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woman entrepreneurs

Women entrepreneurs thrive managing talented teams and balancing many investors

Richard A. Devine, of DePaul University and Siri Terjesen, Dean’s Distinguished Professor in Entrepreneurship at Florida Atlantic University share data that shows how women entrepreneurs thrive in business and leadership. 

Only a handful of the top companies in the U.S. are led by a woman.

Efforts to change that and promote more women into positions of leadership have relied primarily on questions of equality. But is there also a business case for putting more women in charge?

Previous research on differences in leadership styles between men and women has suggested the latter make decisions using more collaborative and relational methods, which enables them to better manage a range of groups and resources. But it wasn’t able to show whether this actually led to better results.

Thanks to a study we co-authored in 2019, we have data that shows women-led businesses, in certain scenarios, do indeed perform better than those run by men.

The case for female leadership

Our research, conducted with colleagues Gonzalo Molina-Sieiro and Michael Holmes, focused on entrepreneurs trying to grow their nascent companies quickly.

We began with the results of the Kauffman Firm Survey, which tracked 4,928 companies founded in 2004 by conducting annual surveys through 2011. The database includes lots of information critical to understanding what factors influence performance, including revenue, employees and intellectual property. For our purposes, it also includes many details about the main entrepreneur and top managers behind the venture, including education, experience and gender.

Most entrepreneurs run small operations with few employees and little desire to grow much. A small share, however, lead what we call “high-growth ventures,” which are often defined as companies that experience annualized employment growth of 20% or more during a three-year period.

These companies are a significant engine of economic activity, producing millions of jobs a year in the United States alone and are responsible for a majority of new jobs created in the U.S. over the last several decades.

For our purposes, we defined a high-growth venture as among the top 10% of all entrepreneurial businesses in our sample in terms of employee growth in any given year. While the majority of these were led by a male entrepreneur, about a quarter were run by a woman.

women entrepreneurs, team-work,

Photo by RF._.studio from Pexels

Collaborative management styles

In our research, we started by comparing how female-led companies performed in terms of employee growth versus those helmed by men.

In preliminary analyses we found that, overall, a female-led business was less likely to experience high growth. However, we knew that there was more to the story since other research has indicated the strengths they bring to organizations.

Given what we know about female leaders’ collaborative and relational know-how, we developed a theory that they should be particularly skilled at leveraging the talents of senior executives and managers. For example, many female leaders argue building relationships with employees helps create win-win scenarios where employees feel valued, which also helps them avoid the double bind of appearing too authoritative.

So we examined two markers of human capital and management talent: the number of top managers with a college degree or higher and how many had previous entrepreneurial experience.

The results were clear: Female-led companies with more educated managers were more likely to attain high employment growth than male peers with a management team with similar levels of experience.

Levels of entrepreneurial experience, on the other hand, didn’t make a difference for high growth.

Investors and capital

We also looked at two other variables: the number of ownership stakes and financial capital.

An important way companies grow is by raising funds. To do so, they often trade equity in the business for financial support. But giving investors a say on internal decisions like management and strategy can lead to conflict and division. It can also upset the balance of power among top managers.

An interesting finding from our research, however, is that female-led companies were more likely to hire rapidly and grow when there were more top managers or investors who held ownership stakes in the company. Research has shown that female leaders often excel at managing conflict, which helps explain our results.

As for capital, much has been written about the struggle women entrepreneurs face obtaining financing for their startups. But when they finally do secure financial capital, how do they fare?

To find out, we looked only at companies in our database that had received financial support from a venture capital firm. Again, we found that companies led by a woman experienced stronger hiring growth than those that had a man in charge.

Other research has found that female entrepreneurs do more with less and are able to generate more revenue per funds invested than their male counterparts.

Utilizing women’s skills and experience

The point of our study is not to show that female-led companies – high growth or not – perform better than men.

Rather, our research suggests that women do bring valuable and unique skills and experience to the table that can make a significant difference to business success. Yet, given so few companies are run by women, their skills and experiences are not fully utilized.

There are many well-known ways to help fix this, of course, such as implementing better family leave policies that are friendly to women staying in their careers, setting up development programs aimed at encouraging female entrepreneurs and finding ways to improve their access to financial capital – to name just a few.

Giving more opportunities to women entrepreneurs isn’t just good for them. It can be good for the entire economy.The Conversation

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This article is republished from The Conversation under a Creative Commons license. Read the original article.

gender inclusion in the workplace

Mariela Dabbah, the perils of a global pandemic for gender inclusion in the workplace

As 2020 draws to a close, Mariela Dabbah, founder and CEO of the Red Shoe Movement, reflects on the Covid-19 pandemic impact for gender inclusion in the workplace. The pandemic has touched all communities and industries across the globe but most importantly, it has affected the lives of women. The consequential economic crisis is now being called the “she-cession” because women, especially those working full-time jobs, have been mostly affected by having to keep up with their jobs remotely AND managing children and their schooling at home. 

Mariela Dabbah, founder and CEO of the Red Shoe Movement (Photo courtesy Mariela Dabbah)

Mariela Dabbah, founder of a leadership development company powered by a global community of women and men allies who support each other for career success, is working to give women the support they need amid these challenging times. 

The TEDx and International speaker, award-winning, best-selling author and go-to corporate authority for Fortune 500 companies interested in inclusive cultures sat for an interview with LatinasinBusiness.us on this very specific and concerning topic. 

How the pandemic has affected women in the workplace

Despite much progress over the years in regards to the issue of gender equity in the workplace, women are still under-represented in higher level positions, with only 7% of women CEOs of Fortune 500 companies. “And while many organizations boast of having a higher percentage of women than men at lower levels of the pyramid, it continues to be very lonely at the top,” Mariela says. 

In the post-Covid landscape, some of this small progress is now being dialed back. The most recent research shows how women have been much more affected by the pandemic, with one in four considering downshifting their careers or leaving the workforce. Many organizations are now losing their female and diverse talent at higher rates than before. 

“This is connected to the fact that women and particularly women with diverse backgrounds and with disabilities have less resources needed to support them at this time. Primarily, reasons include women tending to be the person in charge of childcare, but also, they generally make less than their male counterparts. When a decision needs to be made of who in the household will quit their job, it’s usually women,” says Mariela. 

As the primary caregivers in most households, women were already in charge of the many hours of unpaid work related to raising a family and keeping a home. This past year they have had to shoulder even more of these responsibilities as lockdowns caused children to become homeschooled through distance learning. The struggle of juggling their careers while being a hands-on parent and maintaining their household has forced many women to compromise, step back or quit all together. 

Foreseeing a negative pandemic effect on women in the workplace early on, Mariela and her team developed programs and initiatives to support them. 

The pandemic shock first, the impact later 

“It’s been a very tough year for all of us,” says Mariela. “The first few weeks of the pandemic, I felt as lost as everyone else. It wasn’t so much the change of working from home rather than going to the office. I’ve been working mostly virtually for the last decade. It was more a feeling of unease. Feeling drained. Having no willpower, having not one spark of creativity. As if everything had literally been put on pause, even my brain.” 

This same feeling has been felt by many women struggling to adjust to this new post-Covid reality. It’s hard to figure out what to do next when the future feels uncertain, with no access to resources and support systems to help them navigate these tumultuous changes. 

Women across the globe coming together virtually in solidarity for gender inclusion in the workplace (Photo courtesy Mariela Dabbah)

“It wasn’t long before we started hearing horrible stories of women being overwhelmed by trying to juggle all the new responsibilities. For instance, stories of bosses micromanaging their teams to the point of asking associates to have their cameras on during the 8 to 10-hour workday so they could check on them,” Mariela shares. 

Mariela and her team immediately created a program to address this sense of impotence and being overwhelmed to provide women with a support system that helps them avoid making rash decisions. Additionally, they have launched an initiative that continues to propel the fight for gender inclusion in the workplace. 

 

gender inclusion in the workplace

#InclusionIsNotOnPause initiative (Photo courtesy Mariela Dabbah)

“We launched the #InclusionIsNotOnPause initiative to remind everyone that we needed to keep our eyes on the gender-inclusion ball or we’d lose a lot of our hard-earned gains of the past few decades. This initiative provides a set of tactics that organizations can implement to openly show their support for inclusion of all its talent.”

Continuing the fight for gender inclusion 

Join the #RedShoeTuesday campaign! (Photo courtesy Mariela Dabbah)

Despite the pandemic and the struggles this past year, 2020 has also been a time of growth for many, Mariela included. This strange year has had its ups and downs, and for many the “break” from our traditional routines has led to inspiration and sparked new ideas for innovation. 

“I’ve been very lucky this year just by staying healthy.  Also, the fact that we’ve been delivering our programs virtually for so long played to our advantage; we made tweaks and improvements to everything we offer. My team and I kept coming up with new ways to better serve our clients now that they are all working from home,” says Mariela.

One personal highlight of 2020 that stands out to her is her invitation to present at TEDx Deer Park Women

“It was an amazing opportunity to share my vision for promoting a Global Leap of Consciousness in gender equity with our #RedShoeTuesday campaign.”

What’s next in women equity in the workplace?

“As the pandemic has proven, it’s impossible to predict what will happen five years from now. But our mission is to level the playing field for women and we will continue to do whatever we can to achieve it,” says Mariela. 

The Red Shoe Movement continues to develop new programs to address the needs of its clients and communication campaigns that keep raising awareness to reach gender equity. One of their latest programs is the Allyship Circles to help people talk about problematic issues in a safe environment. “The goal is to foster a culture of inclusion as quickly as possible so that all associates feel like they belong and that they are valued for their contributions,” Mariela explains.  

gender inclusion in the workplace

Wear your red shoes too for gender inclusion in the workplace! #RedShoeTuesday (Photo courtesy Mariela Dabbah)

We have seen many women step into leadership positions this past year, especially in politics. Each time a woman rises in leadership, it shows others that this too is possible for them. That kind of mentality is what Mariela hopes to continue to foster moving forward. 

You may be interested: Gender diversity in the C-suite, where Latinas stand

“The ‘seeing is believing’ kind of effect really works,” she said. “But progress inside corporations continues to be very slow. At the higher levels, there tends to be more women in roles such as HR, Communications and Marketing and many less in other areas of the business. However, since #BlackLivesMatter, the country seems to have experienced an awakening and as a result, organizations seem to be honestly committed to real change. We’ll have to wait and see if these changes stick. For now, we are seeing a wave of companies looking for real solutions to the inequity situation and this will have an impact not only on Black associates but on all under-represented groups, including women.” 

The future ahead is still uncertain, but as we head into the new year, Mariela and the Red Shoe Movement are more focused than ever in ensuring that she and her team continue to help women prosper and thrive in their careers.