Women are ‘just doing it’

Terri Heggum-Allen is National Executive Director of the Canadian Association of Family Enterprise.

Being an entrepreneur and running a family business can be lonely but women simply can't afford to be unproductive, which is why so many of them excel at their task at hand

Women entrepreneurs and their success are widely regarded as a recent phenomenon, but Susanna Moodie and her sister, Catherine Parr Trail, were already earning their living by their pens when they emigrated to Canada in 1832. Moodie, born in Suffolk, went on to write the Canadian classic Roughing it in the Bush. She describes a woman with several small children whose husband was killed while felling trees to clear their land. Did she stop to mourn? No, she got on with the job of clearing the land and preparing for winter, because "it is always best to be about and doing".

My experience with women who head businesses is that it is precisely that willingness to get their hands dirty that accounts for the greater success and profitability of women-owned businesses.

Although they are smaller in revenue terms – generating average annual revenue of US$26.4 million compared with $30.4 million for their male-owned counterparts – sales are achieved with fewer employees, 26 compared with 50 at male-owned firms. This means that female-owned family businesses are 1.7 times more productive than male-owned family firms.

A survey released in January of Fortune 500 companies in the US found an unquestionable link between gender diverse management teams and superior financial performance. The group of companies with the highest representation of women on their senior management teams had a 35% higher return on investment and a 34% higher total return to shareholders than companies with the lowest women's representation. This report produced by Catalyst Canada was based on data from 353 of the companies on the Fortune 500 list.

Are women smarter? Do they work harder?What's new? What's changed and what's going to change? We know the answer to the first question, so I'll move on to the rest.

What's new?
Katherine Gray, in her study In the Company of Women, found today's female business leader has the same motivation as Susanna Moodie's heroine: necessity. "Women in the past who have become entrepreneurs were deserted or widowed, and they had to do something. Today women still tend to become entrepreneurs when something pushes them in that direction."

Family businesses have always depended on their female contingent, though not until recently in leadership roles. The number of woman-­owned family businesses has increased by 37% in the past five years, according to a report by Center for Women's Leadership at Babson College in the US.

Motivation and education
The 1990s were a decade where women started up their own businesses on a scale never seen before. Education is the great equaliser. In Canada 57% of those entering university are female. As we move into an economy where the knowledge worker is king (make that queen) women are better equipped than ever before to take on leadership roles.

New attitudes
Fifteen years ago I was working for a national accounting firm when it altered its contract with senior managers to allow maternity leave. Not one of its female senior managers had returned to work after a first child until 1989. The acceptance of the working mother in the workplace has undoubtedly made an enormous difference. Whether the change in attitude is driven by enlightenment or necessity, I leave others to decide.

What's old
As National Executive Director of the Canadian Association of Family Enterprise (CAFE), I did a straw poll among my membership, male and female, on the reasons women-run businesses succeed. The general consensus was that women are better at multi-tasking. Women can't afford to be unproductive. They have to go home to their other jobs.

Clearly multi-tasking isn't new for women but children and difficulties in accessing financing continue to be the two biggest reasons why women who run enterprises have difficulty growing to the next level.

It's a good thing women know how to do more with less. A recent Women Entrepreneurs of Canada task force pointed out that 58% of small- and medium-sized enterprises that are majority-owned by women entrepreneurs are in a slow-growth stage of development, mainly due to a lack of access to financing. The task force confirms that there is a higher turn-down rate for loans to women business owners. This could be because women entrepreneurs tend to own and operate smaller firms and businesses in slower growth and higher risk sectors such as retail and service.

Support network
One gender's weakness is the other gender's strength. Men tend to be reluctant to ask for help. Women are not. In their new book, Northern Lights – Outstanding Canadian Women, Joan Green, Lynda Palazzi and Marguerite Senecal, interviewed 43 women, half of whom are self-employed. One consistent theme of the book is the importance of a network of friends and colleagues you can trust and rely on and who believe in you.

Being an entrepreneur and running a family business can be lonely. Peer support is a key element of learning to think outside the box. At CAFE we find that our most successful programme is our peer support group or Personal Advisory Group. Each Personal Advisory Group consists of 8–12 business family members in non-competing businesses that meet once a month to share stories and learn from each other.

What it means for our daughters
Changes in education, attitudes and some ground-breaking precedent-setters have set the stage for more parents to allow daughters to rise to the top of the company.  Oddly enough most of the women I have met through my work with CAFE and who are presidents of their family businesses did not have any brothers. Others, at a higher level in the business than their brothers, have not yet determined an ownership structure for the sibling team, and still more of the women in ownership positions are part of a spousal ownership team.

The old joke maintains that behind every great man is a surprised woman. But Shattering the Glass Box, published by the Canadian government indicated that the majority (77%) of self-employed women are married compared with 58% in the general population. A significant number of the women interviewed in Northern Lights: Outstanding Canadian Women, felt that the support and love from their husbands was the key to getting through tough times. As a family business owner myself, I can attest to the importance of my spouse as a sounding board, a shadow consultant and coach.

In a family you are (or can be) equals. In business it is difficult to be equal. In fact one of you may be in a reporting, as well as supporting, role. Even where there is a clear delineation of roles, it can be hard to know when to offer advice, and when to simply lend an ear.

It is equally difficult for family members to accept that when a task is delegated it won't be done exactly as the person assigning the work expected. That's not necessarily a bad thing. I have five boys and wear two professional hats, one being the partner in a busy accounting practice. I can't and I don't want to do everything.

Professionally and privately, I am happy when something gets done 80% the way I wanted it. When I remember my father's working life, I see he sacrificed a great deal, including time with his family, to pursue that elusive remaining 20%. This gender difference accounts for another surprising statistic: women tend to run more profitable operations and spend less time doing it.

What does it mean for the future of family business?
For family businesses to maximise the potential within, they must capitalise on another female skill, communication and consensus building. Effective change will be managed from within by establishing family councils and through outside advisers for an objective perspective.

An outside consultant played an important part in the leadership transition of  Vancouver-based Purdy's Chocolates from Charles Flavelle to his daughter Karen. Karen had earned her business stripes outside her father's business and joined the company after considerable independent success.

In family businesses with more than one child, the gnawing question used to be if we can't share the business equally, how can we at least be fair? That question will look small in light of the new questions arising out of mixed gender sibling management teams.

In the influential American Family Business Survey, conducted by Arthur Andersen and MassMutual, researchers revealed that 11% of the family businesses surveyed now have co-CEOs and 42% are considering moving to co-CEOs in the next generation.

In their book, Making Sibling Teams Work: The Next Generation, authors Aronoff, Astrachan, Mendoza and Ward, note: "Parents are increasingly inclined to welcome all their children into the business…" The assumption that only sons, and usually the eldest, will take on the leadership role in the family business, is becoming outdated.

A mixture of siblings in close quarters, sharing responsibilities, resources and ambitions can be as volatile a mix as being stuck inside on a rainy day, but with much worse consequences than tears over a broken vase. Add to this the presence of entrepreneurial parents and you have a potentially volatile situation.

The book's authors also observe that: "Siblings need to acknowledge that they hear, think, decide and communicate differently. They also need to develop skills to deal with their differences – communication skills, listening skills, empathy, and appreciation for differences." Is it just me, or do these not seem to be many of the skills that are traditionally attributed to women?

Entrepreneurship is driven by the power of invention and the ability to learn. I believe that not only will tomorrow's sibling teams need to develop their feminine skill sets, but that men generally could learn to work more profitably and more rewardingly, if they photocopied a few pages from their sister executives' books.

What of women? Women need to find new ways to capitalise on the skills that give them more profitable and sustainable success, and learn the new ones. And they need to erode the barriers keeping so many from taking their businesses to the next level.

I hope in 'women's liberation' there is also liberation for our sons to enter their family's business – or not. In a discussion with the male president of a successful third generation Canadian family business, he said: "My Dad didn't force me to go into the family business but it looked so much easier than some of my other choices at the time. Sometimes I wonder if I really had a choice? I want my kids to choose their own path." Susanna Moodie would say, I think, that we each have to hew our own path, and the best way to learn how will be by doing it.