When it comes to entrepreneurs, women shouldn’t be underestimated.
There are countless studies that prove this statement to be true. Women-led businesses are outperforming their male counterparts while being underrepresented in corporate leadership.
Why is this?
According to Catalyst, the nonprofit organization that promotes inclusive workplaces for women, women account for around 45% of the employees in the S&P 500, but only 5% of CEOs and around one-quarter of senior-level managers and executives. There are great examples of female CEOs and executives, but sadly too few.
Companies helmed by women tend to earn higher revenues than those by men (about 13%), and in a 2016 study of entrepreneurs, finished 9% above the average for all entrepreneurs. Put simply: women leaders represent all-too-frequently-untapped resources.
What’s more, a 2016 study by BNP Paribas Wealth Management found that 90% of female entrepreneurs expected their company’s profits to grow or remain stable in 2017. “They are more ambitious and have been more successful than their male counterparts,” boasts Sofia Merlo, co-CEO of BNP Paribas Wealth Management.1
Female millennials seem to be illustrating this trend in a special way. In the U.K., for example, women now make up 59% of entrepreneurs under 35.2 (A study out of the U.K. shows this segment is more successful, but far less likely to brag about it.)
Why are female leaders so successful?
Several theories exist, but I believe there are four key reasons women excel as leaders:
- Female entrepreneurs are methodical and, as implied earlier, less prone to overconfidence. In a 2014 study of business leaders, males tended to rate their own performance higher, but at the same time third-party observers rated the female leaders as more effective.3
- Women have strength in communications, collaboration and empowerment. These important areas are commonly associated with women. These attitudinal aspects spill over into the workplace, and I cannot stress enough how important I believe they are to achieving one’s leadership goals.
- The power of female consumers is immense. In 2014 women controlled 64% of household spending—68% in Canada!—accounting for $29 trillion globally. That number is expected to grow to $40 trillion by 2018.4 Who knows how to best serve female consumers than female business leaders? If you aren’t thinking today about how to tap into your female consumers, you need to be. Make it part of your 2017 plan.
- Women get things done! It’s not just the “warm and fuzzy” traits or soft skills in which women leaders shine. In fact, a 2012 study published in the Harvard Business Review found that women excelled most in “taking initiative,” “high-integrity and honesty,” and “drive for results.”5 Bob Sherwin, COO of Zenger Folkman, the firm that conducted the review, speculated this may be because of the double duty women leaders often have. This dispels the myth that a woman’s family duties negatively impact her business activities – and shows them as a strength instead of a liability.
The good news!
Times are changing, especially here in Canada.
A recent global study found that women now make up 23% of executives in Canadian financial services firms (third only to Norway and Sweden). “Unlike other countries with many women in senior positions, more Canadian woman have also broken out of traditional female executive roles, such as HR and marketing,” the report noted.6
The number of women-led start-ups have been growing sizeably over the past 12 years.7 This bodes extremely well for the success of up-and-coming businesses. However, female entrepreneurs often continue to face different scrutiny when raising funds compared with their male counterparts.
Perhaps the best news is that the attributes contributing to the success of women-led businesses can be embraced by all entrepreneurs. Methodical ambition coupled with the appropriate degree of confidence, stronger communications and collaboration skills, deep customer focus, initiative, integrity and drive are all attributes that can, and should be, embraced by all leaders.
Within the Lumber and Building Material industry I’ve witnessed how capable and successful women leaders can be. Many are exceptional. And as the studies suggest, women control a significant portion of household spending in Canada and around the globe.
My challenge to you: if your business doesn’t include women in a decision-making capacity, you may want to rethink your management strategy. All the indicators suggest women know what they’re doing.