Women represent a growth market more than twice as big as China and India combined. They control $20 trillion in global consumer spending, own or operate between 25-33% of all private businesses, and earn an estimated $13 trillion. This “power of the purse” is growing rapidly; expectations are that it will swell to $18 trillion by 2014. For companies that figure out what women want, the future looks rosy indeed.
But CTI research reveals that, while most companies target women as end-users, few effectively leverage the talent most likely to know what these end-users want and need: female employees. Specifically, we find that companies fail to realize the full innovative potential of women in their midst because leadership either doesn’t know how to elicit their insights or lacks the perspective necessary to endorse their ideas.
In 2007, Rajashree Nambiar, head of branch banking for Standard Chartered India, acted on a hunch. She hired a firm to survey the bank’s female clientele, whom she suspected weren’t happy with the service they were getting. Their findings affirmed her own experience: women felt condescended to and intimidated by the male bankers they encountered. So Nambiar proposed that two down-at-the-heels branches in Kolkata and New Delhi undergo a complete overhaul. Not only would the staff, including the security guards, be female; the way they delivered financial advice and even the kind of products they offered would acknowledge women as wage-earners, purse-wielders, entrepreneurs, and family supporters. One such offering, the Diva card, induced them to transfer balances to a credit card that acted as a social club and networking nexus. The bank supported her idea. Between 2009 and 2010, the Kolkata and New Delhi all-women’s branches drove net sales up for the bank by 127 percent and 75 percent, respectively, compared with a paltry 48 percent average among its other 90-plus Indian branches.
It’s hardly surprising that women have valuable insights when it comes to devising products or services that better serve female clients and customers. What our research shows, however, is that teams with even one woman come to feel the “point of pain” necessary to perceive new opportunities and act on them. For companies tasked with understanding female consumers (and 74% of our respondents work for companies that target women), tapping women improves the likelihood of their success by 144%.
Having women among the firm’s innovators is but half the equation, however. Women’s ideas won’t translate into marketable products or services unless leadership backs them. Consider the Standard Chartered example: Just as important as Nambiar’s idea was the environment in which she pitched it. She felt she could afford to propose an unorthodox idea; she believed executives would be receptive to the business case she constructed. Had leadership been less receptive, she might have kept her observations about the problem — and her thoughts on its solution — to herself.
Our study finds that a “speak-up” culture, where all voices get heard and everyone feels welcome to contribute, is indeed crucial to unlocking women’s insights.
Leaders who make sure women get equal airtime are 89% more likely than non-inclusive leaders to unleash women’s innovative potential. Leaders who are willing to change direction based on women’s input are more than twice as likely to tap into winning ideas. And leaders who make sure each female member on the team gets constructive and supportive feedback are 128% more likely to elicit breakthrough ideas.
To capture a piece of this crucial new market, our research shows, companies must develop and deploy two kinds of diversity: inherent — meaning more women and people of color make up the workforce — and acquired, meaning leaders behave inclusively to foster the speak-up culture that unlocks a broad spectrum of perspectives and toolkits. Companies replete with both inherent and acquired diversity, we find, out-innovate and outperform the competition.
Employees who work for companies like these are 45% more to report that their company improved market share in the last 12 months. And they’re 70% more likely to report that their company captured a new market in that time frame. That’s a remarkable testament to the impact of diversity — not just on innovation, but on market growth.
Bottom line? Companies don’t need more Boy Geniuses. To court the $20 trillion market of female consumers, companies need to get serious about leveraging female talent.
Sylvia Ann Hewlett is the author of many books including her latest Forget a Mentor, Find a Sponsor. She is also President and CEO of the Center for Talent Innovation and a Manhattan-based think tank where she chairs the “Task Force for Talent Innovation”—75 global companies focused on fully realizing the new streams of labor in the global marketplace. She is also Co-Director of the Women’s Leadership Program at the Columbia Business School. More at www.sylviaannhewlett.com.
This post first appeared on HarvardBusinessReview.org.