Time for future air mobility companies to get serious about diversity

In the future air mobility (FAM) industry, companies are making some progress on diversity, but they still have significant work to do. To get more specific information on the makeup of their current leadership teams, we recently updated our 2021 research on this topic.

Over the last two years, the share of women leaders (both transgender and cisgender) and nonbinary people at FAM companies increased slightly from 15 percent to 18 percent, well short of the overall average of approximately 26 to 32 percent for US corporate leadership teams (exhibit). For ethnic diversity, the industry made no progress over the last two years, with 13 percent of leadership teams coming from underrepresented groups compared to an average of roughly 20 percent at US companies. Our analysis looks at the global FAM industry but uses US corporations as a benchmark; we recognize that different geographic markets have different contexts and that the comparison is approximate.

The future air mobility industry has improved its diversity on gender but not ethnicity, and still lags US corporate benchmarks.

Looking one level deeper, some nuances emerge in the data:

  • Among segments, sustainable aviation saw the biggest improvement in gender diversity, with the number of women and nonbinary people increasing from 13 percent to 18 percent. Other segments, including manned advanced air mobility/electric vertical takeoff and landing (eVTOL) vehicles and small drones, showed smaller gains. Companies that develop supersonic and hypersonic technology actually regressed, with the number of women and nonbinary people falling from 23 percent to 20 percent, although the small sample size means that the departure of a few senior leaders could sway the numbers in a meaningful way.
  • Among regions, North America has the most diverse leadership teams in both gender (20 percent female or nonbinary) and ethnic diversity—defined as the non-majority group in a company’s home country (18 percent).
  • Technical roles have seen the biggest increase in diversity for both gender (going from 5 percent to 14 percent female or nonbinary) and people from ethnic minorities (going from 12 percent to 16 percent). Despite this progress, women and nonbinary people remain significantly underrepresented in technical roles at FAM companies, as they are in many other industries.
  • While overall diversity in the C-suite has increased, this progress is heavily driven by gains in corporate functions such as legal, sales and marketing, and finance (where roughly one-fourth of CFOs are now women, nonbinary people, or people from ethnic minorities). Conversely, the number of women, nonbinary people, and ethnic minorities among CEOs or in engineering and operations C-suite roles has not significantly improved, and that is where the industry must direct its focus.

In the competitive FAM industry, creating a more diverse leadership team and workforce can give companies a clear advantage. A growing body of research shows that diverse leadership yields business benefits. Companies with leaders who are balanced across gender and ethnicity are more innovative and show greater financial performance. Specifically, companies in the top quartile in terms of gender diversity are 25 percent more likely to have above-average profitability than those in the bottom quartile. For ethnic diversity, the differential is even greater: 36 percent between top-quartile and bottom-quartile companies. Those advantages are growing over time.

Diversity-related gains won’t happen without concerted, deliberate effort among FAM companies. Some measures to improve diversity are already well-known, such as expanding talent pools, providing flexible work environments, and ensuring pay equity. Tactical measures can help close the gap as well. These are not new ideas—many are in wide use in other organizations—so they offer a working playbook that most FAM companies can use to start improving their diversity performance. Some smaller and younger FAM companies have limited resources of time and capital right now, and it may seem unrealistic to add more items to the leadership agenda. But many of these measures don’t require a significant investment and can thus be done even in lean start-up organizations.

Transparency is a key lever. First, companies should be open about their current performance regarding diversity, including how far their organizations lag industry and corporate benchmarks. From that baseline, companies can set ambitious targets for improvement, such as doubling numbers of women leaders at the vice-president level or higher over the next five years. Once companies set a goal, they can establish internal performance metrics to track progress and support their efforts by coaching and developing diverse employees, addressing unconscious bias, and making job descriptions and requirements inclusive.

Crucially, performance against these targets needs to be tracked at a detailed level. Metrics that may be monitored include participation rates, employee satisfaction, and the number of equitable promotions. Leaders should be accountable for progress, and those who step up and deliver results should be celebrated.

The broken rung—difficulty moving up into a management role—continues to be the biggest barrier to women’s advancement. To remedy the problem, all companies should have targeted interventions in place to make sure that men and women are promoted equitably. This is especially crucial in industries like FAM, where women’s overall representation in the pipeline is low and any disparity in promotion rates has a compounding effect. Effective interventions should be data-driven and based on individual root causes. These might include:

  • removing bias from review and promotion processes through employee training or process redesign (for instance, assigning a “bias monitor” to sit in on review committee discussions)
  • rooting out any bias that may be keeping junior-tenure women from getting the same work experience opportunities as men, such as inequitable access to senior leaders
  • training managers on key skills related to people leadership in hybrid work settings, giving constructive feedback, and fostering inclusive teams

The above efforts can have a positive impact throughout the entire pipeline, including retention and recruitment. Given that FAM tends to have less diverse talent than many other industries, it may be particularly important to de-bias job postings and focus on cross-industry recruitment. For companies that struggle to retain underrepresented employees, efforts geared at developing a more inclusive workplace, such as manager training and public commitments from senior leadership, can help to safeguard gains.

As part of external talent development initiatives, FAM companies can participate in industry consortia, such as Women in Aviation International, the Asia Council for Gender Equity, the European Centre for Women and Technology, the Organization of Black Aerospace Professionals, the Society of Women Engineers, and Asian-American Women in Aerospace & Aviation. Similarly, companies can ensure that industry panels, conferences, and events meet minimum thresholds for both gender and ethnic diversity.

The FAM industry is making significant progress in terms of hitting technical milestones and starting to build business plans, but it still needs to create more diverse leadership teams. Not only is that a key to improved performance—it’s simply the right thing to do.

Chang Liu is a consultant in McKinsey’s San Francisco office, where Robin Riedelis a partner; and Kritika Rastogi is a consultant in the Silicon Valley office.

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