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Joan M. Ridley
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Women CEOs Exceed Expectations

by

Joan M. Gruber Ridley, CFP

Gender Does Matter

“Women owned family businesses are nearly twice as productive as those owned by men” according to research funded by MassMutual Financial Group1. They experience 1.7 times higher profits with fewer employees than men owned businesses. Researchers attribute this to women’s leadership and management styles.

Research demonstrates that women-owned family firms: are nearly three times as likely to employ more than one female family member full-time; experience a 40% lower rate of family member attrition; and are more likely to have chosen a successor who happens to be a woman.

The percentage of family-owned businesses that expect the next CEO to be a woman has grown from 25% in 1997 to 34% in 2002. These findings are good news for the U.S. economy since family-owned businesses account for 80-90% of all businesses in North America, 78% of all new jobs, 65% of wages paid, and 60% of total U.S. employment.

Can Profits be Sustained

The question is, can women-owned businesses sustain their current levels of profitability. One fly in the ointment is their reluctance to borrow money. We will leave it to the researchers to discover if the low rate of loan closings is due to perceived reluctance of lenders, or, if women truly are more fiscally conservative than men causing them to avoid debt. Without adequate funding it is unlikely that they will be able to sustain these high levels of profitability. Perhaps they will continue to pursue unconventional ways that have made them profitable while accepting more conventional processes and practices that can spur them on to new heights of profitability.

The Irony of It All

The personality characteristics that made women less successful in the corporate work-place, such as a nurturing spirit, vision, a highly developed intuition, and their undaunted feisty style could be a few reasons behind their success as business owners. If you were to attend gatherings of family-owned and non-family owned women business owners you would be struck by their incredibly resourceful approach to handling employee issues, customer loyalty, and marketing strategies. And they share. They put their issues on the table, soliciting the input from other women business owners. I wonder if men business owners would allow themselves to be this vulnerable. And yet, this ability of women to be vulnerable, and to ask for, and to accept, help from their peers, is their strength.Perhaps a woman’s ability to multi-task and at the same time focus like a laser beam, is one secret behind the success of these incredibly profitable womenowned businesses. This characteristic allows her to do the work of many, while her nurturing spirit results in the retention of productive, loyal employees.

Women Hold the Keys to Prosperity

If you are designing your succession plan, consider a women in the next generation to carry on the family business. If you are a non-family owned business looking to expand, include a women CEO in your business plan. If you are a woman business owner, marry your vision and intuition with sound business practices and then go for it. You may end up with far more than you ever dreamed possible.

1The data in this article is from the Babson College/MassMutual report, Women in FamilyOwned Businesses. It more closely compared and contrasted the businesses owned by women versus men from data taken for the 2002 survey that was published in the 2003 MassMutual Financial Group/Raymond Institute American Family Business Survey.

 

Joan M. Ridley is president of Business Wealth Solutions, a Dallas-based advisory firm that consults with business owners about how to successfully grow and leave their business. Visit our website at www.bwsllc.net. Call us today at 214.692.9192 for a complimentary meeting to learn how we can help you get where you want to go.

Copyright 2005 Joan M. Ridley

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