The percentage of women in high-level leadership roles among the top U.S. companies is still dramatically lower than that of men. While there is still a ways to go, the past few decades have brought vast improvement for women leaders.

On the latest Fortune 500 list released in May 2019, 6.6% of Fortune 500 CEOs on the May 2019 list are female, a considerable jump from 2018’s total of 4.8%.

The stats show that women are increasingly taking up leadership roles at businesses, but what about specific metrics in the areas that matter most, like performance? How do we women fare?

New Study Compares Male and Female Leaders

A recent study by Peakon titled, “The XX Factor: The Strategic Benefits of Women in Leadership,” took on this question, looking into how women leaders are performing compared to their male counterparts.

One key finding: Female-led businesses are better perceived than male-led businesses in all aspects of a crucial leadership driver: strategy.

In Peakon’s methodology, Strategy is one of 14 drivers that influence employee engagement, a key factor in helping employees understand and agree with the overall direction of the business.

Essentially, what we’re talking about with strategy is the level of effectiveness that employees attribute to their leaders.

Effective leaders with strategy and vision are absolutely key to a more engaged team, which has benefits not only in terms of employee happiness but also in terms of concrete business outcomes.

A 2016 Gallup study titled “The Damage Inflicted by Poor Managers” found that engaged teams show “24% to 59% less turnover, 21% greater profitability, 17% higher productivity, and 41% less absenteeism.”

Everything is tied together — good leaders, solid strategy, and engaged employees all lead to business success.

The Connection Between Female-Led Teams And Strategy

How are women-led organisations connected to all of this? Peakon assesses overall strategy on a scale of 1-10 by asking employees to rate the following statement:

“The overall business goals and strategies set by senior leadership are taking [company] in the right direction.”

Women-led companies are scoring 0.3 points higher in response to this question. For context, the report considers companies with more than 50% female representation in management to be “women-led,” and those with less than 50% to be “men-led.”

The difference in rating is no small margin considering the sample size: almost 60,000 employees under 3,000 managers, across 43 countries. In an age where employee engagement reigns supreme, organisations should be taking every opportunity to hire more female leaders.

Now, there’s a caveat here, the age old “correlation does not prove causation.” It’s worth considering: are women-led teams better for strategy or do teams that have good strategy attract more women leaders?

In either case, the proven tie between women-led teams and effective strategy shows that having more women in leadership roles is a positive for organisations.

Originally posted at Inc.

More thought leadership