Women make better CEOs than men. So why aren’t there more of them?
Why aren’t there more women CEOs is a complicated topic; but I thought why not talk about it (what could go wrong?!). Some will say the patriarchy has stacked the deck against women and some will say that women choose babies over careers. There are many more theories that I won’t get into now suffice to say that being promoted to CEO in a company isn’t easy, and I happen to think that the deck is stacked against women, and many different groups also.
So given that, I do have a way to skip the deck altogether and 100% guarantee that you will become a CEO. It worked for me and it can work for you too, and it doesn’t matter if you are young, old, went to Eton, are Jewish, Muslim, Catholic, Lesbian, Gay, Bi, Trans, whatever the Q, I and A stand for, or indeed a woman. Ready for the secret that will guarantee you become a CEO? here it comes:
Start your own company and appoint yourself CEO!
Nothing is stopping you doing this. There is no deck stacked against you so there should be no excuse not to do it. The issue is that fewer women than men are starting companies and doing this. There are many theories why but the one that I personally think is true is that traits that you need to start companies are not the same as traits you need to grow and run companies. I am in this article suggesting women are more suited to growing and running companies than starting them.
Traits needed to start companies
Thinking you are more capable than you really are
Being a risk taker
Not listening to advice
Being a bit of a dictator
(i.e. being guided by (a big) ego)
Traits needed to stabilize and grow companies
Being risk averse
listening to advice
(i.e. not guided by ego)
It is, of course, a generalization to say these two groups of traits are attributable to one gender or another. But that is the generalization that I am making (if you are realizing that have become offended, please skip to the last paragraph of this article labeled ‘disclaimer’ and read it).
All is not lost
I have seen many companies that have a model a bit like Mark Zuckerberg and Cheryl Sandberg, which is in a nutshell: Man (Mark) starts company makes a big success of it and parties with his bro-buddies, then woman (Cheryl) comes in and makes sure they tone it down, get sensible, and grow sensibly without offending too many people. Uber is an example of this. Travis did something amazing, but held on too long and look what happened. No woman took over so it went a little bit wrong.
My suggestion is that longer term, women are better at running companies than men. Men, don’t get upset with me over this, get upset with Jack Ma. Here is a clip of him explaining why women make better CEOs than men.
The (financial) problem for women is that the rewards fall disproportionately to people who start companies but not to people who stabilize and grow companies.
So why don’t women just start companies?
I have many conversations with many people about why they should start companies and why they shouldn’t. The women think they can’t because of many different reasons which I was going to list, but basically, they mostly boil down to not having the confidence in themselves to do it.
Women worry that they won’t succeed because they underestimate their own abilities, but men don’t have the same worry because most of them over-estimate their own abilities.
Many of the women I speak to say “I am not ready to start a company yet, but I am joining this startup as the COO”. This actually isn’t a bad stepping stone to starting your own company because you will realize that you are really running the show and will then have the confidence next time (the male ego just didn’t allow him to relinquish the CEO title). The issue with this model for the woman is as follows:
Male founder starts a company. He owns 100% of the business and takes it to over $xm in revenues. Not a bad achievement. Then he brings in a COO (or CEO if he is evolved enough to relinquish the title). She will, if she is lucky, get between 2% and 20% of the business (depending on how big the business is when she comes in). This isn’t a bad deal. She is getting a salary, and she didn’t take as much risk as the man did, so she isn’t entitled to as much reward. I am not saying this isn’t fair. It is fair. What I am saying is that she should have skipped the man and started the company herself.
I believe this is a gap in the matrix. One that I am exploiting with Silkstone Partners, an angel network that we set up with some other like-minded exited founders. Finding amazing women who would otherwise have been COOs working for male-founders, and working with them to get over that first confidence hurdle. I think that if we can remove the things that are hard about starting a company then we can skip the founder altogether and save his equity for ourselves, and other people that we may need. Those things will then set us up to create long-term value in a purpose-driven sustainable business. Note that Silkstone Partners doesn’t only invest in women, it is just a thesis that I am personally following at the moment.
Yes I realize that my gender generalizations are incendiary and will offend some folks. Men as well as women. So if you do find yourself offended or even outraged, try this therapy: take a piece of paper, write down why you disagree with me on it; fold it in half, and in half again, put it in a drawer, then stand up and walk out the door and go live your life. Better still leave your phone behind.
Side note: If I offended you I humbly apologize.