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Percentage of Women and Millennials in Leadership Roles Directly Tied to Organization’s Overall Business Success

New Global Research from DDI and The Conference Board Reveals No Significant Difference Between Men and Women in Leadership Skills or Abilities—Except in the Area of Confidence Where Women Lag Behind Men

PITTSBURGH—Encouraging leader gender and age diversity has many benefits for an organization, including the injection of more varied perspectives and greater range of thought, decision-making and problem solving. But, for the first time, new research from DDI and The Conference Board, titled The Global Leadership Forecast (GLF) 2014 | 2015, Ready-Now Leaders: Meeting Tomorrow’s Business Challenges, directly connects a critical difference between the top and bottom corporate financial performers and that is companies with higher percentages of women in leadership roles perform better. The research also connects the percentage of Millennials in leadership roles with impacting overall business success.

The report—the seventh since DDI began this research in 1999—consists of responses from an unparalleled participant pool of 13,124 global leaders and 1,528 human resource executives within 2,031 participating organizations. Forty-eight countries and 32 major industries are represented, as well as multinationals and local corporations. Eighteen significant findings are detailed in the report.

The remarkable sample size of the Global Leadership Forecast enabled DDI and The Conference Board to dissect findings across a wide range of leadership topics, looking not only at the present but comparing results of past surveys. “The findings clearly indicate that of the participating organizations, those in the top 20 percent of financial performance* have 37 percent of their leaders as women and 12 percent of their leaders are high-potential women,” said Evan Sinar, Ph.D., DDI Chief Scientist, Center for Analytics and Behavioral Research (CABER) Director and study co-author. “Organizations in the bottom 20 percent count only 19 percent of their leaders as women, and 8 percent of their leaders as high-potential women.”

Competency vs Confidence

The report showed no differences in self-evaluated leadership competencies by gender. This matches DDI’s actual assessment center data of over 10,000 leaders that show when it comes to skills and behaviors, men and women are equally competent. The report did call out a difference between men and women in the area of confidence. Even though competency is equal, men tend to say they are more effective leaders overall than do women. Women are less likely to rate themselves as highly-effective leaders when compared to their male peers and to have completed international assignments, led across geographies or countries or led teams spread out geographically. “These development gaps are critical and not addressing these opportunities for women has a significant impact for these leaders,” said Rebecca Ray, Ph.D., The Conference Board, Executive Vice President, Knowledge Organization, Human Capital Practice Lead and study co-author. “The research indicates that leaders who had more access to global and visible leadership experiences were more likely to advance within their organization.”

Millennials

The study also shows that an organization’s pace of growth is directly related to the percentage of Millennials in leadership roles. Aggressive growth companies, such as those in high-tech industries claim a higher proportion of Millennials in leadership positions (30 percent) than organizations with cautious growth (25 percent) or no to low growth (21 percent). Companies that were more financially successful were also more likely to have a higher percentage of Millennial leaders.

Of all the generational groups, Millennial leaders report being less engaged and more likely to leave in the next 12 months. The research also reveals that Millennials receive a higher percentage of promotions which can be attributed to lower management entry points. Surprisingly, their preferences for using other methods of development such as formal workshops, training courses, online learning and developmental assignments mirrored those of other generations. Not surprisingly, Millennials tend to use social learning and mobile development for leadership skill improvement more than other generations. Learning from others using newly-available methods happens more frequently for this generation.

Leader Quality Predicts Financial Performance

The research incorporates a “learn from the past” approach by looking at historical data across organizations that participated in the 2011 Forecast. Compelling links were identified when comparing talent management and leadership development practices with financial performance.

Organizations with high leader quality were six times more likely to be among the top 20 financial performers for all organizations and positive leader experiences further magnified the link between leader quality and financial impact. Organizations with both high levels of leadership quality and engagement and retention, were nine times more likely to outperform their peers, intricately connecting talent management and leadership development practices with financial success.

“To improve business outcomes, bolster current development programs so that all leaders, including women and Millennials, can improve their skills,” said Sinar. “Development opportunities build confidence. Provide opportunities for stretch assignments, ensure formal practices are in place to facilitate those opportunities and fully-commit your support to mentoring programs to develop and prepare new leaders.”

*Financial performance is defined as a composite of profitability, earnings per share, 5-year rate of return to investors and stockholder equity, for publicly-traded companies where these data were available.

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Access the full report and individual findings here, The Global Leadership Forecast (GLF) 2014 | 2015, Ready-Now Leaders: Meeting Tomorrow’s Business Challenges.

Available for interviews:

Evan Sinar, Ph.D., DDI Chief Scientist and Director, Center for Analytics and Behavioral Research and study co-author 

Richard Wellins, Ph.D., DDI Senior Vice President and study co-author

Rebecca Ray, Ph.D.,The Conference Board, Executive Vice President, Knowledge Organization and Human Capital Practice Lead, and study co-author

Amy Lui Abel, Ph.D.,The Conference Board, Managing Director, Human Capital Research and study co-author

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