In the last five years, the number of woman-owned businesses has increased by 14% and the number of women owners of family businesses has
increased at more than double that rate, by 37%. Not only is the phenomenon of ownership by women worth noting but the outcomes for these
woman-owned firms point to new ways of creating value that may be worthy
of emulation. Much has been said about the differences in leadership
styles among men and women. Recent research by the Babson College Center for Women's Leadership looks at those potential differences among
family firms and points to woman-owned family firms as an emerging new
model for success.
The Babson College/Mass Mutual report, Women in Family-Owned Businesses,
shows that woman-owned family firms are more productive, diverse, and
philanthropic than those owned by their male counterparts.
The woman-owned businesses we looked at operated in the same top five
industries as their male counterparts-manufacturing, wholesale, retail,
service, and construction-- and have relatively the same average revenue
size--$26.9 million in 2002-yet the following differences were exhibited
in a number of areas critical to firm performance and organizational and
family cohesion. Our research found that woman-owned family firms:
Do more with less. They are nearly twice as productive as firms owned
by males. This means that female owners use organizational structures
and create company cultures that result in more effective efforts by
their workforce.
Give more thought to succession planning. Family firms owned by women
are more likely to have chosen a successor chief executive. Overall,
39% of family-owned businesses will experience a leadership transition
in the next five years, yet woman-owned firms are more than 20% more
likely to have named a successor CEO.
Nurture female leadership. Woman-owned firms have more women CEOs, more
women on their boards of advisors, and more women family members employed full-time in the business. They are also more likely to select
a woman as their successor CEO.
Have a vested interest in sustaining and growing their family firms.
Woman-owned family firms have a 40% lower attrition rate of family member involvement and experience greater pride and loyalty to the
business; and agreement with its goals. Female family members also reap
benefits. Woman-owned family firms are nearly three times as likely to
employ more than one female family member full-time.
Demonstrate a deeper commitment to philanthropic causes than male-owned
firms, with a greater proportionate emphasis on philanthropy, specifically favoring community and educational needs.
Female owners are clearly adding value to their family enterprises, with
striking differences in their firms' performance and organizational characteristics. From a competitive standpoint, these women owners may
be the new management gurus to watch.
Nan Langowitz is Co-Founder and Faculty Director, Center for Women's
Leadership; and Associate Professor of Management, Babson College, Wellesley, Mass.
Reprinted with permission from Women's Business November 2003
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