If There Were More Female Executives, We Would Have A Different Business World

If women ran Apple, would they have unveiled a product called the iPad? In Business Week, Vivek Wadhwa argues more women are needed in the executive suite (and not just for name changes).

Wadhwa provides a grim snapshot of women in the top echelons of the technology and financial sectors:

Apple isn’t the only company with a male-dominated executive team. No woman has ever been CEO of a Wall Street firm. Women were primary owners of only 19% of the 237,843 firms founded in 2004, according to the Kauffman Foundation’s analysis of Dun & Bradstreet data. And only 3% of tech firms were founded by women in that year.

Wadhwa and his team sifted through stacks of data about the habits of successful entrepreneurs and surveyed 549 entrepreneurs about their experiences and attitudes. Their conclusion?

Given all the similarities in background and motivation for men and women entrepreneurs-and the fact that women now outnumber men in universities-we remain perplexed by the dearth of female startup executives.

So what could be contributing to the lack of women in top spots of industries all across the globe? Wadhwa explains that the root of the issue is societal expectations of women:

Evidence suggests that this does not reflect a failure on the part of women but rather a societal failure. Consider the contrast with India, a country that is in many respects more conservative than the U.S. It might therefore be expected to be even less amenable to women in leadership. Yet there, women are rapidly rising through the top ranks of the business community.

[Cindy Padnos, managing director of Illuminate Ventures] is optimistic that the tide will turn in the U.S. as more people recognize that having women at the helm makes good business sense. Women-led high-tech startups generate higher revenues per dollar of invested capital and have lower failure rates than those led by men, her research shows. Women are also more capital-efficient; the average venture-backed tech company run by a woman was started with one-third less committed capital than those led by men, yet achieved comparable early revenue levels.

The question of why there are so few women at the top has been a hot topic of discussion within the pages of international newspapers.

The New York Times recently published an article called “Where Are the Women on Wall Street?” as a part of the International Herald Tribune’s yearlong series on women in the 21st century. The story revolves around Sallie Krawcheck – the President of global wealth and investment management at Bank of America and one of the few female Wall Street Executives – and the issues surrounding her work in financial services, and how the industry is facing a major decline in its already low number of women employees. Part of the reason why women are less interested in pursuing a career in financial services is due to the culture. This is a well known problem:

But in the heart of Wall Street, the aggressive environment on the trading floor is often cited as a reason that women are rare at the top. Others cite the dearth of women to aid in career networking.

Whatever the reason, ascending the ladder is much harder for women, said Bruce C. Greenwald, a professor of finance and strategy at Columbia University Business School.

And yet, in developing nations like India, women are ascending to the top ranks of the financial business. Another article in the series reports:

HSBC, JPMorgan Chase, Royal Bank of Scotland, UBS and Fidelity International in India are run by women. So is the country’s second-biggest bank, Icici Bank, and its third-largest, Axis Bank. Women head investment banking operations at Kotak Mahindra and JPMorgan Chase and the equities division of Icici. Half of the deputy governors at the Reserve Bank of India are women.

Why?

Women “excel when they are subject to an open competition,” said Shyamala Gopinath, one of the Reserve Bank of India’s two female deputy governors.

Since financial services are all about the bottom line, the top-producing performers should, logically, come out on top. However, the article explains that an entrenched boys club feel and spirit in the industry – something that is prevalent in America but not quite as rigid in the emerging financial services market in India – may contribute to the exclusion of women stateside.

This “isn’t a golf-playing, beer-drinking homogeneous culture,” said Naina Lal Kidwai, group managing director and country head of HSBC in India and a former head of Morgan Stanley’s investment bank in India. Male bankers and managers run the gamut from devoutly religious to devoted family men to late-night socialites.

Women “could join the workplace on their own terms,” Ms. Kidwai said. “You still have to network, you still have to work hard, but that made it easier.”

So it would appear that a large part of allowing women to be more successful in the workplace is to dismantle the idea of a homogenous work culture. Germany recently examined the cultural norms that penalize working mothers, working to directly attack perceptions that women are bad mothers if they expect to have both a career and children. And entrepreneurs are taking their knowledge to bookshelves across the nation. Christine Comaford-Lynch penned the Rules for Renegades, advising risk-takers to rewrite the conventions of the business world. Kimberly Wilson, author of Tranquilista, rejects the boys club mentality of most businesses to promote a more balanced lifestyle – even in the crazed days of launching a new business.

Ultimately, the influence of women at all levels will promote the much needed changes in the business world.

Addressing the Dearth of Female Entrepreneurs [Business Week]
Where Are the Women on Wall Street? [NY Times]
Female Bankers in India Earn Chances to Rule [NY Times]
In Germany, a Tradition Falls, and Women Rise [NY Times]
Rules for Renegades
Tranquilista