First published in the Financial Times on 2nd July 2013.
Diversity makes organisations more resilient
I’m convinced this may be the most entrepreneurial generation of women yet. For example, last week I spoke on a panel at a British Library event offering advice to companies in the food industry. I would estimate that at least half the audience was female: such a ratio would have been inconceivable even 10 years ago. When I started my first business in the early 1980s few women started companies. I predict that in the coming years there will be a dramatic increase in the numbers of successful start-ups headed by women.
This remarkable shift is almost never discussed yet it represents a profound change. The male need to compete and dominate combined with the fact that women give birth and nurture children, meant that men always tended to assume leadership positions.
But I think patriarchy in entrepreneurship is ending. Surveys indicate that women in the west are narrowing the gap with men in terms of personal wealth. Moreover, they are also responsible for more than 80 per cent of all purchasing decisions and so are probably better placed to supervise new product development, marketing, customer relations and many other aspects of business operations.
Meanwhile, I have found women tend to have a higher emotional quotient than men, and hence are well-equipped for the modern workplace. Frequently, they are less egocentric and better at team-building. Women now make up the majority of graduates in many professions, including law and accountancy, traditionally the source of many business leaders. Their ascendancy seems certain.
Moreover, according to a survey late last year by Dow Jones VentureSource, which tracks start-ups and their investors, new companies have a better chance of going public, operating profitably or being sold for a net gain if they have women founders or board members.
I suspect a mix of the sexes at the top is helpful because it introduces a broader perspective and a calming influence. Diversity in general makes organisations more resilient. Many businesses fall apart thanks to testosterone-fuelled disputes and founders overreaching thanks to rushes of hubris that tend to afflict men more often. Women are well-placed to curb such excess, and keep a project on course with more thoughtful management policies.
In discussions with female entrepreneurs I often sense they are more risk-averse than their male counterparts and less willing to sacrifice family life for the business. Neither of these traits is a negative: over-ambition and burnout are prime causes of bankruptcy and commercial failure. Half the secret of business success is staying alive (both in a corporate and personal sense). Perhaps women are less likely to engineer the most spectacular, world-beating winners – but they will surely go from founding less than 10 per cent of all businesses to at least 30 per cent within a decade.
In the west, women have historically been more likely to start a business later in life, as a second or even third profession – quite possibly after having children. That is now changing, as younger female graduates opt to become their own boss. Of course, there remain challenges and obstacles, from raising capital to juggling family commitments.
In the developing world, women are responsible for half of all micro-businesses. Many are part-time and never expand but as this generation grows up having seen their mothers working for themselves, so they in turn will be more empowered. In my experience, men and women alike tend to care more about their mother’s opinion of their career choice than their dad’s.
What practical difference does this make? I’m not sure. Will the emerging army of female entrepreneurs start to display more masculine traits, or will entrepreneurship as a vocation take on more feminine characteristics?
I suspect there will be fewer of the old-school, macho entrepreneurs in charge. A classic example is Bernie Ecclestone, the 82-year-old Formula One entrepreneur, estimated to be worth $3bn. In an interview last week he said he had never known joy, and described how on his wedding day he and his bride couldn’t find anywhere to have lunch – so he went back to work that afternoon.
Roll on, more female entrepreneurs, I say.