women in business

Six Ways Female Start-Up Founders Succeed: New Research

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Encouraging new research from Lakshmi Balachandra, assistant professor in entrepreneurship at Babson College near Boston, reported by Janelle Nanos of the Boston Globe, identifies six tips from successful female entrepreneurs. Balachandra notes that after publishing several research reports on how little venture funding women raised between 2012 and 2014—only 183 women’s start-ups out of 6,517 companies received venture funding in that period—she decided to study successful women entrepreneurs. These women were successful despite

  • Not being taken seriously by the business community
  • Having their leadership abilities questioned
  • If they are mothers, being written off by potential funders who assumed they would be too busy with family concerns to succeed
  • Facing skepticism about their age as young women while young men are given the benefit of the doubt
  • Assumptions by investors that women are pursuing a business as a hobby
  • Questions about their business’s viability even when earning millions in revenue if the business is run by a woman
  • Feeling unwelcome at CEO networking events because too few or no other women are there

Nanos writes that Balachandra’s research on successful entrepreneurs, published in October 2019, included thirty successful female entrepreneurs whose business earned at least $5 million annually (with an average of $43 million a year). Balachandra reports the following sources of success for her sample:

  • Look beyond venture capital—The barriers for women seeking funding in the venture capital world remain high. For this reason, many successful female entrepreneurs seek other sources or provide their own capital from savings to maintain control of their companies. Consequently, their growth may be slower, but this can also be an advantage.
  • Take it slow—Many of the successful businesswomen in Balachandra’s study intentionally grew their companies at their own pace and did not let anyone else dictate their timetable. They reported feeling that this slower approach allowed them to establish a secure foundation for their businesses.
  • Invest in your employees—The research participants reported that building a supportive environment for their workforce as a long-term investment pays off.
  • Lift others up—Supporting other woman-owned businesses by either buying from or funding them shores up opportunities for others.
  • Create your own networks—Balachandra’s research participants acknowledged the importance of both networking with men and building their own women-centered networks. They also seek out and offer mentoring.
  • Make it personal—Women control half the total wealth in the United States and are informed consumers. Trust your own personal experiences as a consumer to inform your business.

This truly is encouraging research.

 

Photo by Andrew Neel on Unsplash

Ten Things We Know about Gender Dynamics in Organizations

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I recently had the opportunity to make a presentation to a group of senior women leaders and was reminded of the value of sitting together to review what we know about gender dynamics in organizations that create headwinds for women trying to succeed. Each of the items listed below is important in its own right, but looking at them together had a powerful impact on the women in my session, who said things like “It’s good to be reminded that it’s not just me having these experiences, and I’m not crazy.” Of course, more than then gender dynamics that we know about through scholarly research on this topic exist, but these ten stand out to me. I offer them here, along with links to their sources, for the reflection of my readers:

  1. Society still holds strong cultural biases against women as leaders.
  2. Women get interrupted more than men.
  3. Women are more frequently evaluated on personal characteristics (e.g., how often they smile or are abrasive): 76 percent of women get this kind of feedback compared to 2 percent of men.
  4. Women get evaluated higher on seventeen out of nineteen leadership characteristics than men.
  5. Women face double bind challenges and walk a tightrope, such as the likeability trap, where being assertive and decisive is not likeable.
  6. Executive women who talk more than their peers are rated less competent than executive men who talk more.
  7. If a woman challenges a man’s inappropriate behavior, she is seen as a “b——.”
  8. The only —— in the office (whether regarding gender, race, or both) faces more challenges to prove him- or herself and feel heard.
  9. Women who adopt a masculine style are considered “b——es.”
  10. Masculine workplace norms discourage relationship work as a “waste of time” and value task focus and autonomy.

We can change how women are treated at work, but only when we are aware of the systemic problems. Talking about these points and more with other women is the first step.

 

Photo by Christina @ wocintechchat.com on Unsplash

California Passes New Legislation to Put More Women on Boards: Why This Matters

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Patrick McGreevy of the Los Angeles Times writes that in August 2018, the California legislature passed a bill, approved on a 23–9 vote, requiring firms based in the state to include women on their boards. This bill mandates publicly held corporations in California to have at least one woman by 2019. By 2021, at least two women will be required for boards with five or fewer directors, while at least three will be required for boards of six or more. The coauthors of this bill, state senator Hannah-Beth Jackson and senate leader Toni Atkins, explained that because only 15 percent of the directors of public corporations in California are women, while women make up 52 percent of the state’s population, women’s interests are not adequately represented on boards. In an earlier post, I wrote about the benefits of diversifying boards:

  • Boards set long-term direction and policies, including those that create family-friendly workplaces.
  • Boards are in charge of hiring and firing CEOs. Research shows that people tend to hire others like them. With few women and minorities on boards, talented women and minorities may be overlooked for CEO roles, keeping the glass ceiling in place.
  • Companies with more diverse boards pay higher dividends and enjoy more stable stock prices.
McGreevy notes that Senators Jackson and Atkins agree that having more women on boards will benefit the economy. The senators also stated, “We are not going to ask anymore. We are tired of being nice. We are tired of being polite. We are going to require this [change].” Vanessa Fuhrmans and Alejandro Lazo of the Wall Street Journal explain that “the U.S. has no federal requirement for female representation on company boards and no other U.S. state has successfully pushed such a mandate.” In contrast, the Guardian reports that the European Union has proposed that boards increase female directors to as high as 40 percent, following similar mandates in several other European countries. This follows a trend in the EU, where the number of women on the boards of the largest companies more than doubled between 2005 and 2015. Once again, California leads the way for the United States. Change doesn’t happen without pressure and legislation. Those with a vested interest in maintaining the status quo will do so—unless they have no choice. Electing women to public office will keep moving us forward. What other legislative goals might improve representation for women in the corporate workplace?   Photo courtesy of rawpixel.com.]]>

Where Are the Women CEOs?

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In business and in politics, few women have made it to the top—none in politics in the United States, as seen with Hillary Clinton’s recent loss in the 2016 presidential race. And Catalyst reports that the percentage of female CEOs of Fortune 500 companies has been stuck at 5 percent for a very long time. Why has there been so little progress? One factor explaining the dearth of female CEOs is described by Katrin Bennhold of the New York Times as the phenomenon of the glass cliff. The concept of the glass cliff, coined in 2005 by two professors at Exeter University in the United Kingdom, posits that “women are often placed in positions of power when the situation is dire, men are uninterested and the likelihood of success is low.” Bennhold gives the example of the election of Theresa May to prime minister of the United Kingdom right after the Brexit vote, which put her immediately into a lose-lose situation where her chances of success were very low. Bennhold goes on to note that all the men responsible for Brexit “stabbed each other soundly in the back” and ran away. Julie Creswell writes that researchers at Utah State University also report that women are more likely to be promoted to the top job of troubled companies and then “[lack] the support or authority” to make necessary changes. In other words, women are less likely to succeed in glass cliff appointments, and their tenure is often shorter because they are under conditions detrimental to success. Susan Chira of the New York Times describes other factors that contribute to the low number of female CEOs, based on interviews she conducted with dozens of senior women who competed to be CEOs but did not succeed. These women concluded that the barriers for women are “more deeply rooted and persistent than they wanted to believe.” They reported these barriers:

  • Women are not seen as visionary.
  • Women are less comfortable with self-promotion and more likely to be criticized (and villainized) when they do grab the spotlight—and they are often perceived as unlikeable.
  • Men continue to be threatened by assertive women.
  • Women are disproportionately penalized for stumbles.
  • Most women are not socialized to be unapologetically competitive and can be caught off guard by the ruthlessness of competition at the top. One executive explained, “Women are prey . . . They [men] can smell it in the water, that women are not going to play the same game. Those men think, ‘If I kick her, she’s not going to kick back, but the men will. So I’ll go after her.’”
This latter point may also explain research from Utah State University, as reported by Creswell, showing that female CEOs are 34 percent more likely to be targeted by an activist investor who forces them out. A study from Arizona State University found that, out of all chief executive appointments from 2003 to 2013, one in four women-led companies were attacked by activist investors. What can be done? Chira notes that Deborah Gillis, president and chief executive officer of Catalyst, says that it’s not enough for leaders and boards to pay lip service to valuing diversity and advancing women and minorities. They need to put their money where their mouth is by withholding bonuses from leaders if they do not promote women and minorities and increasing bonuses if they do. They must also continue to grow the number of women on corporate boards. More women are seriously considered for CEO appointments when women are board members. Without these efforts, the deck is stacked against women getting the chance to demonstrate leadership from the top.   Image courtesy of businessforward (CC BY 2.0)]]>

The Cost of Being a Successful Woman: New Research from Sweden

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Joan C. Williams, writing for the Harvard Business Review about why white working-class men and women voted for Donald J. Trump in the 2016 presidential election, describes the strong feelings about traditional gender roles that still exist in segments of our society. She explains, “Trump promises a world free of political correctness and a return to an earlier era, when men were men and women knew their place.” She goes on to explain that manly dignity is a big deal for most working-class men. So is breadwinner status: Many still measure masculinity by the size of a paycheck,” and the paychecks of working-class men have been decreasing since the 1970s. During this same time period in the United States, women, especially educated women, have gained greater access to opportunities, increasing the resentment of working-class men and women. While the 2016 election of Donald J. Trump reflects, at least in part, that traditional attitudes about gender roles are still deeply embedded in large segments of society in the United States, a recent study finds that, surprisingly, these attitudes also still exist in Sweden. Why is this a surprise? Ray Fisman, writing for Slate.com, explains that while Sweden is known to be a progressive country with legal protections for women, generous family leave, and free day care for all, societal gender norms still play a big role. Fisman cites research by Olle Folke and Johanna Rickne showing that female career success is harmful to marriages in Sweden. They followed the marriages of aspiring female politicians and found that while winners’ and losers’ divorce rates are identical before an election, the divorce rate for winners doubles relative to that of losers right after an election. They find a similar impact from becoming a female CEO in Sweden. Fisman notes, “The authors argue that the women’s sudden success puts extra strain on marriages in which men are accustomed to playing a more dominant role in the workforce.” According to the researchers, the effect is larger when “the promotion results in the woman becoming the household’s dominant earner.” The costs of these attitudes about successful women are high. Neither the United States nor Sweden has ever had a female head of state—at least in part a reflection of discomfort with ambitious women. Other costs include

  • women having to work twice as hard to be considered for promotions
  • women receiving harsher performance feedback often with a focus on personal characteristics rather than results
  • higher divorce rates
I agree with Fisman’s closing statement: “We still have a long way to go.” Photo courtesy of BusinessForward CC by 2.0  ]]>