OUR BEST IDEAS, QUICK AND CURATED | NOVEMBER 18, 2022

This week, we look at some sobering trends facing women leaders in the workplace. Plus, an interview with the Spanish-born chef José Andrés on what working in emergencies has taught him, and a McKinsey technology expert on how business leaders can harness innovation.

The ‘great breakup.’ Women leaders are switching jobs at the highest rates we’ve ever seen—and at higher rates than men in leadership. This year’s Women in the Workplace report by McKinsey, in partnership with LeanIn.Org, highlights how this trend affects gender equality in business, as well as the ability of organizations to hold onto the few women leaders they do have.

Playing catch-up. Women—and especially women of color—are dramatically underrepresented in corporate America, particularly in senior leadership. Only one in four C-suite leaders is a woman, and only one in 20 is a woman of color. For the eighth consecutive year of the report, a “broken rung” at the first step up to manager is holding women back. For every 100 men who are promoted from entry level to manager, only 87 women are promoted, and only 82 women of color are promoted. As a result, men significantly outnumber women at the manager level, preventing women from catching up.

Watching from the wings. Now, with women leaders leaving at the highest rates in years, companies have a new pipeline problem. As McKinsey senior partners Alexis Krivkovich and Lareina Yee and their colleagues note, if organizations don’t take action, they won’t lose just their women leaders—they risk losing the next generation of women too. Young women are even more ambitious, and they place a higher premium on working in an equitable, supportive, and inclusive workplace.

Still ‘the only.’ Women’s relative representation among jobs in engineering and technical fields is lower than it was in 2018. As a result, women in technical roles are twice as likely as women overall to say that they are frequently the only woman in the room at work. These trends have troubling implications for gender equality. Engineering and technical roles are among corporate America’s fastest-growing and highest-paying job categories. If women in these roles don’t see an equal path to advancement, it could lead to larger gaps in both representation and earnings between women and men overall.

The importance of managers. Managers play an essential role in shaping all employees’ work experiences. But to women especially, having a manager who cares about their well-being really matters—it’s one of the top three factors they consider when deciding whether to join or stay with a company. When managers invest in people management and diversity, equity, and inclusion (DEI), women are happier and less burned out. They are also less likely to think about leaving their jobs and more likely to recommend their company as a good place to work—which translates to higher retention and better recruiting.

From nice-to-have to must-have. Relatively few companies recognize people management and DEI efforts in managers’ performance reviews. Companies are effectively treating this work as a nice-to-have—as opposed to a core part of a manager’s job—and this disconnect is apparent in the way managers are showing up. Less than half of women say their manager shows interest in their career and helps them manage their workload. Until companies take these duties seriously, women leaders are going to continue to feel undervalued, and they are going to continue to leave their companies in unprecedented numbers to get the recognition they feel they deserve.

To discover data-driven best practices for advancing and retaining women employees, read the full Women in the Workplace 2022 report.

Off the charts

Semiconductors: A path to net zero

Growing demand for semiconductors means industry emissions are likely to increase. Semiconductor companies are making sustainability commitments, but more is needed to achieve net zero. The steps they are taking will not be enough to get the industry on a 1.5°C trajectory by 2030. In fact, Scope 1 and 2 emissions may rise significantly above current levels as semiconductor production volume increases and the industry moves to advanced nodes with an expected higher emissions intensity. To gain more clarity about the extent of the increase, we created three different scenarios to estimate future emissions.

INTERVIEW

A chef who can stand the global heat

José Andrés, the Spanish-born chef whose company encompasses nearly 40 restaurants globally, offers unique expertise on how to deal with pressure. In 2010, he founded World Central Kitchen, a nonprofit whose mission is to deliver fresh meals to people in need during emergencies including tornados, hurricanes, pandemics, and wars. This year, the nonprofit estimates that it raised and spent $420 million, including on more than 170 million meals distributed to Ukrainians since the invasion of Ukraine. In a recent interview with McKinsey Quarterly, Andrés spoke about how responding to emergencies has helped him to prioritize action over meticulous planning, test short-term solutions, and apply emergency-level intensity to long-term challenges.

More on McKinsey.com

Europe’s EV opportunity—and the charging infrastructure needed to meet it | To go carbon neutral by 2050, Europe needs more electric vehicles (EVs) on the road—and many more EV chargers too. We look at what this build-out might look like and what it might cost.

Shipping rates are finally falling. Will they reach prepandemic levels? | McKinsey partner Steve Saxon explores why container rates have fallen and how shippers and carriers can safeguard themselves against future uncertainty.

Prioritizing brain health: Scaling what works to add years to life and life to years | How many more years can be spent in optimal health if society viewed mental and substance-use disorders as we do other conditions? We look at potential answers.

INTERVIEW

In the next few years, new and expanded technologies will change the business landscape at unprecedented pace and scale. How can business leaders prepare to harness innovation?

Companies need to look to the edge of the organization, where the business interfaces with its customers, suppliers, and other stakeholders and where small-scale innovations are happening. They should focus on empowering the hands-on experts—engineers, chemists, product developers, and scientists—who are working on the most complex problems for the business.

The question is how to bring in the best of what these experts develop so that the entire organization can benefit. This is more than a matter of providing these would-be entrepreneurs with sufficient seed capital. Companies instead have to invest in an innovation model. Tech companies have been developing the muscle to innovate at the edge for years, and larger incumbents can borrow a page or two from their book.

What are the common practices to this approach?

To empower these edge workers, companies need to form a portfolio of small teams and give them the freedom to work independently along with clear goals and responsibilities. That means, for example, that if the business doesn’t have people with the skills they need, the team can go out and hire them directly. They can spend their allocated budget as they see fit, experiment and fail without penalty—within boundaries—and decide on technologies to meet their goals—within proscribed guidelines.

Some businesses are already practicing this kind of approach. For example, Haier, the appliance and consumer electronics company, has 4,000 “microenterprises”—as they call these teams—each with ten to 15 employees. These teams have the freedom to self-organize to address a specific opportunity that someone has identified. Teams need to convince people to join, and then need to show actual customer adoption to get funding. To enable this system, Haier reduced middle-management oversight to give teams the necessary freedom to operate.

How can IT play a role in building up a scaling capability to funnel innovations to make them work for the business?

At Google, for instance, product managers across the entire business had to report in every Friday on the percentage of user growth for their particular product. This made it easier to track progress. Initiatives that weren’t growing were quickly defunded. Those that did well attracted more resources.

Google also developed a uniform build system—a set of tools and practices around CI/CD, or continuous integration and continuous delivery—that every product team can use, as well as shared and scalable infrastructure resources that support the common needs of products and businesses. This approach made authentication much simpler and faster. Because all code followed through this model, it was easier to spread it throughout the organization. This is a good example of how establishing mechanisms to support experts and scaling winning innovations helps the entire organization to keep pace.

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