Essence of Enterprise - Male and female entrepreneurship

Optimising performance, making differences matter.

Essence of Enterprise - Male and Female entrepreneurs

Why is it that businesses that have a good balance of male and female leaders outperform those dominated by one or other of the sexes?

One recent study by the American non-profit organisation Catalyst, which focuses on researching gender issues, linked better financial results with greater gender diversity among the Fortune 500 companies. Another study by the same group found organisations with female CEOs can outperform the S&P500 by as much as three times. Meanwhile, research from Columbia University highlighted the positive correlation that exists between the performance of companies and the proportion of women it has among its top and middle management ranks.

At the same time, study after study show that the similarities between the sexes are more apparent than the differences when it comes to business.

“There’s certainly a lot of speculation around what the differences are – and to what extent these differences are in fact driven by gender,” says Birgit Neu, Global Head of Diversity and Inclusion at HSBC.

Level of goal attainment among male and female entrepreneurs

Ms Neu believes the clue to why a gender balance drives performance links to the diversity agenda rather than gender per se. She says that organisations that unite their people around a common goal and look to build diverse teams are more effective at blending the qualities they need for success.

“Once you have a common goal and you’re looking at building diverse teams, it becomes about identifying what the right behaviours are for the people you’re working with, ensuring you’re enabling behaviours that encourage collaboration and teamwork,” she says.

If this is the case, it raises an interesting question for entrepreneurs: how they can most effectively optimise their own performance as individuals at the top of their organisations?

As with other studies, data from our Essence of Enterprise study highlights that successful male and female entrepreneurs are similar in many ways.

For example, both men and women are, on average, aged 28 when they make their first foray into entrepreneurship, both set themselves comparably ambitious growth aspirations, and both largely agree on the top challenges facing the business community today.

Male and female business owners are also equally driven by motivations to be their own boss and do the best for their family. Indeed, approximately half of all entrepreneurs expend significant effort on obtaining financial security for their family (55 per cent), doing something they enjoy (48 per cent) and bringing new products and services to market (47 per cent).

As such, when we think about how diversity contributes to success, what we are really discussing is the idea of marginal gains – or optimising performance.

In order to do this, it is important to recognise that differences do exist between men and women at all stages of the business lifecycle.

For example, when starting a business, men are slightly more likely to be motivated by financial reasons such as increasing personal wealth; while women have a tendency towards lifestyle-related motivations, such as pursuing their passion and having greater flexibility over their work-life.

When it comes to management, leadership and future growth plans, approaches can also differ. Male entrepreneurs are more likely to prioritise leading from the front and focus on business development activities – such as increasing sta ng and opening new offices.

Male and female entrepreneur goal attainment around the world

Female entrepreneurs, on the other hand, focus more on accountability and particularly the environmental, social and governance responsibilities of being a business owner. They place more emphasis on finding new solutions to old problems and inspiring and educating others. They are also less likely to perceive obstacles and barriers to growth than male entrepreneurs. To Ms Neu’s point, these different traits can be blended in ways that make for a more effective team. However, that starts with individual entrepreneurs identifying their own strengths and considering how they can balance their own performance individually and through effective team building and management in order to optimise their success.

“ There’s a lot of research that shows that women spend a lot more time concentrating on empathy, relating to their customer and being able to market very well to their customer. I think that’s a huge advantage. Women should acknowledge it as an immense strength that they have.”

Caroline Pugh, Chief of staff, NavHealth

At present, however, it appears that achieving this elusive balance is a work in progress. Male entrepreneurs are much more likely to report having achieved their financial goals. Female entrepreneurs report high levels of personal goal achievement. These levels of goal attainment are more or less directly aligned with the business priorities of their gender.

In turn, this suggests that the question of diversity is as relevant to independent business owners of both genders as it is to large corporates and organisations. In fact, if entrepreneurs consider how to bring the opposite male or female perspective to business decisions it could have an optimising impact not just on the bottom line, but on their own sense of achievement too.

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