Page 64 - Harvard Business Review (November-December, 2017)

CAPTURING THE FEMALE ADVANTAGE

Women are still underrepresented in the top echelons of
corporations today. In an effort to learn why, we dug into our global
database of ratings of executives’ potential and competence, to
subsidiary and supported her by enrolling her in an see how the women compared with their male counterparts. The
executive business program and asking the chief hu- results were telling:
man resources officer to serve as her mentor. Z spent On average, women’s scores trail men’s on five of the seven key
a year and a half overseeing multinational projects and competencies of leaders. While all the differences are statistically
proved to be an excellent team builder and strategist. significant, they’re large in only two areas: strategic orientation
The CEO then asked her to return to headquarters and and market understanding.
promoted her to head of alliance management, where However, women score higher than men on three of the
she is now effectively leading a sizable group. four hallmarks of potential—curiosity, engagement, and
The stories of Z and X and Y highlight the fact that
for most executive appointments, and especially suc- determination—while men have a slightly stronger level of insight.
cessions at the top, organizations must make trade- Again, the differences are statistically significant but not too large,
offs between current competence and development except in the case of determination, where the female executives
potential. A sound estimate of how far each of your we’ve assessed scored much higher than their male peers.
top leaders can go will allow you to do that in a less How can we reconcile these findings? Why do women have
risky, more effective way. higher potential but less competence than men? We believe
it’s because women are typically not given the roles and
responsibilities they need to hone critical competencies. How
REAL RESULTS IN PRACTICE can you develop team leadership if you’re not given the chance
When companies take this approach to leadership to manage a team, or strengthen your strategic orientation if you
development—focusing on potential and figuring out never participate in any planning discussions or strategic projects?
how to help people build the competencies they need
for various roles—they see results.
Shortly after Japan Tobacco’s privatization, in 1985,
the company decided to globalize and to diversify into
various businesses, including food and pharmaceuti- openly discuss business imperatives, critical roles, and
cals. Because of this it needed a new class of leaders. successors, all through the lens of potential, and unit
But in Japan hiring executives from the outside has leaders report back up to the group’s CHRO and CEO,
long been highly unusual. In addition, most companies Tim Rolfe and Mike Wells, sharing details about why
still tend to favor tenure over competence or potential people were deemed high potentials and how over time
in promotions. Japan Tobacco decided to stick with they can grow into different roles across the organiza-
the first tradition but abandon the second. It began to tion. What have the results been? In 2016, Prudential
rigorously assess current leaders’ potential and acceler- had 19 openings in its top 100 global roles, including five
ate their development through frequent rotations and at the executive committee level, and all but one were
focused training. Since then, the company’s high po- filled through internal promotions. The new approach
tentials have been “owned” by HR and “leased” to key has helped the firm find great leaders even for its most
departments under an initiative, currently labeled New quantitative and analytical businesses, such as asset
Leadership Program, that is constantly tweaked with an management, and allowed it to put unexpected people
eye toward future business scenarios. This approach to in highly critical roles. For example, Prudential recently
leadership development, together with sound strategic announced that it would move Raghu Hariharan, the
decisions, has produced impressive corporate results: director of strategy and capital market relations in the
After acquiring the British company Gallaher, in 2007, group head office, into a position as CFO of the firm’s
Japan Tobacco became the third-largest global player Asia business.
in the cigarette sector, and thanks to its profitable diver- More organizations should follow these models. A
sification across geographies and industries, it became scientific approach to talent development—focused on
the sixth-largest Japanese company in corporate value spotting high potentials, understanding their capacity
across all sectors. for growth in key competencies, and giving them the
Four years ago, Prudential PLC also decided to rede- experience and support they need to succeed—will be
sign its leadership development practices to match its an extraordinary source of competitive advantage in
global ambitions. At the time, management acknowl- the coming decades. And it will help many more man-
edged that the existing talent-review process was “as- agers transform themselves into the great leaders they
sessment-heavy but insight-light” and too focused on were always meant to be. HBR Reprint R1706E
current capabilities. Senior leaders set out to revamp it
by emphasizing rigorous succession planning across all CLAUDIO FERNÁNDEZ-ARÁOZ is a senior adviser at the global
divisions and regions. Though this change was led by executive search firm Egon Zehnder, an executive fellow
the executive committee and board, development now at Harvard Business School, and the author of It’s Not the
cascades up rather than down and starts with conver- How or the What but the Who (Harvard Business Review Press,
2014). ANDREW ROSCOE is the global leader of Egon Zehnder’s
sations between HR leaders and line managers, who Executive Assessment and Development Practice, and KENTARO
have been trained to spot future stars. Team managers ARAMAKI is the leader of that practice in Japan.

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