Today's smart leaders know that to succeed tomorrow, they need to develop the right talent. But not many of them may realize that their competitive advantage will depend on building a big pool of top female talent. By 2020--if not before--women will be the ultimate killer app.
Women are already the core consumers in two of the largest market sectors in the United States: financial services and healthcare. Women create, control, and influence an enormous amount of wealth. In the U.S. alone, women exercise decision-making power over $11.2 trillion, a whopping 39 percent of the nation's investable assets. 51 percent of women make healthcare decisions for others.
Yet despite the enormous--and growing--power of the purse, female consumers are startlingly under-served and misunderstood.
Take the financial services industry. Recent research from the Center for Talent Innovation shows that in the U.S., 47 percent of female wealth creators and an astounding 75 percent of women under 40 report not having an advisor. This unmanaged purse represents a massive missed opportunity for wealth management firms, one that in the U.S. alone may amount to more than $5 trillion in assets left on the table. The reason for this gap is simple: 44 percent of U.S. women surveyed feel misunderstood by their financial advisor.
The trend is similar in the $6.5 trillion healthcare market, where, according to forthcoming CTI report, "The Power of the Purse: Engaging Women Decision-Makers for Healthy Outcomes," women make the majority of healthcare decisions for themselves and others but do not trust industry professionals.
Leaders need only look around to see the reason for this disconnect. While the number of female CEOs is steadily increasing, women still make up only 51 CEOs of Fortune 1000 companies and only 14.2 percent of the top five leadership positions among S&P 500 firms. Simply put, the people in positions of power don't match the market. These industries employ a large number of women but many of their ideas, insights and capabilities have not yet been fully supported, endorsed, and promoted. As organizations employ many of the women who have real-world insights, they are failing to leverage the valuable assets that can lead to winning the trust of female consumers.
Companies that ignore the insights of their talented women will lag the curve in delivering successful solutions to the marketplace.
What can leaders do now to prepare for this profoundly changing market dynamic? They must re-think the way they have been identifying and developing female talent. That means creating a culture in which it's not just possible for women to thrive but helping them realize they can thrive.
CTI's report on "Women Want Five Things" shows that a profound misunderstanding of power prevents women from giving full rein to their career ambitions. Although societal norms have shifted as more women assume positions of power, few stories extol their sense of fulfillment, intellectual excitement and sheer joy inherent in having the top job. Instead, the prevalent narrative is still one of sacrifice: the toll career ambitions take on one's personal life.
The result: Too many women step off the fast track because they see an executive role delivering a hefty salary but little else that they value.
The fact is, CTI's study shows, a position of power is a plus for women. It can enhance both their professional and personal lives. In fact, the data reveals, power is what allows women to thrive.
A closer look at what mid-career women (ages 35 to 50) in the U.S. want from their careers exposes their misunderstanding of power and illuminates the benefits it can bring:
- Women want to flourish. However,the majority of women without power--82 percent of women--believe that an executive position would not allow them to flourish. This assumption is incorrect as 58 percent of women with power report having the ability to flourish.
- Women want to reach for meaning and purpose. Yet,74 percent of women without power expect that an executive position would not allow them to have a lasting impact in their profession, advance causes important to them, and be a role model for their family and community. The research finds, however, that 63 percent of women with power say their careers offer them that opportunity to reach for meaning and purpose.
- Women want to excel. They want intellectual challenge to enhance their knowledge and become a recognized expert in their field. Thirty percent of women without power don't expect that possibility from an executive position but 87 percent report being able to excel.
- Women want to empower others and be empowered. Eighty-six percent of women without power believe that an executive position would not afford them the ability to empower others and be empowered: that is, have sponsors--senior colleagues willing to take a bet on them and advocate for their next big opportunity--and build a network of protgs who expand their capabilities, extend their reach and burnish their brand. In fact, 61 percent of women with power enjoy the ability to empower others and be empowered.
- Women want to earn well. Women say it's important to them to attain financial security and financial independence, as well as to sustain a comfortable lifestyle for themselves, their children and their parents. Some 71 percent of women without power expect an executive position would allow them to earn well. The interesting fact here is that only 37 percent of women with power report earning well.
The report also finds that women who perceive that an executive role will fulfill their value proposition are nearly three times more likely to strive for top leadership roles--34 percent vs. 12 percent.
Changing women's perception of the rewards of a top job is a crucial step that more companies must take if they are to maximize their investment in their high-potential women and enable them to realize their full leadership potential. They must provide role models who give voice to the substantial joys and rewards of leadership, thus inspiring more qualified women to stay connected through the difficult mid-career years. They must sustain women's ambition, both by meeting their needs as they progress toward leadership and by ensuring that leadership actually delivers on women's value proposition.
With women wielding ever greater power of an increasingly bigger purse, no industry wants to miss out on a competitive advantage in a multi-trillion-dollar market. When women can expect an executive role to fulfill rather than subvert their value proposition, they both reclaim and sustain their ambition, and enjoy the perquisites of success. And their employers will benefit, too--now and for years to come.