The pharma industry has changed dramatically in recent decades, not only in terms of the vast strides that have been made in science, but also in terms of the leadership landscape. In the 1970s, it was highly unlikely that a woman would be running one of the world’s largest pharma companies, and today we have Emma Walmsley at the helm of GlaxoSmithKline.
65% of healthcare workforce is female
According to recent studies women in healthcare represent 65% of the workforce – a significantly higher ratio when compared to other key industries (Tech – 26%, Financial Services – 46%). Despite their buying power and workforce influence, the number of women in top leadership positions is discouragingly low.
If we look at the pharma sector for instance, the gap is even higher. Although I am very pleased to see many of our big pharma clients and friends at the forefront of the gender equality line, the fact that women account for only 25% of leadership teams and that there is only one female CEO among the top 10 pharmaceuticals (by revenue), demonstrates that we still have a long way to go.
The question arises – why is this? First of all, let’s make one thing clear – this is not only an issue in the healthcare industry. The gender gap in business is well documented, countless studies show that women outnumber men in college. They are well educated, talented, and just as hard working as their male counterparts; yet the percentage of chief executives of global Fortune 500 companies is just under 5%.
Given so many talented female chemists, biochemists, biologists and physicists already in the sector, one can conclude that there is no tangible barrier for women when it comes to workplace entry. However, when it comes to advancement – the obstacles seem to be immense; whether it is the pay gap, unconscious bias, micro-aggressions, or childbearing. Correlated with advancement, it is evident that as women move up the ranks – the resistance, discrimination, and isolation increase as well.
Why should companies be worried about it?
On paper, gender inequality is a long list of statistics showing the imbalance of power between men and women. In reality, gender inequality is a major issue that affects not only the lives of individual men and women but stunts economic growth and innovation, along with hindering social development. As a testament to this fact, the United Nations even named gender equality as one of the Sustainable Development Goals as part of the “2030 Agenda”.
But why should corporates be worried about it?
Because essentially, gender equality is not just the right thing to do, it’s the smart thing to do.
Studies have shown that gender equality provides numerous economic benefits to corporates. PIIE Report concludes that an increase of women in corporate leadership teams to 30% correlates to 1% increase in net margin, which translates to a 15% increase in profitability. Moreover, Credit Suisse revealed that companies with women in leadership positions report 19% higher return on equity (ROE) and 9% higher dividend payments. Remarkably, no matter how the data is manipulated, in any event increasing female leadership is unquestionably positive for companies, leading us to one important conclusion: The diversity in corporate leadership is essentially what improves profitability – it makes teams question their default assumptions in a way that produces better outcomes – more innovation, more creative solutions to intractable problems, and ultimately better financial outcomes.
How can we expand diversity?
There’s reason to be hopeful. A focus on those unconscious beliefs and perceptions that drive instinctive behaviour can activate and change mindsets and actions. Many organisations have started to actively address the issue of unconscious bias but this is just the start.
To create transformation that lasts, organisations must go beyond activation and make non-gender biased behaviours habitual. Creating nudges and a sense of collective endeavour will make for lasting change. Some UK companies are now actively promoting split childcare leave – allowing partners to split the 12 months maternity leave between them; others are even introducing “reconnecting programmes” of support to get women back into the workplace after an extended break. Nordic countries, led by Iceland, have been consistently standing out in the World Economic Forum’s annual Global Gender Gap Report which measures how well countries are doing at removing the obstacles that hold women back. Norway became the first country in the world to introduce a gender quota for publicly listed company boards. And while patterns across these Nordic countries vary, policies such as the mandatory paternal leave in combination with maternity leave; generous, state-mandated parental leave benefits provided by a combination of social insurance funds and employers; tax incentives and post-maternity re-entry programmes make the Nordic countries’ approach a useful role model and valuable benchmark. Training in unconscious bias, and how to avoid it, is one way a noticeable shift in attitude may be encouraged. Companies like Lilly are also a great example of active work on gender equality. Their Chief Diversity Officer, Joy Fitzgerald, successfully reported that their “extra mile” approach, where they have commissioned a third party to identify barriers and actively work on ways to improve gender equality, led to a 3% global increase of women leaders within the company in just one year and subsequently achieved 8% higher revenue compared to the year before.
We already know what the future workplace should look like, and it is now time to make it a reality. There is no quick fix – cultural change takes time. Great strides have been made to remove the barriers for women when it comes to workforce entry in the healthcare sector, but the job is not done. The gradient of change must remain steep, and a pro-active, concerted and dedicated effort must be made by the industry to shrink the leadership gap for women. This has to be done not because of the statistics, but because in the long run it will be shown that shrinking the leadership gap is profitable for companies, beneficial for society and most importantly – it’s the right thing to do.
Oliver Wyman Publications – Women in healthcare leadership report (2019) – Link
Assured Pharmacy – Who, what, why, where, when? The pharmaceutical top 10, Gender diversity in leadership (2018) – Link
Fortune 500 Women CEO’s 2017 – Link
Sustainable Development Goals – United Nations – Link
Is Gender Diversity Profitable? Evidence from a Global Survey (2016) – Noland, M, Moran, T, Kotschwar, B – Link
Credit Suisse – Higher returns with women in decision making positions (2016) – Link
Harvard Business School – Diversity in Innovation – Link
World Economic Forum – The Global Gender Gap Report (2018) – Link
Harvard Business Review – How Lilly is getting more women into leadership positions – Link
Lilly reports strong fourth-quarter and full-year 2017 revenue growth, increases 2018 EPS guidance – Link