The global freakout over Yahoo CEO Marissa Mayer continues to be epic. Being the first pregnant CEO of a Fortune 500 company—and one of the youngest female CEOs of a Fortune 500 company in history—is going to ignite a lot of drama. Last month, sparks flew when Mayer cracked down on telecommuting workers, ordering all Yahoo employees to start working in-house permanently. Some see it as an act of sabotage against other working parents (particularly mothers, who tend to be the primary caregiver), while others see it as a savvy business move that shows that Mayer is more interested in running a company than being the figurehead of a gender equality movement.
But you can’t separate the two. Studies have shown that gender diversity has positive impacts on group processes in companies, and U.S. companies with boards that are more than 33% women consistently outperform market trends. Globally, businesses with boards that are more than 33% women have been found to generate significant positive financial returns.
The thing is, you can always make a business case for greater diversity in the workplace, but that’s not why we should be encouraging companies to diversify their teams. Diversity isn’t just better for business, it’s better for the consumer, which is better for communities and the economy as a whole.
The scene in 2000
For example: 13 years ago, there was no Care.com. If you were a parent looking for a nanny or babysitter, your options consisted of Craigslist or the career center at your local high school. There are a number of reasons for this, starting with the fact that a pretty sizable chunk of the population still didn’t even have email in 2000. And, of course, a number of companies were floundering in 2000. But CEO Sheila Marcelo started the company because she needed a caregiver and the resources offered by the Web were limited.
There was a clear need for an online listing of caregivers, and it took another mother to address that need and create a platform where parents and caregivers could connect.
Having a diverse workplace has a positive impact on a company’s bottom line because it brings different perspectives to the table, which, in turn, allows the company to appeal to a diverse consumer population.
The need for more women leaders
“If you’re a woman in a male dominated culture, you definitely notice it. You’re a fish out of water,” said Deborah Jackson, in an interview. Jackson is an angel investor and the founder and CEO of PlumAlley.co, an e-commerce site for women-founded companies. She’s also a former investment banker for Goldman Sachs.
She gave me an example: when she was pregnant with her first daughter, she was working on Wall Street and one of her male colleagues was also expecting a baby with his wife. When Jackson returned from maternity leave, she told her colleague all about the great daycares and nursery schools she had found, to which he responded: “I don’t know anything about that. That’s my wife’s department.”
Indeed, the hunt for childcare typically falls on a mother’s shoulders. Mothers also do the vast majority of spending for their families. Women account for 85% of all consumer spending in the U.S. Of those who shop online, 21% do so every day and 51% are moms. But only 3% of advertising agency creative directors are women. So it’s no wonder that some 91% of women surveyed have said that advertisers don’t understand them.
The need for female leadership is critical to the health of the U.S. economy, but women face a host of invisible hurdles to get to those positions of leadership. While women tend to out-earn men in their single years, they take a huge financial and career hit when they have children.
In one study that appeared in the American Journal of Sociology in 2007, participants in the study rated fictitious job applicants based on their resumes. Some of the resumes listed Parent-Teacher Association coordinator as an activity—indicating they were parents, while others listed Fundraiser for Neighborhood Association as an activity. The applicants who were mothers were deemed to be “significantly less competent and committed than women without children…”
The study also found that, “Mothers were also held to harsher performance and punctuality standards. Mothers were allowed significantly fewer times of being late to work, and they needed a significantly higher score on the management exam than non-mothers before being considered hirable.”
Those are just the social perceptions of mothers. Not only are mothers viewed as less committed and competent, they are, in fact, struggling under tighter time constraints than their male counterparts. In a typical American, nuclear family, a father enjoys approximately one month of more leisure time in a year than a mother.
And women are just as susceptible to entrenched social mores and gender constructs as well. One survey found that women tend to feel more responsible for housework and childcare than men do. Another paper found that in families in which the wife earned more money than her husband, she tended to spend even more time on housework and childcare than women who learn less than their husbands.
Should we be surprised to learn that few women ascend to the upper echelons of the biggest U.S. companies? Today, of all the Fortune 500 CEOs in the U.S., only 21 are women—which is actually a record high.
Why we need more women entrepreneurs
More women than ever before are rejecting corporate prestige and the seemingly futile climb to the top in favor of starting their own businesses. While women tend to create home-based micro-businesses consisting of less than five people, women-led businesses are expected to create over half of the new small business jobs in the U.S. by 2018. To put that into perspective, women-led businesses accounted for only 16% of total U.S. jobs as of 2010.
“When I see women starting companies, they’re starting companies with their own culture, their own imprint. They might be more female-friendly workplaces. Women understand those issues and those challenges,” said Deborah Jackson.
They also understand what kinds of products and services women need. Looking at some of the companies that failed during the dot-com bust, there was a clear lack of understanding of what female consumers needed. There was Webvan, a grocery delivery service. There was Pets.com. There was Boo.com, an online fashion store. There was Kibu.com, a social network for teen girls.
These sites flopped partly because the technology at the time just wasn’t where it needed to be, and partly because they missed the mark. Women don’t need help shopping for groceries. What they do need help with is childcare (Care.com), getting someone to pick up the dry cleaning (Taskrabbit), and finding good, affordable healthcare for their family (PokitDok).
Over the next few weeks, we’ll be exploring the women-led businesses that are upending long-held beliefs on what female consumers want. Some of the categories we’ll be covering include health tech, social media, mobile, online marketplaces, e-commerce, fianance, and more.
If you have a company that you think should be featured, feel free to reach out at [email protected]