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Why organisational culture is the key to gender diversity and performance magic

Why organisational culture is the key to gender diversity – and & lsquo;performance magic’

The link between gender equality and financial success is well known, but the pace of change remains slow. According to a report from PA Consulting Group, organisational culture plays a critical role in solving this problem.

PA analysed the public reports of 50 US and UK companies over a six-year period to show how those with female leaders generated higher total shareholder return (TSR). The report describes how firms with gender diversity on the board generated up to 600 per cent TSR, while those without generated less than 100 per cent TSR. The report then establishes a relationship between success and organisational culture by analysing employees’ responses to detailed interviews around engagement, behaviour and values.

The research shows that having a high performance culture is key - and that culture, gender diversity and performance are inherently linked. According to the report, organisations with both the strongest financial results and the highest performing culture – those with & lsquo;performance magic’ – had the greatest proportion of women (50 per cent) on their executive leadership team. The two organisations without women on their leadership team sat in the bottom five positions of both the financial and cultural measures.

What is a high performance culture?

A high performance culture (as measured in this research by the Denison model of organisation culture) is one in which:

there is a clear mission and vision, which derives directly from the organisation’s strategy

the organisation is highly adaptable and responds rapidly to the influences of the external market place and customer needs

people are aligned and engaged and there is a & lsquo;team’ orientation

values, systems and processes are in place and aligned to support performance.

How to achieve a high performance culture:

start by reviewing the organisation’s operating model, reward system and its mission and purpose

build talent from within and challenge roles. Lack of diversity must be rooted out on the road to executive leadership and this means the next challenging role has to be visible and achievable

look to the future. There is a link between how clearly an organisation articulates its mission and the percentage of women in executive roles. This is key to the long-term engagement of the best female talent.

Lesley Uren, PA talent management expert, says: “Despite decades of well-meaning interventions, and in the face of incredible pressure from society, many companies have had limited success in accelerating women up the management ladder.

“We started our research with the conviction that something vital was missing from the debate. What we found suggests that organisational culture – something frequently overlooked by other studies – is the key. As our findings show, it is absolutely in companies’ best interests to raise their game when it comes to promoting gender diversity. And the way to start is by getting the right culture in place.”

To find out more about how to start to make a change in your organisation think about attending our free of charge event: The Business Case for Gender Diversity&hellip.Where Do You Start


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