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How women can contribute more to the US economy

The ability to retain and promote more women middle managers is a key point of leverage.

Women are crucial to US economic growth. Indeed, since women’s participation in the workforce took off, in the 1970s, their productivity has accounted for about a quarter of current GDP. But women still aren’t reaching their full economic potential. One important reason is that far too many highly skilled women simply don’t progress up the ladder in corporate America.

A new McKinsey report, Unlocking the full potential of women in the US economy, delves into the details of this well-known phenomenon. The problem isn’t simply a lack of flexible working conditions or support for working mothers. Nor is it an inability to get women into the workforce or women’s desire to opt out; most can’t afford to. Instead, entrenched mind-sets and behaviors—at companies and among women themselves—are two of the biggest culprits in preventing women from advancing. The issue is particularly acute at the transition from middle manager to senior manager, a point when women have proven themselves professionally yet a disproportionate share leave corporate careers. For many, invisible biases become impassable.

Our research included a survey of some 2,500 college-educated men and women. One striking discovery is that women who have progressed from entry-level jobs to middle management, and then from middle management to senior management, have, at each stage, an increasing interest in being leaders and an increasing belief that opportunities exist (exhibit).

How can companies help more women retain that enthusiasm? Most companies are already working hard to reduce structural problems (such as a lack of role models or access to informal networks) and are trying to shift work practices to meet their employees’ desire for a work–life balance. However, our survey and interviews uncovered some more insidious, difficult-to-address problems. These include senior executives’ perceptions that certain jobs just shouldn’t be available to women and a tendency to reward men for their potential but women only for their performance. Many women react to these barriers and biases by reducing their corporate ambitions in favor of achieving greater satisfaction across their lives—and companies lose out entirely.

If women are to reach their full potential in the economy, companies must do at least as much to address those issues as they are doing to address the ones they can more easily see. Helping middle-management women to develop and advance will make the biggest difference because it will begin to reshape the corporate talent pipeline and help companies reach their goal of advancing more women to the top.

Read the the full report on the McKinsey & Company Web site.

Recommend (55)
  • 6 MAY 2011
    Elizabeth Becker
    President
    Professional Business Women of California
    San Francisco, CA USA

    Beyond social justice, getting everyone as productive as we aspire to be—and encouraging each of us to set our sights higher—is just plain good business, the business of leadership.

    .
    Elizabeth Becker
    President
    Professional Business Women of California
    San Francisco, CA USA

    Fifteen years ago, I was a high-potential female technology executive facing all of the above. I attended a conference that changed my life when I saw—and felt—thousands of women all focused on their careers, spending a whole day with great mentors and with peers who just said yes instead of maybe or no, and learning fresh perspectives on work and life. I was used to being one of three women in a room of a 100 telecom execs, and it was really something.

    That conference is now just one thing that the largest community of professional business women in California does to live into its mission of connecting, supporting, and inspiring women to reach higher.

    Congresswoman Jackie Speier is our founder and with her vision, we are now way beyond just the big annual conference. We’ve transformed ourselves into a non-profit community that supports women building their skills, experiences, and business communities—not just the social ones. We bring mentors and sponsors together with women who want to advance.

    I now steward this community as its president. I, too, dropped out of the corporate world and ironically am now solidly back in it, working the productivity conundrum with the biggest lever we have by engaging our workforce. All of it.

    Beyond social justice, getting everyone as productive as we aspire to be—and encouraging each of us to set our sights higher—is just plain good business, the business of leadership.

    Our community recently gathered for its annual conference of women who come every year and do exactly what the authors suggest: experiencing inspiring role models, creating informal networks, and finding ways to engage a sponsor in upper management to create (and sustain) opportunities.

    We create this experience as one way of sparing and encouraging these behaviors back in the workplaces and in our youngest community members, where transformation is really possible. We invest in our youth with college scholarships and our Young Women Summit with some of the most innovative groups supporting young women as they grow into career women.

    I offer that instead of wondering if the data is right or the reasons are sound, just do that seems to make sense. Go out and help someone live into his or her potential. Do it for women. Do it for men. Do it for yourself, your boss, your family and your community. And together, create something new.

    .
  • 21 APRIL 2011
    Ankur Bhatnagar
    CTO
    Delhi, India

    ...The job of a company is to focus on its business and generate wealth for its shareholders. They should not meddle in social affairs and should function completely unbiased — just choose the best candidate, whether it is a he...

    .
    Ankur Bhatnagar
    CTO
    Delhi, India

    Nearly all debates on gender issues, including this one, seem to miss a very basic tendency that’s been with us humans since our hunter-gatherer days and is part of our evolutionary psychology. Women, as a class, want to have relationships, marry, and settle with men who earn more than them and are of higher social standing than themselves.

    At least in India, and I’d imagine something similar in other countries as well, most women don’t even fall in love with a man of lower social standing. This has a strong bearing on the rise of women in senior management and you need to look at it from the family perspective. You need to carry out studies or surveys of families in addition to the studies you do in offices. With some exception, in most families, the husband earns more than the wife (and that’s how the wife wanted it).

    Therefore, it is obvious and economic common sense for a family that if the time comes to make a choice on who would compromise on work and accord priority to home obligations, it would be the woman.

    For anyone who longs for women to be equally represented in senior management, he or she must also understand that women as a class will need to change their mindset at the most fundamental and psychological level. For example, they must look for a very different set of attributes in their potential mates at their subconscious level.

    Based on the above, I am also not in favor of companies making preferential and concerted efforts for promoting women at the cost of men, as that is actually counterproductive for women and, not to forget, unjust for men and the companies themselves.

    When an organization gives special concessions to a woman employee to promote her over an equally qualified man in the name of sacred corporate objectives of “equal representation in senior management,” it must be realized that most likely the woman actually comes from a wealthier family than the man (as her husband earns more and the man candidate’s wife earns less than him). By giving undue weight to the woman employee, the organization must understand that they are being unjust not only to the man candidate but also to his wife.

    Companies should stop seeing unequal representation of women in senior management as an anomaly that needs correction — it is just an outcome of social priorities based on human psychology. The job of a company is to focus on its business and generate wealth for its shareholders. They should not meddle in social affairs and should function completely unbiased — just choose the best candidate, whether it is a he or she.

    Stop seeing low representation of women in senior positions as loss for them. Which woman in her right mind will want to go for a 20 percent increase with her husband —who may be earning twice as much as her — sitting at home?

    .
  • 18 APRIL 2011
    Michaelia Liu
    Researcher
    Synovate
    Beijing, China

    ...there seems to be the invisible principle that females cannot hold higher positions or have no opportunity at all to climb the ladder in the senior management team. This is particularly severe for China mainland females...

    .
    Michaelia Liu
    Researcher
    Synovate
    Beijing, China

    Thanks for this essay, which tells me that our US counterparts are also struggling to climb the career ladder.

    There is a really a long history of bias against women, seen as comparably inferior to males in the working environment in most fields—specifically, engineering, finance, IT, manufacturing, and electronics, to name just a few—let alone to have leading role in such industries.

    But since China’s open-up and reform policies started in the late 1970s, Chinese females have been exposed to higher education and thus have become more and more ambitious and energized. What follows is the aspiration to find the corresponding role and position, as well as belonging and achievement in the company or other professional organizations.

    In China, more and more professional females try their best to achieve greater success, but there seems to be the invisible principle that females cannot hold higher positions or have no opportunity at all to climb the ladder in the senior management team. This is particularly severe for China mainland females who want to be leaders. Take my company as an example: the executive team is well mixed with males and females but the concern is that nearly all the senior managers are foreign and non-mainland people. I think many foreign-funded companies have the “same rule,” and that is really a bottleneck for Chinese mainland people, especially for women.

    The best approach to address the issue is to continuously uplift female’s comprehensive capabilities while, in the meantime, companies deeply reform the employment institution.

    Yet I think we still have a long way to go for Chinese mainland females to really hold the prioritizing and active role on senior management teams.

    .
  • 13 APRIL 2011
    William Feaster
    Product support
    GE
    Atlanta, GA USA

    Some of these presented stats seem to be a bit misleading....

    .
    William Feaster
    Product support
    GE
    Atlanta, GA USA

    Some of these presented stats seem to be a bit misleading.

    Women’s interest in being leaders increases as they progress—based on the data, you could also make the argument that those that have the desire to lead typically progress to management more often.

    Only 50% of all college educated workers were women—two different sample groups are being compared here. College grads from 2010 to all college grads currently working (~1970 through 2011).

    26% difference in return on invested capital—I’d argue that the top companies in this research do a number of things well, including hiring the best candidates regardless of sex, race, religion, etcetera.

    Success traits more often found in women leaders—hard to measure these traits objectively.

    In general, the factors mentioned here are effective for both men and women.

    .
  • 13 APRIL 2011
    Deb White
    Principal
    White & Associates
    Greensboro, NC USA

    After three decades in corporate America human resources, I know that work life—like life in general—lacks fairness....

    .
    Deb White
    Principal
    White & Associates
    Greensboro, NC USA

    After three decades in corporate America human resources, I know that work life—like life in general—lacks fairness. Although we are getting better at pre-emploment testing at certain levels, when it comes to senior management I continue to be fascinated and appalled by how little has changed in that time period.

    Male senior managers still assess potential male peers during the hiring process based on character. “He’s a great guy,” and “He’d be a great fit here,” along with “He’s exactly what we need,” are common reactions post interview. Potential female peers at the senior level are judged more on the depth of their resume (and any holes therein), along with whether they “presented well.”

    The elephant in the room remains: many men fear women in the workplace who are smarter than they are.

    .
  • 12 APRIL 2011
    Robert Jacobson
    Principal
    Bluefire
    Tucson, AZ USA

    It’s right for McKinsey & Co. to redirect our attention to the plight of women in management, but braver still would be for it to deal with the dichotomy...

    .
    Robert Jacobson
    Principal
    Bluefire
    Tucson, AZ USA

    It’s right for McKinsey & Co. to redirect our attention to the plight of women in management, but braver still would be for it to deal with the dichotomy that we want more from and for women in the workplace, but we men and women in senior positions are still unwilling to compensate them equally.

    .
  • 11 APRIL 2011
    Elizabeth Ward
    Principal
    Thought Partners
    Atlanta, GA, USA

    ...If women can’t look up the line and see an environment in which they can flourish, the game is already over....

    .
    Elizabeth Ward
    Principal
    Thought Partners
    Atlanta, GA, USA

    Hats off to McKinsey and Joanna Barsh for their continuing work in getting at why corporations should care and what will really make a difference in making the corporate world a place where more women feel willing and able to contribute and to be recognized and rewarded accordingly.

    One of the biggest insights here is that sometimes, moving up in the corporate environment can take you to a place you don’t want to be. It’s not just that women can’t get there, but that the destination can be unappealing. If women can’t look up the line and see an environment in which they can flourish, the game is already over.

    Are there role models/best practices McKinsey can show us for senior management environments that are attractive to women?

    .
  • 11 APRIL 2011
    Melissa Van Dyke
    President
    The IRF
    St. Louis, USA

    I think this study misses a crucial family dynamic—primarily that the workforce must become more accepting of men as caregivers and providers if women are to progress as well....

    .
    Melissa Van Dyke
    President
    The IRF
    St. Louis, USA

    I think this study misses a crucial family dynamic—primarily that the workforce must become more accepting of men as caregivers and providers if women are to progress as well. In many organizations, it is still more difficult for men to ask for time off for family needs than it is for women. Yet this is what must happen in a two-income household if women are going to be allowed and have the time to address “critical business issues” when the children are sick or must go to the doctor. Unfortunately, some executives still view women as unfit for certain roles because they believe women will more readily ask for family time than men, and that is often true. If it is either the male’s or the female’s job that must be sidelined to tend to urgent family issues, in my experience it is most often the female’s (either because those expectations were up front when she took the job, or because she opted to work for an organization that was understanding of these issues, or simply because the male’s job would not be as accepting of his request). I have seen many women not opt out of a career, but rather take less risks and gun less fervently for promotions because they know, when the chips are down, the kids are sick and things are stressful at both jobs, that she ultimately will be the one to ask for the needed time off because it’s more socially acceptable for her to do so. In sum, the workplace must consider the family in all forms and support both men and women for there to be significant change.

    .
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