unless the current rules othe promotion system are changed, the
growth in emale graduate numbers willhave a very marginal impact on womensrepresentation on governing bodies. InSpain, or example, volume alone would
merely raise the proportion o womenin top executive positions rom 4% in2005 to 8% by 2035 (Exhibit 2). Eveni these projections are applied only tothe academic channels that traditionallyproduce company managers (MBAs andengineering schools, or example), thegain in France would amount to just8 percentage points by 2035, with theproportion o emale top executives risingrom 8% to 16%.
In essence, unless we address the rootcauses o the problem, the notorious
glass ceiling will stay rmly in place,and womens participation in corporateleadership over the next 30 years willremain low.
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WOMEN MATTERi 7
* Sweden, Norway, Finland, Germany, Belgium, UK, Latvia, France, Estonia, Hungary, Slovenia, Lithuania, Poland, Spain, Italy
Source: Eurostat
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4:15
4:45
5:20
4:29
4:55
4:30
3:47
3:42
2:18
1:35
1:37
2:22
2:22
2:18
2:38
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Women
Italy
Spain
Poland
France
UK
Belgium
Germany
Norway
Sweden
EU 15* average
+143
+198
+114
+128
+110
+73
+85
+131
+225
+117
Time spent
hours
2005
Difference between men
and women, minutes
Men
Domestic tasks (including childcare and preparing meals)
Exhibit
European women devote on average twice as much time as men to domestic tasks
To gain an understanding o the mainbarriers that prevent women achievingtop-management positions, we collatedndings rom the many studies in this areaand interviewed more than 50 companyCEOs, men and women, throughoutEurope.
It emerges rom this research thatwhile social policies can be more or less
avourable to womens employment,corporate models historically designedby men orm the pillars on which theglass ceiling is supported.
The anytime, anywhere perormance
model, irreconcilable with womens
double burden
The double burden syndrome thecombination o work and domestic
responsibilities weighs heavily. Womenremain at the centre o amily lie, withall the attendant constraints (maternity,child-rearing, organising amily lie, careo the elderly, etc). The impact o the
constraints may vary rom one countryto another, depending on the supportoered (inrastructures such as day-care centres, tax policies that encouragewomens participation in the labour orce,etc.), but on average European womencontinue to devote twice as much time asmen to domestic tasks: 4 hours and 29minutes a day, compared with 2 hoursand 18 minutes or the men in our sample6(Exhibit 3).
The question arises o how compatiblethe double burden which is currentlyinherent in our model o society iswith the demands associated with seniormanagement. The dominant model in thebusiness world (or the one perceived assuch) equates leadership with unailingavailability and total geographical mobility
at all times (anytime, anywhere). Themodel also presupposes a linear careerpath, with no space or career breaks orthe rejection o a geographical mobilityoer.
A model which remains
predominantly male-oriented
The rst question I am always asked by
women students is how I manage to balance
my private and proessional lie Charwoman o a meda group
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8 iWOMEN MATTER
70% o emale respondents rate
their own perormance as equivalent
to that o their co-worker while 70%
o men rate themselves higher than
their co-workers
This dominant model is elt by women tobe the main barrier to career advancementand success, because it cannot be reconciledwith the double burden. For example,maternity leave and reduced mobility areseen as serious handicaps: in the US, 62%o women perceive amily or personalobligations as an obstacle to promotion7.
Fully 96% o emale graduates romFrances elite grandes coles believe thathaving children, or being o child-bearingage, is a real or perceived barrier oremployers8.
Mastering male codes as the only way
to rise through the ranks
The predominance o the masculine modelor upward mobility is a urther barrier
to womens participation in corporategovernance bodies: it requires a greatereort o adaptation or women to be moreassertive in making their way to the top.
The interviews we conducted show, amongother things, that one o the keys to suc-cess lies in the ability to promote onesel
and to be asser-tive about onesperormance andambitions. Wom-en, it appears,
tend to minimisetheir own contri-
bution, as a survey o MBA students9 sug-gests: 70% o emale respondents rate theirown perormance as equivalent to that otheir co-workers, while 70% o men ratethemselves higher than their co-workers.
I women are thus less naturally inclinedthan men to recognise and appreciate their own perormance, it is probably moredicult or them to assert their talents
and gain recognition in the company, andhence to capture every opportunity orpromotion.
An added nal handicap is that it appearsharder or women to nd a mentor.According to a Catalyst10 study o MBAgraduates, only 33% o the womeninterviewed said that it was easy tond a mentor, compared with 42% omen. And yet, 61%11 o women see thelack o mentoring as a barrier to careerdevelopment, as opposed to 31% o men.
All these acts underscore the diculty thatwomen experience in applying the leverso in-company promotion with the sameeectiveness as their male counterparts.
In addition to these barriers, there arealso psychological obstacles: womensdiculty in identiying with success, andtheir lesser ambition, which combinedwith a greater ocus on their amilies,seem to lead many women to opt out oa business career.
In a male-dominated environment, in
which women nd it dicult to achievepositions that t with their constraints,we have endeavoured to understand towhat extent womens readiness to opt outrom success may account or their relativeabsence in managerial unctions.
Diculty in identiying with success
A third major barrier that has emergedrom our research involves the diculty
women have in identiying with success,which appears to hamper their proes-sional development. The absence o emale
When, or personal reasons, I declined the
top job in an overseas branch, I was told I
was excluding mysel rom the system. It wasseen as career suicide
Head o marketng, French subsdaryo a leadng European bank
Womens ambitions restrained
by an acute awarenesso barriers
On the same project, the men will
demonstrate 100% ambition even i they only
have 50% o the required skills, whereas the
women will be concerned about only having
80% o the required skills
Board member o a bankng group
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WOMEN MATTERi 9
role models seen as a barrier by 64% owomen in the US11 is compounded by a
heightened per-ception o thediculty oachieving successin todays busi-
ness environment. In France or instance,77% o women believe their career devel-opment aces barriers, a perception sharedby 49% o men12.
Lower ambitions
Perhaps because o their perception o thesebarriers, women seem to have lower pro-essional ambitions than men. In act, 48%o men according to a Harvard Business
Review survey13 see themselvesas extremely orvery ambitious,while only 35%
o women have a comparable sel-image.Furthermore, only 15% o highly quali-
ed women aspire to positions o power,against an average o 27% o men.
Opting out: a real and serious reason
or the gender gap in top management
Ultimately, opting out a voluntarydecision to discontinue ones career isboth the result o the barriers identiedand an additional cause o the shortallo women in corporate executive bodies.Among the US college graduates surveyedby Harvard Business Review13, 37% o
the women voluntarily stopped workingat some point in their career, against 24%o the men. One o the main reasons putorward by these women were the needto spend more time with their amily(mentioned by 45%) (Exhibit 4). An evengreater cause or concern is that out o the93% o women who have taken careerbreaks and intended to get back to work,only 74% have managed to do so, andonly 40% have ound ull-time work.
Need more time forthe children
* Survey of 2,443 women and 653 men in the US, ages 28 to 55, who obtained a college degree with honours or a graduate degree
Source: Harvard Business Review 2005
Proportion of US graduates*
who interrupt their careers Main factors behind career break decisions
Sufficient household
income
Lack of job satisfaction
Need more time for
other family members
Feeling of being stuck
in a rut professionally
45 %
32 %
29 %
24 %
23 %
Men Women
37%
24%
2005
Factors behind career break decisions
Exhibit 4
Career breaks or women are mainly motivated by the need to spend more time with amily
64% o women see the absence
o emale role models as a barrier
to their development
Only 15% o highly qualied women
aspire to positions o power, against
an average o 27% o men
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10 iWOMEN MATTER
Given this situation, is change really need-ed? Egalitarian considerations apart, arethere any other reasons why we shouldradically enhance womens urther integra-tion into the corporate world, particularlyin senior management positions? A num-ber o reasons suggest that gender diversi-ty is a real issue or business, and one that
deserves to be tackled urgently. Corporatecompetitiveness is at stake.
A response to the upcoming talent
shortage in Europe
The shortall o European workers is ex-pected to increase in the coming decades,especially or the most highly qualied jobs.Tapping the underutilised pool o skilledwomen (and older people) could thus play
a major role in the war or talent. The g-ures speak or themselves: i the employ-ment rate or women remains constant,
Europe can expect a shortall o 24 millionpeople in the active workorce by 2040;i, on the otherhand, the ratecan be raised tothe same level asor men, then the projected shortall dropsto 3 million (Exhibit 5).
Women: a growing advantage
or companies?
To adapt to changing social and consump-tion trends, companies increasingly needto integrate women into their decision-making processes, as women now have amajor infuence on purchase decisions: inEurope, they are the driving orce behindmore than 70% o household purchases14although they account or only 51% o thepopulation.
Even in industries where buyers are tradi-
tionally male, women represent a growingproportion o theconsumer base:or example,women infuence60% o new car purchases in Japan15 andmake up about 47% o PC users in Eu-rope16.
Gender diversity is also an asset or thecorporate image and helps bring closertogether the company, its employees, its
shareholders and its customers. Accordingto a study by the European Commission17diversity programmes have had a positive
Europe can expect to see a shortall
o 24 million people in the active
workorce by 2040
Women are the driving orce behind
more than 70% o purchasing
decisions
Majoreconomicpotential
More women in business:an imperative or
competitiveness
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WOMEN MATTERi 11
impact on employee motivation or 58%o the companies that have implemented
them, and oncustomer satis-action or 57%,while 69% o the
companies noted an improvement in theirbrand image.
Furthermore, capital markets and investorsare paying more and more attention tocorporate perormance in terms o genderdiversity. For instance, investment undssuch as Calpers in the US or Amazone inEurope include this indicator among their
investment criteria, while rating agencies(Core Rating, Innovest, Vigeo) are nowdeveloping tools to measure genderdiversity.
Exhibit 5
Increasing womens employment rate oers one possible response to the demographic challenge
With an equal employment
rate, women represent
a pool of 21 million jobs
* Total population aged 1565 years multiplied by employment rate (for the European Union 27 countries excluding Slovenia, Slovakia andCzech Republic and including Iceland, Norway, Sweden and Albania)
** Estimate based on employment rate of women in 2005 (56%)
*** Based on employment rate of men in 2005 (71%)
Source: Eurostat; Global Insight; McKinsey
Active workforce*
Million
2000 05 10 15 20 25 30 35 2040
Status quo**
Equality between employment
rates of men and women***Today
24 million
3 million
190
200
210
220
0
180
60% o new car purchases in Japan
are infuenced by women
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1 iWOMEN MATTER
To examine whether greater genderdiversity might correlate with bettereconomic perormance, we conducted twotypes o research on two cross-sections obusiness.
Womens positive impact
on organisational excellence
In the rst study, we used a proprietaryMcKinsey diagnostic tool, which measuresthe organisational excellence o a companyagainst nine criteria: leadership, direction,accountability, coordination and control,innovation, external orientation, capability,motivation, work environment and values(Exhibit 6).
With this tool, our experts examinedthe evaluations o 115,000 employeeso 231 public and private companies,
as well as non-prot organisations, anddemonstrated a correlation between acompanys level o excellence in these nineorganisational dimensions and its nancialperormance. The companies ranked mosthighly according to these organisationalcriteria tended to have operating marginsand market capitalisation twice as highas those o the lower-ranked companies(Exhibit 7).
We then selected 101 companies thatpublish the composition o their governing
bodies, mainly large corporations inEurope, America and Asia, across aspectrum o industries, rom energy todistribution and nancial institutions.We analysed the answers o 58,240respondents to our survey, and thencompared the results or these companiesdepending on the proportion o womenon their governing bodies: it emerged thatcompanies with three or more women insenior management unctions score morehighly, on average, or each organisational
criterion than companies with no womenat the top (Exhibit 8). It is notable thatperormance increases signicantly oncea certain critical mass is attained: namely,
at least three women on managementcommittees or an average membershipo 10 people. Below this threshold,no signicant dierence in companyperormance is observed.
Correlation is not necessarily cause, but
the correlation between organisationalexcellence and womens participation inmanagement bodies is nonetheless striking.Such a correlation echoes a number ocomments and remarks that we heardduring our interviews with CEOs.
We then set out to research whether
companies with women top managers alsoperormed better nancially.
and on nancial perormance
To this end, we conducted a second study,jointly with Amazone Euro Fund. We
When women sit on an executive committee,
the nature o interactions changes But,
one woman there is not enough, you need
several o them
Board member o a bankng group
I think the real benet o having women and
diversity in a team is that you have a richer
set o ideas. So, I truly believe there is a direct
relationship between team perormance and
having a diverse team with the best talents
Vce-Presdent Europe o a leadng globalhealthcare company
More women in control:
a corporate perormance
lever?
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WOMEN MATTERi 1
Exhibit 6
The level o organisational excellence is measured against nine criteria
Articulate where the
company is heading,
how to get there,
and align people
DIRECTION
ACCOUNTABILITY
Design structure/reporting
relationships and evaluate
individual performance
to ensure accountability
and responsibility for
business results
Shape employee
interactions and foster
a shared understanding
of values
Measure and evaluate
business performance
and risk
Inspire and encourage
employees to performand stay
Generate flow of ideas so
that the company adapt
COORDINATIONAND CONTROL
INNOVATION
EXTERNAL
ORIENTATION
MOTIVATIONCAPABILITIES
ENVIRONMENT
AND VALUES
Ensure internal skills and
talent to support strategyand create competitive
advantage
Engage in constant two-
way interactions with
customers, suppliers,
or other partners
Ensure leaders shape
and inspire the actions
of others to drive better
performance
LEADERSHIP
Organisational Performance Profile (OPP)*
* A proprietary McKinsey tool
Source: McKinsey
Exhibit 7
The best-ranked companies on organisational perormance tend to have an operating marginand a market capitalization more than twice as high as those o the lower-ranked ones
Bottom quartile
Top quartile
Middle quartiles
68 %
X 2.2
48 %
31 %
Level of organisational
performance* an above-average** EBITDA***
Probability of having
62 %
X 2.0
52 %
31 %
an above-average** valuation****
* Quartiles based on the arithmetic average of scores obtained by 231 institutions, rated on 9 criteria by 115,000 employees
** Earnings Before Interest, Taxes, Depreciation and Amortization
*** Based on data either for the year of the survey or averaged over 3 years; the surveys were carried out at different times in different companies
over the last five years
**** Enterprise value to book value ratio
Source: McKinsey OPP analysis
Companies economic performance according to their organisational rating
selected the 89 European listed companieswith the highest level o gender diversity intop management posts. The companies wereselected rom all European listed companieswith a stock market capitalisation o over150 million, on the basis o the ollowing
criteria: the number and proportion owomen on the executive committee, theirunction (a CEO or CFO having greater
weight in corporate decisions than aCommunications Manager) and, to alesser extent, the presence o more thantwo women on the board, or statisticson gender diversity in the annual report.McKinsey then analysed the nancial
perormance o these companies relative tothe average or their sector. There can beno doubt that, on average, these companies
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14 iWOMEN MATTER
Exhibit 8
Companies with three or more women in top management unctions score more highlyor each organisational criterion than companies with no women at the top
Work
environment
and values
Direction
Coordination
and control
Leadership
51
56
68
48
72
61
57
55
External
orientation
Motivation
Innovation
Capability
Accountability
63
70
64
52
64
53
65
71
66
67
To what extent is your company effective
in each of the 9 organisational dimensions?Percentage of employees with positive evaluation*
* Analysis conducted on a sample of 101 Worldwide companies, or 58,240 persons surveyed
Note : Given the sample size, a 1% difference is statistically significant
Source: McKinsey
Companies with no women (n=45)
Companies with 3 or more women (n=13)
+7 pts
+6 pts
+5 pts
+4 pts
+3 pts
+3 pts
+1 pt
+1 pt
+1 pt
outperorm their sector in terms o returnon equity (11.4% vs an average 10.3%),operating result (EBIT 11.1% vs 5.8%),and stock price growth (64% vs 47% overthe period 2005-2007) (Exhibit 9).
What conclusions should we draw? Thesestatistically signicant studies show that
companies with a higher proportion owomen on their management committeesare also the companies that have thebest perormance. While these studies donot demonstrate a causal link, they do,however, give us a actual snapshot thatcan only argue in avour o greater genderdiversity.
Exhibit 9
Companies with a higher proportion o women in their top management have better nancialperormance
Economic performance of the companies with most gender-diverse
management teams compared with their industry average
Companies with most gender-
diverse management teams*
Industry average
* 89 companies, identified with the scoring system developed by Amazone Euro Fund
** 87 companies, data not available for two companies
*** 73 companies, financial sector not included
**** Of the 89 most gender-diverse companies, 44 have a market capitalization greater than 2 billion euros
Source: Amazone Eurofund database; Amadeus; Research Insight; Datastream; Bloomberg; McKinsey
Average ROE**
2003-2005
11.4%
10.3%
+ 10%
Average EBIT***
2003-2005
11.1%
5.8%
+ 48%64%
47%****
Stock price growth**** 2005-2007
compared with Eurostoxx 600
sectorial indexes
x 1.7
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WOMEN MATTERi 15
Having established the benets o genderdiversity, our study then moved on toexamine the individual motivations and thecareer turning-points that aect womensadvancement in the corporate environment.In July 2007, we surveyed a sample o male(482) and emale (409) middle and seniormanagers rom around the world (36%in Europe, 31% in the US, 33% in RoW),asking them about the decisions or eventsthat had a signicant and lasting impact ontheir career development. It emerged that
the successul women who had risen to thehigher echelons o major corporations putcareer ahead o amily as did the men but came up against a greater numbero obstacles on their way to the top. Thiswas true or women in top management(about 30% o our respondents) as well asin middle management.
The Big Three-O: a time or setting
aspirations
As our survey showed, the rst moment otruth in the career path o men and womencomes ater about 8 years o work, around
the age o 30. But this milestone appears tobe more critical or women: more womenthan men (25% vs. 20%) said that at 30they decided to take more active control o
their careers, and that it was a time whenthey aced the choice o whether or not torevise their ambitions upwards (22% owomen, 16% o men).
Career plans beore amily
considerations
An unexpected nding emerged rom thesurvey: most executives agree that theactors which most strongly infuencedtheir career choices were related to their
work environment (89%) and changes intheir personal aspirations (79%). Familyconsiderations, by contrast, were o lesserweight or both women and men (42%vs 49%) (Exhibit 10). These ndings aresimilar or men and women, both withchildren and without. A large majority orespondents (89%) added that they didnot regret this career orientation, which,or 75% o them, has had a positive orvery positive eect on their income and,or 90%, on their intellectual stimulation.
Opinions were more mixed (36%),however, on whether the impact o theircareer development on their work-liebalance had been positive.
Womens path
to success:what you needto know
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16 iWOMEN MATTER
Do women pay a higher price
or success?
Two signicant dierences between themen and women were brought to light bythe study.
n First, 27% o women, versus 7% o men,admit that they have elt discriminatedagainst during their proessional career;
n The second dierence is demographic,revealing a substantial disparity in thesituations o the respondents: 54% o
women in our sample vs only 29% omen were childless, and 33% o thewomen were single, compared to 18%o the men.
A Harvard Business Review18 surveyconrms that the higher women climb up
the corporate ladder, the ewer children theyhave, whereas the reverse is true or men.In the 4155 age range, or example, 49%o the best paid women (over $100,000a year) are childless (compared to 19%o men), while the gure or well paidwomen ($55,000 to 65,000 depending onage) is 33% (compared to 25% or men).
This survey suggests that, in a male-centricmodel, women who are today carving outprime positions or themselves ollow thesame path as men, and make the samechoices imposed by the dominant model
particularly that o putting career beoreamily. But it seems that this dilemma thechoice between proessional success andwork-lie balance has more consequencesor women, who might have to pay a higherprice or success.
Exhibit 10
The career choices o middle and senior managers men and women are mainly infuencedby their proessional environment and personal aspirations
What were the factors that influenced the most crucial moment in your career*?
* Survey of a representative sample of male (482) and female (409) middle and senior managers from around the world
** CEO, CFO, CIO, COO, CMO, managing director, board members and chairperson
Source: McKinsey
90
77
42
49
81
87
Work environment
Percentage
Personal circumstances
and aspirations
Family circumstances
Middle and senior managers
87
78
43
47
80
81
Senior managers only**
Women
Men
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WOMEN MATTERi 17
Faced with this evident inequality, andgiven the urgent need and good businessreasons or companies to react, we haveattempted to determine pragmatic solu-tions to increasing womens participationin business, and in particular their pres-ence in the boardrooms and top manage-ment o large corporations.
Increasing womens participation
in the workplace: the crucial role
o political bodies
There is a correlation between womensshare o the total volume o hours workedand the presence o women in the compa-nys top echelons, as shown by a McKinseystudy covering 25 countries and publishedin June 200719. However, this study alsoindicates that womens employment ratehas little or no impact on their participa-tion in the corporate governing unctions.Together, these ndings suggest that there
is a need to create the right conditions orincreasing womens share o the total num-ber o hours worked (Exhibit 11).
Greater participation by women incorporate senior management willrequire social environments that are moresupportive o working women. Two typeso lever can be applied: support servicesand acilities should be developed to helpreconcile work with amily lie (childcare,amily support, amily subsidies, etc),and gender equality promoted in theworkplace (equal pay, equal hours, equal
responsibilities).The priorities or action may vary romone country to another. For example,although France and the UK have similaremployment rates or women (60% and67% respectively), their improvementpotential and policy requirements dier.In France, women enjoy benets thathelp balance amily and proessional lie,thanks to a pro-amily policy and a widerange o public acilities, but equality inthe workplace is more dicult to achieve,
and has to be legislated or. In the UK, bycontrast, while day-care structures or stateaid or childcare have shown improvement,there is a strong tradition o workplaceequality. The measures required thereoremainly concern support acilities.
Having more women in the workplace is aprerequisite or breaking the glass ceiling,but will not be sucient in itsel: womenquickly come up against the barriersinherent in the dominant model. Even
the Nordic countries, which score best onevery indicator, are still a long way romachieving gender equality in corporategovernance (Exhibit 12).
Reinventing
the model?
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18 iWOMEN MATTER
Womens share of total hours worked
* Excluding maximum (Norway: 32%) and minimum (Luxembourg: 1%) in terms of proportion of women in top management
Source: European Commission 2006; Eurostat 2005/06; McKinsey
Percentage
Female leadership (share of women in corporate decision-making bodies), 2006
25 30 35 40 45 50 55
0
10
15
20
25
5 MaltaIceland
Denmark
Sweden
Finland
Netherlands
UK
Estonia
Austria
Portugal
Germany
Lithuania
Latvia
CyprusFrance
Bulgaria
RomaniaHungary
Poland
ItalySpain
r2 = 0.60*
Ireland
Belgium
Exhibit 11
There is a correlation between womens share o the total volume o hours workedand the presence o women in the companys top echelons
Exhibit 1
The public policy requirements vary rom one country to another
Work-life balance(Childcare, family support, employment rate of mothers)
Gender equality(Board representation,
female employment
rate, working hours,
wage gap)
Even the best-placed
countries are a long
way from parity
Pro-egalitarian
Sweden
Norway
Finland
GermanyFrance
UK
Belgium
Spain
Non-interventionist
Pro-familyTraditional-conservative
AustriaNetherlands
Italy
Portugal
Source: Eurostat; OECD; McKinsey
Margin for progress
Hybrid forms
European countries typology
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WOMEN MATTERi 19
Pursuing tried and tested initiatives
within the workplace
To learn more about the most eectiveinitiatives, we interviewed a dozencompanies notable or the progress theyhave made in womens participation in theboardroom and in top management. From
their insights, we have dened our bestpractices or the development o genderdiversity.
There are no miracle solutions or gender
diversity; you just have to keep plugging
away with the tried and tested measures
HRD o a telecom group
FOUR BEST PRACTICES FOR ACHIEVING GENDER DIVERSITY (Exhibit 13)
Creatng and montorng gender dversty ndcators s the rst step towards achevng any change.
The man ndcators nclude: the proporton o women n the companys varous busness lnes, at
each level o management, and among new recruts; pay levels and
attrton rates between men and women n smlar unctons; the rato
o women promoted to women elgble or promoton. Montorng such
perormance ndcators should rase awareness about the magntude
o the gaps to be closed wthn the organsaton; t should also serve as a tool or denng and
drectng prortes or acton.
Quotas are not regarded as approprate, as ther secondary eects are vewed as unacceptable
by our ntervewees.
Some ndustral rms, or nstance, whch have dculty attractng women, have decded to make
womens recrutment a top-prorty lever, even gong so ar as to commsson publc normatoncampagns. One such company s iBM, whch has been organsng presentatons n prmary and
secondary schools to make grls, and ther teachers, aware o careers n scence and technology.
One thousand French secondary and hgh-school pupls beneted rom ths ntatve n 2006.
1 - Create transparency by implementing gender diversity KPIs
Recruiting women under an obligation
would be disastrous
CEO o an ndustral corporaton
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0 iWOMEN MATTER
Two types of measure are required:
nFlexible working hours. Flexblty (e.g. remote workng, part-tme work, fextme) s not a women-only polcy, but should orm part o the general development o the companys busness model,
requrng the company to nvestgate how to adapt ts organsaton
and culture. At a practcal level, actors such as property costs
mght encourage companes to make workng rom home a general
opton, ntroducng a number o moble oces. The nancal benet or the company tsel
would come on top o the benet such a move would brng to ts employees.
nCareer fexibility and support durng breaks not just or one day, one week or one yearbut throughout a career. The act that women tend to take career breaks needs to be taken
nto account to prevent any negatve mpact on ther career paths or pay. 58% o emale
graduates questoned by Harvard sad ther careers were not lnear and only 5% o women
lookng to return to work ater a break want to go back to ther prevous employers13. Ths gves
a measure o just how ar busness needs to change.
Maternty leave s the bggest career break, and needs actve management to ensure that
women go back to work. The companes that manage maternty leave best retan contact
throughout the perod, have personal meetngs beore and ater to ensure ther employees are
properly rentegrated nto the workorce, and keep a watchul eye on pay rses and bonuses n
the years ollowng return. Some companes go even urther, sendng ther managers brochures
explanng what to do, or producng dedcated tranng modules.
- Implement measures to acilitate the work-lie balance
Flexible working hours should
not be restricted to women alone
Exhibit 1
Interviews with companies with signicant results in terms o gender diversity revealedour best practices
1. Gender diversity KPIs 2. Measures to facilitate
the work-life balance
3. Evolution of the HR
management process
4. Support to leadership
Promo-
tion
Recrui-
ting
Pay
levels
Women
%
Satis-
faction
Turn-
over
Training
Work-time
flexibility
Investigate how to
internally adapt the
companys
organisation and
culture
Career
flexibility
Support women
before, during and
after a break
5
2
3
4
1 Mentoring
Coaching
and training
Networking
Role models
Make sure recruitment
includes female candidates
and interviewers
1
Check that the appraisal
system is neutral and
performance centred
2
Support and individualize
career management3
Make sure women are onpromotion shortlists
4
Care forhigh-potential
achievers5
Source: McKinsey
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WOMEN MATTERi 1
The pivotal role o the CEO
Interviews with companies that arechampions o gender diversity reveal thattheir eorts in this area amount to nothing
less than a cultural revolution. The changeprogramme must be set up as a companytransormation initiative in its own right,and driven by top management. Practiceswill not develop unless top managementis convinced that diversity brings acompetitive advantage, and commits toimplementing change, under the leadershipo the CEO. Almost all the companies inour study that have succeeded in pushingthrough genuine change beneted rom thepersonal commitment o the CEO.
PriceWaterhouseCoopers observes thatgender diversity makes signifcant progressin those subsidiaries where the managingdirector gets personally involved in thetopic.
To persuade managers o the need to act,Barclays organises monthly breakastmeetings at which women leaders telloperational managers about the barriersthey have had to ace in the course o their
career.
I have mentored many women in my career.
I challenged them; they began to think in a
more ambitious way. Today they have moved
into very senior positions
Vce-Presdent Europe o a leadng global
healthcare company
At the same tme, companes must ensure that ther recrutment, apprasal and career
management systems do not hold women back n ther proessonal development. The process
or dentyng hgh-potentals oten ocuses exclusvely on managers between the ages o 28 and
35; to avod potental optng outs, or nstance, t could be altered to ncorporate more fexble
crtera, such as the number o years o servce n the company, n order to make allowance
or perods o maternty leave. Lookng beyond the reengneerng
o processes needed, human resource unctons have an essental
role to play n senstsng ront-lne managers and spottng potental
women canddates. When t comes to promoton, many managers
now suggest havng at least one woman on every shortlst. Some
rms, such as JP Morgan, have organsed tranng or recruters and
operatonal managers to make them aware o the mportance o dversty and to denty prejudces
that aect ther decsons. Fnally, the company must be n a poston to oer personalsed career
paths, n order to retan the best talent. Flexblty n the management o human resources goes
hand n hand wth fexble workng tme, as advocated above.
Coaching, network-building and
mentoring programs can be highly
eective in enabling women to
manage their careers in a male-centric
environment
Fnally, women need help to master the company codes. Coachng, network-buldng or mentorng
programs can be hghly eectve n rasng womens awareness o the lmtatons they mpose on
themselves and enablng them to manage ther careers n a male-centrc envronment.
The FTSE-100 Cross-Company Mentorng Programme n the UK and
the comparable CAC 40 programme n France brng emale hgh-fers
together wth the heads o the bggest corporatons n the country, to
provde the women wth both mentorng and new career prospects.
Women also need to be made aware o the vtal mportance o
networkng. Settng up womens networks wthn the company senstses women to ths act,
and creates opportuntes or broader proessonal exposure, whle also rasng the prole o
emale leaders n the organsaton, whch s essental n helpng young women to denty wth
role models.
By motvatng women and acltatng ther development, these ntatves are oten remarkably
successul n retanng and even expandng the emale talent pool wthn companes.
Many companes, reluctant to ntroduce measures that concern women exclusvely, broaden such
ntatves to cover the entre workorce.
4 - Help women master the dominant codes, nurture their ambition
- Adapt the human resources management process
No one size ts all ... its always got
to be tailored, case by case, or menand or women
Charwoman o the board o a holdng
o an nternatonal company
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iWOMEN MATTER
Conclusion:
Going
urther?
Our interviews with senior civil servants,politicians, and the men and women at theoreront o business have revealed areasthat our study does not cover but that needto be properly addressed i we really wantto achieve the mindset revolution needed tospeed up change. Two main areas requireconsideration.
The rst is education. In some elds engineering and management in particular women are under-represented and arethereore deprived o a large number
o potential jobs, especially in topmanagement. We must look at how togive career advice greater prominence insecondary schools, so as to improve accessto these elds at tertiary level (especiallyEuropean MBAs and engineering schools)and also to the jobs they lead to. Itmight also be appropriate to redesigntop executive proles in order to enablecorporate leadership positions to bereached via other career tracks than thosecurrently in avour. Finally, a challenge
even urther upstream would be to changethe binary perception o mens jobs andwomens jobs at a very early stage ochildhood.
The second area or consideration relates tomodels o amily balance. The traditionalsocial pressures on men to be breadwinnersare not so strong in the younger generation,which has greater reedom o choice and amore balanced distribution o roles withinthe household. Nevertheless, some work
remains womens work or which womenare totally responsible and ace all relatedconstraints. For example, motherhoodmakes mothers vital to the well-being otheir babies and, as we have shown, thislimits their career choices and prospects.Men enjoy greater reedom. In seeking tocreate a balance in the work environment,should we not also encourage and enable adierent, more equal balance at home?
In conclusion, it is only air to acknowledge
that we have come a long way in thequest or gender diversity in business. Butbusiness cannot meet this challenge alone.That will require concerted, concrete,repeated action upstream o working lie atall levels o society and in all institutions,by individuals and by groups. Slowly thiswill create the cultural and organisationalbasis or change.
Very ew women study engineering so veryew apply or the engineering positions I
oer and thereore I hire very ew women
CEO o a company n the transportndustry
I you let things happen naturally,
women may not rise in the organisation ...
Its not an easy task but it can be done and
we can change the proportion o women
and men in the organisation i we really
want to do it. It takes time to get it right.
You are bound to have the strategy and
the commitment. You can never let go!
Vce-Presdent Europe o a leadng global
healthcare company
Everyone makes the decisions in
his or her own lie. What they have to
decide is: What do I want to accomplish
with my lie, my time and my career?
What do I eel comortable with? This is theone lie that I have. How am I going to spend
it?
Ex-presdent o a European country
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WOMEN MATTERi
1 Share o women n tertary students, EU-27, Eurostat (2004)
2 Employment rates, EU-25, Eurostat (2005)3 Report on equality between women and men, 2004 data, European Commsson (2006)
4 Chires cls 2006, lgalit entre les emmes et les hommes, data or 2003 (share o women) and 2004(pay gap), Servce des Drots des Femmes et de lEgalt (2006)
5 European Commsson statstcs, Executve Boards (2006)
6 A statistical view o the lie o women and men in the EU-25, data or 15 countries, Eurostat (2006)
7 Women in Leadership: A European Business Imperative, Catalyst-Conerence Board (2002)
8 Le parcours proessionnel des diplms des Grandes Ecoles : regards croiss hommes / emmes, ipsos / GEF(2007)
9 More women at the top : The Impact o Gender Roles and Leadership Style, Alce H. Eagly, n Gender: FromCosts to Benets, ed. U. Pasero, Wesbaden: Westdeutscher Verlag, 2003, pp. 151-169
10Women and the MBA: Gateway to opportunity, Catalyst (2000)11Women in Leadership: A European Business Imperative, Catalyst Conerence Board (2002).
12 Le parcours proessionnel des diplms des Grandes Ecoles : regards croiss hommes / emmes, ipsos /Grandes Ecoles au Femnn (2007)
13The Hidden Brain Drain - O Ramps and On Ramps in Womens Career, Sylva Ann Hewlett, Carolyn Buck Luce,Peggy Schller, HBR Research Report, Harvard Busness Revew 83 (March 2005): 31-57
14 Altema, publ. Ress. Accordng to the study Think tank: marketing to women, by Peter Crush, 83%o consumer goods purchases n the US are made by women
15 Nssan
16 Estmate based on the number o people between 15 and 74 wth iT sklls, accordng to OECD statstcs
17Cost and Eectiveness o Diversity, European Commission, 200318Executive Women and the Myth o Having It All, Sylva Ann Hewlett, Harvard Busness Revew 80 (Aprl 2002):
66-7319A Wake-Up Call or Female Leadership in Europe, McKnsey & Company (June 2007), Clauda Funke,
Anke Domschet , Katrn Suder
Sources
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4 iWOMEN MATTER
Pascal Baumgarten is an Associate Principal in the Paris oce o McKinsey &Company. He works mainly or insurance and social-sector companies on organisationand change management issues. Prior to joining McKinsey in 1998, he worked ininvestment banking and electronics.
Pascal Baumgarten graduated rom lcole des Hautes tudes Commerciales.
Sandrine Devillard-Hoellinger is a Principal at McKinsey & Company in Paris. Sheis one o the core leaders o the European Retail practice. Since joining McKinsey in1993, she has worked in numerous European countries and in Asia. In addition to clientwork, Sandrine Devillard is co-leader oMcKinsey Women in EMEA and sits on the
International Advisory Board o the Womens Forum or the Economy & Society.She graduated rom lEcole des Hautes Etudes Commerciales in 1993.
Georges Desvaux is a Director o McKinsey & Company. Based in Paris, he worked
in our Beijing oce rom 1999 to 2006. In China, Georges Desvaux advised Chinesestate-owned enterprises, designing corporate portolios, restructuring organisationsand processes. In France, he advises companies in the high-technology, transport, andconsumer goods industries. He is also an expert in marketing. A member o our globalpeople committee, he leads our talent development in France. He ounded McKinseysAsia House in Frankurt, which develops our Asian consultants in Europe.
Georges Desvaux holds degrees rom Ecole Centrale de Paris, and an MSc rom MIT.
Authors
Additional contributors
McKinsey & Company France
Hlne Chatillon, Business Analyst
Ccile Kosso, Communications Manager
Chantal Pommier, Communications Advisor
Brigitte Brami, Computer Graphics Designer
Womens Forum or the Economy & Society
McKinsey & Company Germany
Claudia Funke, DirectorDr. Katrin Suder, Principal
Anke Domscheit, Engagement Manager
authors o A Wake-Up Call or Female Leadership in Europe (2007)
Amazone Euro Fund
Marc Cattelani, Co-Founder
Nicolas de Malzieux, Co-Founder
and their teams
The McKinsey Quarterly Survey team
Acknowledgements
To all the companies we interviewed or this study
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W
omen
Matter
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Copyright 2007 McKinsey & Company, Inc.
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