On the surface, the utilities and defense industries don’t have much in common. One runs power plants and other electrical grids; the other builds weapons often used to destroy them.
But both areas feature a larger percentage of female CEOs than many other industries, and experts say they both went through similar scenarios for that to happen. “Growth and diversification in industries follows tough times,” says Tierney Remick, vice chairman and co-leader of Board and CEO Services at Korn Ferry.
Four of the five largest United States aerospace and defense firms are now run by women, and four of the nation’s largest utilities have female CEOs. Both industries certainly went through difficult transition periods — from consolidation and deregulation to more diverse customer bases and a need for digital innovation. Those conditions were decades in the making, which forced utilities and defense firms to take a hard look at their talent pipelines earlier than many other industries. “Leaders in organizations at the time were realizing that management would be in a better place if it tapped into the entire talent pool instead of just half of it” says Remick. “Both industries made a concerted effort to start diversifying leadership to optimize their succession pipelines more than ten years ago.”
Utilities firms were among the first to offer leadership development programs focused on getting women financial and operational experience and to ensure every new leadership position hired externally include a diversity component, says Shelly Fust, a senior client partner in the Global Energy and Industrials practice at Korn Ferry. Utilities were also among the first to advocate for more female representation among board directors, Fust says.
Challenges still remain, however. Women CEOs represent 19% of the leaders in aerospace and defense, compared to just 5% across all other sectors. Nevertheless, it’s still only 19%. Utilities, like many other firms, are struggling with very shallow benches of female leadership. At the same time, the majority of top leadership throughout the utilities industry in not only mostly male, but also nearing retirement age, according to Fust. “Diversity continues to be a significant area of focus for all of the major utilities. Firms would love to fill these roles with women, but there aren’t enough of them,” she says.
The transition to digital offers utilities firms one avenue to increase the female leadership pipeline. Remick says digital transformation will open up more opportunities for women in those pivotal operational roles, giving them both the experience and the access to other leaders and board members to advance into top roles. “Energy is an industry seeing innovation upstream and downstream, creating opportunities for those with the right skills to move through the ranks very quickly,” she says.