SAN FRANCISCO – Female chief executives say focusing on customers and employees are the main drivers of their business success, while more traditional priorities, such as sales growth and market share, were lower on their list, according to a new survey.
When asked to name the business priorities they find most important, 97 percent of the female executives surveyed said customer satisfaction is very important or important, 92 percent cited employee satisfaction and 81 percent said company culture, according to a survey of 215 women who head firms in Massachusetts.
Sixty-seven percent of those surveyed said work-life balance is a very important or important business driver, and 66 percent said personal autonomy, according to the study by Babson College’s Center for Women’s Leadership, in Wellesley, Mass., and The Commonwealth Institute in Boston, both of which work to support women-led businesses.
Traditional drivers
Only then did the executives point to more traditional business drivers: 64 percent of those surveyed said high profitability was very important or important, 48 percent pointed to rapid sales growth, 46 percent pointed to personal financial reward and 41 percent said high market share.
“Typically, what’s taught in many business schools, including ours, is you think about profitability first, and that shareholders come first,” said Nan Langowitz, principal investigator on the study, director of Babson’s Center for Women’s Leadership and an associate professor of management at the school.
But in this study, when offered a list of possible business priorities, including profitability and market share, “what popped up first was the customer, and then … employees, and organization culture, and then they looked to fast sales growth and profitability and market share,” Langowitz said.
“It’s not that they don’t care about those things, but it’s … that putting the people first will get them to those business objectives,” she said.
For this study, the researchers’ aim was to highlight how female executives approach running a business, not to compare women executives to men, she added.
“There has been all this business research that has looked pretty much only at … male-dominated business models,” Langowitz said.
The breakdown
About 39 percent of the companies surveyed are professional-services firms (including consulting, marketing and human-resources companies), about 10 percent are technology firms, 9 percent are health care/pharmaceutical/medical-products companies and another 9 percent are construction-services firms; the rest span a variety of industries, including manufacturing and real estate. The 215 firms employ more than 24,000 people, Langowitz noted. “My experience is people are surprised when they hear that kind of number. The tendency is to think of women-led businesses as lifestyle firms, as sort of small contributors to the economy.”
More than three-fourths of the firms reported revenues of $1 million or more in 2004. The typical firm surveyed reported revenue of about $28 million last year, though not all the companies opted to state their sales figures.
Fifty-four percent of the firms had revenue growth of 5 percent or more from 2003 to 2004, while 18 percent saw more modest growth of 1 percent to 5 percent, and another 10 percent of the firms were flat in that time period.
Nine percent of the companies saw sales drop 1 percent to 5 percent over that time, while 7 percent saw sales fall 5 percent or more.
When asked what motivated them to take on a leadership role or found a company (77 percent of the executives surveyed were also their company’s founder), a strong majority of the female leaders pointed to personal achievement and the desire for a challenge.
“A common myth is that the reason women get into business careers is because they have to, either out of economic necessity or they have no choices,” Langowitz said.
“What you’re seeing in this data is that women have pursued these business leadership opportunities for their own personal satisfaction and because they are seeking a challenge. It’s all about personal achievement and desire for a challenge,” she said.
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Here’s how the women leaders ranked what motivated them to become a business executive:
85 percent said a desire for personal achievement was a very important or important motivator
80 percent said the challenge was a very important or important motivator
65 percent, autonomy
62 percent, flexibility
58 percent, financial reward
51 percent, they had a great idea
33 percent, to avoid the glass ceiling, and
27 percent, economic necessity.
While 32 percent of the women executives said avoiding the glass ceiling was an important motivator for their move into a leadership position, 48 percent said it was barely or not at all important, Langowitz said.
“I don’t want to say that the glass ceiling is not a real issue. I think it is for many women,” she said. “But for these particular women who sought the top leadership jobs, either they just don’t let that affect them or they have never perceived that to be their particular issue.”
It’s unclear whether some of the executives left other companies that did impose a glass ceiling. The women surveyed averaged 27 years of work experience, and averaged only about half that time in their current position.
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AP-NY-12-07-05 1320EST
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