Women in Analytics: Why diversity matters for the future of business
In today’s headline-hype driven world, you could be mistaken in thinking that data and analytics is a modern phenomenon – a product of the new millennium.
Yes the scale, speed and variety of data has exploded in the last decade but data has been one of the inputs to decision making since numbers were marked on a page.
Likewise, there have been women pushing the envelope of data, analytics and insights for over 150 years.
From Ada Lovelace’s first algorithm for computers and Florence Nightingale’s polar area diagram, to Grace Hopper’s foundations for COBOL, and now the many women today at the leading edge of analytics, algorithms, AI and machine learning (just check out the sample of women in analytics today on the IAPA website), these are a fraction of the women working in data and analytics fields since the 1850’s.
Today that fraction is growing more rapidly.
But is it fast enough?
Do we have analytics teams that are inclusive enough for a world with increasing use of algorithms – a world about to enter an era of artificial intelligence?
Are there enough diverse voices around the table and in teams to ensure we’re not cementing unchecked internal bias into the foundation of tomorrow’s business?
Are there enough diverse voices around the table and in teams to ensure we’re not cementing unchecked internal bias into the foundation of tomorrow’s business?
Research from 2009 from the University of Illinois based on US data from the 1996 to 1997 National Organisations Survey found diversity was associtaed with increased sales revenue, more customers, greater market share and greater relative profits. Similarly the 2019 paper “Diversity improves performance and outcomes” for the Howard University College of Medicine and Florida Atlantic University, showed positive associations between diversity, quality and financial performance.
Even more, in 2020 during the Covid year, the University of Washington found as part of the "This cloud has a silver lining: Gender diversity, managerial ability, and firm performanc paper", increasing female representation in top management teams has a substantial and direct influence on overall managerial capabilities and elicits positive performance effects both in times of stability and more so, in times of crisis.
Back in Australia in 2020, the University of Tasmania, University of Otago and La Trobe University's findings in "Female directors on the board and cost of debt: evidence from Australia" support the argument that a certain threshold of gender balance is required for enhancing board effectiveness.
However the most enlightening Australian research outcome came in June 2020 drawing on six years of data as part of the Bankwest Curtin Economics Centre |WGEA Gender Equity Insights series. Its report “Gender Equity Insights 2020: Delivering the Business Outcomes” is among the most conclusive in the world around the benefits of female leadership and found ‘strong and convincing causal relationship between increasing the share of women in leadership and subsequent improvements in company performance. This relationship is present when increasing women’s representation on boards, increasing the share of women in the most senior leadership tier of the company and when appointing a female CEO.’
Additionally, the report found that:
- a female CEO could boost market value by 5%, which amounts to around $80 million for the average ASX200 firm.
- companies that grow female leadership by 10% or higher yield market value returns of nearly 7%, averaging well over $100 million.
- companies that cut female representation in the top ranks saw their value dip by an average of 3%.
While not specifically relating to the analytics function, the trends and relationships from years of research is illuminating for all leadership roles (including analytics) in organisations.