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NAFE Features - The Power of Money
Executives who run their companies' profit-and-loss operations get the glory - and the promotions.
 
By: Katherine Bowers , Illustration: Jérôme Mireault

In every organization there are two kinds of jobs—“staff jobs,” which keep the organization running smoothly (finance, accounting, HR, marketing, etc.) and “line jobs,” which focus on making profits (“line” referring to top-line sales growth and bottom-line profits; extra credit on the quiz, later.)

While both kinds of jobs are important, one type—line jobs—leads to executive roles and the corner office far more often than the other. “to prove you can run the company, you need to have been successful with profit-and-loss responsibility, which means that you have demonstrated that you can make money for the company and not lose it,” says Betty Spence, PhD, president of the National Association for Female Executives (NAFE), a Working Mother Media organization. Sounds simple, right? Yet women often aren’t advised about the importance of taking on entry-level P&L roles—such as sales positions—early in their careers. “They get told they’re good with people and benignly mentored into staff roles,” says Dr. Spence.

It’s not that women aren’t, indeed, great at staff roles; in fact, such jobs have been the beginning of the route for many women into the executive ranks of large corporations. But they’re not traditionally CEO feeders.

Dr. Spence says data collected over the last decade reveal that women hold just about 1 out of every 10 P&L jobs at Fortune 500 companies. Even at the most progressive companies, there aren’t enough women in P&L roles: among the 2013 NAFE Top 50 companies, which earned their places on our list by showing serious commitment to the advancement of women (see list), just 22 percent of all the corporate executives with P&L responsibility are women, even though women represent a full 51 percent of the total employees at the companies.

For advancement, “you want to be in the business of the business, getting hands-on experience on how the company makes money,” emphasizes Sheila Wellington, clinical professor of management and organizations at New York University’s Stern School of Business. Having a P&L job means that you build a team, make operational decisions, creatively solve complex problems and set immediate and long-range strategy. Best of all, unlike in staff jobs, good performance in a P&L role is easily recognized and quantified—it shows up right on the bottom line.

For the three high-powered female executives profiled here, getting P&L responsibility was life-changing.


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