You can understand my disappointment then in reading this recent article, ‘How female CEOs actually get to the top’ published by the Harvard Business Review which not only sends an incredibly dubious message to young women, it also fails to be supported by the kind of academic rigour you would expect to back up their claims.
The premise of the article is to disprove what the authors claim are frequently perpetuated myths: that in order to become a CEO you need to have an undergraduate degree, an MBA from a top-10 school and have started your career as a consultant or investment banker. In doing so, the article analyses the paths taken by the few female CEOs of Fortune 500 companies that do exist and concludes that for women, the best route to CEO is working for the same company for a long period of time.
This instantly started bells ringing for me. For several reasons.
Firstly, the sample size is way too small.
There are only 24 women at the top of Fortune 500 companies. Let me repeat that. Only 24. This is a horrendous statistic for obvious reasons but for our purposes here - not exactly a large number to work with. There is no way any reliable conclusions can be drawn from the analysis of such a small group of people, despite the authors’ self-described “expensively honed analytic skills”.
The article draws the inherently unreliable conclusion that women are more likely to be CEOs if they persevere at the same company. In doing so, they rely on the fact that 71 per cent of female CEOs were promoted as long-term insiders compared with only 48 per cent of men.
As Professor Brett Inder, Head of the Department of Econometrics and Business Statistics at Monash University points out, “with a small sample of females, this difference might look big, but it is not statistically significant. It represents 17 of the 24 females. Sure, this is more than 12 (50 per cent) but can we really make a case based on the specific career history of just 5 women (17 minus 12)?”
The answer to that question is most definitely, no.
Secondly, the article is riddled with reverse causation.
The authors of this piece (who I’m sure had the best of intentions) looked at the information available to them in reverse. As a result, their conclusions tell us absolutely zero about the best path to becoming a CEO in the future.
To explain further, it looks at current CEOs and asks how they got there, finding that many of them worked at the same company for long periods of time, eventually being promoted as ‘long term insiders’. They therefore conclude that there is inspiration for women in the idea that “you can commit to a company, work hard, prove yourself in multiple roles, and ultimately ascend to top leadership”.
However, as Professor Inder states, “to use this as advice for young women, we need to be able to show that the probability of being promoted given you are an insider is higher, which requires us to know something about women who work long term at organisations and do NOT get promoted to CEO. What we need is ‘am I more likely to be promoted to CEO if I stay at one place long term?’"
The data used in this particular analysis gives no answer to that.
There’s a selection bias.
The authors further state only 25 per cent of women CEOs hold an MBA from a top-ten school, implying it’s not necessary to have one to get into a position of power.
This statistic appears slightly engineered. There are probably many more women with an MBA from a top 20 school but that might not fit the narrative. Even then, if you consider the number of people who go through an MBA at a top-10 school I’d say odds are you’re in a better position to be CEO than someone who hasn’t. Reverse causation again.
The study also focuses on a limited number of variables. Given the situation with social mobility in the USA, wealth at birth is probably a better indicator of whether or not one day you will lead a Fortune 500 company, but I’ll leave that to someone else to find out.
The data is outdated.
Assuming that the average of these female CEOs is upwards of 40, that means the advice they are dealing out is based not only on the decisions made by these CEOs 20 plus years ago, but based on the limited opportunities available to those women 20 plus years ago.
It’s naïve to think that women today are faced with the same options as those at the height of their careers currently. Many of the women in this (small) sample for example wouldn’t have had the opportunity to work for an investment bank or consulting firm because they simply weren’t hiring women or at the very least not in the same numbers as they are today.
Issues with the messages sent.
More than anything though, the ability for the HBR to use this misguided research under the veil of a ‘study’ to send such a damaging message concerns me.
Time and time again we are told women are less confident in seeking promotions. They are slower to look for new opportunities outside their own business. They don’t network enough which leads to fewer external opportunities.
But no, according to this research, we should put our head down and stick at the same company for 30 years with our fingers crossed. Why thank you, Satya Nadella. Karma will reward us in the end.
For all we know, the individuals cited as examples were more than happy and rewarded along the way in their on average 23-year stints before reaching CEO-dom. But statements such as “steady focus wins the day” fly in the face of the evidence which suggests women should and need to fight for the promotions they deserve or, better yet, stick their neck out for a job that might be a stretch – as their male counterparts more often do.