How CPG Companies Can Advance Gender Diversity in C-Suite P&L Leadership

We spoke with CHROs and other senior executive HR leaders at 16 global CPG companies to understand how they are addressing this pressing talent management issue. These companies intentionally represent different degrees of success in diversifying the C-suite. At the high end of the spectrum, women typically hold at least 30 percent of C-suite P&L roles, compared with 10 percent or fewer at companies at the low end. What are companies with greater gender diversity in top P&L roles doing differently? While commitment from the CEO and senior leadership team is essential to make progress on diversity, companies in our sample with the highest levels of gender diversity in P&L leadership prioritized the following actions:

The GM role is complex, demanding and often exclusive of women

To understand why some companies have struggled to diversify their GM pool, it is helpful to consider the responsibilities of the role, the traditional career path to the position and why the traditional “requirements” companies set for promotion to GM can serve as a barrier to women.

The scope of the GM role varies by organization, and many have nuances. However, GM responsibilities typically include:

• Having end-to-end accountability of P&L business units (with considerable variations to the end-to-end nature of the P&L)
• Defining, leading and executing strategies — local and/or category focused
• Serving as the face of the company for communities, customers, other businesses and/or regulators
• Managing team culture and talent, including hiring and attracting new people
• Working closely with cross-functional leadership peers, often internationally

Historically, CPG companies have favored GM candidates with strong sales, commercial and/or marketing pedigrees. This makes sense, given the mandate of P&L roles is to drive profitable growth by meeting consumer needs more effectively than the competition. And our conversations with CHROs indicate that this is still the common practice.

Yet, the requirement for sales experience and a commercial pedigree can reinforce gender imbalances. As one HR leader put it, “Commercial roles are challenging for women in that they are expected to work flexible hours and adjust their schedules for customers.” Indeed, many companies we spoke with across the diversity spectrum said that sales and commercial functions simply have fewer women to begin with.

Furthermore, many CHROs also said multi-market and international exposure were still important for a GM role, which demands mobility. This requirement can inadvertently deter women from pursuing GM roles because of societal pressures to bear the brunt of childcare and eldercare, often making travel too challenging. Misconceptions about the demands of the GM role — such as being available 24/7 — can also discourage women from pursuing the position in the first place, according to several CHROs.

Although companies higher on the gender diversity spectrum tend to also prefer GM candidates with marketing and sales experience, they stipulated that they were open to talent from other functions. Indeed, they stressed the importance of leadership skills above specific career milestones when selecting GMs. This approach allows these organizations to widen the talent funnel and increase opportunities for women. One CHRO went so far as to say, “We are looking for critical experiences that shape a leader because it’s first and foremost leadership you’re seeking, not so much functional competencies.”

These same companies by and large emphasized that leadership skills are a critical component of what makes someone succeed in a GM or any other senior role (more on this below). The uncertainty and volatility of the CPG industry today demand leaders who can pivot quickly and garner the trust of their teams. Conversely, many CHROs we spoke to said that unsuccessful first-time GMs struggle to quickly adapt and acquire the leadership skills they need to operate in a more complex and dynamic role. They are unable to galvanize their teams around change, cannot set and execute a longer-term vision and don’t have a firm understanding of how each business function affects P&L.

How leaders are building gender diversity in the GM talent pipeline

We found that the companies with the highest levels of women in P&L leadership roles tend to have a holistic, systematic and intentional approach to building gender diversity in the GM pipeline. These organizations are also committed to constant improvement and refinement, even after they hit their gender diversity targets.

Furthermore, woven throughout our discussions with CPG CHROs was the role company culture plays in enabling women to get a seat on the GM talent bench and ultimately succeed in the role. An inclusive culture is the foundation for greater diversity. Without creating the conditions for all talent to thrive, organizations increase the risk that they will lose their highest-potential leaders well before formal succession planning even begins.

Establish accountability at the leadership level and constantly measure DE&I metrics

In this age of data and analytics, most CPG companies likely have solid reporting tools and capabilities to measure sales, gather customer data and track the outcomes of market initiatives. These kinds of capabilities can and should be applied to talent management processes that address gender diversity.

Several companies we spoke with that are further along in their gender diversity journey take this data-driven approach. They built processes to track KPIs and are committed to regularly reviewing gender representation at all levels throughout the year and holding leaders accountable for diverse hiring.

One CPG company, for instance, uses a dashboard tracker that shows the gender balance of leadership for each region. At the start and end of the year, the CHRO reviews metrics such as the inflow of talent, retention rate and the gender balance of promotions across teams. These insights help its leaders identify trends in hiring and promotions and overall progress. If, for example, the company is losing women in certain functions or regions, then it’s up to leaders in those areas to identify and address the root cause.

Another company uses scorecards to regularly review and share gender diversity metrics at each level with the management team. By keeping track of gender diversity across the organization, the company can see its entire pipeline of talent and identify where it may need interventions to provide more support whether through coaching, mentorship or lateral development opportunities. Incentives are also a strong accountability tool. One CHRO said that their company has a long-term incentive plan tied to maintaining 60/40 gender diversity across all levels of leadership; if the team doesn’t deliver, then their number of shares is affected.

Make assessing leadership potential part of the talent management process

Companies that are further along in their diversity journey were more likely to stress the importance of strong leadership capabilities and behaviors such as agility, resilience, confidence and humility alongside experience. They realize that to diversify their P&L pipeline, they cannot simply select people who fit traditional GM talent profiles. Instead, they must make evaluating candidates based on leadership potential part of the hiring equation and do so earlier in their careers.

Spencer Stuart’s research reinforces this perspective. We find that “beneath-the-surface” attributes such as leadership capacity — how far and fast a person can adapt and grow — and their character (motivations, ethics and preferences) help organizations identify people with the potential to succeed in a broad leadership role, such as a P&L leader. While career experience and capabilities are important to performance in a role, character and potential tend to be better predictors of future business impact. Indeed, leadership candidates with agility, confidence, humility and self-awareness are better prepared to navigate complexity, and engage their teams and organizations when responding to new challenges.

Executive assessments are instrumental in helping organizations get a complete view of a candidate’s strengths and potential to perform (for more, see sidebar). In the words of one CHRO whose company is making strides toward gender diversity, “We are a big believer in assessments. While past performance indicators have some level of predictability, assessment adds more.”

One CHRO whose company is increasing its gender diversity in leadership says their company focuses on measuring and tracking five leadership attributes: growth, relationships, agility, critical thinking and execution. And another company evaluates potential leaders on three levels — how they lead themselves, their teams and the business — to surface how naturally wired an executive is to be capable of leading at scale.

Assessments can also identify people who might otherwise be overlooked for senior leadership positions because their experience does not match the traditional executive pathway. And evaluating candidates based on potential is critical for companies that want to have more women in the P&L pipeline, especially if they have not yet held a senior position or don’t have traditional career experience. Early talent spotting gives women time to build critical experiences and take advantage of a broad range of development opportunities.

Have career conversations early and accelerate development

Timing is everything when it comes to having career conversations. Several CHROs we spoke to said that by waiting too long to have intentional career discussions with female executives with GM potential they run the risk of the women self-electing out of consideration because of familial or other personal obligations, especially if mobility is required. And the pandemic has further restricted mobility, with many women prioritizing proximity to family.

The leaders we spoke to whose companies were higher on the diversity spectrum, however, had clear strategies in place around when to have these career conversations, often after identifying women through assessments for potential. These HR leaders know that it’s often easier for people to make cross-functional or geographic moves earlier in their careers. And from a business perspective, the risk of cross-functional moves is less.

Once women decide to pursue a GM role, companies should get creative about the development opportunities they provide. Examples of experiences include ones where women have ownership and responsibility over a project or team or where they must run an operation to improve P&L outcomes or pursue an M&A-type project.

Of course, finding the right kinds of projects and development pathways early on might mean trial and error. One CHRO, for example, said that her company was testing putting high-potential women with commercial or customer experience into chief of staff positions where they were second or third in command to an operating leader. However, in practice, this meant candidates were doing more administrative work and being “the organizer of all and owner of none.” They learned that it’s better to put women GM candidates into positions where they can go deeper in an operating role and be responsible for a small market to test how they perform and lead. They also found ways to help women gain experiences needed for the GM role without having to relocate by, for example, participating in technology-enabled cross-functional and multidisciplinary project experiences with different teams. Another company supports early talent development through its GM academy program, which helps people with high potential, who are earlier in their careers, develop the skills that will help them succeed as a GM.

Effective talent development also includes regular check-ins with individuals to ensure that they are progressing appropriately. Importantly, this includes keeping leadership teams responsible for hiring, which often includes the CEO, abreast of talent development progress and milestones. If female talent drops out of the pipeline or someone is improving more quickly than anticipated, leadership should be in the know.

Provide visibility and support through sponsorship, mentorship and role modeling

Companies with greater gender diversity stressed the importance of building robust sponsorship and mentorship. Mentors and sponsors can provide women with valuable advice, insight and feedback. Research shows that sponsors may be more effective at helping women advance their careers by extending their professional networks, advocating for them when opportunities arise and providing exposure to executive team members who make hiring decisions. Advocacy by senior leaders is particularly important for up-and-coming leaders, which can lead to promotions and stretch assignments, research finds.

One company with a higher degree of gender diversity has a sponsorship program for women that includes male and female executive team members as advisers. Each executive leadership team member sponsors one or two women, helping advance their careers by making introductions to other people in the company, having career discussions and providing vital development experiences.

Success tends to build on itself. One company that is earlier in its diversity journey found that as women are moving into more senior roles, they are reaching out to help other women succeed. According to the CHRO, “As we’ve attracted more and more senior female leaders in the organization, we’ve got more and more of them playing a role. They’re very intentionally mentoring other female leaders down through the organization.” By showing women that leadership roles are within reach — and that it is possible within your organization — they may be less likely to go looking for opportunities elsewhere.

What next?

Companies that begin by defining and cultivating leadership capabilities required for success in a GM role — rather than starting with career experience and functional pedigree — can reimagine alternative pathways to a P&L role. And in doing so, they can overcome deeply rooted societal gender diversity barriers intrinsic to the common international, commercial-centric route to the top. Critically, this method to talent management requires a globally consistent and robust data-based approach that allows companies to identify “below the surface” leadership attributes and use these as the starting point of leadership development. These intangible traits are the best predictors of a future P&L executive’s potential to make decisions in new, complex and unpredictable situations and are more predictive of success for first-time P&L leaders than prior experience alone.

To reframe their approach to developing general managers and build a more gender-balanced pipeline to the C-suite, organizations that are earlier in their gender diversity journey should consider these key questions:

Our research validates that CPG companies are committed to building a gender-diverse talent bench from entry level up to P&L C-suite roles. Yet, with currently only 24 percent of the GM entry level roles held by women¹, achieving a step change in the gender balance of P&L roles in CPG C-suites will require sustained and focused effort over the next five to 10 years. In the long term, the talent will be there: women represented 41 percent of the enrollment of top MBA programs in 2022, up from 31 percent a decade ago.

While CPG companies that are further along in this gender diversity journey don’t have all the answers, they are differentiating themselves through their intentional, systematic talent development processes and their dedication to rigorous data tracking and KPI measurement. Critically, these methods are tailored to each company’s specific business context, strategic growth agenda and culture, and supported by the CEO and senior leadership team members over many years.