Why More Women Are Turning To Entrepreneurship

The Hidden Advantage of Women in Leadership

  • The ability to network
  • Collaboration
  • Communication, both oral and written
  • Critical thinking

Women have been proven to hold a key advantage in these soft skills–a study by global consulting firm Hay Group found that women outperform men in 11 of 12 key emotional intelligence competencies. According to Richard E. Boyatzis, Ph.D, one of the study’s developers and co-owners, “… If more men acted like women in employing their emotional and social competencies, they would be substantially and distinctly more effective in their work.”

Better Problem-Solving
People who differ from one another in gender, ethnicity, or other identities bring a diversity of perspectives to an organization, which enhances creativity and encourages the search for novel information.

This, in turn, leads to better decision-making, and ultimately, greater success. A study on female representation in top management found that companies that prioritized innovation saw greater financial gains when women were part of the top leadership ranks.

Additionally, another report by the Credit Suisse Research Institute discovered that companies with one or more women on the board delivered higher average returns on equity, lower net debt equity and better average growth.

Building Trust
According to Pew Research Center’s Women and Leadership survey, 34% of American workers say that women have an edge over men when it comes to being honest and ethical, while just 3% believe men are better.

In today’s high-visibility world, where trust is a valuable and fragile commodity, it’s more important than ever to ensure that a company and its leaders are always acting in an ethical manner.

Failing to uphold ethics-based behaviors can have serious consequences and negative long-term implications for any organization. On top of declining team morale, lower productivity, and internal turmoil, unethical behavior can result in financial loss, a significantly damaged public reputation, loss of confidence from investors, and much more.

In the words of Nidhi Raina, Head of Personal Excellence and Organizational Transformation at Tata Consultancy Services, “For any initiative, return on reputation–values and beliefs, as an organization and as an individual–is as important, if not more so, as return on investment.”

From professionalism to collaboration, to a supportive management style, to a cooperative problem-solving approach, women possess skills that make them invaluable assets. When women combine these capabilities to fuel their leadership, they achieve qualitative cultural gains and win quantitative business success alike. By productively integrating and advancing both soft and hard skills, female leaders innovate the organization itself and drive sustainable growth.

To charge what they are worth

Unfortunately, the gender pay gap has remained relatively stable over the last 15 years or so. The Census Bureau found that full-time, year-round working women earned 80% of what their male counterparts made in 2016. If change continues at the rate seen since 2001, women will not reach pay equity with men until 2119.  Do we want to wait another hundred years? Certainly not, which is why women are favoring entrepreneurship. If you’re the boss, you are in the unique position to set your own rates and charge what you’re worte.

To have more control over their future

The belief that working for a company offers the most stability is a myth. Many women have experienced a layoff, restructuring, reorganization, buyout or a variation of those at some point in their corporate life. These scenarios often result in organizational changes which are out of one’s control and can have a negative career impact. Working for yourself means you are in the driver’s seat. This is a powerful statement because you not only have control over your business activities but also whom you work with including clients and business partners.

To advance more quickly

More women are starting businesses to escape the glass ceiling. A fascinating study published in the Harvard Business Review tested the theory that women aren’t promoted as quickly as men because they behave differently. The study, using sensors, found that men and women behave the same in the workplace, get the same amount done in a day, spent the same amount of time at face-to-face meetings with their superiors and scored equally in performance evaluations. These results suggest that the differences in their promotion rates weren’t due to their behavior but to how they were treated. Research by LeanIn.Org and McKinsey & Co. showed that although women and men say they want to be promoted in about equal numbers, women are 15% less likely than men to get promoted. The researchers say that, at this rate, it will take more than a century to achieve gender parity in the C-suite. Not surprisingly, women are turning to entrepreneurship to advance their careers more quickly.

To follow their passion

Many women are leaving corporate life because their jobs just aren’t inspiring them anymore (if they ever were). Starting a business allows you to find meaning and gives you the ability to leave behind a legacy that you can be proud of. To be truly successful, you need to find work that you’re passionate about. In a wonderful book called, Heart, Smarts, Guts and Luck the authors in their research found that without heart, few businesses become truly successful. In fact, they say that “pure brain-based IQ is probably the least essential quality for business success.”