Fixing the Economy? It’s Women’s Work.
By Katty Kay and Claire Shipman
Sunday, July 12, 2009
While the pinstripe crowd fixates on troubled assets, a stalled stimulus and mortgage remedies, it turns out that a more sure-fire financial fix is within our grasp — and has been for years. New research says a healthy dose of estrogen may be the key not only to our fiscal recovery, but also to economic strength worldwide.
The sexy new discussion in policy circles around the world, thanks to the recession, is whether a significant shift of power from men to women is underway — or whether it should be. Accounting giant Ernst & Young pulled out charts and graphs at a recent power lunch in Washington with female lawmakers to argue a provocative bottom line: Companies with more women in senior management roles make more money. The latest issue of Foreign Policy magazine sweepingly predicts the “death of macho.” Economists at Davos this year speculated that the presence of more women on Wall Street might have averted the downturn. Adding to this debate is the fact that the laid-off victims of this recession are overwhelmingly men.
All those right-brain skills disparaged as soft in the roaring ’90s are suddenly 21st-century-hot, while cocky is experiencing a slow fizzle.
The numbers make a compelling case. The studies Ernst & Young rounded up show that women can make the difference between economic success and failure in the developing world, between good and bad decision-making in the industrialized world, and between profit and loss in the corporate world. Their conclusion: American companies would do well with more senior women.
And it’s not only one study, but at least half a dozen, from a broad spectrum of organizations such as Columbia University, McKinsey & Co., Goldman Sachs and Pepperdine University, that document a clear relationship between women in senior management and corporate financial success. By all measures, more women in your company means better performance.
Pepperdine found that the Fortune 500 firms with the best records of putting women at the top were 18 to 69 percent more profitable than the median companies in their industries. McKinsey looked at the top-listed European companies and found that greater gender diversity in management led to higher-than-average stock performance.
Is there a magic number of women? In some cases, it’s just three. Catalyst, a research firm focused on women and business, found that Fortune 500 companies with three or more women in senior management positions score higher on top measures of organizational excellence. In addition, companies with three or more women on their boards outperformed the competition on all measures by at least 40 percent.
It’s time to admit the obvious. Men and women are different, and our management styles are different. Research by the University of Pittsburgh and Cambridge University, among others, finds that some of those differences are intrinsic, thanks to hormones.
Gender stereotypes aren’t politically correct, but the research broadly finds that testosterone can make men more prone to competition and risk-taking. Women, on the other hand, seem to be wired for collaboration, caution and long-term results.
According to a 30-year study of fund managers released last month by the National Council for Research on Women, female investors and professional money managers used more measured strategies. They didn’t take huge risks, but they also didn’t lose big. Their returns were consistent. Men took larger risks and wound up with results that varied more widely. A study by the French Fund association found that funds managed by women had more consistent results over one-year, three-year and five-year measurements. Female-managed funds weren’t usually top performers, but they were never at the bottom.
Whatever the future, we hardly need to explain why, after all the trouble the testosterone-infused Wall Street culture brought us, a bit of that caution would be a healthy ingredient in our financial mix.
If that all seems too touchy-feely for left-brainers, here’s more hard math. The “diversity prediction theorem” is part of the most cutting-edge thinking about best business practices. Scott Page, an economist at the University of Michigan, uses mathematical models to demonstrate that a diverse group will solve a complicated business problem better than a homogeneous group. In fact, diversity is even more important than expertise. In other words, a bunch of white male brainiacs won’t usually reach the best conclusions.
We are proud and flattered – the Boulder County Business Report had some fabulous things to say about the work Margaret Miner of ten20 & Rags Consignments and Heather Smith of Lady Luxe Inc have been doing together on the social media scene!
Here’s the scoop:
Getting social with Lady Luxe
By Valerie Gleaton
June 26, 2009 — BOULDER – Most business owners recognize the importance of online advertising, but using social media platforms such as Facebook, Twitter and blogs to connect with current and potential customers is still a new frontier for many. For those who don’t know a “Friend” from a “Follower,” Heather Smith is here to help.
A self-described “social media maven,” Smith is the founder of Lady Luxe Inc., a consulting firm that assists companies hoping to increase their online visibility.
Smith, who recently became the social media strategist for international eco-cosmetic company Weleda, has revamped online marketing for local companies including Rags Consignment, ten20 nail salon, The T-BAR lingerie shop, Bundle Baby Shop and Jessie Walker Knit Goods.
“I call it ’social media for the socially responsible,’” says Smith, noting that the companies share a commitment to ethical business practices such as sustainability and fair trade.
This isn’t surprising, considering her background. Smith began her career in the natural products industry, and was so successful in launching and promoting her own beauty line that other companies began approaching her to consult on theirs. This led her to found JG Consulting (short for Jersey Girl Consulting) in New York. A few years later, Smith moved to Boulder with her husband. On Earth Day 2006, she launched Coco’s Shoppe, which she says was one of the very first online eco-boutiques.
“That was how I became more online savvy,” Smith says. “Then last fall the economy hit everyone hard, especially retail. You had to decide whether to relaunch, close up shop or reinvent yourself. That’s when I started to jump on board with social media. I wanted to use all the opportunities that were out there and also give them to other businesses. That’s what I’m doing with Lady Luxe.”
The economic downturn offered the perfect conditions to establish the new consulting firm. With low start up costs – “My Mac is my office,” Smith says – and business owners looking for ways to weather the recession, Lady Luxe was a fairly low-risk venture. Now, though she still owns Coco’s Shoppe, Smith says that most of her time is spent advising companies on how to take advantage of social media.
Smith says the first step is simply listening to the client to find out where they are and where they want to go. For instance, when Margaret Miner, owner of Rags Consignment and ten20, told Smith that she wanted to make her companies’ Web sites more dynamic, Smith converted them to WordPress blogs that also linked to Facebook and Twitter profiles.
“She’s does a fantastic job,” Miner says. “We’ve gotten a lot more interest in the Web site and feedback and interaction from customers.”
“All of a sudden, items we featured on the Rags site would immediately sell out,” Smith says. Customers who weren’t planning to come in that day would, just because of something they saw on the blog – that’s what’s so great about social media.”
Other companies have more specific goals. Smith says that T-BAR owner Debra Caplin already had a great blog and Twitter presence, but wanted more media attention for the shop.
“We got her on Daily Candy in a month,” Smith says proudly, referring to the popular e-mail newsletter that professes to be “the insider’s guide to what’s hot, new and undiscovered.”
“Give me a challenge, and I’m gonna deliver,” Smith promises. “I work on a case-by-case basis, so whether you want the full service where we build your whole social media platform, or just a la carte, I want to listen to what people are doing already and then fill in the gaps.”
However, though increasing sales and garnering glowing reviews is great for business in the short-term, Smith says the most important aspect of social media is its power to create brand loyalty through communication with customers.
“Businesses just need to get out there and engage,” Smith says. “Find your friends, find your fans, find your followers, and find your niche. You’ll get the customers who love you already, but you’ll also find those likeminded individuals who will soon love you.”
