The good news is that I am seeing lots of businesses waking up to the power of diversity, especially at board level. Organisations are realising that they need a diverse leadership team in order to create products and services for increasingly diverse audiences.
In recent years McKinsey’s “Diversity Matters” and the Peterson Institute for International Economics’ “Is Gender Diversity Profitable? Evidence from a Global Survey” reported similar findings from large-scale surveys across publicly listed companies in all sectors - that businesses with more women in the C-suite outperform those without.
Consequently, I’m increasingly asked by clients to provide gender-balanced shortlists for leadership roles in marketing and digital. But there’s a challenge here - while marketing as a whole is very well balanced for men and women, at C-Suite it’s almost exclusively male. In fact, according to CMO.com, a mere 8 percent of CMOs worldwide are female.
The reasons for this are complex – and perhaps a blog for another time. But what I have noticed is a gap emerging between big corporates and startups, with the latter employing more female CMOs and CDOs. This observation was reinforced by the 2019 Marketing Week Career and Salary Survey, published at the start of January. The data collected from 4,415 marketers showed that "small companies are delivering best on every measure of diversity, from representation of single parents and older people to inclusion of the LGBTQ+ community".
Why the gap?
There are a number of factors at work here. Startups are more agile than established businesses. Lean startups are especially agile, as they tend to have a less structured hierarchy and are able to concentrate on key issues in multi-disciplinary teams. This creates a great environment to recruit and retain talented women into leadership roles, while the flexibility a startup can offer is crucial for women who are balancing work and family commitments.
Startups are also more likely to be tech-savvy, to understand and embrace the new technologies that make remote working more practical than it’s ever been, which again encourages flexibility around working hours.
They also have the benefit of a blank sheet of paper - they can hire for diversity from day one, rather than have to wait for the right opportunity to recruit a more diverse C-suite.
The other major factor is the success of female-led startups. The Boston Consulting Group, for example, published data last year showing that while startups founded or co-founded by women receive less backing than those founded by men, they perform better. On average, startups with female founders or co-founders generate 78 cents in revenue per dollar of funding, compared to the 31 cents per dollar generated by startups with male founders.
Investors have seen these numbers. They’re now putting pressure on the companies they back to be more diverse, and thereby increase their chances of better returns. Founders too are reading these reports and coming to the same conclusion - that diversity of leadership will give them a better shot at success.
And on top of all of this, startups - and particularly tech startups - are more likely to challenge normal ways of working. If your entire business is predicated on finding a new way to do something or a new way to solve a problem, you’re less likely to go for “business as usual” in all the other aspects of your operation.
Of course, there are corporates that are getting diversity right, and startups that aren’t, but I’m hoping to see more being done to showcase female CMOs at startups – most of the top CMOs lists focus on the FTSE 100. While these people are important, there are lots of very talented female CMOs in startups and SMEs. By highlighting these leaders, and the difference they are making to their companies’ performance, we can make some meanignful steps to improve the overall gender balance at CMO level.
The broader agenda
It is important to remember that diversity is not just about gender. For example, McKinsey’s “Diversity Matters” noted that “companies in the top quartile of gender diversity were 15 percent more likely to have financial returns that were above their national industry median”, but “companies in the top quartile of racial/ethnic diversity were 35 percent more likely to have financial returns above their national industry median”. Businesses need to remember that the factors that make them attractive to a gender-diverse leadership will not necessarily be the same as those that will help build one that is diverse in other ways.
Today’s startups are very likely to form the basis of tomorrow’s economy. And if that’s the case, what does that mean for the future of the CMO role, and of the C-suite in general? Are we on the verge of a diversity revolution based on an increasingly well-demonstrated business case, and seized on as a proven competitive advantage by the emerging generation of new businesses?
I’d love to hear your thoughts on this topic. Do you think there is a gap between start ups and corporates? What are your predictions for the future? Get in touch at firstname.lastname@example.org.
If you’d like to find out more about the importance of diversity, my colleague Emily Massey wrote a great piece on how you can make your recruitment process more inclusive, and our recent Leaders in Change event on diversity led by Dr Marie-Claude Gervais outlined the business case for diversity.