Survey: Startups With Female Founders Perform Best
New research highlights the benefits of diverse perspectives.
Posted May 03, 2017
Startup companies with female founders "almost universally outperformed their male-only counterparts."
As an accompanying chart shows, at four out of five high-growth revenue measures, female-founded companies showed stronger overall performance. "The fastest growing companies," the survey report noted, "at 200%+ growth, are 75% more likely to have a female founder."
The research, which examined startup culture, had a number of interesting insights:
• Benefits and work-life balance didn't drive retention so much as did management transparency and employee happiness.
• Of various management attributes, transparency was the one most highly correlated with growth in revenue and headcount.
• Company leaders typically felt their culture was performing better - in terms of transparency, valuing employees, etc. - than employees did. This finding didn't surprise me at all, as my experience over a long management career was that senior leadership often feels considerably more positive about their operation than does the rank and file. (Perhaps too much Kool-Aid in those c-suite water fountains?)
Gender disparity - But to me by far the most intriguing finding was the strong gender disparity linked to financial performance.
I asked David Niu, the founder of TINYpulse, for some perspective on this disparity. His response: "This corroborates Sheryl Sandberg's assertion that 'endless data shows that diverse teams make better decisions' - and it's also backed up by similar research from MSCI, and from Noland, Moran and Kotschwar."
This latter research rang a bell with me, as I'd read the study and written about it back in February 2016, with The Best Reason Yet To Increase Women In Business Leadership. I remember being impressed at the time with both the scale of the study (21,980 firms in 91 countries) and the strength of its findings. "For profitable firms," the report concluded, "a move from no female leaders to 30% representation is associated with a 15% increase in the net revenue margin."
Indeed, the real takeaway for me in both these studies is nothing as simplistic as "women are smarter than men" or anything of that nature - but that the power of diverse perspectives and a broad range of thinking - whether gender, ethnicity, culture, experience, age, etc. - is of substantive value for something as complex and multifaceted as a business enterprise.
All worth keeping in mind at a time when issues like immigration and cultural diversity are receiving far more emotional national attention than at any period in recent memory.
This article first appeared at Forbes.com.
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Victor Lipman is an executive coach and author of The Type B Manager.