Wednesday, December 20, 2006

Women in Science -- The Poor Babies!

Women in Science: The Battle Moves to the Trenches By Cornelia Dean, Health & Fitness, New York Times, December 19, 2006, Tuesday; Late Edition - Final, Section F, Page 1, Column 2 (2506 words).

So, there’s still a war going on and women are now getting down and dirty in the trenches, is that the message from Ms. Dean and the NY Times? It’s the NY Times, of course, so it MUST be even-handed with a balanced news perspective, right? And because of the “gravitas” of the NY Times imprimatur, you can Google the title and find over 13,000 other newspapers citing the very same article. Ah, yes, fair and balanced news about women of achievement once again hits the wall. NOT.

To evaluate the “objectivity” and the “balanced” nature of this article, we examined each paragraph, and then split them between two columns: the left hand column listed each of the positive paragraphs and the right hand column listed all the negative paragraphs written by Ms. Dean, quoting the women in science at the Rice conference.

There were merely 22 paragraphs in the left (positive) column, encouraging women to pursue science careers. Oh, wasn’t that a wonderfully persuasive conference in Houston!

The right (negative) column contained 64 separate paragraphs, telling women in science they are losers in a female loser world. They tell women they haven’t a prayer of a chance. It’s all “trouble talk”, telling women NOT to consider a science career: “forget it,” “don’t even try” or “watch out for the boogie MAN, MEN, MALES, all of whom are out to get you in the academic science environment. Or, my favorite distorted logic, “if you need encouragement, just talk to us female mentors, girls – cause we’re so-o-o-o-o positive.”

If I were a woman considering a science career, the overwhelming message to me from these women would be that I haven’t a prayer of a chance at achievement in scientific academia unless I’m ready to be a sacrificial lamb or a devious and conniving she-devil who plays the game “just right” to get that special edge. The message is: if you fail, do what all women in science do -- blame the men, the university, and the global village that doesn’t give you what YOU think you need to succeed.

But, what is most upsetting is how one of the female speakers dismissed the very important work and accomplishments of the women of science at MIT. Dr. Steitz trivialized 4 long years of intense negotiations and collaboration at MIT as simply “a report [that] criticized the institute’s hiring and promotion practices.” Perhaps the cavalier attitude of the women at the Rice conference explains why they are not give the credibility they desire. For a more admiring and complete review of exactly how the women of MIT accomplished diversity at this dominantly male school of engineering, see:
Not Every Apple in Cambridge is Rotten.

Women have a choice: they can whine and cry about the injustice they have seen or experienced. “Blame everybody else,” is the option presented at the Rice conference and at the 13,000 newspapers and blogs that supported that view. Women who make that choice must live with the consequences: whining in the academic or scientific world gets you nowhere except a reputation as a baby.

Women can quit: they can “opt out” as we so euphemistically hear everywhere today. “Walk out on the boys” is the advice of one woman of science. Women who make that choice must not want the scientific academic profession as much as they suggest. Women who make that choice will get you a reputation as a quitter, in any profession.

In both cases, don’t you just feel like saying “OHHHH, the poooor babies. Here let me kiss it and make it all better!”

Women could make a different choice. Women can do what the female faculty of MIT did: define the problem that you are willing to address, deal with the problem from the framework of change that you are willing to own, define alternative strategies, build the business case for each option, get support from others with similar vested interests, select viable alternative paths toward the objective in which you believe, and then work together – with other like-minded women AND MEN in your organization -- to implement effective, long-term change.

That doesn’t attract the attention or the headlines. It simply gets the job done. That, little girls, is what women in leadership do.

Nobody was more adamant that I in reacting to Dr. Lawrence Summers’ statement (in January 2005) about inborn gender differences that might predict female failure in science and math. Nobody! But nobody will be as strong as I in reacting to women-on-women verbal intimidation, stereotyping, prejudice, bias, and wrongful attribution of cause: effect relationships. Nobody!

If I were to tell my daughter, “It’s an evil world out there, with everyone in pants out to get you,” she is likely to believe me and therefore not make any effort to overcome the risks I tell her about – even if they represent the biases of 20 to 40 years ago.

If I were to tell my daughter the world is so confined and limited for you that you can ONLY have a family OR a career, that you can ONLY have tenure or children, that you can ONLY work 70 hour weeks, then I am telling her to aspire to only half her potential. And she might believe me.

Whatever we tell our daughters, they are likely to believe us because we are the first sources of authority with which they have experience. They are very likely to believe us. So we should be telling them about opportunities in THEIR world, in THEIR future, based on THEIR education and opportunities, not merely on the world in which we were raised.

The NY Times and the women of Rice University’s conference, do our daughters a major disservice. At least we should be giving them equal measure of hope, of opportunity, of context, of vision, of strategy. We should not simply repeat the “old wives’ tales” that were handed down to us by our grandmothers or even our mothers. Our daughters deserve better.

Saturday, December 2, 2006

The Path to the Boardroom -- Part 2

In October 2006, reported that for the first 10 months of 2006, 227 women were nominated to corporate boards of directors in the U.S. and selected international nations.

Is this a significant number or not? The answer is YES: not only are we seeing continued gains per month, but also more firms in more states are announcing new female directors added to the boardroom. The 10 month total of 227 female nominations represents 27% of the total number of board seats held by women (827) on all Fortune 500 firms as reported by Catalyst Inc. in 2005.

Catalyst Inc. also has tracked the number of women added to boards of directors on Fortune 500 firms over the past 11 years (1995 to 2005). LIke most of the "women on boards advocates," Catalyst reports that women have been added to these top Fortune 500 boards of directors at a rate of "only" one-half of one percent a year over this timeframe.

But they all ignore the very important fact that the TOTAL NUMBER of board seats available for BOTH men and women at these firms DECLINED by 645 seats as boards grew smaller in response to pressure for better governance.

Women, on the other hand, INCREASED the number of seats they occupied by 227 seats between 1995 and 2005, compared to the men who LOST a grand total of 872 seats during that same period.

This is what it really looks like:

Not too shabby a performance at all!

Wednesday, November 15, 2006

The Path to The Boardroom?

My sister is a marvelous pianist. She tells the story of visiting New York City where she bought a book on music theory from the gift shop of the Juilliard School of Music. She then sat down to read it at their coffee shop, just so that she could say,

“I studied at Juilliard.”

She was joking, of course, unlike many who argue that nonprofit board experience qualifies women, prepares them or educates them to meet today’s demanding governance requirements as a director on a major public company board.

One day, perhaps we will finally understand why women keep telling each other this myth. Why is it that women journalists ignore the competence, intelligence, talent and sheer hard work evidenced by the real women on today’s boards? Why do women persist in telling each other that a little nip here (volunteering on a nonprofit board) or a tuck there (at a quickie "financial statements for dummies class") is all that a girl needs if she wants to be invited to dance in the ballroom?

When I attended directors’ training at the graduate school of a major university, the women with real corporate board experience in attendance told me, flat out, “nonprofit board experience is not comparable in any way to for-profit experience.”

When I've talked with women serving on the top Fortune 1000 corporate boards in California, they tell me, point blank, “there is no transferability of experience from a nonprofit board to a for-profit board.”

When I analyze the experience of the women who currently hold corporate board seats, I find that over 41% of their competence came from a successful long-term corporate career track and that 88% of those talented women chose a corporate path PLUS either an entrepreneurial path or an investment/securities path. Only 8% of the experience cited by women serving on boards today is by way of the nonprofit path.

My sister does no harm with her wry humor. Those who advocate that women should pursue volunteerism or nonprofit roles or quick-and-dirty paths into the boardroom do serious harm by implying that women need an “easy path” or some special preferences if they want to be directors. These advocate do a disservice to the very competent and capable women who have achieved board roles by the same path that their male peers pursued.

And what is the message they are giving to the next generation of women about how they should invest in their careers for the 21st century global economy?

There’s only one path into the boardroom and it’s the same path that women AND men pursue at Juilliard or any other venue where competence is the gold standard. It’s “practice, practice, practice.”

Wednesday, April 5, 2006

Outstanding Women

Corporations and government are spending a lot of money trying to motivate, to attract, or to incent women to do something which, apparently today, a lot of women really do not want to do: work in the corporate world, rise to the top of the corporate ladder, and invest in profit-oriented careers.

Corporate and government investments in diversity programs abound. Everywhere we hear about new incentives designed to keep women in the workplace. We seem to want to pay women to stay around, yet women appear to prefer “getting out of business”. It reminds one of price supports paid to farmers in an attempt to keep uneconomic family agribusinesses in operation, in the face of global competition, because we have some historic or emotional attachment to the family farm.

As consumers and tax-payers in a democratic society, we should not like the idea of ever-increasing levies on our investable money, either in the form of price increase or higher taxes, going to support so-called family-friendly programs IF the incentives are not producing the intended results. If, after we spend a lot of money on such programs, women are STILL “opting out” of business career tracks, then we are not getting our money’s worth.

From Basic Economics by Thomas Sowall [p. 192]:

“Where the consumers do not value what is being produced, the investment should not pay off. When people insist on specializing in a field for which there is little demand, their investment has been a waste of scarce resources that could have produced something else that others wanted. The low pay and sparse employment opportunities in that field are a compelling signal to them -– and to others coming after them -– to stop making such investments.”

Women say they “value” family and charitable or community work more highly than mere for-profit work as they walk out our corporate doors. Are they telling us the complete story? Are women telling us the whole truth and nothing but the truth?

Why are women quitting? Why do we call it, euphemistically, “opting out?” Why would so many women toss away a career? Why do so many women consciously accept lower revenue opportunities in exchange for more personal hours? Why do so many women consciously give up leadership opportunities? Are women really telling us that they see no such opportunities or perceived benefits out there in the corporate world, anymore?

If women don’t like what they see in the corporate marketplace, are they telling us what they dislike about it? Women constitute a majority of financial officers and top financial management in corporations. Research points to extensive stock options post-dating, among a host of other corporate financial fraud, from 1995 through late summer of 2002 -- just after Sarbanes-Oxley was passed. Did women leave corporate financial positions because they saw this fraud and dared not to report it?

We see a similar pattern of female exodus from the near top levels of law, finance, accounting, securities and technology firms as well as academia. Did these women see the same problems, but refuse to deal with the bad news?

The past two decades have seen the greatest possible investment of American wealth in internal corporate diversity and inclusion programs, the greatest investment in the education of females, the toughest enforcement of anti-discrimination laws and the greatest outlay on internal corporate anti-harassment training. Yet, it appears that all of that is still not enough to entice women to stay the course and pursue corporate leadership roles, responsibilities, and opportunities.

Either all the investments had little or no traction, no benefit for women at work. Or all the investments were for products or services that were not enough to persuade women to stay at work. Which is the reality?

When women do quit the corporate track, where do they go and what do they do? The women who leave are not a uniform group -– they have many different economic preferences. Some women stay at home with children and provide the family support services.

A very large number of other women start their own businesses. What kind of leadership do they provide there?

Women entrepreneurs tend to enter the soft industry categories, tend to start businesses in low income sectors of the economy, tend not to form employer firms, tend not to hire as many employees when they do hire workers, tend not to pursue or gain corporate or government contracts, tend not to pursue or gain angel or venture funding, tend not to grow their businesses into larger firms, and tend not to accumulate investable wealth to become angel or venture capitalists.

Based on the evidence, it would appear that when women have the opportunity to make their own economic choices, they prefer the low value options.

Should we expect women to be creative enough to provide the full spectrum of child- and family-support services which women say they “value” so highly? Or might it be more accurate to say that women value only those child- and family-support services that are subsidized by corporations and government price supports?

Should we expect women to value child- and family-support services highly enough to be willing to pay for quality products and services out of their own or their spousal discretionary incomes?

Do women do that? Or do women expect to be able to maintain their current quality of life, personal consumption patterns, and the entertainment or discretionary expenditure levels of their spouses while “someone else” invests in the child- and family-support services which women say they require as a prerequisite for staying in the workforce?

Women spend and consume prolifically. Women drive consumption in the U.S. Do women value investments and the returns in the same way as the rest of the marketplace? Do women use the same measures of progress, quality of life, and productivity as the rest of the marketplace?

Women say they “value” family and children above achievement and economic incentives. Yet, today, children and family are woefully obese; US child mortality is high; US adult health is lower than in many European nations; the US educational system has declined to record lows; and prison incarcerations have reached all time highs.

Does this reflect the high “valuation” that women and we as a nation purportedly place on children and family?

It is easy to assume that all women act in the same manner, hold the same beliefs, pursue the same goals. Too easy. It’s also easy to assume that any and all financial investments made on behalf of the female gender are wise and worthy. Too easy.

Women are economic actors on the same stage as other marketplace performers. We need to examine and investigate their motives, behaviors, and preferences just as we would any other economic being.

And we also need to evaluate the costs, the benefits, the investment, and the returns associated with supporting this particular segment of the population in the manner to which they have delightfully become accustomed.

Thursday, March 30, 2006

Where Are the Women Leaders?

In his book The Seven Habits of Highly Successful People, Steven Covey describes the difference between management and leadership. A manager heads up the safari team, hacking away at a jungle path with machetes, proud of the productivity of the group. A leader is the one responsible for ensuring that everyone is headed in the right direction. After climbing to the top of a tall tree for a better view, only a leader has the perspective and courage required to say, “Stop! Wrong jungle!”

We need more women leaders, but we seem to be stuck hacking away at small shrubs, eking out minor, if not dubious, gains; trying to persuade ourselves that “We’re making progress;” when in fact we truly are in the “wrong jungle.”

We seem to be diagnosing the many problems women face -- from the Mommy Wars, the women don’t take risks arguments, women’s aversion to conflict and hierarchies, women’s tendency to be “the helpers”, to all the challenges of work-family balance. There’s certainly a lot of research on the problem, chopping away at the symptoms. Our good “doctors” have done a credible job analyzing what they have observed to be wrong among the patients. Perhaps we need to develop more and different treatments. Instead of the palliative approaches we’ve been trying, perhaps we need to be looking for what it takes for women to take on true leadership roles?

Women and the Mommy Wars

One example of the jungle drama, the focus on symptoms, is the so-called battle between feminists and stay-at-home non-career types depicted in the recent spate of “Mommy Wars” books. It represents a good example of the “power dead even rule” described in detail by Pat Heim and Susan Murphy (with Susan Golant) in their book, In the Company of Women: Indirect Aggression Among Women.

Women on both sides of the “Mommy Wars” debate feel threatened. “One side” sees the prospect that the “other side” might gain sway (or power) in the media, or might attract money for programs, or otherwise might gain advantages that would put them at a disadvantage in this zero-sum game. Those with the lower sense of self-esteem attack and sabotage those whose possible success appears threatening to them -– in an effort to keep the balance of perceived power even.

Unfortunately, both sides suffer from low self-esteem due to a constant barrage of false expectations from the media, the entertainment industry, and advertising sources. Feminists feel their historic progress in accessing higher-paying jobs and professional credibility is threatened. Stay-at-home mothers feel their traditional family values are threatened. Both struggle with low self-esteem, and both strike out at those whom they believe have greater relative external power, whether in fact they do or do not.

Both lose in the long run. We need women leaders to tell the Mommy Wars combatants that the damage they do to each other by their sabotage is far more serious than any threat that outside forces could possibly levy on either side.

If you want to persuade women to buy a product or service, you have to show that a lot of other women think that the product or service is terrific. The key question is “which other women?” Not all women are equal, but women tend to behave as if women should represented one cohesive, coherent group with uniform values, ideals, expectations, and wants or needs. Women need to accept the reality that we cannot “all work together” in some false gender-based happy family. Men accept the reality that men represent a wide spectrum of demands. Women have to learn to accept the difference paths that women take, that they are all valid, and all women will never be united together by some amorphous common denominator that they all share.

Women and Risk

One thing that women do tend to have in common is a greater awareness of risk compared to men. Women believe they can overcome these greater perceived risks if they could find a lot of other women viewing a product or service positively – then it must be a relatively safe choice. If only a few women favor a product or service, then that would tend to reinforce the perceived riskiness of the choice. The media plays to this greater awareness of risk by hyping studies that report on how few women are on boards, how few women are in top management, but how many women follow the escapades of Tom Cruise.

For some women, the areas of greatest perceived risk are their family status, their livelihood, and their children or child-bearing potential, according to Heim/Murphy.

Women have tried to minimize risks in these areas by trying to persuade governments or corporations to underwrite “diversity programs” which have as their goals:

1. insuring against the risks of personal losses or
2. reducing the risks they experience in these areas.

Examples include:

Alternative work schedules (so women won’t have to risk absence from family or children)
Flexible work schedules (providing women more choice in their hours in exchange for lower wages)
On-site day care (keeping transportation costs and day care costs low)
Limit job-related travel (minimizing family absences)
Redefining the job in family-friendly terms (reducing the risks of conflict with family commitments).

Where women have been unable to get government or corporations to subsidize their risk reduction efforts, women themselves have made economic choices that minimize their perceived risks. These take the following form:

Pursuing internal staff and support roles
Accepting lower pay positions.

In both types of circumstances, the women are choosing jobs whose hours have greater predictability and avoiding management or supervisory roles and responsibilities. Women who tell other women that the path to a corporate board of director role is by way of non-profit board roles or public speaking engagements also are offering the promise of a “low risk” solution to a contemporary high-risk leadership challenge. The price women pay for making these choices is a lack of preparation for true leadership roles.

Women who “opt out” of the career track, leaving the corporate ladder and sacrificing top management aspirations, often enter the entrepreneurial sector with the belief that, at least there, they can control their own time and work parameters. Women-owned businesses are characterized by even lower average earnings than corporate salaries, but “opt out” women also realize a lower outlay for transpiration, childcare and other family support services, clothing and other costs associated with full time corporate work.

Women who are making such short-term risk-averse choices are failing to consider the total benefit-cost stream. In the case of governmental or corporate “diversity programs,” the benefits are high only in times of economic surplus when government and corporate entities can afford to be generous. As budgets tighten, or more conservative financial interests get elected, support of such “entitlement programs” comes into question. Financial support wanes as other demands from different special constituencies increase. And, if women are not in public office in great numbers, their ability to sustain such preferential programs is limited.

Corporations also have supported “diversity programs” when the return on their investment justified tapping this pool of female talent resources. As corporations pursue alternative international markets, they also find alternative supplies of human resources. The cost of labor in the global marketplace is comparatively lower, so corporations are able to reduce their outlay on domestic incentive programs while still reaping the benefits of a diversified workforce. Outsourcing to third world economies – where extended families still contribute a full spectrum of support services to the female worker – means that U.S. corporations have cost-effective alternatives to hiring U.S. female managers. And, if women are not on boards of directors in great numbers, their ability to advance management development programs to ensure diversity programs remain intact is likewise limited.

Women leaders need to help women understand that risk cannot be eliminated, entirely, except at huge investments of resources. Risk can be reduced by farming it out to different people who can manage different portions effectively. Risk can be managed. Risk can be insured against. And sometimes, risk simply needs to be accepted as part of life.

Women and Conflict

According to Heim/Murphy, “women avoid conflict at all costs,” preferring instead to sustain relationships by a delicate balancing act which forces external perceived power (position or rank inside the organization) to be absolutely even with internal perceived power (self-esteem). Women are advised to choose a leadership style which is “appropriate for the follower.” Thus, women are told to drop their leadership style to the lowest common denominator -- to the level of the woman with the lowest self-esteem, the woman most threatened by external power, and to the level of the weakest performer in the organization.

This means women are expected, as adults, to sacrifice the leadership style that is most comfortable for them as an inspirational, independently-minded, creative manager on a leadership track.

In order to “avoid conflict at all costs”, women avoid hierarchies where differential power might exist. Women sacrifice the benefits which diverse thinking could produce, even though women argue that diversity which includes women enhances value and productivity.

Women leaders need to educate those who follow this advice that they are sacrificing the power of specialization and task delegation as well as the benefits of trade and leverage – all of which rely upon effectively recognizing and utilizing differences of productivity, output, and power. These are among the important pre-requisites for leadership.

The tendency to avoid conflict is like the Japanese “salary man,” the preference is “to pound down the nail that sticks out.” It is a forced conformity that ensures that true leaders will not emerge from the herd. Women leaders are those who step out of their comfort zone and reach beyond the safe, but stifling world of the shared economic status of the majority.

Women Helping Others

Research also tells us that women feel more comfortable negotiating on behalf of others, rather than on their own behalf. This is like the woman in the damaged aircraft as it careens toward the earth. She prefers to place the oxygen mask on her children and husband before placing it on herself. This is Harriet Braiker’s The Type E* Woman: Everything to Everybody [Else].

Many women sacrifice their career goals “to be with their children” or their grandchildren or their spouse. Many women believe in a mission of “mentoring other young girls” -– essentially the adult version of baby-sitting or hand-holding. At many major “women’s events”, the keynote speaker can almost always be guaranteed to be some philanthropist, wife of a wealthy male executive, who describes her “passion” dealing with starving children somewhere in the worthy third world. Go thou and do likewise, is the persistent message to all women.

Yet, economists say that “Incentives matter because most people will usually do more for their own benefit than for the benefit of others. Incentives link the two together.” [Thomas Sowell, Basic Economics]

If women are acting on behalf of what they think others want in the marketplace, then they are trying to “get into the heads” of other economic actors. The incentives aimed at motivating women as individual economic decision-makers, therefore, will miss the mark.

Women need to “get back into their own heads” in order to focus on defining clearly their own personal economic priorities and negotiating in the marketplace to maximize their own future benefit stream. Women need to state clearly their own preferred and personal terms and conditions to which incentives might be directed.

Women and Work-Family Balance

Women say they are searching for “work-family balance” – how to have a successful career and, also at the same time, a successfully satisfying and fulfilling family life.

Someone once said that “time was nature’s way of keeping everything from happening at once just as gravity was nature’s way of ensuring that everything did not happen in the same place.” And Ann Landers said, “You can’t have it all. Where would you put it?”

Yet, some women persist in the belief that that imaginary world of perfect balance and teamwork is attainable. When women experience this challenge, they feel guilty that – for some inexplicable reason –- they appear to be the only women unable to attain Nirvana.

To resolve this discord, women seek solutions “out there” -– they sign up for women’s associations, women in management networks, and other relationship settings where they believe they will find the Wise Women whom they are convinced Figured This All Out -– the trick to achieving work-family balance. Or perhaps they can find women will band together to demand governments or corporations provide the programs that women believe will grant them work-family balance. When they fail to find the answer there, they switch back to women’s magazines or women’s conferences or Oprah and Martha. Because the answer must be OUT THERE SOMEWHERE.

The area where women could focus for the solutions to these problems is on “the supply side:”

1. to reassess and renegotiate the terms of the contract on their side of the “work-family balance equation” -– their own view of the balance along with that of their family
2. to create women-based business alternatives within the economic marketplace.

There is a limit to the effectiveness of programs that focus only on “the demand side” of the marketplace -– efforts that try to encourage or embarrass governments or corporations or everyone else to make all the changes required to get more women into management or more women on boards of directors.

There needs to be efforts undertaken to address “the supply side” of the economic equation -– the decisions and actions that women must undertake to either enter into the marketplace or to make affirmative choices as economic actors there.

There are just two places where women can impact the supply side. One entails direct discussions and negotiations with the members of their own families in the economic marketplace: husbands, children and extended families. The other entails direct economic action on the part of women as economic actors or as women-owned businesses. If women cannot build businesses that satisfy their demand for family-oriented support services, then how can women expect that only men and their corporations can somehow build the businesses that will serve their needs?

Where Are the Women Leaders?

Women who are leaders understand the economic marketplace and what is required of their partners, their families – but most important of all, what is realistically required of themselves.
Women leaders take steps which “maximize” their benefits or returns as much as “minimizing” costs or risks.

Women who are outstanding, women who lead, women who excel do not ascribe to the “power dead even rule.” They selectively do what men do, while also retaining their unique sense of themselves as women:

They are goal-oriented, driven to pursue ambitions without apology.
They are content (information) driven, incorporating feedback along the way.
They have high personal self-esteem.
They have a leadership style with which they are very comfortable.
They understand that conflict is an essential and perhaps necessary part of business life.
They are enabled, ennobled, and inspired by the achievements of other successful women, not merely the sacrifices made.
They have high-value, rewarding relationships with women and men, alike.
They have made conscious choices about family and accept all the consequences of their choices without guilt.

Saturday, March 25, 2006

On Risk -- Part 2

Research has shown that women seem to have a greater awareness of the existence of risk compared to men.

Jonathan Baron, in Risk: Thinking and Deciding (2000), reports on a number of studies which indicated that:

“Males were more likely than females to fall into the risk-seeker category. Women consistently gave higher ratings than men [on risk-assessment tests], thus perceiving greater risks.”

Byrnes, Miller & Shaffer likewise reported, in Gender Differences in Risk-Taking: A Meta-Analysis (in the journal Psychological Bulletin, 1999):

“… men are more likely than women to take risks, whether the risks are selected because they seem worth taking …, because they do not seem worth taking…, or because they are neutral.”

In short, we’re not sure why the differences in risk perceptions exist -- but exist, they do.

Because women tend to perceive that more risks exist, women tend to evidence more risk-averse behavior, while men evidence more risk-taking behavior. Women might choose not to pursue risky behavior, perhaps, because women might not yet see the same rewards of risk-taking behavior that men do.

Whatever the cause, men tend more toward the Lone Ranger role while women tend more toward the Tonto role. In general, it is the he who pursues the challenges, while she serves in the supportive, assessing, and scouting role -– evaluating the risks more intently than pursuing the rewards. Thus, we tend to see women more often serving in the helping and supporting roles.

Hannah Riley Bowles, assistant professor of public policy, John F. Kennedy School of Government at Harvard University, and Kathleen L. McGinn, professor and Director of Research at Harvard Business School also concluded from their research that:

“Women struggle to claim the authority to lead.”

To be a leader requires stepping out of the comfort zone, taking on greater risks or managing risk through greater initiative.

Women, like men, who take on the riskier roles implied by leadership might delegate the management of certain risks to others on whom they can rely and depend. This entails building alliances on which the risk-taker can depend – outsourcing, delegating or subcontracting.

Men historically have a long history of such contracting. Women are just beginning to learn about and use these strategies effectively. Women historically have been more comfortable with a networking model -– a peer-oriented model with and among other women. While this sister-sorority model made women feel more comfortable, it did not allow or enable women to take on the greater risks required by leadership. In fact, the networking model tends to keep all women at the same level. Tonto seldom leads.

Once a woman aspires to a leadership role -- facing, confronting, and managing perceived risks in order to attain more or higher rewards -- the question next is how that woman is perceived by other women, her peers who are still more comfortable with the networking model.

At one end of the spectrum, the other women could recognize the pioneering, risk-taking behavior of a leading woman as “path breaking” -– beating down obstacles and barriers so that they too might follow in her footsteps. They would cheer her and acknowledge her achievements because they too perceive the possible rewards, over the long term, might be worthwhile.

Alternatively, at the other end of the spectrum, the other women might say “who the hell does she think she is?” These other women would perceive the hardy woman’s behavior as reaching outside of the acceptable parameters of the expected female role – “uppity”. They would attack her risk-taking behavior as unacceptable to the more comfortable role of the network, the lower common denominator.

The responses of these other women to the female leader’s risk-taking behavior would reflect the benefits or costs which they perceive might result from her actions.

If the other women believe they would be better off as a result of risk-taking behavior of a leading woman, they would encourage her and emulate her. The benefits of leadership would outweigh the costs of giving up the protections of the network.

If the other women believe they would be worse off as a result of her risk-taking behavior, they would not encourage her. Perhaps they would sabotage her for daring to step out of the socially-acceptable role -– “the bitch!” Perhaps they would attack her to try to persuade her to not rock their comfortable boat. The costs of her “abnormal” behavior might set a bad precedent, putting all of them at greater risk.

Those who chose to attack her behavior would be perceiving the risks associated with her actions to be greater and more costly to all of them than the benefits that might accrue from her leadership.

The leaders among women who feel successful in their willingness to challenge and manage risks have peers who support and encourage them. On the other hand, those female leaders who feel the “loneliness at the top” experience the silent desperation of being out there, on the leading edge, alone and unacknowledged by their peers while they also try to face the uncertainty of challenging risks – real and perceived.

The risk-taking female leader who experiences the barbs of her risk-averse peers can either ignore them or attempt to bring the others forward with her. The risk-taking female leader could also just give up and merely return to the comfort of the fold.

If her peers are really afraid of the risks, then the leading woman probably will not be able to persuade them to change their colors and test the waters with her. She will only have the choice of going forward alone or slinking back among the protections of her risk-avert sisters.

Thursday, March 16, 2006

Back to Basics

The most fundamental concept in business formation is that boards of directors are elected by stockholders to represent the interests of shareholder investments in the entity.

The election of directors is a function of who holds a majority of the shares of stock in the entity.

The control over the designation of directors is derived from the investment (the valuation) underlying the company.

At the start-up phase of a business entity, the investment deal (whether venture or angel capital) will allocate a number of seats on the board of directors to investors in proportion to their shareholdings in the entity: whether the shares are preferred or common stock or possibly all shares held in total.

If women are not participating significantly in the shareholding as angel capital investors or venture capital investors or advisors, then we would expect that women would not be represented to any great degree among the shareholders of start-up entities.

Therefore, we would expect that the absence of women shareholders would presage an absence of women on boards of directors of start-up companies.

This tends to be confirmed as we look at the smaller of the top 100 or 200 firms in an urban area -- start-up boards tend to be very small (3-5 directors), and women tend not to be present on these boards of directors.

If women have little or no experience participating in the start-up of new entrepreneurial entities, then we would expect that women would not be present in significant numbers in the advisory roles of the mature companies into which the grow and mature.

This tends to be confirmed by the data showing that the size of the boards are increased in order to accommodate bringing one or more women on board, at maturity, to provide diversity or independence of the board composition.

Many women advocates argue that business "should" allocate a certain percentage of their board seats to women.

Perhaps an additional strategy worth considering might be that talented and competent women "should":

  •     get out into the entrepreneurial business environment

  •     pool their collective discretionary wealth into angel and venture investable funds

  •     identify viable, profitable women-owned business enterpreneurial entities worthy of their investment BECAUSE of their rate of return potential, and therefore

  •     women investors would be qualified to elect THEMSELVES to those boards of directors of women-owned entrepreneurial firms

  •     women directors would be acquiring the experience to grow those companies into profitable, mature entities with growing shareholder value and

  •     women-owned businesses would have greater opportunities to grow and attract additional capital and

  •     women-owned businesses would afford more female investors with satisfactory board of director training experience opportunities.
  • Tuesday, March 7, 2006

    Five Phases of Grief

    Over the years, I have been increasingly inspired by the lessons of Elizabeth Kübler-Ross’ research which resulted in her landmark book, On Death and Dying. She described five phases of grief that people go through in response to a death. These phases also might apply to other instances of extreme emotional stress or distress, including post-natural disaster shock, post-traumatic stress disorder; and post-terrorist attack distress to cite a few examples. The five phases also help explain how women view the shocking truths about “how few” women are on boards or in corporate leadership positions, or “how far” women have not progressed in terms of incomes or other measures of advancement.

    The five phases of grief and some of their indicators are:

    1. Shock, numbness, and disorientation: paralyzed, distant, and removed from one's feelings of grief. Some say such numbing is the body's mechanism for protecting itself from being overwhelmed by the shock of the loss.

    2. Denial and isolation: significant difficulty accepting the reality of the loss, either short term lapses of thinking and behaving or long term denial of the reality.

    3. Anger: rage at the world, fate, God, or people in their lives; search for someone to blame; search for a reason for being impacted or selected; a sense of being a victim; the feeling that there is a conspiracy against one.

    4. Depression and sadness: reality of life after the loss grows; increased awareness of a voice or something missing; a feeling of capitulation in the face of overwhelming odds or events.

    5. Acceptance: increasing ability to come to terms with the loss; experimenting with the ability to move on; willingness to re-invest in the new life that lies ahead; experiencing fewer extremes of emotion; taking increased control over the portions of one’s life which can respond to personal choice.

    The power of Kübler-Ross’ analysis comes from the fact that the five phases constitute “the roadmap out”. One need not merely dwell on the stress. Instead, one can check occasionally with the map to gauge where one now stands on the spectrum leading one out toward “the new life that lies ahead,” whatever that might be. By creative use of the five phases, we might also explain where we are, presently, when faced by a whole host of personal earth-shaking realities.

    Phase One: Shock

    I often hear women my age express shock and disorientation when they look at the reality that women have made so little progress in standard measures of income, salary levels, entrance into top management, shares of seats on top public boards of directors, absence of women from the list of senior partners in law firms or major financial firms, and the lack of women in legislative or governmental positions of power, among a host of other statistics about women’s professional performance or economic progress.

    “I thought we solved these problems in the 70’s” often is the phrase they use to describe the shock they feel, responding at the first and most basic level, as they begin to look at the data, look at the problem, and realize that a significant loss has occurred.

    Phase Two: Denial

    Women in the second phase pretend that no loss has occurred. They dismiss those who point out the loss as “rabid feminists,” separating themselves from having to discuss the loss. Isolation also explains the tendency of some women to “opt out,” to get back into the comfort and safety of home in search of the protection which they hope that will provide them, away from the debate, so they do not have to face the loss.

    Phase Three: Anger

    When the third phase arises, women become zealous in their search for someone to blame: “the old boys’ network” and Laurence Summers or Nick French. In this phase, there is righteous indignation and a search for someone to hold accountable: “there oughta be a law” or “let’s band together and attack.” Conspiracy theories abound as an easier explanation of things they perceive to be out of their control. The pendulum swings from isolation in the earlier phase to the activism in this phase.

    Phase Four: Sadness

    In the fourth phase, ennui sets in, taking the form of “gender fatigue syndrome”. There is a sense of tiredness at the futility of past efforts, a fatigue from apparently working alone. A common comment in this phase is “You are the first woman that I have found that I can talk to about this stuff.”

    Phase Five: Acceptance

    This is the phase of coming to terms, of finding the way forward, of integrating the past with the present in order to begin building, again, for the future.

    What is so incredible is the resilience of the human being -- that she is capable of enduring so much shock, sadness, anger, frustration, isolation and yet somehow she can emerge at the end of the dark tunnel ready to continue with life’s challenges and successes. And the awe is that she can emerge actually stronger for having passed this way on her journey.

    Kübler-Ross also said that the path through these phases might not be sequential or continuous. One might step forward, then jump to another phase, then return back one or two. One might dwell longer in one phase than another. Some might get stuck forever in one phase. What was clear was that the bereavement process required some passage of time in all five phases.

    The happiness and “the new life ahead” would be clearly marked by the landmark of Acceptance. One would know the landmark when one was able to take personal responsibility for the journey through to one’s own goal.

    Friday, February 24, 2006

    Harvard Post-Summers

    Many women tell me they feel vindicated now that Lawrence Summers has been kicked out as President of Harvard University.

    First, the sequence of events suggests instead that the intellectual tsunami about “innate gender differences” was but a tiny aftershock of a much larger underlying earthquake. Second, the women of Harvard have not yet impressed us with their ability to take $50 million and produce concrete, measurable results. Third, the post-Summers blow-back might be even more devastating.

    We should ask ourselves whether we have made real progress. Which IS better: the devil you know or the devil you don’t know?

    The Underlying Earthquake

    By most measures, Lawrence Summers was a difficult man to work with at Harvard University.

    In 2001, Summers spoke out against African-American Studies professor Cornel West for spending too much time on political activism. West left Harvard for Princeton University in 2002.

    In September 2002, Summers suggested that proposals favoaring Harvard's divestiture of investments in companies in Israel might be considered anti-Semitism.

    From 2001 – 2004, Summers advocated the reintroduction of the Reserve Officers’ Training Corps (ROTC) at Harvard.

    In June 2004, Summers again came under fire over a scandal involving a close friend, Andrei Shleifer, the economics professor who headed a US government-funded project chartered to help Russia establish and operate financial markets. Harvard settled a lawsuit again Shleifer for $30 M for allegedly violating conflict-of-interest regulations. No disciplinary action was taken against Shleifer.

    On July 14, 2005, Conrad K. Harper, the only African-American board member of the Harvard Corporation (the university’s governing body), resigned in protest of not only Summers’ comments, but also an increase in his more than half-a-million-dollar salary.

    At the end of January – early February 2006, Summers was accused of forcing the resignation of William C. Kirby, the Dean of the Faculty of Arts and Sciences.

    On February 16, 2006, the Boston Globe reported that Peter T. Ellison, Cowles professor of anthropology and former dean of the Graduate School of Arts and Sciences (GSAS), attributed his own decision to step down in 2005 to Summers’ actions.

    The Intellectual Tsunami About Gender Differences

    At a January 2005 conference on workforce diversity, Summers mused that the under-representation of women in science and engineering might be due more to gender differences in “intrinsic aptitude” than “socialization and continuing discrimination.” Tenured women professors walked out, other women professors defended Summers on free speech terms.

    Summers allocated $50 million in funds to assuage his gender activist critics. He established two major task forces to design and implement solutions to the issues identified. The two committees were established to assess the situation and publish their findings and recommendations.

    In May 2005, two reports of the Task Force on Women Faculty and The Task Force on Women in Science and Engineering were released for comment through end of June 2005. The reports suggested work efforts and that more funding would be required.

    The Resignation

    Two votes of confidence in Summers' performance were considered by the Faculty of Arts and Sciences. The first was in March 2005 and the second was scheduled for February 28, 2006.

    Before the second could be held, Summers resigned February 21, 2006 citing “rifts between [himself] and segments of the Arts and Sciences faculty.”

    The Blow-Back

    Former Dean of the Harvard Law School, Derek C. Bok, 75-years of age, was named interim president, a position he once held on a full time basis in the late 1970s. Are we better off or worse?

    The Faculty of Arts and Sciences seemed to be out on a limb pretty much alone. The Harvard Overseers still had confidence in Summers. Surveys of Harvard undergraduates reportedly were satisfied with Summers by a 3:1 margin. Heads of the graduate schools appear to have been satisfied with his performance.

    On March 4th, 2006, the Wall Street Journal reported the comments of Harvey Mansfield 73-year-old tenured government professor and conservative elder statesman at Harvard. He said Summers was not acting “manly” enough to lead the university.

    On March 5th, 2006, the LA Times and the NY Times reported “the return of the happy housewife”, according to research by two sociologists, W. Bradford Wilcox and Stephen L. Nock at the University of Virginia, whose research has focused on sustaining the evangelical Christian traditionalist female view of family.

    Better the Devil You Know Or The Devil You Don’t Know?

    We have three more months of this delightful limbo where we await the transition of Summers to Bok to whom? As the women of Harvard advance name after name of talented female presidential candidates, we will have to see if Harvard is really ready, willing, and able to change its colors that dramatically or if we find there are aftershocks yet to be felt.

    Friday, February 10, 2006

    Gender Differences in Negotiations

    Hannah Riley Bowles, assistant professor of public policy, John F. Kennedy School of Government, Harvard University and Kathleen L. McGinn, professor of Negotiations, Organizations and Markets Group and a Director of Research at Harvard Business School collaborated on research about the gender gap in leadership and negotiations.

    “Women struggle to claim the authority to lead.”1

    Riley Bowles surveyed the research on women’s negotiation behaviors, drawing primarily on the work of Professor Kathleen Valley of the Negotiations, Organizations and Markets Group at Harvard Business School and Professor Deborah Kolb of Simmons College Graduate School of Management.

    Not all negotiations produce results that can be explained by gender differences. However, two situation do emerge as factors where negotiated results do differ by gender.

    1. Ambiguity, uncertainty and secrecy create situations where opportunities and limits to negotiations are unclear.

    Women negotiate differently for salary “and other packages” in situations that are much more ambiguous and salaries were not normative.

    Women have lower expectations than men, entering into negotiations. This is described as the “entitlement effect”.

      “Women work longer hours with fewer errors for comparable pay and pay themselves less for comparable work” in conditions of ambiguity – where women are unsure of the standard of compensation. “In ambiguity, women perceive that they deserve less than men.”

      “Women are a lot more likely to compare themselves to women . . . to a group that on average makes less than the men. So, in conditions of ambiguity... the standards that the women are looking at are probably lower, on average, than the standard for men.”

    2. Gender triggers: there are situational clues which, in ambiguous cases, trigger different behaviors by men and women.

    Gender triggers for females are factors which persuade women to restrain or check their otherwise ambitious personal expectations in negotiating situations.

    Women saying to themselves, “I don’t want people to think I’m too aggressive” is an example of a gender trigger.

    Women perceive that they could incur a backlash from other women (or men) if they appear to be stepping into a masculine role (i.e., perform as a strong or assertive negotiator).

    The recommendation is to reduce gender triggers by turning them around: “How am I going to be perceived if I don’t negotiate?” Why would someone hire a weak negotiator?

    A variation on the gender trigger concept is self-satisfying behavior: how women like to perceive of themselves.

    Reduce the tendency of self-satisfying behavior to limit one’s actions by finding external, satisfactory benchmarks. Find out what are appropriate standards for being paid based on experience levels or rank within the organization. Reduce ambiguity, increase viable alternatives.

    Social networking among the right group: women talking with women friends may increase gender triggers and superimpose socioeconomically-acceptable social standards that limit women’s expectations. Women network socially for the benefit of the "tight emotional bonds". It is difficult to have tight emotional bonds across gender; but there may be more successful alternatives from which to learn.

    Competitive negotiations can act as “gender triggers”: men outperform women in those environments where payoffs are determined by comparative relative performance (men’s perfomance rises in competitive situations; women stay at the same levels)

    Negotiating for others can be a “gender trigger”: women outperform men when negotiating on behalf of others compared to the results when they negotiate for themselves.

    Women executives were particularly energized when they felt a sense of responsibility to represent another person’s interests: when the beneficiary was someone other than themselves.

    1“Claiming Authority: Negotiating Challenges for Women Leaders”, a chapter in the book, Psychology of Leadership: Some New Approaches, edited by David Messick and Roderick Kramer (2004: Lawrence Erlbaum Press)

    See: “When Does Gender Matter in Negotiation?” Negotiation, Vol. 8, No. 11, November 2005

    Dina W. Pradel, VP of affiliate and networking development at Y2M: Youth Media and Marketing Networks, a Boston-based strategic marketing services company; Hannah Riley Bowles, assistant professor of public policy, John F. Kennedy School of Government, Harvard University and Kathleen L. McGinn, Cahners-Rabb Professor of Negotiations, Organizations and Markets Group and a Director of Research at Harvard Business School.

    From: The Harvard Business School Working Knowledge electronic newsletter:

    Saturday, February 4, 2006

    1 Powerful Career Strategy for Women: Stop Listening to Women’s Advice

    Katherine Hansen is trying hard, I know. But her “10 Powerful Career Strategies for Women”, published for Quintessential Careers, really take the cake.

    Let’s do the math, here:

    • She says female managers in the communications industry LOST 13 cents in earnings, compared to male counterparts, from 1995 to 2000. “Similar DROPS were reported in entertainment and recreation services; finances, insurance and real estate; business and repair services; retail trade; and other professional services.”

    • THEN, Ms. Hansen concludes that “our best hope to crash through that glass ceiling is to keep doing what we’re doing.”

    • She says women should get as much education and training as possible. Citing data that reports that women in 2000 were earning a MAJORITY of the degrees at associate, bachelor’s and master’s levels.

    • In the past 25 years, when women HAVE been getting the best education possible, women have LOST traction in the salary wars. So, she recommends that women should spend even more money doing the same thing?

    Ms. Hansen suggests that, in addition to throwing good money after past unproductive (salary-wise) investments in traditional colleges and universities, women should ALSO spend even more of their hard-earned money on distance learning and to buy books she recommends about financial aid (most of which, still, does not go to women).

    And after they have dropped good money there, women should ALSO sign up for professional organizations, conferences, and trade publications. Then she suggests women mention -- IN a new job interview -- their expectations that the company continue to ante up for your personal ongoing education and training. Won’t that give women great leverage in the salary negotiation competition with guys who don’t set out such pre-conditions to employment. That’s a real salary killer -– almost as big as the lactation room question.

    All this investment in top level education has really paid off in academia, at least? No? Women ALSO aren’t at the top at academic slots in the colleges and universities? Imagine that!

    Then Ms. Hansen provides the same old recommendations to women that we’ve heard forever:

      surf the internet, improve your communication skills, improve you interpersonal skills, plan you career, network, find a mentor, project confident, self-promote, incubate your talents, be a free agent.

    Why does this all sound like stuff from Mademoiselle, Elle, and Good Housekeeping -– only for the working girl? Because it IS the same stuff from the same writers -– only, now, for the working girl e-magazines and web sites.

    Who among us believes that a guy would believe one shred of this drivel? Who are we kidding, here?

    Why is it that women keep paying for this quality of advice? Why do women believe that paying MORE and MORE will somehow give them the value they seek?

    What really works effectively are shortages. Shortages have a very dramatic tendency to focus the attention of the male mind.

    Women could start by saving their money, stop spending it head over heels on garbage advice from magazines, conferences, coaches, advisors that continue to say the same stuff over and over again.

    The best advice we could give to women is “STOP”. Don’t spend your money. Save it, girls. Stop spending it on “stuff” like the billions of dollars women spend on changing clothing fashions every quarter; hair, nails and beauty salon “stuff” every month; beauty and health supplies “stuff” every week; dietary “stuff” everyday. Stop spending the money, girls, just to see if anyone starts to pay attention to you as a customer, instead of a guaranteed “golden goose”.

    Shortages, my dear, make people pay attention. If there were suddenly a shortage of, say, buyers of Barbie Dolls, don’t you think someone at Mattel might start paying attention and finally listen to some of the women who don’t like year after year of exorbitant executive pay going out to the bad boys at a dying doll-company?

    Shortages, my dear. Think of the savings AND the impact if women stopped buying all the magazines they purchase religiously every month. These magazines really do keep saying the same thing over and over again. You could buy the same magazines from 1975, and they would still be saying the same thing: “Get the best education you can!” Go back and look! Prove me wrong!

    Shortages result from conserving your valuable, scarce resources. Hold onto your cash until you find the best available opportunity, the highest possible return. While you’re waiting for the next best opportunity, you could invest your money into something that earns a return while you search out alternative opportunities. Maybe it is a savings account with a nice interest rate. Maybe it’s an index fund with a nice track record. Maybe it’s a bond with a nifty coupon.

    “Husband your resources”, girls! That means “To use sparingly or economically; to conserve.” The “archaic” definition of husband is “A prudent, thrifty manager.” And I think we all know why!

    Pursue only those alternatives with a high probability of a substantive return – in the currency you value. That includes “networks” and “mentors”. Two big wastes of money and time.

    Ms. Hansen suggests that “the number of all-women networking groups is increasing enormously”. Not because women are necessarily getting hard dollar value from the networking groups, but because the networking groups are getting good hard dollars from the women.

    In like manner, almost 60% of women in business followed each other, lemming-like, into the lowest revenue 4 sectors of the economy from 1995 to 2002. It looked good on paper. It sounded good when all the networking groups recommended it. But, it didn’t pan out in the numbers! Networking groups worked well, in the 70s, when there were few women in the workplace. Now, in the 21st century, women constitute a majority of the lower to middle rungs of the ladder, and networks have become the social or electronic equivalent of “soap operas” for women. And somebody is making good money off of women’s investments in networking.

    Mentors are the fairy godmothers we never had. The tooth fairy. The Easter Bunny. Prince Charming in a suit. The frog to be kissed into the prince. The promise that Mommy and Daddy will always be there to take care of you, dear. Is there someone, please, someone to tell you how to do this? Someone, please, pretty please, to advise you, coach you; take care of you, and on whose coattails you can ride to the top of the mountain.

    Wake up! Grow up!

    Mentors find you when you are worth something to them – when it’s worth their while to use your labors rather than their own. Mentors clerk you when they need someone to do at least a portion of their work for them -– and if you’re smart, you’ll learn from the experience. Mentors are there for themselves -– not for you, dear. When you’re a success, maybe you can mentor someone else. When you’re not a success, probably nobody wants to waste their time on you.

    So, here’s a different set of professional career recommendations:

    Do the math.
    Create shortages.
    Husband your resources.
    Look for the best return from the available opportunities.
    Value yourself.
    Don’t just follow the lemmings.
    Define your own success and make it happen.
    Don’t believe everything you read -– not even this.

    Friday, January 27, 2006

    Women-Owned Businesses -- Are We Making Progress?

    The U.S. Census recently published its report on women-owned businesses from the 2002 Economic Survey. We should be pleased to hear that women-owned businesses increased 20% in absolute numbers during the 5 years between 1997 and 2002, twice the national average for all businesses. Revenue also was up 15% in the same period.

    However, it is the averages that concern me. And I'm also concerned about where women concentrate their women-owned businesses.

    If the number of women-owned businesses increased 20%, but the dollar revenues over the same period increased only 15%, then the average sales and revenues per woman-owned firm had to decline. And it did.

    In 2002, U.S. women-owned businesses earned an average of just $145,000 in sales and revenues a year. That’s 56% of the average earnings of 50%-50% male-female owned businesses and closer to 25 or 30% of what male-owned businesses make.

    Five years earlier, in 1997, the average was $151,300 in sales and revenues a year per woman-owned business. That's a decline of $6,300 or 4.2% (not considering inflation) during a period when the SBA should have seen much more bang for its buck in terms of results for all of its investment in woman-owned business programs.

    A High Number of Firms in Low-Revenue Sectors

    Maybe we should take a closer look at the economic sectors that women-owned businesses choose. Perhaps women are entering businesses with a low likelihood of generating high returns. We focus, first, on the sectors that women choose: those with the highest share of women-owned businesses (10% or more of the total number).

    Over 60% of women-owned businesses enter just 4 sectors of the economy, all of them low-revenue generating. In fact, these sectors earn only 35% of all the sales/revenues produced by women-owned businesses -- an average of $84,700 per firm, just 58.7% of the average of all women-owned businesses ($145.000 per firm).

    One out of every 6 women-owned businesses (16.0%) is engaged in the “health care and social assistance” sector where they earn only $66,100 a year in sales and revenues. Almost 60% of these women-owned businesses are involved in “social assistance”, earning barely $24,600 a year. Another large concentration within this group (39.2%) provides “ambulatory health care services” where they receive and average of $1,100 a year.

    The second largest concentration of women-owned businesses is in the “other services (except public services)” sector, also involving 15.7% of the women-owned business market. An overwhelming share, 91%, are involved in “personal and laundry services”, earning just over $30,200 a year.

    Another 14.6% share of women-owned businesses is in the “retail trade” sector, earning an average of $158,000 in sales and revenue per firm. Almost half (47.9%) are to be found in the “non-store retail” category earning barely $30,500 in sales and revenues a year.

    “Professional, scientific and technical services” represent 14.4% of women-owned business firms, earning an average of $84,800 a year. The “other professional services” sub-category represents almost 30% of this total where the women-owned businesses earn only $44,400 a year.

    In translation, the common businesses for women-owned businesses include care-giving, nursing and child care services, hair and nail care salons, laundry and dry cleaning establishments, handicraft and personal items sales. All of them are low revenue-generating businesses.

    High Revenue Sectors Have Few Women-Owned Businesses

    The highest revenue-earning sector for women-owned businesses is the “wholesale trade” sector where they earn an annual average of $1.7 million per firm. But only 1.9% of women-owned businesses operate in this sector. “Durable goods merchant wholesalers” represent 52.5% of this sector, earning an average of $973,000 a year.

    A second high revenue-generation sector, where women’s businesses do relatively well, is the “management of companies and enterprises”, with the average sales/revenue per firm is $812,800. But, fewer than 0.1% of women-owned businesses enter this sector.

    Women-owned businesses in the "construction" sector represent only 3.1% of the total. They are dominantly (76%) “specialty trade contractors” earning $248,000 in sales/revenues a year.

    Let's consider the newest NAICS sub-category, "information" -– a field in which women represent about the same market share as men when measured as users or customers. Barely 1.2% of women-owned businesses fall within this sector. Overall, those women-owned firms earn an average of $275,000 -– almost twice the average sales/revenues of women-owned business. However, almost 40% of these innovative businesses are in the traditional publishing industry -- not the Internet services sector.

    Clearly, some progress has happened. Is it sufficient?

    Barely 1.8% of women-owned businesses (117,069 firms) earn $1 million or more a year. And only 6.2% of those (7,240 firms) employ 100 or more persons. Only 14.1% of women-owned firms even have employees, but those that do earn an average of $877,100 sales/revenues a year -- 6 times the earnings of their non-employee peers. In fact, 85.5% of all the revenue made by all women-owned businesses was earned by the 1 in 7 women-owned businesses which do have employees.

    Are women who are entering the business world even aware of these average sales/revenue figures? Are women-owned businesses aware of how the sectors which they select will determine their revenue potentials? Do the average sales figures represent women who "have to work” or do the women have the opportunity to choose to work and select the sectors that will generate the greatest earnings?

    Do women-owned businesses realized that, to achieve performance results better than these historic averages, women-owned businesses must differentiate their products/services from the very large aggregations of women-owned businesses also in those dominant sectors?

    Do women-owned business appreciate the opportunities that exist for them to find their unique niche and make their idea outstanding in the marketplace? Or are women-owned businesses just doing the same things they'd do in the house, but out here in the marketplace, hoping and wishing somehow to make ends meet?

    See: 2002 Survey of Women Business Owners

    2002 U.S. avg. sales and revenue women-owned businesses - $145,000/year = 100%

    High concentrations of women-owned businesses, but low average revenue

    16.0% Healthcare and social assistance - 45.6% of the average
       60.0% - Social assistance - 17.0%
       39.2% - Ambulatory care - 0.8%

    15.7% Other services - 24.6%
       91.0% - Personal and laundry services - 20.8%

    14.6% Retail trade - 109.0%
       47.9% - Non-store retail - 21.0%

    14.4% Prof., sci, tech. - 58.5%
       30.0% - Other prof. services - 30.6%

    Low concentrations of women-owned businesses in high revenue sectors

    3.1% Construction - 233.8%
       75.7% - Specialty trade contractors - 171.0%

    1.9% Wholesale trade - 1197.3%
       52.5% - Durable goods merchant wholesalers - 670.9%

    1.2% Information - 189.6%
       38.1%% - Publishing (except Internet) - 171.6%

    <0.1% Management - 560.6%

    Tuesday, January 10, 2006

    Where Does L.A. Fit?

    If Los Angeles area businesses have only 7.77% of their board seats held by women (according to a recent survey by the non-profit, women's membership organization, NAWBO-LA), what does that mean? Is it good? Is it bad? How do we know?

    In order to measure LA area business performance and set attainable goals, we need to know how our the public companies in our community stack up in comparison with other states or urban areas.

    © 2005 by Champion Boards. All rights reserved.

    Los Angeles' performance is indicated by the red bar in the chart above, to the far right -- just a little better than the top Georgia businesses in terms of women as a share of board seat holders. Not a good performance.

  • The average size of the boards of directors of L.A. area top corporations is 7.7 board members -- quite small.

  • The apparel industry has the highest share of women on boards: 15.5%, followed by health care at 14.7%, and insurance firms at 11.5%.

  • The Fortune 1000 firms listed in the survey averaged an 11.7% share of women on boards -- suggesting that if it had not been for the big firms, LA's women on boards profile would have been far, far worse. In fact, without these firms, LA's average drops to under 7%.

  • The construction/engineering professions averaged 10.5% -- ahead of the financial sector (9.2%) and real estate (8.8%) where women represent a large share of middle and upper management.

  • Technology firms have a poor women on board performance: communications - 0%, computers/peripherals/electronics - 3.8%, Internet - 3.0%, and software - 2.9% even though women represent a large share of consumer electronics decision makers.

    A Good Beginning, But . . .

    Yes, we know that women are under-represented on boards of public companies –- Catalyst has been telling us this for over a dozen years. In the past year, the number of women on public boards actually has declined further. Just this month, Georgia reported another drop in the share of women on their top public corporate boards.

    But WHY? First, because boards themselves are changing.

  • Boards are getting smaller in response to Sarbanes-Oxley expectations: CEOs are being told to limit their board roles, boards are instituting age and tenure limits, and shareholder activist groups are insisting on fewer interlocking directorships.

  • Mergers and acquisitions among area firms and firms leaving California for more business-friendly markets are cutting back on CA-based women on boards: Tenet, WellPoint, Flour, Knight-Ridder are just a few examples.

  • Boards at smaller firms (the Fortune 500-1000 firms) have fewer board members because corporations just starting to work with boards need to take small steps in those directions.

    But why are WOMEN not pursuing boards of director roles? In many cases, it's because women continue to believe too many myths about boards that simply are not true.

  • “Good ol’ boy network.” Does this explain why women have not responded to the tremendous growth in demand for independent directors, and the associated rise in director compensation, that has followed the increase in Sarbanes-Olxey requirements?

  • “Recruiters.” Do women know the facts about how boards, themselves, assess their director candidates’ performance, how they determine their needed skill sets, how they solicit candidates for board roles, and how boards of directors actually recruit new boardmembers?

  • “The non-profit board route.” Does working for free, volunteering, or soliciting charitable contributions really qualify one to perform adequately in a for-profit-oriented environment?

    And, when women on boards of directors -– especially women on the NOMINATING COMMITTEES of boards of directors -– actively pursue more women on THEIR boards of directors, then we will know we have begun to make real progress in this area.

    See: "Women Don't Make Climb to Top Rungs of Board Ladders" by Kate Berry, L.A. Business Journal, November 21-27, 2005
  • Thursday, January 5, 2006

    How to Leverage State-Based Data

    How can we more effectively use and leverage our state-based surveys of the share of women on boards of directors? Let's look at the example of Georgia's survey, released in November 2005 by the Board Directors Network Inc.

    Georgia reports they have 187 “top public companies” with 1,611 board seats (or an average of 8.6 board members per company). In 2005, women held 115 of those board seats (for a pretty dismal average woman’s share of 7.1%). Due to women holding multiple board seats, 103 different women actually held board seats. One woman held seats on 3 separate boards, and 10 women held seats on 2 boards.

    The situation for 2005 was worse than in 2004. In the more recent year, only 46% of Georgia top public companies (86 firms) had at least one woman on their boards -- 3% fewer than the previous year. Possible explanations are that some large firms merged into others and consolidated their boards; possibly women left boards due to the greater demands being placed on them by Sarbanes-Oxley responsibilities; or women with tenure at boards decided to retire. Clearly, we need to take a closer look at why change occurred.

    As of January 2006, Georgia’s 187 top public companies included 26 Fortune 1000 level firms and 161 lower level firms (a 14% to 86% split). It is that bottom tier performance that drags the overall women’s share down to a sub-par average. Typically, the very largest public firms tend to have larger boards of directors and also more women on boards than the smaller tier firms.

    Georgia reported 15 firms in the Fortune 500 rank and 11 firms in the Fortune 501-1000 rank. There were 31 women holding board seats out of a total of 300 available board seats or a women’s share of 10.3% among Georgia’s 26 firms on the Fortune 1000 list.

    In 2005, among the 15 firms at the top tier Fortune 500 level, Georgia had 23 women holding board seats out of a total of 187 board seats (a 12.3% women’s share). There were 13 firms with women on board and 2 with zero women on boards. These larger firms averaged 12.5 total board seats per firm, overall.

    At the next level, among the 11 firms at the second tier Fortune 501-1000 level, Georgia had 8 women holding board seats out of a total of 113 board seats (a 7.1% women’s share). At this level, 7 firms had women on boards while 4 firms had zero women on their board. This tier averaged 10.3 total board seats per firm, overall.

    If we take away from the grand total the numbers that we know are Fortune 1000 women on boards, we come up with 161 smaller public companies (187-26), with 1,311 board seats (1,611-300) of which 72 seats were held by women (103-31). This would mean that the smaller public firms averaged 8.1 total board seats per firm. Women held only a 5.5% share of seats on those smaller boards.

    What can women’s’ organizations consider as they “measure to manage” improvements in women on boards of directors?

    1. Recognize the difference between large firms and small firms: they have different average board sizes, and they also have a different available pool of talented, competent women available from which they can select board members.

    2. Don’t focus on the wrong goal: by focusing primarily on the number of firms with 1 or more women on boards versus ZERO women on boards, we are not targeting a meaningful goal. Most of the firms with ZERO women on boards are the smaller firms.

    Focus on getting the top firms, with the largest available pool of talented women executives, to INCREASE their number of women on their boards from among their talented executive and managerial ranks. It is harder to improve from having zero women; it is somewhat easier to progress from having at least one woman on board. It is dangerous to pursue the goal of “women tokens” (one woman on a board), as if that could ever be considered “enough”.

    3. Be consistent and informative in year-to-year comparisons. Be clear about the companies being measured. How are we defining and measuring them as “the top public companies” in the state? Are they the top Fortune or S&P 500 or the top 1000? Or are they all of the public companies in the state -– large and small?

    Clearly count and report the number of firms in the total group, the total number of board seats available, the average number of board seats per firm, the number of women holding board seats, and the actual number of women.

    4. Focus on target firms. Firms with 1 woman on board (“the Trojan horse”) represent a real opportunity to expand to two or three or more women on that board. Firms with women holding multiple board seats represent another opportunity to recruit other women to take over one or more seat, given the expanded demands facing women on boards.

    5. Recognize where leverage could have the greatest effect. Should women push harder on the corporations or should women be pushing other women to prepare for, and pursue, corporate board roles? Where can women’s organizations have the biggest bang for the buck?

    Focus on building the competencies of women to serve in leadership positions. Don’t dilute your efforts trying to embarrass companies or boards with low statistics. Focus on finding women of talent in executive ranks and “pushing them forward” to pursue board of director roles.

    6. Finally, why are women’s organizations “honoring” corporate boards of directors for small token numbers of women on boards? By awarding and recognizing corporate boards of directors for their so-called “achievements” at attaining 6% or 7% or even 10% or 14% shares of women on boards, women’s organizations are setting the bar way too low. We may think women’s organizations are “attracting more with honey than lemons”, but the end result is that we are not making progress. In fact, in the post-Sarbanes-Oxley environment, we are sliding backwards in some areas. If we continue using these historic techniques, we can look forward to another 50 years of the same results.

    When corporate boards have closer to 40% shares of women on their boards of directors, then it will be time to spend our good money recognizing the achievement of corporate boards. Until then, women are showing corporate boards how willing they are to “settle for less”. So, why should those boards work hard to achieve substantive progress?

    A better strategy would be to build better and stronger networks among women’s organizations, leverage our efforts more effectively, push competent women to the front, expect more, and not merely settle for the absolutely poor performance we’ve achieved to date.

    See the Georgia data at Board Directors Network Inc.: (November 2005)