Hiring more women in top-level positions may boost a company’s customer orientation, improve business operations, and secure customer satisfaction.
In a new study published in the Journal of Marketing, researchers discovered that with the right factors, there is a positive connection between female influence in the C-suite as well as long-term financial performance.
The researchers cited the case of Mary Barra, who was appointed as the first female CEO of General Motors in 2014.
During that time, General Motors had recently declared bankruptcy, was under heavy criticism for an ignition-switch product recall that led to customer deaths and had experienced a slowdown in sales in the United States due to changing customer preferences.
Analysts, investors, and employees debated if Barra could change General Motors’ strategic approach.
Barra decided to hire a set of female leaders and their team focused on incorporating and listening to the voice of the customer in all their moves.
The company codified customer orientation into its vision statement and made decisions that were customer-centric, including initiating a massive shift from sedans to more popular sports utility vehicles and creating a foundation to recompense customers who suffered problems with their ignition-switch.
Barra admits that she benefitted from the support of women such as Alicia Boler-Davis (EVP) and Dhivya Suryadevara (CFO). She said it is crucial to explore the collective influence of these women on the company’s decisions.
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In the new study, researchers examined 389 Fortune 500 companies throughout six years and found that women in the C-Suite are likely to focus on customer relationships to a greater extent than their male counterparts. Because of this, women encourage more customer-oriented discussions in the C-Suite.
Consequently, the team is highly likely to make strategic choices that reflect a growing attention to customers, which accounts for the positive link between female influence in top-level management and financial performance.
However, hiring more female executives in the C-suite will not always result to superior financial gains, the study said. A C-Suite that is made up of entirely women may suffer the same issues of gender imbalance – homogenous perspectives and groupthink – similar to a team composed mainly of men. CEOs must create a gender balance in the top management which will facilitate the right strategy for their companies.