Making Room for Women Leaders
On October 18, 2019, Chris Schultz announced his move to the role of Chief Community Officer, making room for Anne Driscoll to take over the role of CEO of Launch Pad. This article is the first in a series marking Anne’s move to CEO and the kickoff of Launch Pad’s #makeroom movement—a campaign that aims to encourage executives and leaders to evaluate their own team dynamics and see where they can make room for women on their leadership teams and boards.
The statistics on gender disparities in American business are all too familiar.
Women-owned firms comprise 21 percent of private companies, yet these businesses are smaller than those owned by men. Women-owned firms account for just 12 percent of total sales at private businesses and male-owned firms earn more than twice as much as women-owned businesses. Male-owned companies account for nearly three-quarters of total employment. (From the ASE, the Census Bureau’s Annual Survey of Entrepreneurs.)*
At the very top, only 5 percent of Fortune 500 CEOs are women; just 7 percent of top executives at Fortune 100 companies are women. Among companies in the S&P 1500, women comprise just 19 percent of board seats.
All this despite the fact that women make up a slight majority of the American population, a majority of the college-educated workforce, and now earn close to 60 percent of all undergraduate and master’s degrees. (Statistics in this and the preceding paragraph sourced via Center for American Progress.)
The challenge isn’t — or shouldn’t be — awareness. It’s how to #MakeRoom for women leaders and entrepreneurs.
Diversity is a Public Good
It should be obvious by now that diversity is not a politically-freighted buzzword, but a smart strategy for organizations — and a necessity for economic development.
Studies repeatedly find a “diversity bonus,” with better financial performance from those companies that have greater gender diversity, especially in their leadership ranks. The performance payoff is also true for startups: having a female founder is associated with more innovation and more capital raised.
The relationship is causal, not correlative — “identity diversity” is an important source of “cognitive diversity” and the latter leads to better ideas, better problem-solving, and better overall performance. Basically, if your company isn’t Making Room for female leaders at all levels, you’re hurting your bottom line.
This is even truer when it comes to economic growth. As noted, women represent just over half the population and the majority of workers with college degrees. So if, in your city or region, women are a small minority of business owners and leaders, you’re leaving bills on the sidewalk. Gender diversity is not simply an end in itself but one of the most sensible ways to drive economic development.
The Pipeline Challenge
Part of the problem is that there isn’t simply a cadre of women entrepreneurs and leaders standing by. The lack of gender diversity runs deep within businesses — in many parts of the economy, the pipeline of potential leaders isn’t getting any more diverse.
A study of 90,000 venture capital-backed startups, dating back to 2001, found that of their 400,000 employees, founders, executives, and board members, only 60,000 were women. That is astonishing. America’s most innovative firms— the next generation of Fortune 100 and S&P 500 companies — have almost no options for taking advantage of the gender diversity bonus.
Worse, women are 30 percent less likely than men to be called for a job interview during a recruitment process. Companies don’t have the internal pipeline for developing female leaders and they aren’t doing themselves any favors in the hiring process either.
It’s Time to #MakeRoom
Diversity, unfortunately, doesn’t always happen on its own; and it shouldn’t happen by quota. The former is a magical fantasy; the latter is insulting to all. Companies need to be intentional about building pathways for diversity; the same is true for entire regions and the institutions (colleges and universities, chambers of commerce, etc.) responsible for economic development.
That’s what the #MakeRoom campaign is all about. It means “stepping up, not stepping aside,” as Launch Pad founder (and now former CEO) Chris Schultz says.
With Anne’s move to the CEO role, Launch Pad is proud to call other organizations to #MakeRoom. This is good for our businesses and our economy.
Follow along as we highlight important stories of female representation in business and join us in being an active participant in this change. Have a story you’d like to share? E-mail Virginia Beard at virginia@lp.co or tag us on Twitter or Instagram and use #makeroom.
Follow Launch Pad on Twitter @launchpad and on Instagram at @launch.pad.nation.
*Data from ASE pertain to all privately-owned businesses that are “classifiable” by gender. This covers around 95 percent of U.S. businesses. Firms that are “equally-owned” by men and women are included in the calculations.
