Female leadership and soft power: is there a link?

Leadership and pandemic: men are from Mars and women are from Venus

The pandemic has reignited an age-old debate: who are better leaders in today's environment: women or men?

Much has been written about how women leaders have managed the pandemic better than their male counterparts. Most analyses have focused on proving this link without attempting to identify the causes of that difference in outcomes and its implication for the future of political leadership. Given our extensive "Global Soft Power Index" database, we set out to answer what we consider to be the most important question: why do women leaders appear to be better leaders in the face of the pandemic?

To perform this analysis, we identified all female-led countries in our database. Only eight countries are led by women: Germany, Switzerland, Belgium, Denmark, Norway, New Zealand, Bangladesh and Myanmar. For those countries, we identified those pillars and attributes in which they scored better than average, as well as their impact on the country's overall influence. But also, and in order to understand which traits of female leadership could explain these results, we conducted an extensive literature review on female leadership, its traits and impact. Identifying which traits of female leadership are linked to better results is key to understanding the reasons why women leaders seem to be performing better during the crisis and incorporating those aspects into modern leadership.

The future is feminine

One of the most popular slogans used by feminist leaders, "the future is feminine," originated in the 1970s in New York. But recently it has been used by activists, influencers and political leaders. Madame Gandhi, the American electronic artist and activist, released a song with this slogan as its title. Hillary Clinton declared in 2017 that "the future is female." This is not surprising in an environment dominated by identity politics. Just searching for female leadership on Google brings up 33 million results. Clearly, much has been written on the subject.

Despite the interest in the topic, there are only 24 female CEOs among the Fortune 500 companies compared to 32 the previous year, according to Brand Finance's 2020 "Brand Keeper Index." In the latter, only four female CEOs appear in the top 100. However, the world's top female brand guardian, according to Brand Finance's analysis, was Marillyn Hewson, CEO of Lockheed Martin. The four female CEOs in the ranking, on average, perform much better in "Positive Net Coverage" and "Average Dividends per Share," where they have a 3.5 out of 10 point advantage over their male counterparts.

On the other hand, we reviewed the existing literature on the subject and, depending on their objectives and results, we found three types of research:

• Those who set out to demonstrate the link between female leadership and better financial results.
• Those who set out to prove that female leadership traits are the cause of these better results.
• Those who set out to demonstrate that the female leadership style (often coined as compassionate leadership or cautious leadership) is preferred by the general population.

In 2018, Nordea conducted research to study whether diversity was profitable for shareholders. While it was unable to prove a link between a higher proportion of female leaders and higher returns, it showed a correlation with lower volatility in returns.

In 2016, MSCI found that, in the period from 2011 to 2014, companies with three or more female managers had higher earnings per share and return on equity compared to companies with no female managers in the same period.

Goldman Sachs recently analyzed 496 large-cap U.S. equity funds and found that funds managed by women outperformed their male counterparts amid coronavirus-related market fluctuations (Flood, 2020).

In the second set of studies, Corinne Post (2015) conducted work that showed that female-led teams scored higher on cohesion, cooperative learning, and participatory communication, and that the female leadership advantage was amplified when coordination requirements were higher.

Within the third group, we find a myriad of studies. We will only focus on the results of a few. A recent study by Deloitte (2018) states that "modern leaders should seek to balance hard and soft power traits." In fact, being communicative, flexible, and patient, soft power traits that are generally considered feminine, were among the five most important factors for strong leadership.

Another study conducted by Harris Poll in 2018 showed that half of Americans would prefer to work for a company led by a female leader (see Berlin, C., 2018).

All the studies discussed above provide evidence on the link between female leadership or female leadership traits and financial impact or social preference.

Now the question is: what traits define a feminine leadership style? How do women tend to lead? What can we classify as typically feminine or masculine attributes? To answer this question, we conducted further research.

Leadership and feminine and masculine attributes

John Gerzema and Michael D'Antonio did extensive research on this topic. They surveyed 64,000 people in 13 countries and published their results in the book The Athena Doctrine: How women (and the men who think like them) will rule the future . Their goal was to discover "whether, due to the influence of economic, technological, generational, or other factors such as globalization, people in general may be valuing the feminine side of human nature more highly." Some of the key findings support that hypothesis:

• 66% of respondents thought that "the world would be a better place if men thought more like women."
• 57% of respondents are "dissatisfied with the behavior of men in their country".

As part of the same work, they asked half of their sample to classify 125 different human traits as masculine, feminine or neutral. Attributes such as rude, dominant, aggressive and selfish were classified as masculine, while selfish, patient, sensitive, sincere, caring and trustworthy were classified as feminine. They then presented the same list of attributes to the other half of their sample and asked them to explain the importance of these traits for leadership and success. By comparing the results from both samples, they determined which feminine attributes would make up an ideal modern leader (see Figure 1).

Figure 1: Feminine attributes most strongly related to leadership

Source: Gerzema, J. and D'Antonio, M. (2013), p. 12.

What the data show is that the definition of leadership is changing and masculine traits such as aggression and control are becoming less effective than feminine attributes such as collaboration and flexibility. The authors conclude that in "an increasingly social, interdependent and transparent world, (...) feminine values are on the rise."

Now, our question is: are these results from the business world equally valid in the world of public diplomacy and geopolitics? To answer this question, we will explore the results of our "Global Soft Power Index".

Our "Global Soft Power Index" tests

The concept of soft power has become increasingly relevant in the 21st century. Professor Joseph Nye (2004) defined it as "the ability of a nation to influence the preferences and behaviors of various actors on the international stage (states, corporations, communities, publics, etc.) through appeal or persuasion rather than coercion". Brand Finance published the "Global Soft Power Index" in February 2020 to measure a nation's soft power, its pillars and its impact on prosperity.

The measurement methodology, based on 55,000 surveys of specialists and the general public carried out in 100 countries, incorporates a wide range of metrics that allow a complete and balanced evaluation of the presence, reputation and impact of nations in the world. Some of these metrics are:

• Recognition and familiarity: The greater the recognition, the greater the soft power.
• Influence: The degree to which a nation is considered to have the ability to impact the world.
• Reputation: The esteem in which a nation is held.
• Performance in the seven pillars of soft power: Business Environment, Governance, International Relations, Cultural Heritage, Media and Communication, Education and Science, People and Values). Figure 2 shows each of the pillars and the variables measured in each pillar.

Figure 2: Pillars of soft power

Source: "Global Soft Power Index 2020", Brand Finance.

Although nations governed by male leaders, on average, have more influence overall, their negative influence is perceived to be significantly higher, on average, than in nations led by women. Female-led nations, on average, have a better reputation and higher net positive influence (see Figure 3). Female-led nations perform better in governance, international relations, and business and trade (Figure 4).

Figure 3: Reputation and influence, "Global Soft Power Index 2020".

Source: "Global Soft Power Index 2020", Brand Finance.

Figure 4: Soft power attributes, "Global Soft Power Index 2020".

Source: "Global Soft Power Index 2020", Brand Finance.

Of the attributes we measure in our "Global Soft Power Index," on average, female-led nations outperform male-led nations in 26 of them, and only underperform in nine (see Figure 5).

In particular, they are significantly better perceived in the following attributes:

• A strong and stable economy
• Take action to protect the environment
• Good relations with other countries
• Safety and security
• Attractive lifestyle
• Politically stable and well governed
• Reliable
• Strong educational system
• Stable ethical standards and low corruption

Most of these attributes relate to three key themes: stability, safety and security, and trust and ethics. Many of these attributes are related to the values classified as feminine in Gerzema and D'Antonio's work (Gerzema, J. and D'Antonio, M., 2013).

Recently, Simon Sinek described in his book Leaders Eat at the End how strong leaders today make people feel safe. This is probably one of the key common traits that have stood out about women leaders in the pandemic: clear communications and decisive actions that made citizens feel safe.

Most countries led by women performed better even before the pandemic on these traits: protection, stability, security, safety, trust. The need for greater cooperation and multilateralism brought about by the pandemic, if anything, has further enhanced the importance of a leadership style based on these values.

In this context, it is not surprising that Germans call Chancellor Merkel the nation's Mutti (mom). This only exemplifies that, in an increasingly volatile world, leadership is about cooperation, protection and security, values in which nations led by women outperform those led by men.

In addition, when comparing how nations perform in military and economic power, an interesting pattern emerges (see Figure 5). emerges (see Figure 5).

Figure 5: Military, Economic and Soft Power

SourceSource: "Global Soft Power Index 2020", Brand Finance, Global Fire Power, IMF.

While female- and male-led nations perform similarly in terms of economic power, divergence is evident when comparing hard and soft power scores. Male-led nations perform better in hard power, while female-led nations lead in soft power. As soft power is seen as an increasingly important tool for a nation's prosperity, female leadership styles appear to be well positioned to deal with the changes of the future. The coronavirus pandemic, climate change, social conflict and polarization are some of the greatest challenges of our time that require cooperation, stability and security, attributes in which female-led nations perform better than male-led nations.

Can we prove that these results are 100% female-influenced? The short answer is "no." A key question is whether there is a correlation between the tenure of women leaders and these outcomes or whether these outcomes were forged prior to their tenure and accelerated by women leaders. Many of these outcomes we discuss are forged over the long term.

 We also know that, historically, there have been women leaders with extraordinary negative influence in their nations, kingdoms or cities. There have been and will continue to be. Our analysis points to particular leadership styles based on attributes that historically have been recognized as being more associated with women. In addition, it is possible that most nations led by women are diverse and inclusive societies, respectful of differences and providing opportunities and support for a diverse pool of talent, which may explain the representation of women in positions of power, but also the maturity of that nation in many other pillars of soft power.

This could be the main explanatory variable behind the disparity in the results of nations led by women: inclusion. As Rami Aboukhair, CEO of Santander Spain, says, "no company that wants to grow can do without talent, and women represent 50%." We at Brand Finance have conducted extensive analysis on the impact of diversity and inclusion on brand strength, and have found a significant positive link between the two variables (cf. https://brandfinance.com/knowledge-centre/whitepapers/stand-up-to-stand-out-how-brands-are-impacting-the-debate-on-social-justice/).

If female talent is so important for growth, corporations must take steps to ensure female representation in executive positions. These actions can be classified into three groups:

• Education and training: How can the organization support the development of women leaders? Through mentoring programs, coaching and training in specific leadership skills, among others. IBM is a great example of a company that provides all of these platforms for women leaders. In its EMEA division, it has created a "Women in Tech" mentoring program, as well as an open network called "Inspired by Women," which educates about unconscious biases or specific obstacles in female development and how to address these challenges. These initiatives not only support individual development, but also enable the connections needed to drive careers forward.
• Policies and standards: Flexibility policies, extended leave and remote work are key for many working mothers and instrumental in avoiding losing talented female leaders.
• Evaluation and reporting: All of the above sounds good, but it is also imperative to demonstrate the impact it has in terms of internal climate, employee satisfaction and retention. Not only that: ideally, it should be linked to brand value creation. Measuring the impact of D&I (diversity and inclusion) initiatives aimed at leveraging female talent is essential to ensure investment in such initiatives.

Conclusions

Analysis of our database shows that nations led by women outperform, on average, those led by men in net positive influence, reputation and most attributes under the seven pillars of soft power, particularly those related to safety and security, stable economy, trustworthiness and cooperation.

Although this is based on a relatively small sample and recognizing that these results can also be explained by many other factors, after analyzing the literature on the traits and impact of female leadership, we can infer that female values definitely have a positive impact from a geopolitical point of view as well. This is not to say that female leaders are free from mistakes.

As Joseph Nye explained in an interview with David Haigh in September 2020, "women are human, too, and they make mistakes." But female leadership style is definitely more related to soft power attributes than hard power attributes. In the corporate and geopolitical arena, these attributes will be key to generating positive influence and reputation in the future. To ensure that we have more of this type of leadership in the future, public and private organizations must focus on training, standards and diversity measurement.

Jacinda Ardern, prime minister of New Zealand and one of the leaders praised for her local management of the pandemic, recently said, "One of the criticisms I've faced over the years is that I'm not aggressive or assertive enough, or maybe somehow being empathetic means I'm weak. I totally rebel against that. I refuse to believe that you can't be compassionate and strong at the same time." This underscores the importance of compassionate leadership in an environment that is becoming increasingly volatile. We are convinced that a leadership style based on traditionally feminine traits will have a positive impact in a world plagued by polarization and conflict, which now more than ever requires multilateralism, collaboration and compassion.

Sources:

• Berlin, C. (2018). "Research Reveals Half of Americans Want to Work for a Female Leader". Can be downloaded from the following link.: https://www.globenewswire.com/news-release/2018/01/25/1305181/0/en/Research-Reveals-Half-of-Americans-Want-to-Work-for-a-Female-Leader.html
• Brand Guardianship Index 2020. It can be downloaded from the following link: https://brandirectory.com/reports/brand-guardianship-index-2020
• Deloitte (2018). "What's the future of leadership?". Can be downloaded from the following link: https://www.deloittedigital.com/us/en/blog-list/2018/what_s-the-future-of-leadership--read-about-our-new-research.html
• Flood, C. (2020). "Female-managed US funds outperform all-male rivals". Can be downloaded from the following link.: https://www.ft.com/content/021a1b60-a5fa-42ad-83b4-482268cac7ac
• Gerzema, J. and D'Antonio, M. (2013). The Athena Doctrine: How women (and the men who think like them) will rule the future., Jossey-Bass, San Francisco, 1st Edition.
• Global Fire Power 2020. It can be downloaded from the following link: https://www.globalfirepower.com/
• Nordea (2018). "Investing in female leaders makes business sense". Can be downloaded from the following link: https://www.nordea.com/en/press-and-news/news-and-press-releases/news-group/2018/investing_in_female_leaders_makes_business_sense.html
• Nye, J. (2004). Soft Power: The Means to Success in World Politics, Public Affairs, NY, New York.
• Post, C. (2015). "When is female leadership an advantage? Coordination requirements, team cohesion, and team interaction norms," Journal of Organizational Behaviour. Can be downloaded from the following link.:https://doi.org/10.1002/job.2031
• Rubin, K. (2015). "Research: Investing in Women-led Fortune 1000 Companies". Can be downloaded from the following link.: https://www.quantopian.com/posts/research-investing-in-women-led-fortune-1000-companies
• Sinek, S. (2015). Los líderes comen al final. Ediciones Urano, Barcelona.