It appears the good folks at Yahoo may have been paying attention when Pepperdine researchers showed putting woman at the top can bolster a company’s bottom line. Not only did they name a woman, Marissa Mayer, as CEO, but they also did so knowing she is expecting her first baby this fall.
It’s a bold move, considering Yahoo is struggling with lackluster earnings and other challenges. But in addition to Mayer’s proven track record as a technology exec at Google, hard numbers show naming a female leader is a sound decision.
Led by professor Roy Adler and chronicled in part in the book Womenomics, Pepperdine researchers wanted to know if companies with more women in leadership roles did better than companies with fewer women. They applied economic analysis to 19 years of survey data from 215 Fortune 500 companies to get their answer. The results were extraordinary.
Adler’s team found that by every measure of profitability, including equity, revenue and assets, companies with the best records for promoting women outperform the competition. In fact, the company with the very best record of promoting women beat the industry average by 116 percent. They called the study “Women in the Executive Suite Correlate to High Profits.”
Womenomics authors Claire Shipman and Katy Kay go on to chronicle how other research substantiates the Pepperdine work. Experts at institutions like the University of California-Davis graduate school of management, independent research organization Catalyst and Cranfield University School of Management in Great Britain are finding that if you want to outperform your competition, you need more women at the top.
Why do researchers believe women aid success in business? Many attribute it to workplace behaviors – what some might call competencies or others, just plain smarts. Women executives possess qualities such as inclusiveness, empathy and flexibility that can help a person, male or female, negotiate effectively in a complex world.
And that success is transferrable from one company to the next. A Harvard Business School study made this discovery when they found women have the ability to build good relationships with clients and peers wherever they go.
Women also have a knack for getting people to feel good about themselves as well as the company. At Yahoo – where morale is said to be very low – this could be an asset for Mayer. She is described as someone who truly values and appreciates her teams, quoted in the Wall Street Journal as saying, “What drives technology companies is people.”
Melissa Mayer has smarts. She’s a Stanford engineer, worked 13 years at Google and was responsible for pushing through the iGoogle customizable platform as well as Google’s profitable AdWords system. But she may have another special skill: the ability to attract and retain talented employees because she can authentically relate to them as professionals and as people.
What could be more difficult than taking on your first CEO role at the same time you’re about to give birth to your first baby? Mayer may be humbled by the experience in ways other Silicon Valley CEOs are not. It could be an added ingredient to her already talented management style. Yahoo’s board of directors appears to believe Mayer and everything she brings will give the company the boost it needs to get back on top.
Michelle Hicks, a senior professional in human resources, is a director in the communication practice of Buck Consultants, a Xerox company.