Female leaders with career aspirations that include the C-suite face immense pressure. Scrutiny from others and high expectations create barriers to entry and trigger stereotypical doubts.
As they meticulously check off the standard boxes of CEO leadership qualities, one area is often forgotten: managing a profit and loss (P&L).
“For women to get into that C-suite, they need to be in the pipeline of succession,” Maria Doughty, CEO of The Chicago Network, explains during a Zoom interview. “And they need to be prepared and ready to be in that pipeline of succession. My biggest piece of advice is to gain P&L responsibility.”
Many women either don’t realize they must manage a P&L to land a C-suite role or wait until it’s too late. Leveraging data from DDI’s 2020 Global Leadership Forecast project, the research team analyzed P&L responsibility across more than 1,700 companies and 15,000 leaders worldwide. The findings left a 9% gap: 42% of women leaders said they had managed a P&L function, compared to 51% of male leaders. As for early executives, nearly 81% of executive men had led P&L responsibility at this level, but only 63% of women had accomplished the same.
This was the case for Doughty. She spent the majority of her career at Allstate serving in various roles, from managing counsel to director of public policy and regulatory investigations and examinations and corporate counsel. When she wanted to pivot to an operations role, she quickly learned her resume was missing a critical component. Having not managed a P&L put her in a position to be unqualified for the job.
“When you look at like pure leadership skills, and I’m talking about the bigger softer leadership skills, the ability to be able to communicate clearly, to be able to get a message across with inspiration, to be able to lead a team, to be able to think strategically, to be able to be compassionate, empathetic, all those things that now we see as major important characteristics and traits of leaders, I had all those,” she states. “[I had] a tremendous track record in that space. However, I didn’t have this finance role.”
Understanding the shortcoming, she took action. She asked to be on projects that would give her the necessary financial experience needed for a C-suite executive role. As she progressed, the opportunity to lead TCN came across her desk.
Doughty has led TCN, an organization of Chicago’s most influential women leaders, for three years to empower women to lead; the vision is gender equity for women of all colors at all levels. She became intentional about P&L management, which led to TCN.
What does it mean to own a P&L
It’s about understanding an organization holistically, especially the expense side of the business. This aspect includes the human capital side and the manufacturing and transactional components. The most prominent element is understanding how to read the P&L, generate money and where to spend the company’s capital.
Doughty continues, “Owning a P&L means understanding the full scope of the business, which is the money going in, and money going out, which is the ultimate goal of having the money coming in exceeding the money that goes out of a business. If you’re a publicly traded company, that’s how you give shareholder value.”
Where to start
Face financial fear head-on. With the plethora of readily available resources on the web, take a finance course, and learn the fundamentals of spending and earning. If you work for a publicly traded company, listen to investor calls. Read proxy reports. Public companies must follow the GAAP for financial statements—understanding the policies helps protect your role.
As you become more comfortable with line items and budgeting, aligning with projects that advance your career is critical. “Until you sit in someone else’s shoes, you don’t get it,” Doughty shares. “I realized this is more about knowing that you need to create a profitable service or product because all these people depend on that profitability. It changes your perspective on so many levels. For example, ‘I have to squeeze this area to create some type of return on this side.’ You get really creative. More importantly, you realize what you don’t need.”
How to position yourself for the C-suite
Let everyone know that you are looking to advance in your career. For many women, asking for help or sharing accomplishments is a frightening experience. The first step is knowing your worth; if you put in the effort, you deserve whatever you’re vying after. Start sharing with those you trust. The more comfortable you become, the easier it will be to share with the leadership team. Remember to focus on the value that you bring to the position.
“You always receive when you take a leap,” Doughty concludes. “If you want to step into those C-suite roles, you may be feeling like you’re doing a lot of leaping. But there’s no question that it will pay off when you continue to take the risk.”
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