I read with interest a recent report by Grant Thornton exploring the impact on business risk management of having more women in leadership roles. The research, “Women in business: New perspectives on risk and reward” was published in March 2017 and raised interesting insights, in many cases challenging the usual gender stereotypes.
The global research included South Africa and it was encouraging to see that South Africa outpaces its global counterparts with 28% of leadership roles currently being occupied by women. Our employment equity legislation does seem to be making inroads to achieving greater gender parity in the workplace.
VUCA world demands effective Risk Management
The realities of a Volatile, Uncertain, Complex and Ambiguous (VUCA) world mean that organisations are faced daily with situations that require time-sensitive, yet considered, decision-making. Organisational leaders need to be equipped to balance risk and reward, enabling success.
Companies that are both ‘risk resilient’ (able to mitigate risk events) and ‘risk agile’ (able to more quickly meet new opportunities) will find long-term success
Lagarde: What If It Had Been Lehman Sisters? – New York Times (2010)
For many years risk management has been a male-dominated sector although we are seeing a greater number of women entering this career path. As gender parity continues to gain ground, particularly within the financial sector, we can expect to see larger numbers of women entering the field and progressing into middle and senior management roles. The shift in thinking and decision-making that results will be interesting to see.
Men and Women assess Risk differently
The way in which men and women perceive and experience risk and opportunity differs and as a result, they act on these differently too. Rather than negating these differences, organisations that choose to recognise, celebrate and leverage these differences are more likely to succeed in navigating the complex world we operate in today.
The researchers examined the differences between the 5500 men and women surveyed on three fronts: firstly, how they see risk, secondly, how they see opportunity, and finally, how they reacted to risk. In each instance, the findings seemed to indicate that there was in fact very little difference in the way that men and women ranked the risks and opportunities, although there was a difference in the time taken to arrive at this decision.
Women seem to operate more in the “grey”, choosing to examine the context and nuance relating to the risk being assessed more than their male counterparts. This difference in assessment style, rather than the black and white consideration of the risk itself, drives these differences in decision-making and behaviour.
Risk and Reward
Risk and reward (opportunity) are ultimately two sides of the same coin. Whilst companies stand to damage their reputation or lose income if they fail to identify and avoid risk, they may also lose out on growth and income that could be gathered by seizing the opportunity.
In the survey, women tended to see less opportunity than men, across the full spectrum. This might be linked to the so-called Confidence Gap touted in gender studies. The belief that women, in general, are less confident than men. In a study, people were asked to assess their competence in comparison to their colleagues, women tended to believe themselves to be equally competent whilst most men believed themselves to be more competent than their peers.
The counter-balance between women’s more cautious nature and men’s desire to jump at an opportunity is ideal in a business environment where considered decision-making, that is not too time consuming, is more likely to lead to the most favourable outcome.
In a socio-economic environment characterised by rapid change and where traditional models for prediction of outcome are no longer valid, a more diverse leadership team is likely to make the best decisions, more of the time.