How Women Have More Success in Business
Women make more successful business owners than menAll of us who take the leap to start our own business knows the chances of creating a successful enterprise can be low, with 80% of new businesses failing in the first five years. But one way to be part of that 20% success rate is to be a woman, with 85% of new businesses that succeed in the first five years being run by women.
 
So how does that work? There’s a lot to do with how women and men take risks and when they set up businesses.
 
Many women who start up businesses come armed with years of experience, a broad range of skills and a pragmatic mind set about how best to systematically create a successful project. They are also fed up with industry glass ceilings that can be so very slow to crack and smash. Why put up with pay inequality, oversized, under warranted egos and being part of a minority when you have options?
 
Whereas there’s a much larger number of new businesses that are set up by men who with the enthusiasm of youth and strong self belief create a new business with a great idea (or not) but with little experience. They capitalise through investments from family and friends, believe the market will suddenly realise how much they need what they have dreamt up. Sadly, most of these types of businesses fail within the first five years and much of that seems to come down to experience.
 
The differences are stark. 
 
What I find fascinating about these scenarios is the costs and benefits to us in society. How many medium and large companies are missing out on significant profit opportunities by treating their female staff unfairly? 
 
If these businesses figured out that a more diverse management team that included an equal number of women and men would make for a more profitable outcome then they wouldn’t be doing such stupid things that make the women leave (with all their talent and corporate knowledge).
 
As businesses with more women on their boards have greater profits and are more successful you’d think the decision to improve the odds and the promotional ladder would be simple. But apparently not.
 
So very skilled, talented, tough and capable women are stepping out and making their own businesses work and the banks are starting to realise they are sound investment options, more sound than the young lads with limited experience but tonnes of passion.
 
But what about the impacts on society with having more women setting up more sustainable businesses? They are creating employment, paying taxes, doing business with others they resonate with and, in effect, growing the economy. So really, is there a loss to society in having old fashion thinking to women in management that strongly encourages women to leave to setup their own profitable enterprises?
 
I think there is. 
 
Handmade bird brooches and necklaces by Creatively BelleWe need companies to be as smart as possible and we need new businesses formed that can go the distance. With the drastic drop off of women progressing through medium and large businesses the example set to young women and men is dismal. The messages remain mixed, with one side saying girls out perform boys through out school and university and the reality of progressing on the corporate ladder being stifled and often capped.
 
This is such a significant failure for companies to repeatedly be choosing year in, year out. It costs money for all involved with profits and equal pay, it is sexist and ugly. If directors and management are paid bonuses based on performance on profits then they are screwing themselves out of cash by putting a lid on profits because they won’t let women progress through the senior ranks. Now that’s just plain stupid, or as my mum would say, cutting your nose despite your own face.
 
Karen James, formerly of Commonwealth Bank of Australia, writes in her book “On Purpose” about the purpose of a company being to make profit and do good.
 
If you’re limiting one and missing easy opportunities for the other then what are you actively choosing for your business and the economy you’re meant to be part of?
 
I think women are more successful with running and growing their own businesses for a whole host of reasons, namely from starting with more maturity and experience, understanding the power of money on a more wholistic level, to being focused on strong relationships within the business, carefully weighing the risks involved with a view of strategically minimising them and taking a more analytical and planned approach.
 
Business is done person to person, it is all based on relationships. Maintaining and nurturing healthy relationships empowers you to grow, whether that’s with suppliers, collaborators, customers or staff, strong relationships will make the difference.
 
But this is often learnt through experience and maturity. Over the years you learn a great deal from the crappy behaviour of some about how not to treat others. You learn that professional, respectful and enjoyable relationships are those that you want to connect with. 
 
Years of experience of managing budgets at work and home gives you a great deal of respect for money. You know you can’t spend it twice, that incoming funds need to exceed outgoing dollars, paying in a timely manner makes a significant positive difference and interest adds up really quickly. You also learn that it takes a very short time to get into trouble with money and a much longer time to get out of strife.
 
Women tend to take risks differently to men and maturity sees risk differently to youth. All business owners deal with risk all the time but it is how you approach it, manage it and reduce your exposure that makes the difference. Most interestingly it can be the small things that make the biggest difference with risk. The Australian Army has a team who comes in during the planning stage and asks all the nasty questions about scenarios to find the weak points. It’s about thinking through situations, asking why and how, where’s the surprises and what are the alternative options. It doesn’t take much really but the end result can be radically different.
 
That’s when we get down to the analysing and planning. It can seem at times that there are loads of messages about women being poor at analysing and it’s a load of old Victorian rubbish. Women are the ones who think through consequences of behaviour, that’s analysing a situation. Looking at the risks involved and how to reduce or negate them is all about being analytical. 
 
Working on plans and figuring out how to make something successful is key for a profitable business. It’s about knowing what you want to achieve and then looking at the various ways of getting there. With maturity and experience, this is much easier.
 
So why would a corporation set up a system that would encourage these amazing human resources to leave? I don’t have an answer for that, aside from foolishness.
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