Issue 14 (emailed version), Thursday December 7, 2000
Made in New Zealand - twice winners of the America's Cup


"To create real change in this world, you have to have a vision, and you have to have enormous perseverance. It's the same principle that applies in any entrepreneurial venture: You've got to be too stupid to quit."

Marguerite W Sallee, chairwoman and CEO of Frontline Group

Welcome to issue 14 of EDGE FIRST, an email magazine dedicated to making you a better leader, by providing:
— provocative thinking about what it means to be a leader
— the tools, techniques and best-practices that drive leadership improvement

Increasingly, we'll lean towards the personal, and away from the corporate—delivering on our promise of big ideas in a small package, but with a clear focus on total quality you

In this issue
WarmUp — Take a deep breath guys - it's all about women!
MasterClass — Women and leadership
QuickStudy — An (womens') incubator of one's own


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WarmUp® — In both Edge First and it's sister eZine Award, we've devoted occasional space throughout this first year of publication to the subject of women as leaders.

Because:
— we're interested in the social phenomenon – the whole glass ceiling thing;
— we wonder whether there are general lessons about leadership to be drawn from the particular issues of how women lead;
— we didn't see much attention being paid to the subject (although as the year has rolled by, it's become a noticeably more visible in the business and new-economy literature);
— and because we wondered, as children of the sixties and boomers (your editor is at the leading edge of the 46-64ers) whether our cohort will do things differently in this area, as we have in so many others.

It's a topic that emerges in many ways – sometimes superficial, sometimes pretty fundamental. We think (that's what editors are for) that the influence and role of women as agents of change and of progress has been and is being underestimated. We were engaged, naturally, when a big Business Week article reinforced that view.

We've made the article, and its key findings, the single subject of this issue of EDGE FIRST. If you're a women who is already – or aspires to be – a leader, or a man who needs to learn what's different about how women lead (and we all do, guys), we think you'll find this issue essential reading.
MasterClass® — Women and Leadership
Twenty-five years after women first started pouring into the labor force – and trying to be more like men in every way, from power dressing to picking up golf clubs – Business Week's Rochelle Sharpe wrote, we're discovering that it's the men who ought to be doing the imitating. After years of analyzing what makes leaders most effective and figuring out who's got the Right Stuff, management gurus have discovered that to get a great executive: Hire a female.

A growing number of studies, conducted across the US, in companies ranging from high-tech to manufacturing to consumer services, show that women executives score higher than their male counterparts on a wide variety of measures – from producing high-quality work to goal-setting to mentoring employees. The gender differences were often small, and men sometimes did better in areas like strategic ability and technical analysis.

Who's investigating? Hagberg Consulting Group of Foster City, CA, for one. Women score higher on almost every indicator they look at, said Shirley Ross, an industrial psychologist who helped oversee a recent study by Hagberg – who do performance evaluations of senior managers for clients in technology, health care, financial-service, and consumer-goods companies. Of 425 high-level executives evaluated, women won higher ratings on 42 of the 52 skills measured.

Who's hiring? IBM for one. Women think through decisions better than men, are more collaborative, and seek less personal glory, says the head of IBM Global Services, Douglas Elix, who hired two managers within this year – both women. Instead of being motivated by self-interest, women are more driven by ''what they can do for the company,'' Elix says.

The growing body of new research comes at a time when talent-hungry recruiters are scrambling to find leaders who can retain workers and who function well in the smaller new-economy bureaucracies.

Harvard Business School Professor Rosabeth Moss Kanter, author of the 20-year-old management classic, Men and Women of the Corporation agrees. ''Women get high ratings on exactly those skills needed to succeed in the global Information Age, where teamwork and partnering are so important.''

It's no surprise then that recruiters are starting to show a new hiring bias – women first. Not because of affirmative action or any particular desire to give the female a chance but because they believe she will do a better job.

So why aren't more women running big companies? Thousands graduate each year from business schools and 45% of all managerial posts are held by females, according to the US Labor Department. But there's less than a handful at the top – only two in the Fortune 500. Go on – name them … Fiorina at HP. Ah, that women at Avon … Andrea Jung. You get the picture. Of the 1,000 largest corporations, only six are run by women.

One reason – the pipeline problem: Most are stuck in HR or PR. Jobs that rarely lead to the top (why that's the case is also interesting – but the subject of another discussion).

And the rhetoric doesn't always translate into reality. Some businesses view women only as middle management workhorses, not suited for prime jobs – a bias that infuriates many, who bail out rather than fight. Often to start their own companies. There are more than 9 million women-owned businesses in the US, double the number of 12 years ago.

The new studies offer some clues – both about the persistence of the cultural mismatch in large companies persists and about why it's so critical to keep women on board.

What makes the new research so compelling is that it's based on actual performance evaluations, not on opinion surveys or simulations. The participants had no idea that their data would end up as part of a study on gender, so it's untainted, says Janet Irwin, a consultant who conducted one of the studies.

Irwin and her colleagues discovered that women ranked higher than men on 28 of 31 measures. She was stunned by women's consistently high ratings and how the scores defied conventional wisdom. Contrary to stereotypes, women outperformed men in all kinds of intellectual areas, such as producing high-quality work, recognizing trends, and generating new ideas and acting on them.

Other studies showed similar patterns. Personnel Decisions International, a consulting firm in Minneapolis, looked at 58,000 managers and found that women outranked men in 20 of 23 areas. Larry Pfaff, a Michigan management consultant, examined evaluations from 2,482 executives from a variety of companies and found that women outperformed men on 17 of 20 measures.

There are, of course, some doubters. Maybe, some say, the research just shows that women executives are as effective as their male counterparts. Sure, women score better, and the scores are statistically significant, says Susan Gebelein, executive vice-president of Personnel Decisions, but the differences don't mean much in the real world. Why? Because very large samples can make minor differences appear more important than they really are. Women have always outscored men in such evaluations, says Gebelein, whose company began looking at gender differences in 1984. And maybe they score highest at the most male-dominated companies because of the type of woman who succeeds in such environments.

Robert Kabacoff, a VP at Management Research Group in Portland, ME, also wondered if women were getting higher test scores in these studies for reasons other than gender. Perhaps they're not being compared with men holding similar jobs, he suggests. HR executives often get rated higher on people skills than other supervisors, for instance. If most of the women in a study work in HR, but few men do, the results may have more to do with job than gender.

So Kabacoff ran some tests normalised for those variables – comparing males and females at the same companies, with similar jobs, at the same management level, and with the same experience. Women still outranked men on about half of the measures. Female managers were graded more effective by peers and subordinates, but bosses still judged men and women equally competent as leaders.

Everyone knows that women have long excelled at teamwork, but getting results was one of the categories in which women earned their highest marks in these studies. Jackie Streeter, Apple Computer's VP for engineering, says she has repeatedly volunteered to shift dozens of employees out of her division because she felt they would better fit into a different department – a move that she says ''startled'' her male colleagues. ''It's not the size of your organization that counts but the size of the results you get,'' says Streeter, who has 350 people working for her.

Women are also more likely to disregard as a useless power trip another long-held management bugaboo: keeping information tightly controlled. ''It's better to overcommunicate,'' says Shukla, whose Web startup, Rubric, made 65 of her 85 employees millionaires. Rather than dispensing information on a need-to-know basis, she made sure information was shared with all of her employees. She also created the CEO lunch, inviting six to eight employees at a time to discuss the business with her.

How important are the people skills? It's common for companies to assume that people skills are not business skills. In fact, they are inextricable, argues Joyce Fletcher, a professor at Simmons Graduate School of Management in Boston and author of Disappearing Acts: Gender, Power, and Relational Practice at Work. Employees who feel cared about by their bosses or are inspired by them often produce higher-quality work. And supervisors who know how to deal with conflict get better results.

Women have always done this kind of work, but their behavior is often devalued because their intentions are misunderstood, says Fletcher. A woman who takes the time to talk to an employee about a meeting he has missed, for instance, might simply be considered a nice person – not someone trying to make sure that the staff has enough information to make an important decision. Her business actions become invisible, since the staff attributes her behavior to just being kind.

Similarly, duties such as coaching and keeping people informed are often taken as a given. But these tasks can be the invisible glue that holds a company together. ''It's like somebody doing your laundry,'' says Hawthorne, the former Continental Cablevision exec. ''You rely on them to have clean clothes,'' but the work is ''invisible when it's done well.'' Because ''the guys are into glamour,'' says National City's Kiely, women often end up in charge of difficult and unglamorous tasks such as performance reviews.

Kiely bristles at some research that concluded that women aren't perceived as strategic or vision-oriented. Her strategy, she says, is to make people think something is their idea so she can get them to buy into a plan.

In the end, it takes a lot more than competence to make it to the top. Getting the best performance evaluations in the company's history may not be nearly enough. ''When you actually sit down in a selection committee to choose the CEO, lots of subtle assumptions come into play,'' said Deborah Merrill Sands, co-director of Simmons' Center on Gender & Organization.

Companies may say they want collaborative leaders, but they still hold deep-seated beliefs about heroic leadership. Interpersonal skills may be recognized as important, she said, but not as key corner-office skills. ''We are in the process of changing our concepts of leadership,'' she says. ''But organizations haven't evolved that much yet.'' Kabacoff has just finished a study showing how CEOs and corporate boards view upper management, and he found a clear double standard. Male CEOs and senior VPs got high marks when they were forceful and assertive and lower scores if they were cooperative and empathic. Female CEOs got downgraded for being assertive and got better scores when they were cooperative.

His conclusion? ''At the highest levels, bosses are still evaluating people in the most stereotypical ways.'' That means that even though women have proven their readiness to lead companies into the future, they're not likely to get a shot until their bosses are ready to stop living in the past.
QuickStudy® — An Incubator of One's Own
From the December 12, 2000 issue of Business 2.0

Women working from the ground up and succeeding at the highest levels in Net businesses is the grand vision of Shannah Whithaus, founder and CEO of Ground Floor Ventures, a new-economy incubator for companies owned and operated by women.  

"The important difference between GFV and other incubators is that we are finally giving qualified women a chance to succeed on the same level as their male counterparts," Whithaus says. "Women simply do not get a fair hearing in most cases. GFV is just giving women a place to come with their great ideas."

Ground Floor, in Hoboken, NJ, plans to form and nurture relationships with various women's groups to build awareness about its services. "We are working closely with a number of women's organizations to get the word out about GFV," Whithaus says. These groups include the National Association of Women Business Owners; Working Woman Networks; the American Women's Economic Development Corp.; Women in Technology International; and the National Association for Female Executives.  

These organizations appeal to the same category of women entrepreneurs that Ground Floor is looking to help—whether as "residents" (firms operating out of Ground Floor's offices) or "affiliates" (firms with less-formal ties to the incubator), she says. "We are in a growing marketplace with literally endless possibilities. We expect the companies that become residents to grow quickly into major players."  

Both groups will have access to Ground Floor mentors and other resources, but fees will vary.  

According to Whithaus acceptance into the incubator rests on meeting at least one of three criteria: a woman developed the business plan; a woman owns 50% or more of the company's common stock; or a woman is the company's CEO.
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