By Jessica Zartler
Photo by "Pictures of Money"
Although it looks like the glass ceiling is beginning to break in politics, female entrepreneurs are still struggling to gain respect in the business world. Female founders are the fastest growing segment of entrepreneurs, yet they receive less than three percent of venture capital funding. Although statistics and research increasingly show the exponential value added with women at the top, businesses and organizations are slow to realize the boundless potential female leadership offers.
The obstacle mostly stems from outdated, preconceived notions about the role of women in society. However, gender barriers need to be broken for humanity to keep on evolving. For those who still struggle with closing the gender gap and investors who are skeptical when it comes to funding women-led businesses, below is your data-driven reason to vie for more women in leadership roles.
Female leadership offers higher ROI - 63 percent higher ROI
The internet has been buzzing with new research and an analysis published by venture capital firm, First Round Capital, showing high-performing investments tend to have at least one female founder. In the firm’s unique data on more than 300 companies and nearly 600 founders, companies with a female founder performed 63 percent better than investments with all-male founding teams. In addition, First Round’s top ten investments of all time, based on value created for investors, had at least one female founder as well, far higher than the percentage of female tech founders in the data set.
As Harvard Business Review recently wrote on the research. “This isn’t surprising, given other research about the performance of diverse teams; it’s a timely reminder of the importance of increasing female entrepreneurship and of the opportunity that VCs may be missing by continuing to disproportionately fund white men.”
Women are Better at Risk Assessment
Several studies, including one conducted by the University of California on gender differences in risk assessment, acknowledge that women are not only better at assessing risk, but also guiding their decisions and actions accordingly. Car insurance companies have known this for years, which is why men pay higher insurance premiums. Considering more than 75 percent of projects fail mainly from not anticipating risks, it would make sense that women have the upper hand when looking to the future and planning large scale projects.
Stronger Female Leadership Results in More Profit
Companies with strong women leadership* generated a return on equity of 10.1 percent per year versus 7.4 percent for those without, according to a 2015 study by
*Defined as three or more women on the board, the percentage of women on the board is above its country’s average, or the company has a female CEO and at least one women on the board.
Women Managers Are Better Communicators
The most critical skill for managing employees and customers? The ability to listen. The author of the book The Female Brain, Louann Brizendine, says that women’s brains have more connections between the two hemispheres and have ten percent more cells in the area of the brain called the planum temporale, which is engaged in perceiving and processing language.
According to psychologist Dr. Susan Sherwood, women are not only better listeners but more discussion oriented, can tune in and give attention to their employees and build stronger relationships. Employees and customers alike want managers to empathize with their problems, making women, again, the better choice to lead.
The evidence is clear—companies could benefit greatly in ROI, customer and employee relationships and project success if they employed more females at the top. More than 75 percent of projects fail to meet deadline, and companies waste 109 million dollars for every one billion dollars invested. If you consider the fact that more than 80 percent of those projects are being run by men—it’s obvious companies could greatly benefit with more women at the helm.
Jessica Zartler is a Bangkok-based Social Media Manager and Multimedia Consultant for Taskworld. Before working in Public Relations and Marketing, she was an award-winning television reporter and multimedia journalist for eight years in Florida and Colorado. When she is not hunting for the best content on the web to share with Taskworld users, blogging or producing videos, she is teaching yoga, cooking, playing drums and travelling.
