McKinsey research shows why McKinsey’s next leader should be a woman

Vivian Hunt is said to be a top contender to lead McKinsey.
Vivian Hunt is said to be a top contender to lead McKinsey.
Image: McKinsey & Co.
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McKinsey & Co., a consulting company and revered global authority on management issues, has reportedly kicked off its secretive, papal conclave-like process to choose a new company leader. According to the Financial Times (paywall), the firm’s 500-plus senior partners descended on a posh London hotel last week, a prelude to the first round of voting.

No one knows for sure who will be among the final contenders for the position to be vacated by Dominic Barton next June. But six unnamed company insiders and former partners who spoke to the FT identified the people believed to be frontrunner candidates: Vivian Hunt, managing partner of the UK and Ireland; Gary Pinkus, managing partner for North America; Kevin Sneader, Asia-Pacific chairman; and Bob Sternfels, head of global functions.

Observant readers will notice that everyone on the list is a McKinsey insider and only one—Hunt—is a woman. The British-American power broker also happens to be the lone person of color on the 30,000-employee firm’s short list of probable candidates. If she is indeed on the ballot when the voting begins in January, McKinsey’s senior partners would be remiss not to elect her—that is, if you accept the findings of McKinsey’s own comprehensive research on diversity and gender equality.

Consider the data from a 2015 report co-authored by Hunt, called “Why Diversity Matters.” The findings, to quote from the McKinsey website, include this: “Companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians,” and those led by leadership teams in the “top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians.”

The research, which measured the performance of 300 companies in Canada, the US, the UK, and Latin America, across industry sectors, also uncovered a no-diversity penalty: Not only were those corporations with less diverse leadership not ahead in their market segment, they were falling behind the average performers in their group.

Hunt presented these discoveries during a seminar at Sweden’s Pontus Schultz Foundation in 2015, calling the findings “wow” outcomes that surprised the researchers. “The numbers are correlated, not causal,” Hunt noted, “but they are statistically significant in every world market, every sector, every industry sub-segment that we could find.”

Hunt, whose work as a consultant has been primarily in the healthcare sector, also noted that her first project at McKinsey took her to Sweden as a junior partner, and she was so low on the totem pole at the time that she never imagined she would be back in the country someday as an invited event speaker.

“I have to tell you, I didn’t expect to be standing here for another reason as well,” she continued. “It is very rare to find a six-foot-tall, American-African, American-sounding, British female head”—and here she pauses for a darkly comic effect—“…of anything, much less McKinsey.”

In a recently released study co-produced with LeanIn.org, McKinsey found that women remain severely underrepresented in the upper echelons of management. The data from 222 companies representing 12 million employees showed that only one in five C-suite leaders is a woman, and fewer than one in 30 is a woman of color.

Some other key findings from McKinsey research over the years:

  • “Indeed, some leadership behaviors, observed more frequently among women than among men, have a positive impact on a company’s organizational performance. In this way, women complement and enhance the range of leadership behaviors that are critical to corporate performance.” —From McKinsey’s Women Matter 2 (2008)
  • “Leadership behaviors more frequently adopted by women leaders are critical to navigate through the crisis and beyond.” —From McKinsey’s Women Matter 3 (2009)
  • “The introduction of a gender-diversity policy is often like a cultural revolution and requires full and visible commitment of the CEO to drive the changes. Building a truly gender-diverse company, which supports the development and the promotion of women at the highest levels, can only succeed with the support of top management. Positive practices stand little chance of developing fully if senior management does not commit to changing the culture of the organization under the sponsorship of the CEO.” —From McKinsey’s Women Matter 2010 (2010)

All three of the reports referenced above are sequels to the firm’s landmark 2007 report, Women Matter, which helped to kick off a decade of reasoning about the enhanced performance of diverse teams, and a reckoning over the corporate world’s slow progress in attaining it. And McKinsey’s voice on this issue has remained an influential one. In a piece posted to its site this month, the firm acknowledges that “collectively, this body of work remains some of McKinsey’s most popular research, filling three of the five top spots on the list of our most cited reports last year.”

In his letter introducing the 2017 edition of the Women Matter report (subtitle: “Time to Accelerate”), Barton notes:

We know that moving the needle on this issue is not easy—and that despite the commitment of many organizations, progress has been slow. In this report, we highlight the many barrier to women’s advancement that will have to be addressed to achieve more gender-equal businesses and societies. We do so with a dose of humility, as we are on our own journey toward increasing representation of women at McKinsey, and have more work to do ourselves to achieve our own goals of a gender balanced workforce.

Diverse groups of leaders, as Hunt emphasized in the speech she delivered in Sweden, have been found to make better decisions because they almost inevitably have more viewpoints feeding into internal decisions. They are also more attuned to the desires and needs of diverse customers and have access to a wider talent pool. And, importantly, ”high-performing colleagues, your top 20% of employees in an organization, score working in a modern, tolerant, progressive organization very highly,” Hunt said. “So even if you don’t value progressive policies around diversity … your highest-performing employees, particularly millennials, value that”—even when the policies don’t apply directly to them, she noted.

So now the world’s most celebrated management experts have the opportunity to not only promote one of their stars but also model the very best practices of high-performing teams and work against a trend of gross inequity. The question is, will they take it?